Charterers’ failure to pay hire: owners’ right to damages where the vessel is withdrawn

The right of owners to claim damages in the event of charterers failing to pay hire and the vessel being withdrawn is complicated. The complication has been reflected in the commentary in Time Charters1 and is generated from conflicting authorities as to whether the contractual obligation of charterers to pay hire punctually and regularly is a condition or an innominate term.

It is not controversial that breach of such obligation by charterers gives owners the right to withdraw the vessel, albeit they sometimes require the service of an anti-technicality notice (eg clause 11 of the NYPE 93 form and clause 9 of the Shelltime 4 form). In the recent case of Kuwait Rocks Co v AMN Bulkcarriers Inc [2013] EWHC 865 (Comm), Flaux J had the opportunity to discuss this issue. This article reviews the law followed by a discussion of Kuwait Rocks .