Charterparty Ship Name

Unless the charterparty provides that the vessel is ‘to be nominated’ or allows the owner of the vessel a right of substitution for one of his other vessels then the charterparty is for the specific ship named in the charter and no other. To this extent the performance of the charterparty by the specific vessel is ‘of the essence’. However to the extent that the vessel’s name is solely for the identification of the vessel it is arguable that the owner may change the vessel’s name prior to delivery of the vessel to the charterer provided that it is one and the same vessel that performs the charterparty service. This was broadly the approach taken by the House of Lords in Reardon Smith Line Limited v Hansen-Tangen (the ‘Diana Prosperity’) [1976] 2 Lloyd’s Rep. In the above case the time charter for a newbuilding provided that the ship was ‘to be built by Osaka Shipping Co Limited and known as Hull number 354 until named’. The Osaka yard had sub-contracted the construction to another yard, where the vessel was being built to the Osaka yard’s design and under their supervision, and the vessel remained on the Osaka Yard’s books, bearing the yard number stated. The charterers refused to accept delivery on the grounds that the vessel was not built by the Osaka yard. The House of Lords held that the words quoted above were words of identification rather than of contractual description. The question was thus whether the vessel tendered could be clearly identified as the specific vessel to which the charterer referred. Clearly it could and the claim to reject therefore failed. Lord Wilberforce described the references to the shipyard and yard number as fulfilling the same purpose as a reference to the name of a ship already in service. Even if the words were words of description in the true sense, they were an intermediate term rather than a condition.  However, where the name of the vessel is important then it may be treated as a condition of the charterparty. So, for example, if a charterer were to enter into a contract for a named vessel such as the Queen Elizabeth 2 (a famous cruise ship, now scrapped), where the name of the vessel would be important to his business requirements, then the owners would not be entitled to provide a vessel of identical characteristics but a different name. In these circumstances the name of the vessel would be important for marketing purposes and would probably be treated as a condition of the charterparty.