Charterparty CASES
In English law, a charter-party is a specialised form of maritime contract in which a shipowner agrees to rent out their vessel to another party (charterer) for carrying goods or passengers.
Definition and principles
A charter-party outlines the terms and conditions under which the vessel is hired. It typically details freight rates, voyage specifics, cargo descriptions, and the obligations of both shipowner and charterer.
Types of charter-party
Voyage charter: Vessel hired for a specific voyage or voyages.
Time charter: Vessel hired for a specified period, allowing charterers greater operational control.
Bareboat (demise) charter: Charterer takes full control and responsibility for the vessel, including crewing and maintenance.
Case example: Bank Line Ltd v Arthur Capel & Co (1918)
In Bank Line Ltd v Arthur Capel & Co, the House of Lords addressed the impact of unforeseen events on charter-parties, specifically delay caused by requisition during wartime. It clarified when charterers could treat contracts as frustrated or terminated due to extended interruptions.
Obligations and rights
Shipowners must provide a seaworthy vessel, adhere to voyage schedules, and care for cargo. Charterers must pay freight, use the vessel responsibly, and comply with agreed voyage terms.
Breach and remedies
Breach can lead to remedies such as termination, damages for losses, or specific performance. Courts emphasise precise interpretation of charter-party terms due to their complexity.
Criticism and practical considerations
Charter-parties, although commercially critical, face criticism for complexity and susceptibility to disputes, especially regarding demurrage, delays, and frustration.
Home » Charterparty
A ship was chartered with a clause stating it was 'expected ready to load' by a certain date. The shipowners could not reasonably have met this date. The court held this clause was a condition, allowing the charterers to terminate the contract. Facts The shipowners (claimants) chartered their vessel, the ‘Mihalis Angelos’, to the charterers (defendants) for a voyage from Haiphong in North Vietnam to a European port. The charterparty, dated 25th May 1965, contained a clause stating the vessel was ‘expected ready to load under this Charter about 1st July 1965′. The charter also included a cancelling clause, allowing
A company chartered a trawler but was only granted three fishing licences for its fleet of five boats. It allocated the licences to its own boats, leaving the chartered one unlicensed, and then claimed the charter contract was frustrated. The court held frustration cannot be self-induced. Facts The respondents, Ocean Trawlers Ltd, chartered a steam trawler named the ‘St. Cuthbert’ to the appellants, Maritime National Fish Ltd. The charter was for a period of twelve months. The St. Cuthbert was fitted with an otter trawl, the use of which required a licence from the Canadian Minister of Fisheries, as stipulated
A defendant hired a steamboat to view the Royal Naval Review for the King's coronation and for a cruise around the fleet. The review was cancelled. The court held the contract was not frustrated because a key purpose, the cruise, remained possible. Facts The plaintiffs, the Herne Bay Steam Boat Company, agreed to let their steamship ‘Cynthia’ to the defendant, Mr Hutton, for two days, June 28 and 29, 1902. The contract stipulated the hire was for the purpose of the defendant ‘viewing the naval review and for a day’s cruise round the fleet’. The total hire price was £250,
A time charterparty required a voyage via the Suez Canal, which then closed during the 1956 crisis. The charterers argued the contract was frustrated. The Court of Appeal held it was not; the longer, more expensive voyage around the Cape was not radically different. Facts The owners of the vessel, The Eugenia, (Ocean Tramp Tankers Corporation) chartered it to the charterers (V/O Sovfracht) for a time charter trip from Genoa to India via the Black Sea. The charterparty contained a war clause which stipulated that the vessel should not be brought into any zone which was dangerous as a result
Facts The appellants (the shipowners, Tenax Steamship Co) chartered their vessel, ‘The Brimnes’, to the respondents (the charterers) under a time charterparty. The agreement required the charterers to pay hire in advance. The charterers were persistently late with their payments. A clause in the charterparty entitled the shipowners to withdraw the vessel from service ‘in default of payment’. Frustrated by another late payment, the shipowners instructed their bank to refuse the payment if it arrived and sent a notice of withdrawal by Telex to the charterers. The Telex message was sent and printed on the charterers’ machine in London at
Facts The appellants (Bank Line, Ltd, “the charterers”) entered into a time charter-party with the respondents (Arthur Capel & Co, “the owners”) on 16th February 1915 for the steamship *Quito*. The charter was for a period of twelve months, commencing upon delivery of the vessel at a coal port in the UK. The charter-party stipulated that the vessel was to be delivered by 30th April 1915, and provided the charterers with an option to cancel the contract if she was not delivered by this date (clause 26). The contract also contained a standard exception for “restraint of Princes, Rulers or
