Time bar for claims under a COA


Published: 1 March 2011

Time bars (both time bars that apply according to statute or law in a any given country and those that are agreed in contracts such as charter parties) are, of course, important.

The one year time bar for cargo claims under the Hague-Visby Rules is well known but other time bars sometimes catch a creditor out. The specific time bars agreed in the c/p can be overlooked and sometimes there can be doubt as to when the time limit starts to run.

An English Court recently (February 2011) had to consider a claim under a COA and decide when time started to run for that particular claim.

The Vessel had been chartered for 3 consecutive voyages and the standard arbitration clause in the C/P (the CENTROCON Arbitration Clause) was amended to say that a claim would be time-barred unless an arbitrator was appointed within “12 months of final discharge or termination of this Charter Party”. The time bar clause therefore referred both to “final discharge” and to “termination” of the COA.

More than a year after completion of the first voyage the Owners started arbitration for a claim for demurrage under that first voyage. When this arbitration was started it was well within a 1 year period form completion of the third and last voyage under the COA i.e. the completion of the entire COA as such.

The Charterers argued that the claim was out of time. The Owners argued that the “final discharge” in the time bar clause in the COA was referring to the last cargo i.e. the last and third voyage under the COA.

The Court held that “Final Discharge” had become generally accepted , in a consecutive voyage charter/COA, to meaning and referring to the discharge of cargo on the voyage in respect of which the claim was made.

The claim was, however, in time under the second part of the time bar clause, i.e. within 12 months of “termination” of the C/P.

(The Charterers has tried to argue that there should be implied/read into the clause “whichever is earlier” but this was rejected by the court)

The judgment is a reminder not only that one has to be careful about complying with time bar clauses in C/P’s but also how there may be an accepted understanding of a particular wording such as “ final discharge” in this case.

Strict compliance with time bar clauses should always be observed. This is perhaps especially important where the C/P requires that a claim has to be made within a fairly short period such as is often the case for demurrage claims. An article on time bars for demurrage claims was published on this web site in March 2008.

X v Y QBD (Com Ct)(Burton J) 9 February 2011
Published in (2011) 815 LMLN 3