Two recent arbitrations addressed two different aspects of redelivery notices. In the first, owners claimed damages for losses said to be caused by defective redelivery notices. The charter provided for redelivery notices as follows: 30 day probable, 15 days approximate and 5 days definite. The vessel was on sub-sub charter when the time for giving those notices arose and the last permissible date for redelivery was 19 December.
15 days before that date, 4 December, sub-sub-charterers gave the 15 day notice. Sub-charterers passed it on two days later and charterers a day after that. At that point, owners requested a proper redelivery notice. On 22 December sub-sub-charterers gave a notice direct to owners for 28 December and on 5 January gave a one day notice, again direct. Redelivery eventually took place on 8 January.
Owners claimed damages for late delivery and for breach of the redelivery notice obligations contending that the last day for the 15 day notice was 4 December and had a proper 15 day notice been given at that date, the next employment could have been fixed immediately thereafter rather than early in the New Year when the market had fallen.
Charterers responded that late redelivery had been caused by a sunken vessel at the discharge port on 26 November, delaying all operations. However at the time charterers gave the 15 day notice they had no knowledge of that event but, rather, had relied solely on the sub-charterers’ notice. Charterers submitted that their sole obligation was to give redelivery notices in good faith or, if they must be given on reasonable grounds, this meant only facts actually known to them. Charterers relied upon “The Lendoudis Evangelous II” [1997] 1 Lloyd’s Rep 404.
In considering owners’ contention, the tribunal decided that the essence of the redelivery notice was the need to give a 15 day notice before the estimated redelivery date. It was not linked to a particular date but rather varied according to when redelivery was likely to be, so 4 December was not the last date on which the notice could be given.
As for charterers’ assertion of good faith, it was said that redelivery notices were important in owners being able to fix further employment and ought to be as reliable as possible, requiring charterers to make appropriate enquiries. The tribunal made an analogy to notices of expected readiness, which must be given in good faith and on reasonable grounds, encompassing facts which ought to be known. “The Lendoudis Evangelous II” would not assist charterers as that estimate was expressly “WOG”.
However, on the facts, the notice given on 4 December was not unrealistic in the circumstances and charterers were not in breach. Although it may have been late by the time charterers passed it on to owners, there was no suggestion this made the slightest difference, the breach complained of was that the notice was unrealistic.
Turning to owners’ claim for damages for late redelivery, charterers admitted a prima facie breach but relied upon the mutual exception of “all dangers and accidents of the seas.” Owners admitted the sunken vessel was such an event but claimed this was not causative as charterers could have redelivered elsewhere, and charterers ought to have discharged at an alternative port as the bill of lading contained a similar exception.
The Tribunal disagreed. Whilst the exception would excuse non-delivery it did not import a right to deliver the cargo at an alternative port and owners’ claim must therefore fail.
The second arbitration concerned early redelivery of a vessel rather than late. The charter trip was “abt 20 days wog” and charterers were to give redelivery notices of 20 days approximate followed by 10 and 5 days definite.
The trip in the event only took 12 days as operations had proceeded more smoothly than sub-charterers anticipated. However the 20 day estimate had been given in good faith. Disponent owners took redelivery when tendered but under protest.
Disponent owners argued that proper redelivery notices were a condition precedent to redelivery and so charterers were not entitled to redeliver when they did. The tribunal disagreed. The giving of such notices was not a condition precedent to redelivery. There was always uncertainty in relation to vessel operations and, for that very reason, margins were built into charter periods and redelivery notices were given on “approximate” and “expected” terms.
That would be the case even if the charter had not contained the “wog” provision. However its use strengthened the case for not having redelivery notices define the charter period in some way. In any event, disponent owners could demonstrate no loss as they had no right to deliver the vessel under the head charter until after the time they contended for as the earliest possible redelivery date by charterers and so would have paid precisely the same hire up the line.
Whilst the two awards concern different issues relating to redelivery notices it is interesting that one of the tribunals plainly considered such notices to be an important factor in allowing owners to run their business whilst the other seemed to view such notices to be of less import.
2007 713 LMLN (London Arbitration: 3/07) and 2007 715 LMLN (London Arbitration:5/07)
