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Time charter – redelivery on short notice – measure of damages

The Facts

The vessel was let on an amended NYPE form for a period of minimum 4 and maximum 5 months, plus 15 days in charterers’ option.

Clause 60 read “On redelivery charterer has to tender 20/15/10/7 days approximate and 5/3/2/1 days definite notice”.

Due, in particular, one major mishap, what turned out to be the final voyage took longer than expected. This led charterers to discard plans for a next voyage and to give notice of redelivery which was premature by 12 days.

Instead of claiming damages based on the actual effect of the premature notice i.e. comparing their actual position with what it would have been if full notice had been given, owners worked backwards and claimed damages on what they could have earned with the vessel if full notice (in this case 20 days) had been given prior to actual notice of redelivery.

Proceeding on this basis, they claimed the difference between the charter rate and the prevailing rate on the very date of premature redelivery.

Charterers contended that owners should have claimed the difference between the charter rate and what owners could have earned if proper notice had been given i.e. 12 days after the date of actual notice of redelivery.


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Charter Party Casebook