Upholding an arbitration award, the English High Court held that it did not matter which of the two contractual trigger dates came first to start the time limitation period running.
The issue examined by the arbitral tribunal and the High Court in X v Y1 revolved around whether, under the contractual terms of the charterparty, the arbitration claim was out of time.
In a consecutive voyage charterparty (CVCP), the parties had agreed to bring all demurrage claims under a modified Centrocon arbitration clause "within 12 months of final discharge or termination of this Charterparty".
The claimant, X, argued that a demurrage claim relating to the first of three voyages under the CVCP was time-barred 12 months after the date of the first discharge. Disagreeing, the defendant, Y, argued that it had until 12 months after the date of termination of the charterparty to present its demurrage claim. The arbitrator agreed with Y and X appealed to the English High Court.
The English High Court upheld the arbitrator's decision, as the wording of the clause had two trigger dates – either the date of "final discharge" or "termination of this Charterparty" and it did not matter which came first.
The court also confirmed that, under a CVCP, a requirement to submit claims within a defined period after "final discharge" meant final discharge of the cargo on the voyage in respect of which the claim arose. So if a claim arose out of the second of five consecutive voyages governed by a CVCP, time would run from final discharge of the cargo on the second voyage and not the last or fifth voyage.
This case serves to highlight the importance of ensuring that contractual time-bar terms are clearly drafted so that they are understood to mean the same thing to all parties to the contract.
Footnotes
1 [2011] EWHC 152
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