Participants in the Shipping and the Law conference have explored a legal dispute in which an owner wants to end a charterer’s contact and claim damages over being paid a minute late.
The case, which will be presented to London’s Court of Appeals next June, was presented to attendees at the event in Naples, Italy, by Sir Bernard Eder, a former international judge with the Singapore International Commercial Court and currently an Arbitrator at Essex Court Chambers in London.
He described this “difficult question” as “vital to the way that owners and charterers conduct their business”.
The audience at Shipping and the Law, under way on 15-16 October, was canvassed for their opinion, giving a majority view after his presentation against the owner.
Sir Eder explained that the owner claims a contractual right to end the contract and claim damages, while arguing that a time provision means that “if the charterer does not comply, the owner can bring the contract to an end even if one minute late”.
In contrast, the other party claims there is no general rule that time is of the essence, he added.
Further, the existence of an “anti-technicality clause”, giving the charterer an extra few days to pay, provides “a special reason” for the owner to end the contract and claim damages if the charterer still fails to pay, according to owner’s party, said Sir Eder.
This party also says that the condition (to cancel and claim damages) is commercial certainty, and that for this to exist, the charterer must pay on time.
Yet the second party argues “certainty is achieved by giving the owner… the right of withdrawal, but commercial certainty does not require that the owner be entitled also to claim damages”, said Sir Eder.
Each party has put forth its views in documents of at least 100 pages, he added.