Category: English Maritime Cases

Great Eastern Shipping Co. Ltd. v. Far East Chartering Ltd. and Anr (The “Jag Ravi”) – English Court of Appeal, 9 Mar 2012

LETTER OF INDEMNITY – WRONGFUL DELIVERY – Owner Award In upholding the Commercial Court’s ruling of 27 May 2011 (background details previously recapped in The TANKVOYager, Vol. 18, No. 1), the Court of Appeal held that the Owners are protected under an LOI issued by the Receivers to the Charterers. Despite the Owner being unaware of the LOI, the Owner was protected by it on the basis that the Owner was acting as the Charterer’s agents when delivering the cargo. The Appellate Court held that "delivery" is a legal concept that does not mean “discharge” and that the Owner need not physically hand over the cargo to the Receiver; rather Owner’s obligation was fulfilled by surrendering possession and power relating to the cargo when delivering to the port authority. With regard to the public policy argument in the Receiver’s attempt to preclude Owner’s protection under the LOI, the court held that the Owner was incapable of a deliberate wrongdoing as the Owner was unaware of a dispute between the sellers and the intermediate buyer; furthermore, this was deemed a commercial dispute (not a public policy issue).
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Isabella Shipowner SA v. Shagang Shipping Co. Ltd. (The “Aquafaith”) – QBD (Comm. Ct.), 26 Apr 2012

NYPE -- TIME CHARTER -- PREMATURE REDELIVERY -- REPUDIATORY BREACH -- Owner Award Under a time charter contract, the Charterer redelivered the Vessel early and the Owner refused to accept the repudiatory breach in an attempt to affirm the charter party rather than the usual course of action in re-fixing and then claiming damages.
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ENE 1 Kos Ltd. v. Petroleo Brasileiro SA (The “Kos”) – English Supreme Court, 2 May 2012

SHELLTIME 3 -- TIME CHARTER -- UNPAID HIRE -- WITHDRAWAL OF VESSEL -- SECURITY -- BUNKERS -- Owner Award In partially overturning the Appellate Court ruling of 6 July 2010 (recapped in The TANKVOYager Vol. 12, No. 4), which in turn had overturned the Commercial Court ruling of 23 July 2009 (recapped in The TANKVOYager Vol. 15, No. 4) the Supreme Court addressed the issue of time lost discharging Charterer’s cargo after Owner’s termination of the contract necessitated by Charterer’s non-payment of hire. The Supreme Court discussed the concepts of bailment and indemnity.
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VTC v. PVS – QBD (Comm. Ct.), 26 Apr 2012

SHELLTIME 4 -- TIME CHARTER -- CHARTER BREACH -- CANCELLATION -- CARGO TANK DEFINITION -- Owner Award Charterer deducted hire basis a crack in the slop tank necessitating repairs and causing their sub-charterer to cancel a voyage charter. Owner contends that the time charter clause governing tank suitability is restricted to cargo tanks, pumps, and lines, and therefore, does not include the Vessel’s slop tanks.
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Glencore Energy (UK) Ltd. v. Sonol Israel Ltd. (The “Team Anmaj”) – QBD (Comm. Ct.), 26 Oct 2011

EXXONVOY 84 -- CONTRACT OF SALE -- DEMURRAGE -- INDEMNITY -- CAUSE OF ACTION -- TIME BAR -- Buyer Award The relationship between demurrage clauses in the sale contract, underlying charter party, and the relevant commercial background determines what constitutes the accrual of the cause of action for Seller’s claim against the Buyer. The issue that the contract was finalized after the completion of discharge is broached.
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Pacific Basin IHX Ltd. v. Bulkhandling Handymax AS (The “Triton Lark”) – QBD (Comm. Ct.), 25 Jan 2012

NYPE -- TIME-CHARTER -- RISK OF PIRACY -- CONWARTIME 1993 --GULF OF ADEN -- ALLEGED DEVIATION AROUND CAPE OF GOOD HOPE -- Charterer Award Due to the inherent risk of piracy along the contracted route, the Owner instructed the Vessel to change course incurring additional costs for Charterer’s account. The arbitrators held that the Owner acted appropriately. On appeal the Court ruled that the arbitration panel had deconstructed the CONWARTIME 1993 clause improperly and, as such, remanded the case back to the arbitrators for reconsideration on findings of fact.
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Hyundai Merchant Marine Co. Ltd. v. Trafigura Beheer BV (The “Gaz Energy”) – QBD (Comm. Ct.), 25 May 2012

SHELLTIME 3 -- TIME CHARTER -- SPEED WARRANTY -- PERFORMANCE CLAUSE -- UNDERPERFORMANCE -- BUNKER CONSUMPTION -- ALL WEATHER WARRANTY -- Charterer Award The sub-charterer contends that the time-chartered vessel did not meet the contracted requirements for speed and fuel performance basis the construction of the relevant clauses. Such construction is based on the inclusion of an all weather warranty, which the owners claim is not proper in the context of this time-charter.
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Progress Bulk Carriers Ltd. v. Tube City IMS LLC (The “Cenk Kaptanoglu”) – QBD (Comm. Ct.), 17 Feb 2012

GENCON -- ECONOMIC DURESS -- REPUDIATORY BREACH OF CONTRACT -- VESSEL SUBSTITUTION -- Charterer Award Although Owner’s action of substituting the contracted vessel without notifying the Charterer created a repudiatory breach, the Charterer did not cancel the charter. Owner proposed a new vessel and promised to reimburse the Charterer for damages, however they later used economic leverage to gain a better deal during renegotiation.
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London Arbitration 10/11

WORLDSCALE -- PORT EXPENSES -- AMOCO CLAIMS CLAUSE -- TIME BAR -- Charterer Award When Charterer directed the Vessel to a port which did not have an established Worldscale (WS) rate, Charterer advised Owner that port expenses would be for Charterer's account. When Owner's claim for port expenses arrived 155 days after discharge, Charterer rejected the claim stating it was barred under the Amoco Claims Clause.
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London Arbitration 12/11

BALTIME 1939 -- NON-PAYMENT OF HIRE AND BUNKERS -- REPUDIATORY BREACH -- QUANTUM MERUIT FOR COMPLETION OF VOYAGE -- Owner Award When Charterer failed to pay three installments of hire, other expenses and arrange and pay for bunkers under a time charter contract, Owner first informed Charterer that they were suspending performance of the charter until outstanding hire was paid and then three days later, informed Charterer that they accepted Charterer's repudiatory breach. At the time of the repudiatory breach the Vessel was at sea en-route to the disport and in fact Vessel continued on to the disport and discharged Charterer's cargo.
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