You Can Draft Your Way Out of Almost Anything - Article 2: How Can You Achieve the Result Desired by Owners in The "Caravos Liberty"?

The following is a robust solution to achieve the result desired by Owners in The “Caravos Liberty” (to suspend performance and to withdraw the vessel for an earlier non-payment of hire) by amending the BIMCO Non-Payment of Hire Clause for Time Charter Parties:

QUOTE

(a)  If the current hire and/or any earlier hire still due and owing is not received by the Owners by midnight on the current hire due date, the Owners may immediately following such non-payment suspend the performance of any or all of their obligations under this Charter Party (and if they so suspend, inform the Charterers accordingly) until such time as the current payment due and/or any earlier payment still due and owing is received by the Owners.  Throughout any period of suspended performance under this Clause, the Vessel is to be and shall remain on hire.  The Owners’ right to suspend performance under this Clause shall be without prejudice to any other rights they may have under this Charter Party.

(b)  The Owners shall notify the Charterers in writing within 24 running hours that the current payment due and/or any earlier payment still due and owing must be received within 72 running hours from the time the current hire was due.  If the current payment and/or any earlier payment still due and owing is not received by the Owners within the number of running hours stated, the Owners may by giving written notice within 12 running hours withdraw the Vessel.  The right to withdraw the Vessel shall not be dependent upon the Owners first exercising the right to suspend performance of their obligations under this Charter Party pursuant to sub-clause (a).  Further, such right of withdrawal shall be without prejudice to any other rights that the Owners may have under this Charter Party.

(c)  The Charterers shall indemnify the Owners in respect of any liabilities incurred by the Owners under the Bill of Lading or any other contract of carriage as a consequence of the Owners’ suspension of and/or withdrawal from any or all of their obligations under this Charter Party.

(d)  If, notwithstanding anything to the contrary in this Clause, the Owners choose not to exercise any of the rights afforded to them by this Clause in respect of any particular non-payment or late payment of hire or a series of non-payments or late payments of hire, this shall not be construed as a waiver of their right either to suspend performance under sub-clause (a) or to withdraw the Vessel under sub-clause (b) in respect of any earlier or subsequent non-payments or late payments under this Charter Party.

UNQUOTE

If the above drafting solution is adopted then any reference to the clause being a BIMCO clause should either be deleted entirely or appropriately qualified to ensure there is clarity as to the clause having been amended from the original wording, to avoid a misrepresentation, misstatement or misdescription as to the true nature or origin of the wording used.

Disclaimer: the above does not constituted any recommendation or legal advice, which should be sought from a suitably qualified and experienced lawyer before adopting any drafting solution in light of all the material circumstances in each and every situation.

JAL

Copyright Jim Leighton 2019