Supplytime 2017. Pay now, counterclaim later.

Boskalis Offshore Marine Contracting BV v Atlantic Marine and Aviation LLP (The “Atlantic Tonjer”) [2019] EWHC 1213 (Comm) is the first case to consider Supplytime 2017. A multi-purpose support vessel was chartered by disponent owners, Atlantic Marine, to Boskalis for 21 days on Supplytime 2017 form. Atlantic Marine rendered invoices for hire, accommodation, meals and other services which Boskalis did not pay on the grounds that the largest item in dispute was not due because the vessel was offhire throughout.

Clause 12(e) of Supplytime 2017 provides:
“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…”
In this case the due date was 21 days.
Sir Ross Cranston, acting as a judge of the High Court has held that clause 12(e) does debar charterers from raising defences against owners’ invoices if and to the extent that they have failed to notify owners that they believed those invoices to be incorrect because of those defences by the due date of those invoices. Clause 12(e) is not a time bar provision. It gave Boskalis a relatively short period of 21 days within which to dispute an invoice and once that period has expired, Boskalis came under an obligation to pay any undisputed sum to Atlantic Marine, whether they were liable for such sums or not, with disputed sums left over to be subsequently resolved. Boskalis’s obligation to pay any undisputed sum to Atlantic Marine was also subject to their right subsequently to challenge their liability for such sums either by requiring an audit under clause 12(g) and a credit (if appropriate) or by way of a counterclaim.

The clause was clear and unambiguous. “A reasonable person with the background knowledge available to the parties at the time of the contract would understand that invoices had to be paid within 21 days of their being received. namely, that charterers are barred from disputing the payment of invoices unless done within the 21 days referred to in the contract.”

If charterers reasonably believed that there was an error in the invoice they could withhold payment of the disputed amount by notifying the owners under the clause within the period agreed in the contract. Charterers also had the audit rights under clause 12 (g) to reclaim amounts paid through accounting-type errors (wrong hire rate, wrong number of meals and so) up to four years ahead, as well as the right bring a counterclaim, for breach of contract or for unjust enrichment, if they had paid sums which they later believed were not properly payable.

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