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notecheck32.png Laycan. Cancelling date achievability. The Kriti Filoxenia [2015] EWHC 997 (Comm)

The owners let their vessel to the charterers under amended BEEPEEVOY 3 form, which provided in clause 17 that the vessel is entitled to give notice of readiness to load at 0600 hours on the first day of laycan period and if the vessel is not ready to load by 1600 hours on the cancelling date then charterers have the option of cancelling the charterparty. Charterers exercised their option under clause 24 and gave a revised order nominating Batumi as the first loading port. Next day, while the vessel was on her way to her first load port, charterers cancelled the charterparty invoking their option under clause 17.2, "as ETA advised by owners is outside laycan".

Read more: Demurrage claim.
notecheck32.png Statement of Facts or Port Log? Kassiopi Maritime Co Ltd v Fal Shipping Co.Ltd (The Adventure) [2015] EWHC 318 (Comm)

The owners claimed demurrage (21 days 13 hours and 48 minutes) in the amount of US$ 364,847.78 as a result of delays at both the load port, Sitra, and the discharge port, Port Sudan.
The Tribunal crucially found that a number of the Letters of Protest at Sitra referred to delays or stoppages "recorded in the vessel’s port log/time sheets." The Tribunal held that the Owners had failed to provide the following documents to satisfy requirements of both Clause 19.7 and Clause 20 of BPVOY4.

Read more: Demurrage claim.
notecheck32.png The Court of Appeal dismissed charterers appeal on ITL clause issue in Trafigura Beheer BV v Navigazione Montanari SPA [2015] EWCA Civ 91

Longmore LJ underlined that following decision in The Olympic Brilliance the ITL clause serves to provide a simple solution in notoriously difficult oil shortage claims, albeit such claims should arise only from a normal voyage and when there is no doubt that the loss is otherwise unexplained.
But even if the charterer were right about the construction of the ITL clause, it was nonetheless found by the Court of Appeal that loss by piracy is excluded by one or other of the Hague-Visby Rules which were incorporated into the charterparty by clause 46 of Beepeevoy 3.

Read more: ITL claims should arise only from a normal voyage and is subject to the Hague Rules exceptions.
notecheck32.png The High Court ruling on claim for "container demurrage" in MSC Mediterranean Shipping Company SA v Cottonex Anstalt [2015] EWHC 283 (Comm)

Leggat J at para 115: The ability to claim demurrage in a significant category of cases in an amount which is extravagantly high in comparison with the sum that would be required to compensate for loss caused by the breach signifies that the payments cannot be justified as a pre-estimate of the loss. Nor can I see any other commercial justification for such an arrangement. Making every allowance for the advantages of certainty and avoiding disputes, it is impossible to justify on compensatory grounds a provision which can require payments without end for so long as the Carrier chooses to keep the contract in force. Such a clause could only be explained as serving the function of penalising breach of the contract.


notecheck32.png FOB Seller’s right to reject goods.

In Aston FFI (Suisse) SA v Louis Dreyfus Commodities Suisse SA [2015] EWHC 80 (Comm) it was held that subject to the terms of any particular contract, an FOB buyer may be able to reject the goods even if the documents are contractually compliant. In other words FOB Buyer can reject goods without reliance on a certificate of quality which complies with the documentary requirements set down in the payment terms of the contract. Clear and unambiguous expression required for such certificate to be determinative of the quality of the goods, such that the absence of such contractually compliant certificate would, in effect, preclude Buyers from rejecting the goods for relevant disconformity.

Read more: Sale Contracts. FOB Terms..
notecheck32.png When contract provides for the payment on breach of a sum which significantly exceeds the greatest loss. Parkingeye Ltd v Beavis [2015] EWCA Civ 402.

The cases all concerned clauses stipulating for sums payable on breach of contract and since the contract in each case was of an ordinary commercial nature it was possible to take only two views of the clause: either it was a genuine pre-estimate of damage or a conventional amount agreed upon to dispense with the need to ascertain damages in circumstances where they would be difficult to quantify, in which case it would be enforceable as liquidated damages; or it far exceeded any loss which the injured party could conceivably suffer, in which case it was regarded as being extravagant and unconscionable and therefore unenforceable as a penalty.

Read more: Penalty.
notecheck32.png The Hague Rules: concept of a sound system. Volcafe Ltd & Ors v Compania Sud Americana De Vapores SA [2015] EWHC 516 (Comm).

In Volcafe Ltd & Ors v Compania Sud Americana De Vapores SA [2015] EWHC 516 (Comm) Donaldson J. decided a question whether the carrier employed a sound system of stowing of cargo of coffee beans in bags. The bags in question were sent by several consignments in a total of twenty dry and unventilated 20 ft containers from 1 January 2012 to 6 April 2012 from Columbia to North Europe. It was discovered on delivery that each of the consignments and all of the containers save two have suffered some degree of damage from condensation. …

Read more: The Hague Rules, Article III (1)(2). The concept of a sound system.
notecheck32.png The Court of Appeal set aside judgement of Teare J in Gard Marine & Energy Ltd v China National Chartering Co Ltd (Rev 1) (Ocean Victory) [2015] EWCA Civ 16

Shipping – Bareboat Charterparty – The demise charterers had insured the vessel for the respective rights and interests of themselves and the owners – Vessel attempted to leave port in adverse weather conditions – While leaving the port and the vessel was driven back onto the breakwater wall, and subsequently became a total loss – Insuring companies took an assignment of both the owners’ and the demise charterers’ rights in respect of the grounding and the total loss of the vessel – The Insurers claimed from Charterers damages arising out of the loss of the ship – Whether as a matter of law in the circumstances there had been a breach of the safe port warranty – Whether, on the true construction of the terms of the demise charterparty, the demise charterers, who had insured the vessel at their expense, had any liability to the owners in respect of insured losses, notwithstanding that such losses may have been caused by a breach of the safe port warranty.

Read more: Gard Marine & Energy Ltd v China National Chartering Co Ltd (Rev 1) (Ocean Victory) [2015] EWCA Civ 16.
notecheck32.png CTL and cost of repairs. Suez Fortune Investments Ltd v Talbot Underwriting Ltd & Ors Re: M/V Brillante Virtuoso [2015] EWHC 42 (Comm) (15 January 2015)

It is always a question of fact dependent upon all the circumstances of the case, where the prudent uninsured owner would have carried out the repairs.

Whilst cost is always an important factor, it cannot necessarily be determinative, given the presence of other factors, such as are present in this case, including the need for cleaning before any long tow, the costs, time and risks of a long tow, the reputation of the rival yards, the risk of delay in those yards and the difficulties of repositioning the vessel for gainful employment after repairs have been undertaken.


notecheck32.png Who was party to the charters? Navig8 Inc v South Vigour Shipping Inc & Ors [2015] EWHC 32 (Comm) (16 January 2015)

Shipping – Demise Charters – Timecharter – Who are parties to contract – Four time charterparties fixture – Management company signed charterparties as "Disponent Owners Signatory in Contrac" – Whether the Managers intended that the charterparties were fixed on behalf of the registered owners - Whether the phrase "disponent owners" was used in the sense of the Managers being a manager of the vessels with power to fix charterparties on behalf of the Registered owners – Whether the Registered owners gave authority to the Managers to fix vessels.

Read more: Navig8 Inc v South Vigour Shipping Inc & Ors [2015] EWHC 32 (Comm).

News Archive @ 2014

notecheck32.png The High Court defined damages for redelivery earlier than the owners were entitled to expect. The Great Creation) [2014] EWHC 3978 (Comm)

When charterparty provides for redelivery notices ("on redelivery charterers to tender 20/15/10/7 days approximate and 5/3/2/1 days definite notice") failure to comply with this requirement will not be a condition precedent to redelivery, but if vessel prematurely redelivered, i.e. redelivery earlier than the owners were entitled to expect, then such redelivery will constitute a breach of charterparty, see Maestro Bulk Ltd v Cosco Bulk Carrier Co Ltd (The Great Creation) [2014] EWHC 3978 (Comm).

Read more: Time Charters. Date of Redelivery. Redelivery notices.
notecheck32.png The High Court resolved inconsistency between incorporation of different Arbitration Clauses. The Eleni P [2014] EWHC 4202 (Comm)

When the parties have chosen to agree terms which, in certain respects, are inconsistent with each other, e.g. arbitration clause in one c/p provides for two arbitrators and an umpire whilst the BIMCO clauses in another c/p provide for three arbitrators and default provisions being also different.

The court held upheld the view that the BIMCO arbitration clauses are the "industry standard" and that was held to be a powerful indication that the parties, probably intended (assessed objectively), that the BIMCO Arbitration Clauses were the applicable clauses.

Transgrain Shipping BV v Deiulemar Shipping SpA & Anor (The Eleni P) [2014] EWHC 4202 (Comm).
notecheck32.png Court or Appeal: harshness of the result of a fraudulent devices rule is necessary inevitability.

Fraudulent devices, as their definition shows, are used by those who think their use desirable in order to bolster a claim which appears to have potential weaknesses and to avoid or cut short lines of inquiry or investigation which might prevent or postpone the payment of it. At the stage when they are used it will probably not be possible to tell whether the claim is one that will in the end be accepted, or held, to be valid.

The risk to the insurer is that the device may achieve its purpose, so that the insurer fails to explore the claim properly and pays out in respect of a claim where he may have a defence.

Versloot Dredging BV v HDI Gerling Industrie [2014] EWCA Civ 1349


notecheck32.png Use of VHF. Collision between Paula C and Darya Gayatri in Dover Strait.

Collision between Paula C and Darya Gayatri took place in Dover Strait TSS on 10 of December 2013. OOW on Paula C interpreted Dover Coast Guard question about "three sixty" turn as a suggestion, which he immediately adopted as solution to the collision avoidance problem. He put wheel hard to starboard and vessel started quickly approach Darya Gayatri, which in its turn just started her course alteration to port. In few moments vessels collided. This case study vividly illustrates how easy one "marker" word can break human line of thoughts and unintentionally prompt targeted person to catastrophic action.

Read more: Use of VHF in Collision Avoidance.


notecheck32.png Collision in Port Said between Colombo Express and Maersk Tanjong.

As per AIS data Maersk Tanjong was coming from Suez Canal Container terminal and recklessly approached vessel on his stbd side, i.e. Colombo Express. Not clear why it was not evident to master and pilot that there was no chance to squeeze ahead of Colombo Express. AIS data shows that Colombo Express was trying to keep as much to starboard as possible while Maersk Tanjong actually pushed Colombo Express out of fairway and to stbd side of canal. Huge ships in narrow canal obviously had difficulty in steering …

Watch dramatic video here.


notecheck32.png Clause 19, GAFTA 64. "… in case of resales/repurchases all notices …".

Agreed delivery period was 10 November – 10 December 2010, and since 10 December 2010 was a Friday and it is common ground that "the next business day following the last day of the delivery period" on which any notice claiming extension had to be served was Monday 13 December 2010. The Buyers’ vessel was delayed and because of this they tendered a notice claiming extension at 1709 on 13 December 2010. The Sellers, pursuant to their interpretation of clause 19, considered this notice to be out of time limits imposed by notice provision. …
Soufflet Negoce SA v Fedcominvest Europe Sarl [2014] EWHC 2405 (Comm).


notecheck32.png BPVOY4. Ship-To-Ship Transfer. (Un)reasonable withholding approval of the receiving Vessels.

VLCC The Falkonera was chartered to carry crude oil from the Yemen to Pasir Gudang, Malaysia as discharge port and operation to be done by way of a STS transfer. During negotiating stage on vessel’s approach to Pasir Gudang, the owners rejected several Charterers’ proposals related to two nominated VLCCs, which included intention to provide them with LOI against any damage that might be sustained in the course of STS transfers between The Falkonera and the Frontline vessels. The Court found that owners unreasonably withheld approval of …
Falkonera Shipping Co v Arcadia Energy Pte Ltd (The Falkonera) [2014] EWCA Civ 713


notecheck32.png Time charter repudiation by the charterers and the owners’ duty to mitigate.

The Owners claimed damages for wrongful repudiation calculated by reference to the net loss of profits which they alleged that they would have earned during the additional two year extension. The Charterers argued that the Owners were bound to bring into account and give credit for the difference between the amount for which the Vessel had been sold in October 2007 (US$23,765,000) and her value in November 2009 (US$7,000,000). The Owners argued that the difference in …
Fulton Shipping Inc of Panama v Globalia Business Travel S.A.U. (formerly Travelplan S.A.U) of Spain [2014] EWHC 1547 (Comm) (21 May 2014)


notecheck32.png Injurious Cargoes. Whether anything that tends to harm the vessel as an instrument of trade is harmful to the vessel?

The High Court rejected owners’ submission was that "the vessel in the claimants’ hands is an instrument of trade and anything that is harmful or tends to harm the vessel as an instrument of trade is harmful to the vessel". Charterparty wording directed to physical damage: it expressly covers two types of cargo which might cause physical damage to the vessel, acid and explosives, and the inference is that it also covers other cargoes that also might cause physical damage.
American Overseas Marine Corp v Golar Commodities Ltd (The LNG Gemini) [2014] EWHC 1347 (Comm)


notecheck32.png Lifeboats: born to be unsafe? Questions and answers.

The wave of emotional criticism and difficult to answer questions driven by The Sewol disaster prompted many discussions about safety of passengers on board of ferry vessels and usage of lifeboats as the main means of survival. Modern lifeboats have to be enclosed, self-propelled, with sprinkler fire-fighting system, able to be lowered remotely from inside, must be equipped with on-load release mechanism … all these difficult to meet criteria became a birth trauma of this adopted child of ship’s architects whilst cost effectiveness prevented any positive improvement all these many decades since its birth. Thus, clumsy original design was later attempted to be patched by equally unsuccessful modifications.

Read this article here:Lifeboats: born to be unsafe?


notecheck32.png Can single bill of lading be subject to two different package limitation figures?

During sea passage part of claimants’ cargo was damaged. The Hague-Visby Rules were applicable as a matter of statute law but Paramount clause in Bills of Lading was referring to the Hague-Visby Rules.
The owners accepted and paid damages as limited by The Hague-Visby Rules, but the claimants contended that they are entitled to choose the higher figure within single bill of lading between two different package limitation figures.

Read this article in full: Yemgas Fzco & Ors v Superior Pescadores S.A. Panama [2014] EWHC 971 (Comm) (02 April 2014)


notecheck32.png Required inevitability of anticipatory breach.

In Geden Operations Ltd v Dry Bulk Handy Holdings Inc (The Bulk Uruguay) [2014] EWHC 885 (Comm) (28 March 2014) the High Court rejected the time Charterers’ argument that there is a principle of law whereby a party who has made his performance dependent on a discretion to be exercised by a third party is ipso facto deemed to be evincing an intention not to perform. Anything short of inevitability would be insufficient for treating both renunciation and self induced impossibility as entitling the innocent party to treat the contract as at an end.

Read this article in full: Geden Operations Ltd v Dry Bulk Handy Holdings Inc (The Bulk Uruguay) [2014] EWHC 885 (Comm)


notecheck32.png The High Court awarded damages res inter alios acta in The Glory Sanye [2014] EWHC 4176 (Comm)

Disponent owners, chartered the vessel GLORY SANYE to the Respondents on the SYNACOMEX 2000 form for a voyage from Constanza to Djibouti with a cargo of wheat. The Disponent owners themselves had time chartered the vessel from the registered owners on the NYPE 1946 form for a time charter trip "intention via Constanza to Djibouti or Port Sudan". The vessel loaded a cargo of wheat at Constanza and arrived at Djibouti on 20 November 2009. However, the vessel was unable to discharge because there were no receivers for the cargo. The vessel remained off Djibouti for some three months. An agreement, addendum no.1, was reached between the disponent owners and charterers that the discharge port would be changed to …

Read more: HBC Hamburg Bulk Carriers GmbH & Co KG v Huyton Inc (The Glory Sanye) [2014] EWHC 4176 (Comm).
notecheck32.png Infringement of customs regulations and malicious acts of third parties. Atlasnavios - Navegacao, LDA v Navigators Insurance Company Ltd & Ors [2014] EWHC 4133 (Comm)

Institute War and Strikes Clauses. 4 EXCLUSIONS
This insurance excludes
4.1 loss damage liability or expense arising from
… 4.1.5 arrest restraint detainment confiscation or expropriation under quarantine regulations or by reason of infringement of any customs or trading regulations.

The High Court held that "infringement of customs regulations" in the exclusion does not include an "infringement" which is itself no more than the manifestation of the relevant act of third parties acting maliciously and the exclusion is subject to that limitation, equally applicable on the facts of this case as in the cases of the various "put-up jobs".
Atlasnavios - Navegacao, LDA v Navigators Insurance Company Ltd & Ors [2014] EWHC 4133 (Comm).


notecheck32.png BIMCO Electronic Bills of Lading Clause.

This clause addresses existing problem that restrict usage of electronic bills of lading as a consequence of English law requirements to issue paper documents. Statutory, by way the Carriage of Goods by Sea Act 1992 (COSGA 1992) the law deals with paper documents only. Moreover the common law requires master to deliver the cargo only against signed bill of lading.

Clause proposes to circumvent these difficulties by exercising an option available to the charterers to issue electronic bill of lading. …

Read more here.
notecheck32.png Supreme Court held that a bribe received by an agent is held by the agent on trust for his principal.

Agent owes a duty of undivided loyalty to the principal, unless the latter has given his informed consent to some less demanding standard of duty. The principal is thus entitled to the entire benefit of the agent’s acts in the course of his agency, in just the same way as an employer is liable to bear the burden of an employee’s unauthorised breaches of duty in the course of his employment. The agent’s duty is to deliver up to his principal the benefit which he has obtained, and not simply to pay compensation for having obtained it in excess of his authority.
FHR European Ventures LLP & Ors v Cedar Capital Partners LLC [2014] UKSC 45 (16 July 2014)


notecheck32.png Court of Appeal disagreed on whether customer name is irrelevant for the purpose of CHAPS payment.

Appellant had an obligation to pay one of its suppliers the sum of £217,781.57. It appears that someone purporting to represent suppliers had spoken to someone at appellant’s office and supplied banking details (sort code, account number and bank name). Appellant provided the relevant mandatory details: sort code, bank name, account number and customer name,thinking that those data are of its supplier, but in fact a name of account number holder was not appellant supplier’s name. Appellant telephoned the bank, but money had been already withdrawn.
Tidal Energy Ltd v Bank of Scotland Plc [2014] EWCA Civ 1107 (31 July 2014).


notecheck32.png Clause 8 of GAFTA 49. Buyer’s right to extend period of delivery.

Sellers were unable to provide cargo due to Ukrainian government export restrictions in the form of export quotas for various cereal products. Buyers claimed 21 days extension of the shipment period in accordance with Clause 8 of GAFTA 49. By reason of inability of obtaining an export licence and according to the terms of contract, specifically the Prohibition Clause in GAFTA 49, sellers declared the contract as cancelled. Inspite of buyers insistance that the effect of their "extension" was to extend the period for delivery …
Nidera BV v Venus International Free Zone for Trading & Marine Services SAE [2014] EWHC 2013 (Comm)


notecheck32.png Safety of berth versus Navigation to the berth in a proper and seamanlike manner.

The "XIN XIA MEN" was discharging and loading containers at Genoa container terminal. Between about 17:10 and 17:30 strong winds and rain from the south west passed over the port which caused vessel’s winches to render and slack her stern and head line moorings, then her aft spring lines broke and she was blown off the quay. By about 17:18 the vessel had stabilised and the Master considered her to be back under control. Shortly thereafter she was re-berthed. Somewhere in the course of re-berthing vessel’s bow stroke and damaged shore crane …
Terminal Contenitori Porto Di Genova Spa v China Shipping Container Lines Ltd [2014] EWHC 1629 (Comm).


notecheck32.png The Court of Appeal considered off-hire claim under amended NYPE, Cl.49. Capture, Seizure, Arrest.

The "Global Santosh" was mistakenly arrested together with her cargo by the cargo seller in West Africa’s port to secure a claim for demurrage against the buyer. Charterers withheld hire under clause 49.Capture, Seizure, Arrest of the charterparty in respect of the period for which the vessel was under arrest, i.e., 14.00 hours on the 18th December 2008 and 07.03 hours on the 15th January, 2009. The owners argued that an act by a delegate of charterers (the cargo receiver) causally linked to the capture, seizure, detention or arrest of the vessel.
NYK Bulkship (Atlantic) N.V. v Cargill International S.A. [2014] EWCA Civ 403.


notecheck32.png Is the seller to pay fees in full even if they exceed the price?

In Omv Supply And Trading AG v Kazmunaygaz Trading AG (Rev 1) [2014] EWCA Civ 75 (06 February 2014) the Court of Appeal rejected byer’s submission that clause 6 makes clear that the seller is to pay the fees whatever they may be even if they exceed the price. If the parties had intended that to be so they would need to have used clear language to that effect. Instead they provided for a deduction of fees from the price, no doubt contemplating that the fees would always be less.

Read this article in full: Trafigura Beheer BV v Navigazione Montanari Spa [2014] EWHC 129 (Comm)


notecheck32.png Does In-Transit Loss (ITL) clause cover cargo stolen by pirates?

In Trafigura Beheer BV v Navigazione Montanari Spa [2014] EWHC 129 (Comm) (30 January 2014) the vessel while waiting for discharge orders off Cotonou was hijacked by pirates. Pirates arranged for an STS transfer of approximately 5,300.00 mts of cargo to unknown vessel. As a result of STS transfer this transferred or stolen cargo was never delivered to the consignees. Vessel was released by pirates next day. Charterers claimed value of cargo stolen by the pirates under In-transit loss clause.

Read this article in full: Trafigura Beheer BV v Navigazione Montanari Spa [2014] EWHC 129 (Comm)


notecheck32.png The contract price/market price differential is not a computation of lost profit.

In Glencore Energy UK Ltd v Cirrus Oil Services Ltd [2014] EWHC 87 (Comm) (24 January 2014) the judge held that "firm offer" email was intended to be capable of acceptance with a binding contract thereby concluded and moreover stated that the contract price/market price differential is not a computation of lost profit. Lost profit is the difference between the total net cost to the seller of acquiring the goods and bringing them to market on the one hand and the net sale price that would have been achieved on the other …

Read this article in full: Glencore Energy UK Ltd v Cirrus Oil Services Ltd [2014] EWHC 87 (Comm)


notecheck32.png The Court of Appeal clarifies application of cl.15 of NYPE form The Athena [2013] EWCA Civ 1723.

The key to a proper understanding of the off-hire clause is in my view that it is triggered by a cause preventing the full working of the vessel. It is axiomatic that the full working of the vessel refers to her ability to do that which she is immediately required to do.… The service immediately required of The Athena whilst drifting in international waters was to proceed to the roads at Benghazi. It is nothing to the point in computing the time lost by reason of the Master’s default that a similar length of time, … might have been lost had there been brought forward the moment at which the service immediately required of the vessel became not the sea passage but rather berthing and discharge.


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News Archive @ 2013

notecheck32.png The Court of Appeal dismissed Charterers’ appeal in ED & F Man Sugar Ltd v Unicargo Transportgesellschaft GmbH [2013] EWCA Civ 1449.

Lord Justice Tomlinson giving the only reasoned judgment, underlined that the arbitrators’ findings, based on the evidence provided by the charterers, led them to right conclusion that there was no mechanical breakdown of the conveyor. The Court of Appeal also agreed with the judge that The Afrapearl (Portolana Compania Naviera Ltd v Vitol SA Inc [2004] EWCA Civ 864) and Olbena SA v Psara Maritime Inc, The Thanassis A unreported, 22 March 1982, cases should be distinguished as concerned simply with "breakdown of machinery or equipment",
ED & F Man Sugar Ltd v Unicargo Transportgesellschaft GmbH [2012] EWHC 2879 (Comm).


notecheck32.png Collision of mega-vessels in the Malacca Strait on 29 December 2013.

On Dec 29, 2013, Liberian-Flagged 349 metres long container vessel "Hanjin Italy" collided with 314 metres long LNG tanker "Al Gharrafa" early Monday in the Malacca Strait, off Singapore. "Al Gharaffa", which had sailed from Ras Laffan Port on Dec 19 to Tokyo Electric Power Co’s Futtsu LNG terminal in Japan, hit starboard side of container carrier. "Hanjin Italy" sustained relatively slight damage to her midship shell plating just beneath main deck. "Al Gharaffa" appears to have suffered more serious damage to her bow.
Read this article in full: Collision of mega-vessels in the Malacca Strait, 29 Dec 2013.


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27 May 2015. Time Charters. Is payment of hire condition?

Occasions when the owner cancels time charter for non-payment of hire are not a novelty. This option usually has far reaching consequences and as Lord Sumption outlined in ENE 1 Kos Ltd v Petroleo Brasiliero SA (The Kos) [2012] 2 AC 164 at para 6, owners will not exercise their right of withdrawal unless it is in their commercial interest to do so. And usually, the owners keen to go ahead with withdrawal of their vessel from charterers’ service on rising market with favorable outlook to get better employment. In such market conditions, there would be no need for the owner to consider whether he had suffered loss and damage as a consequence of early withdrawal of the ship, because the reverse is true. Consequently, in disputes around cancellation clause when timecharter rates were rising, there was no commercial stimulus to examine punctual and timely payment of hire from judicial viewpoint of whether such a provision constitutes a condition of the contract.

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22 May 2015. Laycan: Cancelling date achievability. The Kriti Filoxenia [2015] EWHC 997 (Comm)

Cancelling clause is a kind of conditional agreement, i.e. its operation depends on an event which is not certain to occur, namely, charterers have an option to cancel which they can exercise in event of late arrival of the vessel. Such conditional agreements by implication impose an obligation not to prevent the occurrence of the condition.

Guiding principle of this duty has been explained by Lord Blackburn in Mackay v Dick [1881] 6 App Cas 251.

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21 May 2015. Laycan: Premature cancellation.

It is well to emphasize that, as judgement of Megaw LJ in The Mihalis Angelos [1970] 3 All ER 125 illustrates, the charterers gain no advantages prematurely invoking cancelling clause if they are confident of the non-arrival of the vessel by the cancelling date.

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19 May 2015. Laycan.

Standard charterparty forms stipulate cancellation options either within Laydays provision, as for example in ASBATANKVOY and Norgrain 89 forms or by way specific Cancellation clause, see BPVOY4 clause 16, EMV 2005 clause 12 (Cancellation of charter) and Gencon clause 9.

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30 April 2015. Law of Contract: Repudiation and Rescission.

The word rescission is often used in the same sense, meaning a termination of the contract for breach following alleged defect in the performance of the contract. In such case both parties are discharged from further performance of the contract, but all rights which have already been unconditionally acquired are not divested or discharged. Rights and obligations which arise from the partial execution of the contract and causes of action which have accrued from its breach alike continue unaffected.

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05 April 2015. Stow Properly and Carefully. Common law obligation.

When goods are in custody of the carrier his status is equal to one of a bailee at common law, who is entrusted with goods for reward. When shipowner acts as a common carrier (locatio operis faciendi), he "bound to answer for the goods at all events … but acts of God and the enemies of the king" (Coggs v Bernard (1703) 2 Ld Raym 909 per Holt CJ, see more at Common Carriers).

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05 April 2015. Stow Properly and Carefully. The Hague Rules Article III (1)(2). Concept of a sound system.

With exception of marine deviation only the Hague and Hague/Visby Rules have modified all other absolute obligations imposed at common law on the carrier. The obligation to provide a seaworthy ship is limited by Article III (1) to one of due diligence to make the ship seaworthy before and at the beginning of the voyage. Article III (2) provides that " the carrier shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried."

Obligation imposed by Article III (2) is evidently less stringent than that of the common carrier and similar to one of private carrier albeit it includes both loading and discharging operations, i.e. the "tackle to tackle" period. It is, however, more stringent than one of due diligence to make ship’s compartments ready, fit and safe for reception and carriage of goods as stated in Article III (1).

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05 April 2015. Stow Properly and Carefully. From Common law to Uniform international code.

Several early attempts at end of the nineteenth century to agree on the common form of bill of lading failed to produce any form that would come into general use. It was evident that the decision on a subject with regard to which the interests and opinions of the shipowners and the cargo interests were so widely divergent would never at once commend themselves to all parties. But this difficult work, at least, provided some grounds for common understanding and possible future basis of settlement of several very difficult questions.

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22 March 2015. Letters Of Protest. Unintelligible documents produce no or negative effect.

Decision of the High Court in Kassiopi Maritime Co Ltd v Fal Shipping Co.Ltd (The Adventure) [2015] EWHC 318 (Comm) (19 February 2015) is a vivid illustration of destructive effect caused to demurrage claim by incomprehensible wording of Letter Of Protest.

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12 March 2015. Voyage Charters. Demurrage Claim.

Authors of Laytime and Demurrage in the Oil Industry, underline the importance of presenting all the relevant documents with the demurrage claim, because without this documentation a claim could be time barred even if the claim itself is presented within the 90 days. They furthermore clarify that such set of documents "must include the notice of readiness, the Statement of Facts and Discharge Pumping Logs where applicable … [and] bear the signatures and stamps of the parties concerned, at the very least those of the vessel and that of the loading or discharge terminal."

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11 March 2015. Repudiation of Contract. The pros and cons of election to keep the contract alive

Within main reasons to keep contract alive is substantial difficulties in fair assessment of damages by injured side, especially when some part of loss is hardly recoverable because it is too remote and commitments, which injured party may have with third parties, as in case of The Odenfeld, which he must honour as a matter of business.
Read more → But apart from evident advantages which innocent party may gain in certain circumstances if he so chooses elect not to accept the repudiation, he may also be at certain risks, the chances either that the other party may yet take a different course or that it may be one of those special cases of limitations to general rule or that keeping the contract alive may become unrealistic if party in default should persist in their refusal to perform.

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09 March 2015. Voyage Charters. Interruption and Exclusion of Laytime and Demurrage

Parties can expressly agree for interruption of laytime or for period of time when laytime will not run, such as "weather working days" – i.e. day or days when laytime is not running at all because of adverse weather which prevents working of the vessel. Said periods of time equally affect running of laytime and demurrage, because they deemed to be outside of laytime definition as it is formulated in the laytime clause.

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02 March 2015. Voyage Charters. In Transit Loss Clause. Trafigura BV v Navigazione Montanari SPA [2015] EWCA Civ 91

ITL clause serves to provide a simple solution in notoriously difficult oil shortage claims, albeit such claims should arise only from a normal voyage and when there is no doubt that the loss is otherwise unexplained.
But even if the charterer were right about the construction of the ITL clause, it was nonetheless found by the Court of Appeal that loss by piracy is excluded by one or other of the Hague-Visby Rules which were incorporated into the charterparty by clause 46 of Beepeevoy 3.

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25 February 2015. Voyage Charters. River Ports Clause.

Remoteness of ship’s location at the moment of tender of NOR from its ultimate destination often lead to disputes between the owners and the charterers as to when laytime starts (or resumes in case of discharge port) to accrue. Arrival at river port naturally provide grounds to dispute commencement or resumption of laytime/demurrage, unless clear words used in contract. That is especially true with regard to "at immediate charterers’ disposal" concept.

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23 February 2015. Voyage Charters. Laytime. Arrived Ship - At charterers’ disposal.

Second limb of Lord Reid test requires that "arrived" ship must be effectively placed at the charterers’ disposal for loading or unloading. Question whether vessel was at the charterers’ disposal on arrival can, for example, come up in circumstances when vessel being anchored at customary waiting place within port limits is unable, on charterers’ request, proceed to the loading or discharging berth due to low water or fog.

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22 February 2015. Voyage Charters. Laytime. Reid’s Test - Within the port limits.

Application of principles stated in The Leonis raised in the Aello another question, what exactly those principles are? Whether port is a place where a ship can ultimately be loaded or discharged or it may encompass much wider waiting areas, sometimes located many miles away from the berths, where the owner effectively place his ship at the disposal of the charterer, as near as circumstances permit to the actual loading berth.
- The Johanna Oldendorff
- The Maratha Envoy
- Reid’s Test. Analysis

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25 January 2015. Safety System of the Port.

The Court of Appeal disagreed with the judge’s decision in Gard Marine & Energy Ltd v China National Chartering Co Ltd (Rev 1) (Ocean Victory) [2015] EWCA Civ 16 and agreed with the Charterers that the casualty could rightly be described not merely as "remarkable" but also as unprecedented, thus being exemption from safe port warranty as stated by Sellers L.J. in Leeds Shipping Co. Ltd. v Société Francaise Bunge (The Eastern City) [1958] 2 Lloyd’s Rep. 127 in a passage which refers to "abnormal occurrence."

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25 January 2015. Identity of parties when fixing time charters.

Chartering of vessel for a prolonged period of time increases risks of default from either side, especially at times of global financial uncertainty. While owners are worried about financial sustainability of the charterers in case of sharp decline in spot rates, charterers in their turn concerned about uninterrupted utilisation of vessels under their commercial management throughout duration of charter. Navig8 Inc v South Vigour Shipping Inc & Ors [2015] EWHC 32 (Comm) - Managers signed all timecharters as "Disponent Owners Signatory in Contract:"

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24 January 2015. Gard Marine & Energy Ltd v China National Chartering Co Ltd (Rev 1) [2015] EWCA Civ 16

Shipping – Demise Charters – Timecharter – Who are parties to contract – Four time charterparties fixture – Management company signed charterparties as "Disponent Owners Signatory in Contrac" – Whether the Managers intended that the charterparties were fixed on behalf of the registered owners - Whether the phrase "disponent owners" was used in the sense of the Managers being a manager of the vessels with power to fix charterparties on behalf of the Registered owners – Whether the Registered owners gave authority to the Managers to fix vessels.

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18 January 2015. Navig8 Inc v South Vigour Shipping Inc & Ors [2015] EWHC 32 (Comm) (16 January 2015)

Shipping – Demise Charters – Timecharter – Who are parties to contract – Four time charterparties fixture – Management company signed charterparties as "Disponent Owners Signatory in Contrac" – Whether the Managers intended that the charterparties were fixed on behalf of the registered owners - Whether the phrase "disponent owners" was used in the sense of the Managers being a manager of the vessels with power to fix charterparties on behalf of the Registered owners – Whether the Registered owners gave authority to the Managers to fix vessels.

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15 January 2015. Contractual Terms: Condition, Warranty and Innominate term.

During negotiating stage parties agree on terms of future contract. Those terms can be formulated by way of exchange of oral promises between promisor and promisee in case of simple contract or be presented by each party in form of multipage sets of standard clauses with additions and amendments made in the course of negotiations. In our daily life we deal with contract terms each time we buy food in the supermarket and clothes in shopping center, when we pay for bus ticket or withdraw cash from cash machine. Our signature on the receipt or pin-code confirmation of electronic transaction symbolise our agreement with terms of contract, though we not always realise it.

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06 January 2015. Law of Contract. Quantum of damages. Mitigation.

The relevant criteria which defines recoverable amount of damages is the actual suffered loss of the innocent party, i.e. the innocent party shall not be better off with the damages than it would have been off if the contract would have been fulfilled properly.
Quntum of damages

The basic principle stated in British Westinghouse Electric and Manufacturing Co. Ltd. v. Underground Electric Railways Company of London Ltd., [1912] A.C. 673, is that compensation for pecuniary loss naturally flowing from the breach. This principle is however qualified by another one, to take all reasonable steps to mitigate the loss consequent on the breach.
Mitigation

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05 January 2015. Law of Contract. Damages: nominal, liquidated, exemplary, aggravated.

… it is the general intention of the law that, in giving damages for breach of contract, the party complaining should, so far as it can be done by money, be placed in the same position as he would have been in if the contract had been performed. That is a ruling principle. It is a just principle.
Per Lord Atkinson in Wertheim (Sally) v Chicoutimi Pulp Co. [1911] A.C. 301 at page 307.
Nominal Damages
Liquidated damages
Exemplary or punitive damages
Aggravated damages

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  • Letters of Protest. User’s Manual.

    Any master knows what letter of protest is or, at the very least, supposed to know when such letter shall be issued. Generally, there is no any restriction to issue a letter of protest, rather the contrary, master usually encouraged and sometimes instructed to serve letter of protest whenever he thinks necessary.

    It can be noted in passing, that letters of protest is not a modern invention and was known long since. Already in the eighteenth century master’s protest was treated only as a paper containing the account of the loss given by the captain. Sixty years later the following definition of a marine protest and protests in general, one could meet in old text books on English shipping law.

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  • Laycan

    The term "laycan" is habitually used in the negotiation of charterparties, to refer to the earliest date at which the laydays can commence and the date after which the charter can be cancelled if the vessel has not by then arrived.

    As indicated in the name itself, ‘laycan’ is an agreed time range at the end of which comes the date when the charterers are entitled to exercise their option and cancel the charterparty for non-arrival of the owners’ vessel. The charterers can, but are not obliged to exercise cancellation option. It is not unusual for the parties to come to solution and extend laycan for a day or so, considering market condition and availability of substitute tonnage in the area.
     

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  • NOR and Laycan

    There is abundant authority for saying that the courts always insisted on strict compliance with stipulations as to the time in the contracts of affreightment. In the eighteenth century case of Croockewit v Fletcher (1857) 1 H & N 893 it was held that the stipulation as to the time "is the condition precedent upon the performance of which the defendant contracted to take and load the ship". In more modern case law on this proposition - Evera SA Commercial v North Shipping Co Ltd [1956] 2 Lloyd’s Rep 367, Devlin J outlined commercial background of charterer’s, expectations to have vessel ready for his cargo by a certain date or range:"A charterer manifestly wants, if he can get it, a fixed date for the arrival of the ship at the port of loading."

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  • Bill of Lading

    Bills of lading have been known from at least the thirteenth century. At those times shippers (usually the owners of the goods) as a rule accompanied their cargoes on the voyage to destination and bill of lading served only as an invoice of the goods shipped.
    Later, in the sixteenth and the seventeenth centuries, when larger ships has begun to carry varied cargoes belonging to several shippers, this practice gradually came to naught and it became the custom to incorporate the terms of the contract of carriage into bill of lading. Finally to meet requirements of businessmen who wished to sell the goods before the vessel reached its destination bill of lading extended its status to a document of title.

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  • Laycan

    The term "laycan" is habitually used in the negotiation of charterparties, to refer to the earliest date at which the laydays can commence and the date after which the charter can be cancelled if the vessel has not by then arrived.

    As indicated in the name itself, ‘laycan’ is an agreed time range at the end of which comes the date when the charterers are entitled to exercise their option and cancel the charterparty for non-arrival of the owners’ vessel. The charterers can, but are not obliged to exercise cancellation option. It is not unusual for the parties to come to solution and extend laycan for a day or so, considering market condition and availability of substitute tonnage in the area.

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  • Off-hire

    When the owners let their vessel to the time charterers in consideration of the payment of hire the later entitled to the use of the vessel during contracted period of time. Express provision for punctual advanced payment of hire usually followed by relevant withdrawal wording in time charterparty. Thus, being under strict obligation to pay for services rendered by the owners, the charterers are obviously concerned over uninterrupted employment of the vessel. On the other hand, there are many factors peculiar to shipping business make delays inevitable. To deal with consequences of such delays parties insert certain provisions into the time charter contract, which are primarily collected in an ‘off-hire’ clause.

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Last updates on Law Quotes.

IMAGINATION

… the vice of our modern legislations is that they do not speak to the imagination. Man can be governed only by imagination; without it, man is a brute. It is a mistake to govern men like things; it is by speaking to man’s soul that he can be thrilled …

Words of Napoleon from Mémoires sur le Consulat de 1799 à 1804 par un Ancien Conseiller d’Etat, Thibaudeau 419-424, translated by and cited in Alain Levasseur, "On the Structure of a Civil Code" (1969-1970), 44 Tul. L. Rev. 693 at p. 698.

LAW MERCHANT

It is true that Law Merchant is sometimes spoken of as a fixed body of law forming part of the law, and, as it were, coeval with it, but as a matter of legal history this view is altogether incorrect… The Law Merchant is of comparatively recent origin; it is neither more or less than the usages of merchants and traders in the different departments of trade ratified by the decisions of the Courts of Law, which, upon such usages being proved before them, have adopted them as settled law with a view to the interests of trade and public convenience…

Per Chief Justice Cockburn in Goodwin v Robarts (1875) LR 10 Exch 337

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Anuj, 1 November 2012

Nicely written article. Explored both sides of the view point on VHF use. Ofcourse the main problem is that there are so many situations at sea that you can hardly generalize.
Sent from:
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It might be of interest to you to check the new BIMCO clause on the subject of hull fouling which will help a long way in resolving the issues with hull fouling if included in the CP.
Sent from:
http://www.lawandsea.net/CP_Time/Charterparty_Time_Off_hire_ HullFouling.html

Ying07, 29 October 2012

Pretty nice post. I just stumbled upon www.lawandsea.net and wanted to say that I have truly enjoyed browsing your phorum posts. After all I'll be subscribing to your rss feed and I hope you write again soon! good luck.
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Oguz Kankavi (Turkish shipbroker), 29 October 2012

Pls really do not give up righting on this excellent blog! it is only one source reg chartering and its law!

Muhammed Zubair, 12 October 2012

Good day to Team of "lawandsea"
I am Dry Chartering manager at Pakistan National Shipping Corporation" , & i like your web site very much.
Keep up the good work.
With Best Regards

Capt.Akhtar, 03 October 2012

Good day sir, I am captain akhtar , & i like your web site very much. good luck in future. Kind rgds
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Maureen9, 22 September 2012

Well worth the read. I found www.lawandsea.net very informative as I have been researching a lot lately on practical matters such as you talk about… Best regards!
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Bethann1991, 04 September 2012

I admit, I have not been on www.lawandsea.net in a long time however it was another joy to see It is such an important topic and ignored by so many, even professionals. I thank you to help making people more aware of possible issues.
Sent from:
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Mark Mirosevic-Sorgo, 06 August 2012

You have clearly taken a lot of time to look into all the different angles of shipping and shipping law for which I thank you and congratulate you. Especially with recent changes to accepted interpretations of long established principals, it is important to have easily accessible forums where the information can be disseminated and different points of view saught.

Ronald, 02 August 2012

This info was very concise, and extremely helpful.
Sent from:
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Awad, 17 June 2012

It is really great and informative website …

Darlingtons, 14 June 2012

Interesting that due diligence has maritime links and has always been associated with warranties, which usually bridge the gap between what is ascertainable from enquires and paperwork with what is not and forward looking possible problems.
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Ghassan Nayef, 14 May 2012

Hi, I must admit that I have learnt so much from this info website. Great.

Ashish Dangle, 23 February 2012
The Shipping Corporation of India Ltd.

At the outset, I must compliment you for this informative website, which I delightfully discovered while surfing the net yesterday. Many thanks for replying to my query, It has indeed helped me in understanding tendering NOR under such circumstances. Thanks also for providing related links in the mail.

Bryan A. Bittner, 12 February 2012

First, please accept my admiration for this website and your efforts. I assume this little white box is for comments so I will leave one on this topic… (see full text of this comment on Is a cadet’s negligence always the master’s incompetence? page)
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Evandro Gomes do Nascimento, 29 December 2011
Afretamento Mar�timo/Chartering

…congratulations to keep this valuable website with really useful information.
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Brasma Oktavianto, 21 December 2011

that really helps.. massive thanks from indonesia!.

Armando Chavez, 20 December 2011

Thanks for your information, on this page.
Sent from:
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Evandro Gomes do Nascimento, 29 December 2011
Afretamento Mar�timo/Chartering

…congratulations to keep this valuable website with really useful information.
Sent from:
http://www.lawandsea.net/CP_Voy/Charterparty_Voyage_Deadfreight.html

Brasma Oktavianto, 21 December 2011

that really helps.. massive thanks from indonesia!.

Armando Chavez, 20 December 2011

Thanks for your information, on this page.
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Mark Francis, LLB, 15 December 2011

Sailors would let their ship sink unless they were paid extra? How mad is that? I suspect Kenyon had never been to sea.
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Tanya Burke-Wright, 26 November 2011

Thank you for taking the time to create such a useful website.

Hamad S. Balharith, 12 November 2011

I would like to thank you for sharing such useful information.
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Khalid Mohsen, 29 October 2011

I believe it is a matter of presenting the right documenations as incorporated in the relevant c/p.Documnets required were stated clearly as from cls 16-23 as specifying the required documents in case any anticipated demurrage.Furthermore,the subject vessel was leaving the loading port on demurrage,due to exceeding the limited time for loading, more » « less
quote

"once on demurrage always on demurrage"

unquote(BIMCO-INTERTANKO),

As such and as the subject vessel have already arrived to the designated disport on demurrage,I would consider this is a clear demurrage case in owners favor and against the Chrtrs of the vessel.It is true that after examening the relevant documents as presented by the Owners that they were not sufficinet and as per the cls in the c/p,however this is not an execuse to the Chrtrs to eludes from his/their obligations to compensate the Owners.However and in order to set the records straight,the Owners should be granted a short period of time to prersent a full texts of the documnets to include the following:

-NOR in both ports,SOF in both ports,pumping logs in both ports,letter of protest in both port(s).All the above should be mutually authenticated i.e. if this is required and to be represented to the arbitrator for the final Award.

Once the Owners failed to present the above documents within the agreed time limits,then the award should be as follows:

-All documnets were presented :Demurrage to be 75 pcnt to Owners.
See my comments here.
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Marina, 20 September 2011

You have really interesting blog, keep us posting such informative posts!
Sent from:
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Aubrey, 12 August 2011

Thanks for using the time and effort to write something so interesting.

Colin Mackenzie, 22 July 2011

I first came across your site some weeks ago. There’s a lot of useful information there. I thought the material on use of VHF in close quarter situations was very useful.

Evernice Nyatoro, 14 June 2011

thank you very much for allowing us to view and read your articles. Reading them always gives me pleasure and value. I get insightful education from them. Please never tire to do the good work which is beneficial to millions of people.

Dinkar, 23 May 2011

Thanks a lot Capt.Warm Regards, �

turkish shipbroker, 1 May 2011

good day, really great website, for me as a chartering broker in turkey.
keep going like this.

Jeffrey Blum, 12 April 2011
Visiting Professor at World Maritime and Shanghai Maritime Universities
Visiting Lecturer at Southampton University
Founding Director of Maritime Education & Training Ltd
Fellow of Institute of Chartered Shipbrokers
Past Chairman, ICS London Branch
Fellow of Chartered Institute of Arbitrators
Maritime Arbitrator ~ LMAA and ICSAS

Hi Igor,
Except for a few typo errors, this is all superb and very useful as an extra guide for my many students worldwide. Regards

David Malakwana, 7 April 2011

This is a great and informing site I have ever seen on the issues of maritime/shipping law. thanks a lot

FEMI OMOMOWO, 2 April 2011

http://www.lawandsea.net/CP_Voy/1_index_Charterparty_Voyage.html Good article. Conscise and straight to points.

J.F.L.Kalee, 4 March 2011

Good evening,
I was on board of that ship m.s.Amstelslot,and i have made it all,in september 1957.From Honolulu to Kobe,further to Hong-Kong,a few days in a hotel,with an airplane from Hong-Kong to Amsterdam,(via Saigon-Bangkok-Karachi-Teheran-Rome-Paris.
I was Ass.Engineer and 17/18 jears old.
I,m sorry about my English.
Best Regards,
John Kalee.
P.S.I'm thinking that i am de latest living crew member from that ship. Sent from:
http://www.lawandsea.net/CP_Voy/1_index_Charterparty_Voyage.html

Syam Kumar, 4 January 2011

Dear Capt,
I found your web page on law of the sea very informative and helpful. I congratulate you on your excellent work.
Best regards
Syam Kumar.

Amit Kalhans, 12 April 2008

Hi Igor,
I have recently accessed the website www.lawandsea.net and I'am highly impressed. I am also glad that it does have a forum for question and answers. This is excellent work and will go a long way in helping aspiring sea farers who donot have access to a lot of information that they should possess.

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