Anti-Technicality Clause

Anti-Technicality Clause is designed to moderate the severity of the Withdrawal Clause. NYPE (New York Produce Exchange) 1993 Time Charterparty form includes an anti-technicality clause as standard. Therefore, one the most popular time charterparty forms among charterers.

Grace Period: where there is a failure to make punctual and regular payment of hire due to oversight, negligence, errors or omissions on the part of the charterers or their bankers, the charterers shall be given by the Owners …..clear banking days (as recognized at the agreed place of payment) written notice to rectify the failure, and when so rectified within those ….. days following the Owners’ notice, the payment shall stand as regular and punctual. Failure by the Charterers to pay the hire within …. days of their receiving Owners’ notice as provided herein, shall entitle the Owners to withdraw as set forth in Sub-clause above.

Anti-Technicality Clause is stipulated in NYPE (New York Produce Exchange) 1993 Time Charterparty form as standard. On the other hand, NYPE (New York Produce Exchange) 1946 and BALTIME Time Charterparty forms do not stipulate Anti-Technicality Clause. So, charterers and shipowners should add an anti-technicality clause into charterparty during charter negotiations.

Under an anti-technicality clause, a valid notice cannot be given until after midnight on the due day. After midnight on the due day charterer becomes in default. In Afovos case, Bingham J expressed that “it makes evidence of banking hours and practice irrelevant to the question when notice may lawfully be given”.

Up to now, which time zone should be taken for banking hours purposes has not been decided in any case. Feasibly, most appropriate time zone is the time zone of the country where the shipowners’ bank account is located.

In order to be and the safe side and to be as cautious as possible, shipowner should take whichever is the latest time zone before sending an anti-technicality notice. In Pamela case, a notice was telexed shortly before midnight on a Friday of the day hire was due and was held by the court not to be premature because it would only be read by charterers on Monday morning.

Wording of an anti-technicality notice must be:

  • Clear
  • Unambiguous
  • Absolute Terms

A valid notice must make clear that hire has not been paid punctually and that shipowners are giving an ultimatum that unless it is paid within the relevant period shipowners will withdraw their ship.