Time Charters. Date of Redelivery Last updated 22-Dec-2014

It would seem to me … that every time charter must have a final terminal date, that is a date by which (in the absence of an exonerating cause) the charterer is contractually obliged to redeliver the vessel. Where the law implies a margin or tolerance beyond an expiry date stipulated in the charter-party, the final terminal date comes at the end of such implied extension. When the parties have agreed in the charter-party on the margin or tolerance to be allowed, the final terminal date comes at the end of such agreed period
Hyundai Merchant Marine Co Ltd v Gesuri Chartering Co Ltd (The Peonia), [1991] 1 Lloyd’s Rep 100, per Bingham LJ at p.108.

Time charter necessarily contains terms as to its duration.

Under time-charter contract the vessel is to be delivered by the owners to the charterers for their commercial use within stipulated period of time. At the end of this time, subject to any express provision contained in the contract, the charterers obliged to redeliver the vessel to the owners. Therefore time charterparty necessarily contains terms as to its duration.

Where a charterparty is for a fixed period such as three or six months, the court may imply a reasonable margin or allowance because it is impossible for anyone to calculate exactly the day on which the last voyage may end, but it is open to the parties to provide that there is to be no margin or allowance.

The inclusion of the word "about" in describing the period of the charter indicates that it allows a little latitude as to the time of redelivery.

US view that the overlap/underlap option requires the charterer to choose a final voyage which brings the redelivery closest to the charter party target date – Britain S.S. Co v Munson Line (1929) 31 F2d 530. See also Wilson, Carriage of Goods by Sea, 6th edt., p.89.

If charterers attempt to redeliver the vessel earlier, i.e. wrongly repudiate a contract the innocent party can reject the wrongful repudiation and continue the contract according to White & Carter (Councils) Ltd v McGregor [1961] 3 All ER 1178 (read more Option to disregard repudiation).

Timely redelivery is not always a condition of a time charterparty, but may well be an 'intermediate' term since a short delay in redelivery will not justify the termination of the contract. When the charterers insist on their orders which, at the moment of performance, will apparently lead to late redelivery, they may find themselves in repudiatory breach shall they not replace that orders for a valid one, if in a result of compliance with such orders, the vessel would proceed on last voyage and consequently being redelivered late (read more on Legitimate and Illegitimate orders).

Redelivery notices

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). Measure of damages for such breach is deprivation of the owners of the hire which was payable under the current charter for the balance of the notice period after actual redelivery.

In my judgment what the parties would have in contemplation at the time of entering into the charter as a consequence of the failure to serve contractual notices on 13th April would be the loss of hire from the date of actual redelivery to the date when the approximate 20 day notice expired and the vessel should have been redelivered in accordance with the service of compliant notices. In this case that would be the hire from 19th April to 1st May, on the arbitrators' findings. That must be the prima facie measure of loss.
Per Cooke J in Maestro Bulk Ltd v Cosco Bulk Carrier Co Ltd (The Great Creation) [2014] EWHC 3978 (Comm) at para 67

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