Performance Disputes in Shipping: A Collection of Case Notes from India

Performance Disputes in Shipping

A Collection of Case Notes from India

Mayank Suri

Walnut Academia

Copyright © 2024 Mayank Suri

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, recording or otherwise, without the prior written permission of the author.

This book has been published with all efforts taken to make the material error-free after the consent of the author. However, the author and the publisher do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from negligence, accident, or any other cause. In addition, the author and the publisher do not represent or warrant that the information accessible via this book is accurate, complete or current.

ISBN-13: 9798891711082

ISBN-10: 889171108X

To students everywhere,

Like the class of LLB 2022 (Section C) at Jindal Global Law School

Contents

Title Page

Copyright

Dedication

Introduction

Redelivery Default, Expired Charterparty, Agreement by Conduct

Incompatible Port, Laytime, Responsibility

Dispossession of Ship, Omitted Lay Days, Reasonability

Engine Breakdown, Laytime Calculation, Scope of Clause

Dysfunctional Equipment, Validity of NoR, Specified Consequences

Withdrawal of Ship, Hire Payment Deductions, Possessory Rights

Cancellation of Carriage, Concluded Contract, Express Terms and Intention

Expiry of Term of Performance, Laycan, Reasonability

Frustrated Charterparty, Advance Freight, Domestic Law

Delivery Default, Role of Disponent Owner, Remedy

Draft Charterparty, Condition to Formation, Intention

Redelivery Default, Off Hire Clause, Ordinary Meaning

Delay, Risk Allocation, Contract Terms

Refusal to Load, Disponent Owner, Admiralty Jurisdiction

Failure to Mobilise, Bank Guarantee, Separability

Slack Bags, Unknown Weight, Burden of Proof

Shortage of Goods Received, Discharge Clauses, Pragmatic Interpretation

Damaged Cargo, Role of Inspection, Material Difference

Wrong Goods, Nature Unknown,

Non-Admiralty Breach

Damaged Cargo, Incorporation Clause, Intent

Rejected Goods, Agent’s Negligence, Frustration of Remedy

Shortage and Damage to Goods Received, Clean Bill of Lading, Balance of Evidence

Shortage of Goods Received, Unattended Arbitration Notice, Effect of Silence and Inaction

Rejected Goods, Deviation, Intervening Acts

Delayed Delivery, Foreseeable Losses, Information

Damaged Goods, Applicable Law, Intent

Misdelivery, Bills of Lading, Agent’s Responsibility

Demurrage, Nature of Clause, Intention and Understanding

Charterparty Repudiation, Broker’s Letter of Guarantee, Knowledge of Obligation

Bunker Payment, Privity, Terms and Conduct

Demurrage, Exception of Restraints of Established Authorities, Effect of ‘Without Fault’

Calculation of Laytime

Demurrage, Nature of Payment, Conduct

Demurrage, Exclusion Clauses, Interpretation

Arbitration, Incorporation Clause, Conduct

Demurrage, Failure to Load, Foreseeability

Laytime, Weather Working Day, Meaning at Formation

Laytime, Discharging Rate, Practicality

Incorrect Shipping Mark, Bank Obligations, Unconditionality

Laytime, Calculation, Evidence and Reasonability

Acknowledgement

Introduction

The title and table of contents are usually sufficient for this kind of literary work. Therefore, one could do without an introduction, but I feel it is important to provide context so that this book is as useful to the novice legal scholar, businessperson, foreign lawyer, or a beginner learner, as it is to a maritime law veteran.

These case notes are stories of performance disputes in shipping that came to be adjudicated in Indian courts. As such, they should not be read to understand the specific peculiarities of the law of procedure. They are insights into the substantive laws at play in these disputes. It is envisioned that the reader will consider the case notes relevant in determining whether further examination of the judgment is needed by them.

The book is divided into 3 parts by grouping the case notes into categories based on the main subject of the dispute; ship, cargo or documents. The headnotes of each of the case notes are created to indicate the event, cause of dispute, and determining factor. Thereafter, the essential identifiers have been mentioned: Title, Citation, and Court; where a judgment’s citation is not available, the date of the judgment has been mentioned. All the case notes have been broken down into three sections; issue, facts, and analysis. All the three sections are a compression of the relevant judgment. The idea being that the reader is able to discern what happened in the dispute and what was the judgment of the Court.

Narration in the case notes follows the procedural story of the specific dispute so that it is clear whether the dispute was adjudicated in an arbitration first or in a Court directly. You will notice that where some facts are unimportant to the conclusion of the judgment, they have been omitted. For example: if a conclusion does not depend on an agent’s actions then, the reference to the agent has been left out. Another example: where the volume of the cargo or the dates of the contracts do not matter, these have been omitted. However, to facilitate understanding of the social context, month and year of the event have been retained, where available.

Mainly Relating to Ship

Redelivery Default, Expired Charterparty, Agreement by Conduct

Title: Bharat Petroleum Corporation Ltd versus Great Eastern Shipping Co Ltd

Citation: (2008) 1 SCC 503

Court: Supreme Court of India

Issue:

This was an appeal from an order of a single judge of a High Court whereby they had set aside the award of an arbitral tribunal ruling that the tribunal had no jurisdiction to decide the dispute because there was no existing charterparty. The pertinent issue was whether the fact that the ship was in fact being used by the charterer after the expiration of the charterparty duration, coupled with their silence on the charter hire rate, be seen as acceptance of the previous charterparty terms.

Facts:

The ship Jag Praja was chartered for two years from 1996-1998 based on a charterparty drawn up in May 1997. In 1998, the charterparty was extended by mutual agreement for a period of two months. Post this, although the charterer continued to use the ship, no express agreement between the parties on the terms of a charterparty could be reached. It was the stance of the shipowner that the previous charterparty continued to exist, even though the duration stated in the charterparty had expired, because the charterer had continued to use the ship and had not redelivered it.

Analysis:

An offer is not accepted by mere silence on the part of the offeree, yet it does not mean that an acceptance is conveyed only by words. It can take the form of conduct in appropriate circumstances. Thus, where silence is coupled with a positive act, a sub silentio agreement develops. Therefore, the existence of a contract between the parties can be proved not only by their words but also by their conduct.Additionally,there was an obligation on the charterer to redeliver the ship to the shipowner on the expiration of the charterparty.

The Court found that during the course of communications between the parties, after the expiration of the previous charterparty and during the use of the ship by the charterer, the shipowner had informed the charterer that the usual practice, pending finalisation of a new charterparty, was that the existing terms and conditions continue to apply.

The conduct of the parties which included the charterer’s continued use of the ship showed that, except for the charter rate, there was no other dispute between the parties. The charterer had agreed to the stand of the shipowner sub silentio and continued to bind themselves by the terms and conditions contained in the previous charterparty.

The arbitral tribunal had overlooked the clauses on ‘redelivery’ and ‘final voyage’. A conjoint reading of these clauses obligated the charterer to