154. Jadranska Slobodna Plovidba v Gulf Shipping Line Ltd (The “Matija Gubec”) [1983] 1 Lloyd’s Rep 24

Redelivery – tolerance implied by law ousted by specific provision in the contract

The facts

The vessel was let for a period which was described as follows:

“From the time of delivery for one far east round voyage… charterers have the option of taking the vessel… on 12 months period time charter – 45 days more or less in charterers’ option, … charterers have the option of extending the first period time charter by further 12 months – 45 days more or less in charterers’ option.”

The charterers exercised both options. On the basis that the tolerance of 45 days’ provided was not cumulative for both options i.e. not doubled to allow for 90 days’ tolerance, the vessel was delivered 69 days late.

The charterers attempted to argue that the tolerance period was cumulative and that they therefore had a further 45 days i.e. that the period of the charter was for two years, 90 days more or less in the charterers’ option.

The charterers sought to escape liability for damages for late redelivery on two further grounds:

1. that in addition to the tolerance provided for in the charter, the law implied a further tolerance; and

2. they could not be held liable for damages if the final voyage orders were given in the reasonable expectation that the vessel would complete the voyage within the allotted time.

Findings

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

Staughton J found against the charterers on the cumulative tolerance point on the authority of Gulf Shipping Lines Ltd v Compania Naviera Alanje SA.

He held that the law was well settled that where the parties provided their own period of tolerance, the law did not imply a further period of tolerance. In this regard he relied once again on the Gulf Shipping Lines case.

He declined to decide the third point, namely, at which stage the legitimacy of the final voyage was to be determined as he considered that a finding on this point was not necessary. He indicated, however, that the time for determining the legitimacy of the final voyage was not the time when the charterers had subjectively made their decision.

Commentary

The judgment contains a juxtaposition of the leading cases and demonstrates a clearly held, if somewhat oversimplified, view of the difference in the speeches of Lord Reid and Lord Morris in the London Explorer.

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