The Globe Danae | ZFZ Postcard Cases

Pursuant to a charterparty dated 9 June 2021 on an amended NYPE form (the “Charterparty”), Langlois Enterprises Ltd (“Owners”) agreed to let, and Smart Gain Shipping Co Ltd (“Charterers”) agreed to hire, the MV Globe Danae (“Vessel”) for a time charter trip of about 40 to 50 days via the east coast of India to Brazil.

Upon arrival at the discharge port in Brazil, located in tropical waters, the vessel remained idle for at least 42 days. Clause 86 of the Charterparty required the Charterers to carry out underwater cleaning “at the first workable opportunity and always at Charterers’ time and expense” if the Charterers had stayed “in ports exceeding 25 days trading in tropical… waters”. Owners requested Charterers to undertake hull cleaning prior to redelivery, but Charterers redelivered without cleaning the hull upon completion of discharge. Owners arranged underwater cleaning of the vessel’s hull and propeller at their own cost and time and pursued a claim for damages from Charterers.

Owners subsequently initiated arbitration proceedings against Charterers on the basis that Clause 86 obligated the Charterers to pay for the time and costs of cleaning regardless of whether the vessel was on hire or had been redelivered. They argued that “always at Charterers’ time” implied that the Charterers were always obliged to pay the costs associated with the underwater cleaning. Charterers contended that Clause 86 only applied during the charter period and did not extend to post-redelivery cleaning.

The tribunal found in favour of the Owners, holding that Clause 86 imposed an ongoing obligation on the Charterers to arrange for underwater cleaning at their expense, regardless of when the vessel was redelivered. Charterers appealed the decision.

The Commercial Court upheld the tribunal’s ruling, and the appeal was dismissed. The Commercial Court concluded that Clause 86 extended to the post-redelivery period and reasoned that the phrase “first workable opportunity” did not necessarily mean that the Charterers themselves had to perform the work.

For further information on this decision, please reach out to Miguel Caballero. For the full decision, click here.