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Euronav NV -v- Repsol Trading SA (m.t. “MARIA”): When time zone matters

Details

In a judgment handed down on 24 September 2021 (Euronav NV -v- Repsol Trading SA (mt MARIA) [2021] EWHC 2565 (Comm), the High Court provided useful guidance on contractual time-bars involving multiple time zones: in the absence of a contractual provision to the contrary, the date and time when the triggering event took place will be determined on the basis of local time at the place of such event. 

The Facts

The factual background of the case is straightforward and common:

  1. Euronav NV (‘Owners’), the owners of the “MARIA” (‘Vessel’) chartered the Vessel out to Repsol (‘Charterers’) on a charterparty in the Shellvoy 6 form (‘Charterparty’). The contractual trip was for carriage of a cargo of crude oil from Brazil to Long Beach, California.
  2. Under cl. 15(3) of the Charterparty, Owners had ‘30 days after completion of discharge’ to tender notice of a demurrage claim. 
  3. The Vessel spent almost 152 hours on demurrage at the loading port, leading to a claim of approximately US$490,000.
  4. Hoses at the discharge port were disconnected at 21:54 PST on 24 December 2019/05:54 GMT on 25 December 2019/06:54 CET on 25 December 2019. PST was the local time zone at the port of discharge, but CET was the time zone where both Owners and Charterers were based.
  5. Owners tendered notice of their demurrage claim on 24 January 2020. 

The question was what time zone would apply to the commencement of the time-bar: if PST was the proper time zone, then Owners’ claim notification was out of time.

The Judgment

Following an elucidating discussion on computation of time and the meaning of ‘day’ (much of which is obiter and was agreed between the parties), Mr Justice Henshaw (‘Judge’) sided with Charterers. The Judge held that time is a local concept and therefore, absent express agreement in the contract, the day of an event should normally be determined using local time at the place where the event occurred. In the Judge’s reasoning, this solution avoids confusion and uncertainty, and tallies with the parties’ expectations.

Key points to take home

There are a number of lessons to take away from the judgment: 

1. Act sooner rather than later: usually there will be no stipulations as to the appropriate time zone for the purposes of calculating time bars. Where contractual limitation periods are tight (eg in demurrage or bunker claims), notification of claims should not be left for the last two days. Borderline cases such as this can (and should) be avoided by taking a pro-active approach.

2. Meaning of ‘day’: although not strictly part of the Judge’s reasons, para. 25 of the judgment contains a useful summary of principles for calculating time in contracts.

a. When computing a period of time within which a certain thing must be done, the first day is not ordinarily counted.

b. In the absence of any contrary indication, a ‘day’ means a calendar day and not 24 consecutive hours.

c. Except when it is necessary to settle which of two acts done on the same day was done first, the law does not recognise fractions of a day. 

3. Analogies between legal concepts are not always successful: The Judge dismissed an attempt by Owners draw a parallel between grace periods in anti-technicality clauses and time-bar provisions for demurrage claims. A mere similarity between two legal concepts is not likely to persuade the court.  

4. There may be some room for distinguishing the judgment in cases of even tighter deadlines: Owners argued that the court’s preferred computation method deprived them of the benefit of some hours due to time zone differences. The Judge held that this ‘loss’ did not make any difference in the context of a 30-day period, and that it was “not germane to consider whether the position could be different if the notice period were a much shorter one [eg two or three days]”. It will be interesting to see how this passage is treated in the context of, for example, seven-day limitation periods.