In this reference, the tribunal had to consider what amounted to a valid notification under the Inter-Club NYPE Agreement 2011 (the ICA).
The dispute arose under a charterparty on the NYPE form incorporating the ICA and a clause paramount dated 22 May 2013 for the carriage of engine equipment from the United States to North Africa.
Loading was completed on 5 January 2015 and Charterers issued twelve bills of lading with Charterers as carrier on their house form naming "G" as shipper and "to the order of S" as consignee. During transit, the crew accidentally pumped water into a hold causing damage to part of the cargo.
On that day, Charterers emailed Owners stating:
"As you know there has been an accident on [the vessel] where the crew have pumped the seawater into the cargo hold instead of pumping it out. Therefore we hold the Owners fully liable for all claims and costs arising from the crew's negligence... Please acknowledge receipt of this notification."
Owners replied "receipt of your notification hereby acknowledged."
The cargo was delivered around 8 March 2015 and G notified Charterers of its intention to claim against them as contractual carrier.
In the meantime, correspondence was passed by G to Charterers and by Charterers to Owners. Extensions of time were granted by Charterers to G and by Owners and their P&I Club to Charterers.
However, at the time of the reference, no claim had been formally presented by G against Charterers. G had not quantified its claim or provided any details of the claim . The dispute between Owners and Charterers in the reference was whether after the expiry of 24 months from the date of cargo delivery, Charterers would be time-barred against Owners in relation to G's intended cargo claim under the ICA.
Clause 6 (time bar) of the ICA provides:
"Recovery under this Agreement by an Owner or Charterer shall be deemed to be waived and absolutely barred unless written notification of the Cargo Claim has been given to the other party to the charterparty within 24 months of the date of delivery of the cargo or the dates the cargo should have been delivered, [or 36 months where the Hamburg Rules apply]. Such notification shall if possible include details of the contract of carriage, the nature of the claim and the amount claimed."
Owners' position was that Charterers had failed to give written "notification" of the cargo claim within the prescribed timeframe under clause (6) of the ICA and therefore any indemnity claim Charterers had against Owners with regard to G's claim was by then waived and absolutely barred. Owners argued that the information passed through the contractual chain (as above) did not constitute "written notification of the Cargo Claim". As to the time extensions, Owners maintained that these extensions were not for giving "written notification" within the meaning of clause (6) of the ICA regarding the time for bringing a cargo claim under the Hague Rules etc.
The tribunal found that a "notification" did not have to refer to the ICA, either expressly or impliedly, given that the application of the ICA and its recourse provisions were compulsory if the ICA were applicable. Clause (6) only required a simple written notification made to the other party.
The tribunal further considered that for the notice to be effective, the written notification had to include "if possible" details of the contract of carriage, the nature of the claim and the amount claimed, namely the requirements referred to in the second sentence of clause (6).
The tribunal drew a distinction between the first sentence of the clause which stated that failure to give notice in writing within 24 (or 36 months) rendered the claim waived and time barred and the second sentence which did not include any such wording. Even though in the second sentence "shall include" was used, the notifying party was required to provide these details "if possible", without threat of any penalty. In addition, the words "such notification" in the second sentence indicated that the notification remained a notification under clause (6) whether the additional information was included or not.
In the circumstances, the tribunal was of the view that a notification given in writing to the other party within the relevant timeframe, without the additional information that was to be included "if possible", was valid. The difference in wording between the two sentences of clause (6) was material meaning that the waiver / barring provision could only be read as applying to the absence of written notification (first sentence) but not to the absence of details which should be included in the notification (second sentence).
However, the tribunal noted that a breach of the obligation to provide the various details "if possible" would give rise to a right to damages, though it would be unlikely for a party to establish a loss.
In the current reference, the tribunal was of the view that the exchanges at the date of the incident constituted a valid written notification of a claim to be made by Charterers against Owners in respect of cargo damage caused by water ingress. Therefore, the indemnity claim was not time barred. The tribunal further found that Charterers were in breach of their obligation under the second sentence to provide sufficient details. That breach entitled Owners to damages, though any loss was unlikely.
Even though the tribunal did not decide the time extension point in light of its above conclusion, the tribunal noted that the idea of a time extension to give an ICA notification was an "oddity", since all that was required was notice in writing of the cargo claim and therefore there should be no need for an extension.
This arbitral decision indicates that for a valid ICA notification all that is required is notice of the cargo claim to be given in writing to the other party. There is even no need for reference to the ICA to be made. However, the parties would be advised to provide, where possible, details of the contract of carriage, the nature of the claim and the amount claimed, as doing so would avoid potential disputes, as arose in this case, and also there could, possibly, be a damages claim, if the party receiving the notification (but not the details) has suffered loss.
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