Redelivery – charterers not entitled to give instructions for final voyage where an overrun is reasonably anticipated
The facts
The vessel was let on the Baltime charter form for a period of 6 months, 20 days more or less in charterers’ option.
Prior to the expiry of the charter, the charterers entered into a voyage charter with a third party where the reasonable expectation was that the vessel would be delivered two weeks late.
Despite the owners’ objection the charterers persisted with their sub-charter and the vessel was sent by the owners on the final voyage.
In the event, the vessel was delivered eight days late.
The charterers contended that on a true interpretation of the charter, the redelivery date was an approximation and that a reasonable overrun was impliedly agreed upon between the parties.
Findings
The two arbitrators appointed agreed with the charterers’ contention and stated a special case for the Commercial court.
Mocatta J, relying principally on Watson Steamship Co v Merryweather and Co, confirmed the arbitrators’ finding.
The Court of Appeal (Lord Denning MR and Browne LJ) overturned the decision in the Commercial Court.
Their reasoning was that while, in the ordinary course, there was some flexibility with regard to the redelivery date in time charters, where a range of dates as provided within which the vessel could be redelivered, the final date was the cut-off date and redelivery after that was a breach of contract.
Orr LJ disagreed, basing his dissent on certain dicta in the London Explorer.
Commentary
The arbitrators’ award which is set out in the report indicates a potential willingness on their part to award special damages i.e. loss of profits on a further fixture.
In the event, the arbitrators found that there was no breach in the first place and the remark concerning special damages was only mooted as a possibility. The mention of such possibility casts doubt on the supposed generally accepted state of the law as found by the House in Achilleas.
It is trite that the owners are entitled to refuse to send their ship on an illegitimate last voyage.
In this case where the owners acceded to the charterers’ illegitimate request, an argument of waiver could have been raised. The fact that such argument did not occur to either the counsel representing the parties or the judges is a demonstration of the difficulty in finding the correct juridical niche for the charterers’ orders. Generally, the charterers have the right to issue orders to the master. The master may only refuse if the order is patently a breach.
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