Withdrawing

Withdrawing from timecharter has its own problems. There have been many cases where unscrupulous charterers have taken ships on timecharter paid hire correctly until they have filled the ship with cargo for which freight has been paid in exchange for “freight prepaid” bills of lading.  At that point the charterers disappear with the cash.  The problem which arises for the owner is that the consignees have title to the goods so that the ship is obliged to complete the voyage and deliver the cargo. Even in cases where the time charterers’ financial difficulties are genuine and even if the cargo is not “freight prepaid” the fact remains that the ship is full of cargo for which sensible legal arrangements have to be made.  Thus withdrawing the ship is no panacea and reaching accommodation with the charterer may often be the better course to follow. Time charters tend to be prone to two other areas of dispute. The first is an allegation that the ship’s performance – speed and fuel consumption – has been overstated.  Quite often this involves arbitration in order to analyse the ships bridge and engine room logs as well as weather reports to ascertain whether, given less sever weather the figures would prove correct or whether there has been misrepresentation.  In such a case it will be a breach of a warranty so that damages rather than cancellation of the charter is the correct outcome. When a time charter is for a substantial period, timing re-delivery to the exact end of the agreed time is not possible. A charterer who deliberately commits the ship to a final voyage which will obviously mean that re-delivery will be substantially late will be in breach of the contract.  If the market is weaker than at the time the ship was fixed, it is unlikely that the shipowner will complain.  It is more likely to happen when the market at the end of the period is much firmer than at the commencement.  Again help may be needed to resolve the dispute as to how much additional hire the charterer should pay for the over-extended period.