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Notice of ETA in voyage charterparty held to be a condition

The Facts

Charterers, a company in the Cargill / Tradax Group sold wheat (150,000 long tons, 10% more or less) to Iraq, delivery to be staggered over six months.

To carry out their obligations under the contract of sale, charterers entered into an affreightment agreement and four individual charterparties with the vessel owners.

Each charterparty contained an obligation to carry 35,000 / 40,000 tons, 10% more or less in owners’ option.

A dispute arose with the third charterparty which stipulated a laycan period of 24 days with 30 / 20 days’ notice of ETA.

Owners had the option of nominating multiple vessels.

The first vessel was nominated within the contractual parameters and carried 21,700 long tons. Owners were thus obliged to nominate a further vessel or vessels to carry the remaining 9,800 minimum (35,000 less 10% = 31,500 – 21,700 = 9,800) parcel of wheat.

In breach of their obligations, owners made four nominations, none of which complied with the contractual notice provisions. For good measure, the ETA also fell outside laycan spread.

Charterers rejected the nominations and entered into a replacement fixture for 13,650 tons at double the freight rate.


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Charter Party Casebook