Time Bars: Mind your Ps And Qs

Many a heart-stopping moment has been had at desks around the globe on becoming aware of an imminent time bar. The recent High Court decision in P v Q [2018] EWHC 1399 (Comm) highlights not only the risks facing parties when they learn of claims immediately after a time bar, but also the limited relief available from the English courts in those circumstances.

Key Facts

The case concerned four parties in a chain of back-to-back voyage charters on the Norgrain 1973 form, anonymised to reflect the confidentiality of the underlying arbitrations and so identified as 'P', 'Q', 'R' and 'S'.

Clause 67 of each charterparty provided that any claims "must be notified in writing to the other party and claimant's arbitrator appointed within thirteen (13) months of the final discharge of the cargo and where this provision is not complied with, the claim shall be deemed to be waived and absolutely barred."

Discharge was completed on 16 October 2015. At 6:44pm on 16 November 2016, the final day of the 13 month period, China National Chartering Co Ltd, as disponent owner, gave notice to P, its charterer, of a third party claim brought against it.

P received this notification after its office had closed and so the first P knew about it was the following morning, 17 November, after the time bar had passed.

On 17 November, P gave notice of the claim to its charterer, Q, and requested details of whether other parties in the chain had received notifications of any claims. Crucially, however, P's operations department did not notify its legal department until 23 November and no arbitration against Q was commenced until 25 November.

On receipt of P's notice on 17 November, Q gave its own notice of claim and commenced arbitration against R by a notice sent to R's broker.

R became aware of Q's notice via the broker on 17 November but contested that its broker did not have authority to accept service of an arbitration notice. To protect its position Q eventually served a notice of arbitration directly on R on 30 November.

Although aware of Q's notice of claim since 18 November, R did not instruct lawyers until 28 November. On 29 November R appointed an arbitrator and on 1 December gave notice of the claim and commenced arbitration against S.

The notifications and commencements of arbitration between the parties were therefore all sent and received after the 13 month time bar had passed. P, Q and R, applied to the High Court for:

Declarations that each claim had been...