Boskalis Offshore Marine Contracting BV v Atlantic Marine and Aviation LLP (the “Atlantic Tonjer”)
| Jurisdiction | England & Wales |
| Judge | Sir Ross Cranston |
| Judgment Date | 14 May 2019 |
| Neutral Citation | [2019] EWHC 1213 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2018-000726; CL-2018-000722; CL-2019-000222 |
| Date | 14 May 2019 |
[2019] EWHC 1213 (Comm)
Sir Ross Cranston
(sitting as a High Court Judge)
Case No: CL-2018-000726; CL-2018-000722; CL-2019-000222
IN THE HIGH COURT OF JUSTICE
IN THE BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT (QUEEN'S BENCH DIVISION)
IN THE MATTER OF THE ARBITRATION ACT 1996
AND IN THE MATTER OF AN ARBITRATION CLAIM
Royal Courts of Justice
Strand, London, WC2A 2LL
James M. Turner QC (instructed by HFW) for the Claimant
Robert-Jan Temmink QC and Robert Scrivener (instructed by Stephenson Harwood LLP) for the Defendant
Hearing date: 10 April 2019
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
These appeals raise a short point on the interpretation of clause 12 (e) of the BIMCO SupplyTime 2017 Charter Party for Offshore Support Vessels (“BIMCO Charterparty”), which is set out below in paragraph [7] in the context of other clauses in the form relevant to this case.
In general terms the defendant owners, Atlantic Marine and Aviation LLP (“Atlantic Marine” or “the Owners”) contend that the clause means that payment under the charterparty has to be made or disputed within the number of days agreed from the receipt of an invoice. The claimant charterers, Boskalis Offshore Marine Contracting BV (“Boskalis”) deny that the clause has this effect, since it would mean that a failure to challenge an invoice before the due date for payment would result in the loss of any substantive defence to it, with limited prospects of recovering any sums overpaid as a result.
The dispute between the parties was referred to arbitration, and the Tribunal agreed with the Owners' interpretation.
Background
The Atlantic Tonjer (‘the vessel’) is a multi-purpose support vessel. On 9 April 2018, Atlantic Marine as disponent Owners chartered the vessel to Boskalis for 21 days, plus 21 daily options in the Charterers' favour. The delivery date was to be 2 June 2019. There was an addendum to the BIMCO Charterparty dated 22 May 2018. Together they are called the Charterparty in this judgment.
The BIMCO Charterparty used for the charter contained in Part I a number of boxes which the parties had to complete. In this case, hire was agreed at €35,050 per day (Box 20); invoices were to be issued 14 days in arrears (Box 22); payment of hire etc was to be made 21 days after that (Box 24); and the maximum audit period chosen was 4 years (Box 26).
Part II of the BIMCO Charterparty contains standard clauses. In this case they were modified in various respects. Additions were made in red and excisions by clauses being crossed out in blue.
Clause 12 is headed “Hire and Payments”. Clauses 12(b) and 12(c) had additions in red. Clauses 12(e), (f) and (g) were as in the original form. They read in their relevant parts as follows:
“(e) Payments — Payments of hire, fuel invoices and disbursements for the Charterers' account shall be received within the number of days stated in Box 24 from the date of receipt of the invoice. Payment shall be received in the currency stated in Box 20(i) in full without discount or set-off to the account stated in Box 23… If payment is not received by the Owners within five (5) Banking Days following the due date the Owners are entitled to charge interest at the rate stated in Box 25 on the amount outstanding from and including the due date until payment is received.
If the Charterers reasonably believe an incorrect invoice has been issued, they shall notify the Owners promptly, but in no event no later than the due date, specifying the reason for disputing the invoice. The Charterers shall pay the undisputed portion of the invoice but shall be entitled to withhold payment of the disputed amount…
(f) Suspension and termination –
…(ii) At any time while hire or other sums due and payable to the Charterers to Owners remain outstanding the Owners shall be entitled to suspend the performance of any or all of their obligations under this Charter Party until such time as all the hire due to the Owners' under the Charter Party has been received by the Owners. ….
(iii) If after five (5) days of the written notification referred to in Subclause 12(f)(i) the sums referred to have still not been received, the Owners may at any time while such sums remain outstanding terminate the Charter Party…
(g) Audit – The Charterers shall have the right to appoint an independent qualified accountant to audit the Owners' books directly related to work performed under this Charter Party at any time after the conclusion of the Charter Party, up to the expiry of the period stated in Box 26, to determine the validity of the Owners' charges hereunder. …. Any discrepancies discovered in payments made shall be promptly resolved by invoice or credit as appropriate.”
Clause 13 is the off-hire clause. It provides in part (as modified by the parties) that any hire paid in advance shall be adjusted accordingly, provided always that hire shall not cease in the event of the vessel being prevented from working as a result of specified events in the clause.
On 2 June 2018, at 19.45, Boskalis and the Master signed an on-hire certificate. The vessel proceeded from Rotterdam to Waalhaven. Then at 06.00 on 7 June 2018, Boskalis and the Master signed an off-hire certificate. The vessel was at Franklin Shipyard to load an Ampelmann gangway. At 23.45 that day, Boskalis and the Master signed an on-hire certificate. The vessel returned to Waalhaven and from then until termination of the Charterparty it was occupied by Boskalis.
Atlantic Marine rendered invoices for hire, accommodation, meals and other services between 16 June 2018 (14 days after hire commenced) and 13 July 2018. They amount in total to €1,475,029.26 and £42,683.04. Boskalis did not pay the invoices and they remain unpaid. It has raised an off-hire defence, namely, that the largest item in dispute (€1,115,276.30) is not due because the vessel was offhire throughout.
Under the dispute resolution clauses in the Charterparty Atlantic Marine initiated arbitration in accordance with London Maritime Arbitrators Association terms. It applied to the Tribunal for a partial final award on their invoices.
In their First Partial Final Award dated 3 September 2018 the Tribunal identified three issues (at para [16]):
a) When were Atlantic Marine entitled to issue invoices to Boskalis under clause 12(d) and what is the consequence if they were issued prematurely;
b) When was the “due date” by which Boskalis should notify Atlantic Marine that they believed an incorrect invoice had been issued under clause 12(e) and what is the consequence if they failed to do so by that date;
c) Did Boskalis notify Atlantic Marine before the due date that they believed an incorrect invoice had been issued.
The Tribunal found in favour of Atlantic Marine on the first issue. Boskalis do not appeal that finding.
On the second issue, the Tribunal found that Boskalis had not challenged any of the invoices before their due date for payment (21 days after their receipt of each invoice) and that the proper construction of clause 12(e) meant that Boskalis had to pay the invoiced amounts. The Tribunal determined as follows:
“(c) If Boskalis wished to avoid their obligation to pay Atlantic Marine's invoices within 21 days from receipt of an invoice … they had to notify Atlantic Marine within 21 days from receipt of the invoice that they believed that an incorrect invoice had been issued…; and
(d) The consequence if Boskalis failed to notify Atlantic Marine within the relevant period (as in para. 1(c) above) that they believed that an incorrect invoice had been issued is that they came under an obligation to pay Atlantic Marine the amount invoiced which they had not disputed within the relevant period.”
In its Reasons, the Tribunal said in part as to the construction of clause 12(e):
“46. [T]he context in which clause 12(e) appears is in a time charter where ‘cash flow has become a matter of considerable, sometimes crucial importance’ to owners of ships…
48. In our view, the focus of Clause 12(e) is on Atlantic Marine's cash flow. This much is apparent from the provision that ‘Payment shall be received in the currency stated in Box 20(i) in full without discount or set-off to the account stated in Box 23’. The intention of this provision plainly is that Atlantic Marine should receive payment in the first instance for sums to which they might ultimately prove not to be entitled because Boskalis has a valid counterclaim which, but for this provision, would operate as a defence or set-off.
49. A similar intention is apparent in clause 12(g) which provides that the validity of Atlantic Marine's charges can be re-opened up to 4 years after the conclusion of the Charterparty…
50. It follows from this, that clause 12(e) is not a time bar provision and Boskalis's characterisation of it as such is misconceived. The clause gives Boskalis a relatively short period of 21 days within which to dispute an invoice (although the length of that period is a matter for negotiation between the parties when they enter into the Charterparty). Once that period has expired, Boskalis is under an obligation to pay any undisputed sum to Atlantic Marine, whether they are liable for such sums or not, and disputed sums are left over to be subsequently resolved. Boskalis's obligation to pay any undisputed sum to Atlantic Marine is also subject to their right to subsequently challenge their liability for such sums either by requiring an audit under clause 12(g) and a credit (if appropriate) or...
To continue reading
Request your trial
-
CIS General Insurance Ltd v IBM United Kingdom Ltd
...obligated to pay the invoice within seven days of receipt. 321 A similar provision was upheld as enforceable in The Atlantic Tonjer [2019] EWHC 1213 (Comm) per Sir Ross Cranston: “[32] Those time periods had been negotiated by two commercial parties. There was no suggestion that they were ......
-
Compass Point Holdings, Ltd v Nagico Insurance Company, Ltd
...the Commercial Court) in the case of Boskakis Offshore Marine Contracting v. Atlantic Marine and Aviation LLP (the Atlantic Tonjer) [2019] EWHC 1213 (Comm). 17 In that case the principal issue was whether an invoice “due date” contractual time bar, on its proper construction, precluded cha......
-
The “Atlantic Tonjer” – the first glimpse of the judicial approach to interpreting SupplyTime 2017
...“Atlantic Tonjer” [2019] EWHC 1213 (Comm) is thought to be the first reported judgment on SupplyTime 2017. The decision clarifies the meaning of clause 12(e) of the standard form, which requires Charterers to notify Owners by no later than the due date of an invoice, if they reasonably beli......