Clause 15 of SHELLTIME4 provides as follows:

“Charterer shall accept and pay for all bunkers on board at the time of delivery, and Owners shall on redelivery (whether it occurs at the end of the charter or on the earlier termination of this charter) accept and pay for all bunkers remaining on board, at the price actually paid, on a “first-in-first-out” basis. Such prices are to be supported by paid invoices”.

In Eitzen Bulk A/S v TTMI Sarl [2012] EWHC 202 (Comm), the High Court considered the issue of whether the words “price actually paid” mean the price paid by the party seeking reimbursement under the clause, or the price paid when the bunkers were stemmed. Where bunkers are stemmed by the party seeking reimbursement, these two approaches amount to the same thing. However, they are likely to differ where a party buys bunkers upon delivery or redelivery under one charterparty and then delivers or redelivers the same bunkers under another charterparty.

It was held that the words “price actually paid” referred to the price paid when the bunkers were stemmed. It was held to be very unlikely that an owner could be taken to have agreed to pay a price for bunkers on redelivery over which he would have no control, which did not necessarily reflect either the market price or the actual costs paid to a bunker supplier. In addition, the “first in first out” requirement of clause 15 supported the conclusion that “price actually paid” referred to the stemmed prices.

It is notable that in giving judgment, Mr Justice Eder specifically noted that clause 15 is badly drafted and potentially open to more than one interpretation. As such, this issue may well come before a tribunal or the courts again.