Laycan-Dispute Case Studies

PRESENTED BY :
ROUSHAN
1803305032
QUIANA NAVIGATION SA V PACIFIC GULF SHIPPING (SINGAPORE) PTE LTD
(THE “CARAVOS LIBERTY”) [2019] EWHC 3171 (COMM)

(Withdrawal – BIMCO non-payment for hire clause not deployable for historic debt)

 The facts
 The vessel was leton an amended NYPE form incorporating the BIMCO non-payment of hire
for charterparties, entitling owners to withdraw the vessel for failure to pay hire timeously.
 Hire was US$9000 per day payable every 15 days (ie US$ 130 652) in advance. 
 Charterers underpaid by US$ 8000 on the 4 thinstalment.
 Charterers paid 130 652 on the 5thand 6thinstalment dates thus failing to purge their default.
 Owners invoked the withdrawal clause on payment of the 6 thinstalment.
 Charterers failed to pay the shortfall and owners purported to withdraw.
QUIANA NAVIGATION SA V PACIFIC GULF SHIPPING
(SINGAPORE) PTE LTD (THE “CARAVOS LIBERTY”) [2019] EWHC
3171 (COMM)
Findings
 Mark Hamsher, Alistair Schaff QC and David Owen QC held the owners to be in repudiatory
breach on the basis that the BIMCO clause could not be invoked for historic debt. 
 Cockerill J upheld the panel after leave to appeal had been given by Teare J.

Discussion
 Argument centred on the meaning of “hire” in the gateway portion of the clause: “if hire is not
received …”. 
 Owners argued in vain that “hire” meant the full amount owing not confined to the stipulated
instalment. 
 Possibly, the owners should have argued the trite principle that the creditor is entitled to
allocate payment to the oldest debt. On this analysis, there would have been short payment of
hire in the sense accepted by the Court on both the 5 thand 6thinstalments.
BILGENT SHIPPING PTE/ADM INTERNATIONAL SARL/ OLDENDORFF
CARRIERS GMBH (THE “ALPHA HARMONY”) [2019] EWHC 2522 (COMM)
(Notice of Readiness required to be given during office hours – laycan dates falling on Sunday –
office hours provision determinative under sub-charter but not under head-charter )

The facts
 The vessel was let under a Norgrain 1973 form for two voyages from South America to
China and sub-let on a Baltimore Form C Berth Grain form for a voyage from Brazil to
China. 
 Both charters provided for cancellation cut-off times that fell on a Sunday and both
required NOR to be given during office hours.
 Both charters were cancelled in circumstances where the respective Notices of Readiness
were given before the cut-off times but not during office hours. 
BILGENT SHIPPING PTE/ADM INTERNATIONAL SARL/
OLDENDORFF CARRIERS GMBH (THE “ALPHA HARMONY”) [2019]
EWHC 2522 (COMM)
Findings
 The arbitration panel appointed for the two arbitrations which were held together, decided that
neither cancellation was good. 
 Whereas the laycan clause was expressly made subject to the office hours provision in the sub-
charter, the equivalent provision in the head charter read “See also clause 70″ [the office hours
provision]
 Based on this difference, Teare J upheld the cancellation on the sub-charter but not the head
charter. 
BILGENT SHIPPING PTE/ADM INTERNATIONAL SARL/
OLDENDORFF CARRIERS GMBH (THE “ALPHA HARMONY”) [2019]
EWHC 2522 (COMM)
Discussion
 The more compelling argument is that which the arbitrators accepted, namely, that by
stipulating a cut-off time on a Sunday ie on a day where there are no office hours, the
parties intended to create an exception to the office hours requirement for a NOR for the
purposes of the laycan clause. This argument holds good for both charters.
 A NOR tendered outside of office hours remains valid but takes effect at the
commencement of the next working day cf the Petr Schmidt.