Non-performance of charterparty

Shipbrokers, acting as charterers' brokers, fixed a ship with owners' brokers with laycan 18th/22nd September.  On 18th September the owners' brokers advised that the ship would be delayed.  There followed a number of requests for extensions of laycan which were granted by charterers subject to the proviso that they would hold owners liable for any loss suffered due to the delay.

Owners refused to accept this proviso, and on 1st October charterers' brokers were authorised by charterers to inform owners that they would not be held responsible for the ship's delayed arrival at loading port.

The following day, owners' brokers advised that owners would not proceed with the charterparty, whereupon the charterers, through their lawyers, held charterers' brokers and others responsible for any loss suffered by them.  Subsequently a writ was served claiming US$ 177,500 plus interest for additional freight charges and penalties payable by the charterers under the cargo purchase contract.

Enquiries by the Club's lawyers revealed that the so-called owners had not, in fact, completed the purchase of the ship when the charterparty was completed and this probably accounted for the delay in presenting the ship.  Furthermore, the name of the ship given in the charterparty was not the true name of the ship concerned, but the name the new owner intended to use after completion of the purchase.

These circumstances identified a breach of warranty of authority by the charterers' brokers, and whilst a defence to the claim could be raised, the Club and its lawyers agreed that a negotiated settlement rather than Court proceedings was the right course to follow.

After lengthy discussions with lawyers for the claimant, the matter was settled with a payment of US$ 130,000 including interest and costs.

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