590. Quiana Navigation SA v Pacific Gulf Shipping (Singapore) Pte Ltd (the “Caravos Liberty”) [2019] EWHC 3171 (Comm)

Withdrawal – BIMCO non-payment for hire clause not deployable for historic debt 

The facts

The vessel was leton an amended NYPE form incorporating the BIMCO non-payment of hire for charterparties, entitling owners to withdraw the vessel for failure to pay hire timeously.

Hire was US$9000 per day payable every 15 days (ie US$ 130 652) in advance. 

Charterers underpaid by US$ 8000 on the 4thinstalment.

Charterers paid 130 652 on the 5thand 6thinstalment dates thus failing to purge their default.

Owners invoked the withdrawal clause on payment of the 6thinstalment.

Charterers failed to pay the shortfall and owners purported to withdraw.

Findings

Mark Hamsher, Alistair Schaff QC and David Owen QC held the owners to be in repudiatory breach on the basis that the BIMCO clause could not be invoked for historic debt. 

Cockerill J upheld the panel after leave to appeal had been given by Teare J.

Discussion

Argument centred on the meaning of “hire” in the gateway portion of the clause: “if hire is not received …”. 

Owners argued in vain that “hire” meant the full amount owing not confined to the stipulated instalment. 

Possibly, the owners should have argued the trite principle that the creditor is entitled to allocate payment to the oldest debt. On this analysis, there would have been short payment of hire in the sense accepted by the Court on both the 5thand 6thinstalments.

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