London Arbitration 3/20

Time chartered under the NYPE form, Clause 27 of the charter expressly incorporated the Inter-Club NYPE Agreement (ICA) the relevant clause of which is:

Time Bar

Recovery under this agreement by an owner or charterers is not allowed unless they are given a written notice from the other party about the cargo claim within 24 months of the date of delivery

The vessel in question was chartered on a NYPE time charter beginning 22 May 2013 for 20 months. The charterer had been contracted by G, the merchant, to carry a large cargo of engine equipment from the United States to a North African port. On 2 February 2015, the ship’s crew pumped water into the second cargo hold by mistake, submerging the cargo in water. The shipment was then delivered on 8 March 2015. 

Upon being informed of the submerged cargo, G informed the charterers of its intention to make a cargo claim whilst the charterer informed owner on the day of the submersion that:

“As you know there has been an accident on [the vessel] where the crew have pumped the seawater into the cargo hold instead of pumping it out. Therefore we hold the Owners fully liable for all claims and costs arising from the crew’s negligence. We will arrange for a surveyor to attend at the discharge port to protect [the charterer’s] interests thus please let us know if you want to arrange for a joint survey. Please acknowledge receipt of this notification.”

When 24 months then passed without a formalized claim or further notification, owners stated that  the charterers had not notified them of the cargo claim within that 24 month period, meaning that any claim made by the charterers on G’s behalf was not valid. The owners also claimed that the information provided did not constitute a cargo claim. They had given the charterers extra time after the 24 month period but claimed they had not received written notification. Because G had only suggested that they would make a claim but had not done so in the 24 month period, it was owner’s position that charterers’ subsequent claim for damages were time barred.  

The tribunal disagreed with owner and decided that notification did not have to refer to the ICA directly, and there was no need to specify if the notice was given under clause 6. They were also under the impression that the contracted draftsman had intended to point out the differences between the absences of a written notice, barring the recovery claim and missing details. If the shipowners had sent in the intention, the recovery claim would have been stopped unless there was written notice of a cargo claim with supporting details of that claim. 

Inspections of the ship occurred from 4-8 March, and cargo reviews occurred from 21-27 March. The cargo inspections included looking at the cargo and recording the damages found. The information would be sent to G’s engineer to see if the damaged goods needed to be replaced. If they did then, G would have to export the damaged goods or throw them out altogether. This information was passed along from charterers to owners. Time extensions were granted by owner from February 2016 to December 2017. 

This being said, the tribunal’s findings were that a written notification could be accepted even if the details were not concrete.  Because of this, the notification given the day of the submersion was valid and thus any extensions given whilst inspecting the cargo were irrelevant to the topic of time bar.