376. NYK Bulkship (Atlantic) NV v Cargill International SA (the “Global Santosh”) [2013] EWHC 30 (Comm); [2014] EWCA Civ 403, [2016] UKSC 20

NYPE – off-hire clause – proviso – whether sub sub charterers agents of charterers

The Facts

Disponent owners chartered the vessel to charterers for a one time charter trip from Sweden to Port Harcourt, Nigeria.  The vessel was sub chartered on one or more voyage charters to carry a shipment of cement.

The head-charter contained the following off-hire provision:

“Should the vessel be captured or seiz[ed] or detained or arrested by any authority or by any legal process during the currency of this Charter Party, the payment of hire shall be suspended until the time of her release, unless such capture or seizure or detention or arrest is occasioned by any personal act or omission or default of the Charterers or their agents. Any extra expenses incurred by and/or during the above capture or seizure or detention or arrest shall be for Owners’ account. ”

Sellers, as sub-sub-charterers, sold the cement to buyers who were also the notify party in Port Harcourt, on C+FFO terms.  Pursuant to the contract of sale, buyers were liable to sellers for demurrage if unloading was delayed.

Berthing of the vessel was delayed for just over 2 months.  The delay was caused by congestion partly due to failure of the buyers’ equipment.  Based on the delay, sellers obtained a Federal High Court Order arresting the cargo to secure a demurrage claim and prohibiting any attempt to remove the cargo from the vessel.  “By an obvious mistake” the vessel was also arrested.

Thereafter a settlement was reached and the cargo discharged.

Charterers invoked the off-hire clause and withheld hire for the period that discharge was prohibited.  Owners contended that the proviso in the off-hire clause applied in that the off-hire event was occasioned by an act or omission of buyers and/ or sellers, both of whom were charterers’ agents for the purposes of proviso.

 Findings

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