The operations of the bunker barge involved its berthing at a filling facility operated by British Petroleum (“BP”) but filled with marine fuel obtained from Chevron’s storage facility, and then delivered to vessels in the port. Within two weeks of its operation, a discrepancy arose with respect to the amount of marine fuel pumped into the barge as measured by BP’s on-shore fuel meter readers and those on the barge, resulting in a net loss between that loaded and that delivered to vessels in the port. While Chevron advised Unical that it considered Unical liable for those losses, both parties cooperated in undertaking a series of tests to identify the source of the inaccuracies in meter readings. After more than a year of testing, without any result, Chevron finally demanded payment from Unical for the discrepancy, though it only initiated arbitration proceedings a further five months later. Unical raised a special defence to the effect that a significant portion of the claim was time-barred as a result of the inclusion of the Hague-Visby Rules in the charter party, which, according to Art III, r.6, discharges a ship from all liability in respect of goods unless the claim is brought within one year of their delivery or the date when they should have been delivered. While Chevron disputed the application of Art.III, should it be applied, the application before the court was for an order that the time required to bring suit under the charterparty be extended pursuant to the Arbitration Act 1965, s.8. Section 8 provides that, where an arbitration agreement includes a time bar, the court, if it is of the opinion that in the circumstances of the case undue hardship would otherwise be caused, may extent the time for such period as it considers proper, but subject to the provision of any law limiting the time commencing arbitration proceedings.

Decision: Application allowed.

Held: (1) The raising of the time bar in the arbitration proceedings is sufficient to enable the court to determine the issue and in doing so it must proceed on the basis that Unical’s defence is a good one. That is, while the applicant disputes the application of the time bar,