Statement of facts


Published: 2 July 2008

The Statement of Facts is a document which can be central to many disputes between Owners and Charterers (and others) as this is the document where relevant facts are recorded and the sequence of events can be followed. At the same time, the statement of facts is not the “only truth” and will in some cases only be signed by one or more parties “for receipt only” to indicate that either the whole, or at least part, of the statement is not necessarily agreed to. If a dispute continues to litigation, the facts of what transpired at a given time may, however, be difficult to establish and it would certainly be costly to obtain either witness statements or even direct evidence by hearing relevant witnesses – sometimes a very long time after the event.

It is therefore important to be aware of the way the courts and arbitration panels view a statement of facts. It is certainly not the case that a statement of facts is treated as being in any way “absolutely final”, but case law both before the ordinary courts and before arbitration panels has shown that the Statement of Facts is indeed treated as a very important piece of evidence.

Most recently this was shown by the case concerning the “NEWFOREST”.

This concerned a demurrage claim in the order of some USD 280,000 brought by the owners and relating to the unloading of iron ore in bulk in China. The dispute was about interruptions to lay time and demurrage and at least partly related to the true understanding and interpretation of a particular clause in the voyage C/P.

The demurrage and dispatch clause provided that:

“Demurrage and dispatch shall be calculated on the basis of the statement of facts made by Agent at loading and discharging port(s) entrusted by Owners and mutually confirmed by Master and LOADING PORT AUTHORITIES or DISCHARGING PORT AUTHORITIES.”

There was also an exception to lay time running in that the clause also provided that stoppage caused by bad weather should not count as lay time.

The owners claimed that the statement of facts was wrong and that the real reason for a delay in discharge was not bad weather (as indicated in the SoF) but instead that the real reason was shortage of lighters or inadequate fenders.

Part of the judgment is taken up by a comment on the status of the SoF, and this is certainly a good insight into how the courts view the status of the SoF.

In this particular case, the specific clause in the C/P stipulated that the Statement of Facts should be “mutually” confirmed, and there was an issue over whether or not there was in fact any “mutuality”.

The court commented that the SoF was not final and binding (because it did not say so) because the words in the C/P “on the basis of” did not point clearly enough to the SoF being final as such. The important aspect of the comment on the SoF is, however, that the Court said that the “evidential value of the SoF is unquestionably strong whether or not the requisite mutuality is achieved and almost regardless of its contractual status.” It was considered important that a statement of facts is prepared on the spot by the agent confirmed at the time by the master and (although much later) also by the port authority. Consequently, the Statement of Facts was said to be “powerful evidence in any civil case to set against potentially self-serving recollection and reconstruction of unremarkable and detailed facts”. This was so even though any such recollection, reconstruction etc. could be assisted by various records and other contemporaneous documents given that this was taking place two years later.

It was even said that the court would “lean towards seeing finality when documents like the SoF are available” in order to avoid what was called “unsatisfactory exercise” having to be conducted with regard to examining evidence which necessarily was now provided much later than when the actual events in fact took place.

This is not the first time the statement of facts has been considered in this way.

In an arbitration award from 2000 (London Arbitration 1/00), the charterers had objected to the statement of facts given that it had not been signed either by charterers themselves or by their agents in the discharge port. In this case, the Statement of Facts had been signed by the receivers, the Owners and their agents. In their award, the tribunal considered that the Statement of Facts had to be the best available evidence of the factual position as it was a contemporary document signed by three of the parties on the spot and was evidence “that could not be ignored”.

This attitude towards the Statement of Facts should be remembered as events take place – even if one or more parties choose to refuse to sign a statement of facts, it may very well be considered powerful evidence much later and it may be a heavy burden to dispute this kind of evidence a long time afterwards. If an Owner, Charterer or any other relevant party therefore objects to what is being put in the Statement of Facts, they should at least make sure that they make an effort to obtain hard, documentary evidence which can be used to dispute whatever fact or information is being put in the Statement of Facts and to which there is an objection. The best way of doing so may be to make any objection as a remark on the SoF itself. If this is not possible, an objection could be made by way of an entry in the log book or by a protest letter.

The “NEWFOREST” [2008] 1 Lloyd’s Rep. 504
London Arbitration 1/00 (LMLN 538)