Reported cases

The demise of the OW Bunker group of companies in November, 2014, provoked litigation worldwide. In this industry leading case the Club supported the owner of the RES COGITANS in its efforts to avoid having to pay twice for fuel supplied to the ship. This culminated in a decision by the Supreme Court of England & Wales in favour of the bunker supplier.

The Member entered in to shipbuilding contracts with a yard and paid several instalments of the contract price. The yard had established bank refund guarantees in respect of those payments, in the event the Member was entitled to rescind, cancel or terminate the contract. Neither the contract nor the guarantees envisaged the yard entering in to statutory insolvency protection and, when this occurred, the Member sought payment under the guarantees.  The bank resisted the Member’s demands, arguing on strict interpretation that insolvency was not specified as an event that triggered liability under the guarantees...

In this case the sub-charterer of the ship argued that the requirement for a disponent owner to seek permission from a head owner to transit the Gulf of Aden evinced an intention not to perform its obligations under the relevant charter...

Following a major collision in 2009 the Member declared the ship to be a constructive total loss (“CTL”) and terminated its charter with Bunge. Bunge disputed that the ship was a CTL and challenged the Member’s termination of the charter. The Member brought a claim in London arbitration proceedings for a declaration that the charter was frustrated and Bunge counter-claimed for damages of over $9 million...

The English High Court has today ruled (“The SALDANHA” – [2010] EWHC 1340 Comm) that a ship which was seized by pirates early in 2009 remained on-hire for the period of the detention. The case was brought by a Member entered in the Association.

The English High Court considered whether the NYPE off-hire clause applied when a ship was detained by pirates. The charterer had placed the ship off hire for the duration of the detention, but failed to persuade the court that the piracy and hostage event should fall within the off-hire clause.  The court pointed out that parties should expressly provide for seizure events if they wished their rights to be certain...

The Court of Appeal considered the owner’s claim for demurrage under an amended Shellvoy 5 charter with Shell additional clauses. A dispute arose because the ship was not granted free pratique within 6 hours of issuing notice of readiness. Although a second notice of readiness was given when the ship was granted free pratique, when the owner submitted its demurrage claim it did not include the second notice of readiness in the supporting documents. The court held that the owner’s claim was time barred and made clear the importance of fully complying with time limit provisions in a charter...

Following loading at Yokohama the charterer instructed the ship to proceed to Shanghai. Meanwhile the ship sustained damage after colliding with a breakwater in and proceeded to Hong Kong to discharge all of her cargo and then to a repair yard in China. The owner accepted that the ship was off-hire during the delay following the incident however the initial routes from Yokohama to Hong Kong and Shanghai were identical and the owner claimed that the ship came back on hire for a period following departure from Japan. The London arbitration tribunal found in favour of the charterer however the award was overturned on appeal to the English High Court.  The court concluded that the important question was not what the ship was doing at a particular moment but what instructions she was operating under. Proceeding in the general direction of a port was not the same as proceeding to the designated port and the ship was off-hire as a result...

During charter negotiations, the charterer sought to include a requirement that the owner obtain approval for the ship under the RightShip private vetting scheme but this was declined by the owner. Several years later the charterer sought to argue that RightShip approval was so pervasive in the dry bulk trade that it was an unspoken contractual requirement...

The ELLI was chartered out a on a long term basis. During the course of the charter the MARPOL accelerated single hull phase out regulations came into force. The ship was a partially, but not fully double sided oil tanker, and under these regulations, was no longer legally able to carry fuel oil. As a result, the charterer paid a reduced rate of hire for the balance of the charter period, and brought a claim for lost profits.