Expenses After Ship Withdrawal

Ship owners sought to recover from the charterers remuneration and/or expenses incurred in respect of the removal of the charterers’ cargo from the vessel following the exercise by the owners of their right of withdrawal for the non-payment of hire. At first instance, Andrew Smith J decided that: (1) no claim lay under the express employment and indemnity (or any other clause of the charterparty); (2) nor was there any claim under any implied term of the charterparty; (3) there was no request by the charterers for further services which created an agreement for remuneration and expenses; (4) no claim lay under a quantum merit, but (5) that, when the vessel was withdrawn the owners remained bailees of the cargo and, as such, remained under a duty to care for the cargo while it remained on board the vessel. That gave rise to a correlative duty on the charterer to remunerate ship owners and pay the expenses they incurred in fulfilling those duties while the cargo was being discharged.The Court of Appeal upheld the Judge’s decision in relation to (1) to (4) but disagreed that the owners were entitled to remuneration pursuant to (5); where there was no element of accident, emergency or necessity, remuneration which had not been expressly or impliedly agreed could not be due. However, the owners’ claim did succeed in the amount of the costs of the bunkers consumed during the period that the cargo was actually being discharged (cf. the earlier period during which negotiations were ongoing between the parties). The expenses of those bunkers were expenses incurred in taking care of the cargo during actual cargo operations and hence, and as per The Winson, could be recovered from the charterers. Whilst this was not the position on the facts of that case, the reasoning of the Court of Appeal would suggest that, where the owners go on to perform further services at the request of the charterers (e.g. carrying the cargo to its destination), they may well be entitled to remuneration for those services under a new contract.