Demurrage Time Bars(01/06/93)


Our Ref: 93/6/1

June 1993

To: Ship Broker Members

Dear Sirs,

In recent months the Managers have become concerned about the increasing number of claims on brokers arising from the submission of demurrage statements to charterers outside the charterparty time bar. Such claims sometimes arise as a result of a failure by the broker to establish proper procedures, or by failing to follow those procedures which have been set up.

We therefore recommend that brokers carefully review their procedures for passing on demurrage statements to ensure that their system is as fool-proof as possible. In order to assist with the review of Members' procedures, we are attaching suggested guidelines.

If Members require any further assistance or would like to discuss this matter with the Managers, please contact the Club.

Yours faithfully,

ITIM & Co. Ltd, Managers
International Transport Intermediaries Club Ltd.

ITIC recommended Procedures for dealing with Demurrage Statements in Charterparties that incorporate a Time Bar Clause

A. Procedure prior to the submission of Demurrage Statements

  1. If possible, attempt to obtain agreement at the time of the fixture for demurrage claims to be sent direct from the owner to the charterer (it is appreciated that this may be difficult in practice).
  2. Failing (i) above, when the fixture is completed, a confirmation note should be sent to the Operations Department highlighted the time bar clause.
  3. The Operations Department should open a file.
  4. When the time limit begins to run e.g., on signing bills of lading or on completion of discharge, a standard message should be forwarded to the owner in the form of Appendix A attached.
  5. The Operations Department should maintain a manual or computer diary identifying the time bar expiry date.

B. Procedure when claim(s) received from owners prior to expiry of time bar

  1. A receipt date stamp should be applied to all demurrage statements.
  2. Simultaneously, the date of receipt of the demurrage claim should be compared with the time bar date.
  3. If (ii) above shows that less than three weeks exists between the date of receipt in the office to that of the expiry of time limit, then the additional protective message set out in Appendix B should immediately be sent.
  4. All demurrage claims must be photocopied and placed in the Operations Department file and the originals forwarded to charterers by Recorded Delivery whether a time bar exists or not.
    In the UK consideration should be given to taking out consequential loss insurance on registered post, the current cost of which is £1.35 for £10,000 compensation.
  5. At the time the demurrage claim is submitted to the charterers, a request for acknowledgement of receipt should be made and followed up by a further written request for acknowledgement within ten days.
  6. Owners who have submitted the demurrage claim should be advised the date on which:
    (a) the claim was received; and,
    (b) the date on which it was forwarded to charterers.

APPENDIX A

NAME OF SHIP:
C/P DATE..............................

We would remind you that this charterparty contains a time bar clause which will become effective when

the ship completes discharge

the bills of lading are signed

We trust that owners will present all claims in good time and in accordance with the terms of the charterparty.

Should you submit any claims to charterers through us, it is most important that such claims reach us in sufficient time to enable us to send them on to charterers before the expiry of any time limit.

Should you forward any claims direct to charterers yourselves we would appreciate your advising us of this and sending us a copy of your claim.

delete as appropriate

APPENDIX B

NAME OF SHIP:
C/P DATE..............................

We have today received your claim for demurrage under charterparty dated ................... We would respectfully point out that our calculations show the time bar under this charterparty expires on .................(day).

Accordingly, while we shall immediately forward this claim to charterers, we cannot ensure its receipt by them within the time allowed if it is sent by recorded post. Would you please therefore contact ...................immediately to confirm your acceptance of the position and to discuss possible alternative means of submitting your claim?

Date: 31/05/1993

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