Damages for renunciation under sub-time charter.



In Spar Shipping the shipowner recovered damages for a renunciation of the time charterer who shows that they do not intend to make full payments of hire in future. A similar claim may succeed where it is the disponent shipowner who is in this position and has withdrawn from the sub-time charter and is now seeking to recover damages for the unexpired balance of the charter. In London Arbitration 29/16 the tribunal awarded the disponent owner damages and rejected the charterer’s argument based on impossibility of performance, in that the head owners had also withdrawn the vessel under the head charter due to the disponent owner’s inability to pay hire.

The tribunal had first to consider whether the disponent owners would have been able to perform the charter, had the sub-charterers paid their hire. The tribunal had to consider the position not as it was at the moment of withdrawal, but as it would have been had charterers not defaulted. On that basis, disponent owners would have been able to perform the charter. Second, the tribunal had to consider the measure of damages. They would start by looking at the hire lost during the remainder of the charter period and credit would then be given for hire earned under alternative fixture/s. The owners had instead offered to give credit for the savings incurred in termination of the head charter which equated to the credit given by head owners in computing disponent owners’ liability for renunciation of the head charter. This was correct.

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Professor Simon Baughen

Professor Simon Baughen was appointed as Professor of Shipping Law in September 2013 (previously Reader at the University of Bristol Law School). Simon Baughen studied law at Oxford and practised in maritime law for several years before joining academia. His research interests lie mainly in the field of shipping law, but also include the law of trusts and the environmental law implications of the activities of multinational corporations in the developing world. Simon's book on Shipping Law, has run to seven editions (soon to be eight) and is already well-known to academics and students alike as by far the most learned and approachable work on the subject. Furthermore, he is now the author of the very well-established practitioner's work Summerskill on Laytime. He has an extensive list of publications to his name, including International Trade and the Protection of the Environment, and Human Rights and Corporate Wrongs - Closing the Governance Gap. He has also written and taught extensively on commercial law, trusts and environmental law. Simon is a member of the Institute of International Shipping and Trade Law, a University Research Centre within the School of Law, and he currently teaches at Swansea on the LLM in:Carriage of Goods by Sea, Land and Air; Charterparties Law and Practice; International Corporate Governance.

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