Lloyds Report

If after giving what, at the time of giving it, was a legitimate order, the practical situation changes before the voyage is commenced and it becomes apparent that the intended last voyage could not be completed within the charter period, the shipowner is at that time entitled to refuse to comply with it. The measure of damages for late delivery is: regardless of any liability for damages for breach of charter party, the charterer must pay hire at the contractual rate up to actual redelivery; if the voyage runs beyond the redelivery date (latest permitted by margin) and the market rate is currently higher, then the owner is entitled to additional damages being the difference between the contractual and the market rate for the extra days that the charterer has in fact used the vessel. No loss will, of course, have been suffered if the market rate has dropped below the charter party rate. It is a feature of charter hire that the money is paid in advance. It is the consideration given by the charterer for his being allowed to have the use of the ship and the services of her Master and crew. This expression means, as interpreted by the courts, the right to the immediate use of the funds however they may have been transferred – no strings attached. (The Chikuma (1981) Lloyds Report 371). The NYPE form contains the following words “… failing punctual and regular payment…” as a prelude to the words giving the owners the right to withdraw their ship from the charterer’s service. Such a right to withdraw is only available if expressly reserved. There is no common law right to withdraw. The law regarding withdrawal was firmly established by The Laconia (1997). The right to withdraw accrued immediately the hire instalment was late in being paid and that, furthermore, the default committed could not be erased or remedied by effecting a late payment, unless, of course, the owners agreed to accept a late payment.