The Span Terza (No. 2) - House of Lords (Lord Diplock, Lord Fraser, Lord Keith, Lord Brandon and Lord Templeman) - 8 December 1983

Bunkers remain property of charterers on cancellation of time charter

The vessel Span Terza was chartered on the NYPE form. Clause 71 provided that the charterers had the option to cancel the charterparty if the vessel remained off hire continuously for longer than 25 days. On 18 November 1981 the vessel was arrested at Liverpool, a port which happened to be in the range of ports for redelivery on expiry of the time charter. On 16 December 1981 the vessel was condemned and ordered to be appraised and sold. On 23 December 1981 the charterers exercised their option under clause 71 and cancelled the charter. On 8 July 1982 the vessel was sold together with the unbroached bunkers on board her at the time of sale. The question was whether the owners or the charterers had the property in the bunkers at the time of the sale.