Is  a ‘Waiting for orders’ claim a demurrage claim?

The answer to this question matters because of the documents required under a time bar clause for “demurrage claims”.

In The Ocean Neptune [2018] EWHC 163 (Comm) the vessel was chartered for a voyage from Taiwan to three Australian discharge ports on ExxonMobil VOY2005 form, and the Lukoil International Trading and Supply Company Exxonvoy 2005 clauses dated 30.05.2006 (“the LITASCO Clauses”). Clause 2 of the Litasco clauses provided a requirement for demurrage claims to be provided with supporting documentation within 90 days of completion of final discharge, with a similar provision for other claims but with a time limit of 120 days. In addition cl. 2(b) specified the types of documentation that had to be required for a demurrage claim.  Clause 4 of the Litasco clauses was a ‘waiting for orders’ clause which provided “If charterers require vessel to interrupt her voyage awaiting at anchorage further orders, such delay to be for charterers’ account and shall count as laytime or demurrage, if vessel on demurrage. Drifting clause shall apply if the ship drifts.”

At Gladstone, the first discharge port, the vessel berthed but then shifted back to the anchorage, remaining there for more than a month until charterers ordered the vessel to sail to Botany Bay.  The reason for the delay at Gladstone was that the receivers, Caltex, refused to take delivery of the cargo on the grounds that it was alleged to be contaminated/off specification. Owners initially presented this delay claim as a demurrage claim, but then reformulated it as a claim under cl. 4. The Tribunal held the Owners’ demurrage claims were barred because they failed to include a statement of facts for the loading port and the discharging ports, countersigned by the terminal, or if it was impossible to obtain such a countersignature, a letter of protest from the Master, as required by cl. 2(b). However, the Tribunal found that cl.2(b) did not apply to the claim for delay under cl.4. Charterers appealed against the finding.

Popplewell J allowed the appeal. The claim under clause 4 was a demurrage claim. Demurrage was defined by clause 13(d) of the ExxonMobil VOY2005 form which provided that demurrage was to be paid for all time by which the allowed laytime “is exceeded by time taken for loading and discharging and for all other Charterer’s purposes and which, under this Charter, counts as laytime or as time on demurrage.”  Clause 4 provided that the delay caused by waiting at anchorage shall “count as” used laytime or demurrage. Demurrage was not limited to a claim where charterers had exceeded the allowed laytime by the time taken for loading and discharging. The waiting time was, therefore, time taken for Charterers’ purposes which under the charter counted as laytime or demurrage.  This was to be contrasted with other clauses in the charter which provided merely that compensation for delay caused by breach would be at the demurrage rate.