129. Oceanic Freighters Corporation v M.V. Libyaville Reederei Und Schiffahrts G.M.B. H. (The “Libyaville”) [1975] 1 Lloyd’s Rep 537

Withdrawal – owners failing to adhere to anti-technicality clause – not entitled to withdraw

The facts

The vessel, a RO/RO car carrier, was let on the NYPE form.

The charter contained a clause giving the charterers the right to deduct disbursements and cash advances from hire and an anti-technicality provision requiring the owners to give 2 bank working days’ written notice to rectify any default in payment.

During the course of the charter a dispute arose between the parties regarding the capacity of the car carrier. The charterers claimed to be entitled a reduced hire based on their contention of a reduced capacity.

A test carried out during the course of the charter confirmed the charterers’ assessment of the vessel’s capacity. Nevertheless, the owners withdrew on the basis of short payment.

The owners failed to give the charterers the 2 working days notice as required by the anti-technicality clause.

The arbitrator, Mr Cedric Barclay, decided in favour of the owners and stated his award in the form of a special case for the Commercial Court.

During the course of the arbitration which ensued, the owners managed to prove their version of the vessel’s capacity.

Findings

Mocatta J held that the owners were not entitled to withdraw having failed to comply with the anti-technicality provision.

He decided assorted questions as follows:

1. the charterers were not entitled to set off liabilities as opposed to actual disbursements against hire;

2. the charterers were not entitled to set off cash advances to the master against hire which had been made shortly before the due date but not brought into reckoning with their payment.

3. the owners were estopped from relying on short payment for the greater period of the charter insofar as they accepted payment without returning same. The fact that they received payment under protest did not avail them as this was tantamount to approbating and reprobating. The courts’ finding on this point did not assist the charterers insofar as a shortfall in the payment of hire remained.

The last payment of hire was not returned immediately but only after about 2 weeks after certain deductions had been made. The court found that there was no evidence that it would have been feasible for the bank, acting on behalf of the owners, to refuse payment. Should this question have been determinative, he would have referred the matter back to the arbitrator.

The anti-technicality clause contained the proviso that charterers should not have “intended to fail” to pay. Although the deductions made by them were deliberate, Mocatta J found that what was required by the proviso was that charterers should had the objective not to comply with the payment provisions of the charter.

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