Scandanavian Trading Tanker Co. AB v. Flota Petrolera Ecuatoriana (The Scaptrade) - Court of Appeal (Sir John Donaldson M.R., May & Robert Goff L.JJ.) - 26 November 1982

No relief for charterers where vessel withdrawn for late hire payment

In 1977 Flota Petrolera chartered the vessel Scaptrade from the owners on a Shelltime 3 form which contained the usual provision for withdrawal in default of payment of hire. Hire was due on the 8th of each month. By 1979 the market had risen steeply and the market rate was almost double the charter rate. On 8 July 1979 the charterers failed to pay the hire due. Owners checked with the receiving bank on 9 July and, when payment had still not been made, they sent a telex to the sole brokers at 1500 on 12 July asking for charterers’ confirmation of hire. At 1546 on 12 July, having made one last enquiry, the owners sent a telex to the sole brokers withdrawing the vessel. Owners claimed damages amounting to the difference between the charterparty rate and the market rate for the balance of the charter period - about $1.2 million. They succeeded before Lloyd J. at first instance.