Western Bulk Carriers K/S v Li Hai Maritime Inc, Court of Appeal - Commercial Court, May 05, 2005, [2005] EWHC 735 (Comm)

Reporting Judge: [2005] EWHC 735 (Comm)

President: Western Bulk Carriers K/S v Li Hai Maritime Inc

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Western Bulk Carriers K/S v Li Hai Maritime Inc, Court of Appeal - Commercial Court, May 05, 2005, [2005] EWHC 735 (Comm)

Case No: 2003 Folio No 1114

Neutral Citation Number: [2005] EWHC 735 (Comm)

IN THE HIGH COURT OF JUSTICE

QUEENS BENCH DIVISION

COMMERCIAL COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 5 May 2005

Before :

JONATHAN HIRST QC

SITTING AS A DEPUTY JUDGE OF THE HIGH COURT

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Between :

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Nicholas Hamblen QC (instructed by Ince & Co) for the Claimant

Jeremy Russell QC and James M. Turner (instructed by DLA (Hong Kong)) for the Defendant

Hearing dates: 28th February - 3rd March 2005

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JUDGMENT

Mr Hirst Q.C.:

1. This case represents commerce, red in tooth and claw. The issue is whether the Defendant owners were entitled to withdraw the m.v. ``Li Hai'' from the Claimant time charterers, after it had been on more or less continuous hire to the Charterers for some 4½ years, for non-payment of US$500, after the market had risen in the space of 10 months to about 2½ times the charter rate. Although $500 represented less than two hours hire, no-one suggested that this sum was de minimis; nor was it. So, there can be no doubt that if it was owing and the appropriate ``anti-technicality'' notice was given, and in the absence of any estoppel, the Owners were entitled to withdraw the vessel. The Court has no power to relieve from forfeiture on the grounds that this is a harsh case.

The Charterparty

2. M. V. ``Li Hai'' (``the vessel'') is 27,000 ton ``handymax'' bulk carrier. It was owned by the Defendants, a Panamanian corporation, but managed by Cosco Bulk Carrier Co. Ltd of Tianjin, China. The vessel was first chartered to the Charterers under a charterparty dated 23 March 1999. The third charter expired on 28 December 2002. The vessel was immediately delivered into the fourth charter, dated 27 September 2002. The vessel was performing under this charter when she was withdrawn.

3. The charterparty was on the New York Produce Exchange form as amended by the parties. It provided as follows:

``The said owners agree to let and the said Charterers agree to hire the said vessel from the time of delivery, for about 5/7 months period in Charterers' option (about meaning +/- 15 days) - charterers option for further about 5/7 months ... on the following conditions:

cl.4 That the charterers shall pay for the use and hire of the said vessel at the rate of $8,100 per day including overtime for first 5/7 months, $9,100 per day including overtime counting from the maximum time of the first period i.e. 28th July 2003, 10:20 hrs GMT United States currency ...

cl.5 Payment of said hire to be made by charterers to Owners' nominated bank in cash in United States currency, 15 days in advance, ... otherwise failing the punctual and regular payment of the hire ... , the Owners shall be at liberty to withdraw the vessel from the service of the Charterers ...

Cash for vessel's ordinary disbursements at any port may be advanced with Owners' prior approval as required by the Captain, by the Charterers and their agents, subject to 2½% commission and such advances shall be deducted from the hire.

cl. 10 Owners to victual Pilots and customs officers [etc.] ...Charterers paying for all victualling US$1,200 lumpsum per month or pro rata including communication/entertainment which to be paid directly to Owner's bank.

cl.18 ... the charterers to have a lien on the Ship for all monies paid in advance and not earned, and any overpaid hire or excess deposit to be returned at once.

cl. 47 Punctual Payment/Breach of charter

With reference to Cl. 5 it is agreed that the hire to be considered paid upon charterers instructing their bankers to irrevocably remit the hire to Owners' bank [in Tianjin].

Before exercising the option of withdrawing the vessel from the charter the Owners will give the Charterers seventytwo hours (Saturdays, Sundays and Holidays and Banking Holidays excluded) official notice in writing and will not withdraw the vessel if the hire is paid or the alleged breach is rectified within the...

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