Refuse to Sail

If the charterers knowingly send the ship on a final voyage the estimated length of which, in any reasonable calculation, would exceed the redelivery date plus margin, the owners may refuse to sail and request alternative orders. In the absence of those, they may regard the charter as finished, find other employment and claim damages. If the owners allow the vessel to embark on such an illegitimate voyage, they do not by such waiver lose their right to claim damages. They will be entitled to the charter party rate up until the redelivery date (plus margin if any) and the market rate thereafter until actual redelivery, provided, of course, that the market rate is higher (see the Dione [1975]). If the market rate happens to be lower, the owner will still be entitled to the charter party rate until actual redelivery and this will be contractually backed up in the NYPE form by the wording of Clause 3. The innocent owner may theoretically choose either to accept the ship back and claim damages or to hold the charterer to his contract. In the majority of cases the owner will be expected to choose the former course of action and would probably have little sympathy from either arbitrators or a court if he attempted to hold the charterer to the full performance of the contract. In The Peonia (1991) the Court of Appeal confirmed that when the parties do not expressly agree a margin, such margin will be implied if there is otherwise merely a rigid fixed redelivery date. The court construed the words ‘further option to complete last voyage’ as being confined to an illegitimate last voyage. It does not mean that an illegitimate voyage can or should be legitimised.