Lloyd's Maritime and Commercial Law Quarterly
Australian Maritime Law
Martin Davies *
CASES
1. APC Marine Pty Ltd v. The Ship APC Aussie 11
Charterparties—ship arrest—whether demise charter had been terminated
The pipe-laying barge APC Aussie 1 was owned by APC Marine Pty Ltd (“APC”) and chartered to Trident Darwin Joint Venture Pty Ltd (“TDJV”) under a bareboat charter in the Barecon 2001 form. Clause 28(i) of that form is an “anti-technicality” clause, which provides that, if the charterer’s failure to make punctual payment of hire is due to “oversight, negligence, errors or omissions on the part of the Charterers or their bankers”, the owners must give the charterers written notice of the number of clear banking days specified in the charterparty—in this case, ten—in which to rectify the failure.
A payment of hire was due on 23 March 2009. TDJV paid nothing on that day. On 3 April 2009, APC sent an email to TDJV that referred to cl 28 of the charterparty (among others) and which stated that, unless hire was paid by 6 April 2009—ten clear banking days after 23 March 2009—APC would terminate the charter. TDJV then paid the lesser amount of hire that it contended was due. On 7 April 2009, APC sent TDJV an email pointing out that full payment had not been received and on 8 April 2009 APC sent TDJV a formal notice of withdrawal. After receiving that notice, TDJV, under protest, paid the outstanding amount of hire claimed by APC ($1.75 million). On 9 April 2009, APC instituted proceedings to arrest APC Aussie 1 to regain possession. On the same day, TDJV instituted separate proceedings seeking a declaration that the bareboat charter had not been terminated effectively by APC.
Decision: Order to arrest the ship refused. Declaration made that the charterparty had not validly been terminated.
Held: (1) APC would have been entitled to terminate the charter with immediate effect only if TDJV’s failure to pay had been due to some reason other than “oversight, negligence, errors or omissions on the part of [TDJV] or their bankers”. APC’s email of 3 April 2009 referred to cl 28 and the period of ten clear banking days required by that clause in case of failure to pay due to oversight, etc. Thus, APC did not seek to terminate the charter with immediate effect.
(2) The ten clear banking days required by the “anti-technicality” clause, cl 28, ran from the giving of notice by APC, not the failure to pay hire. Thus, the period did not begin to run on 23 March 2009 but on 3 April 2009, and did not expire until 17 April 2009,
* Admiralty Law Institute Professor of Maritime Law, Tulane Law School; Director, Tulane Maritime Law Center; Professorial Fellow, University of Melbourne.
1. [2009] FCA 690. Subsequent proceedings in this dispute are considered infra, § 6.
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