Category: Bareboat Charter

Caught up in the sanctions web? Not quite: a lucky escape.

The trouble with sanctions, especially with shipping, is that they can hit innocent third parties almost as hard as sanctionees themselves. Full marks, therefore, to Foxton J in Gravelor Shipping Ltd v GTLK Asia M5 [2023] EWHC 131 (Comm) for finding a way to rescue a shipowner caught in the cross-fire when its Russian financiers were fingered by the UK, the EU and the US.

Cypriot owners Gravelor had financed a couple of their small to medium bulkers by a bareboat arrangement with Russian lenders GTLK. These finance charters required hire payments into a Hong Kong account or any subsequently nominated account; they bound Gravelor to purchase the ships at expiry, but also by Clause 19 gave it an option to buy during the charter on three months’ notice on payment of all sums owing plus a “termination amount”. In the event of default, the lenders themselves had a right under Clause 18 to cancel the charter and insist on a sale to Gravelor against payment of all sums due, with a right to sell elsewhere if Gravelor would or could not come up with the money.

Following the 2022 Ukraine debacle, GTLK was sanctioned by the US, the UK and the EU. (It made a half-hearted and decidedly fishy bid to avoid the sanctions by a supposed sale of the business, but we can ignore this here.) At that point the vessels’ insurers and P&I club backed out, and it became illegal for Gravelor to credit the Hong Kong account stipulated in the charter or in any other way to make cash available to GTLK.

To protect its rights, Gravelor immediately gave notice exercising its option to purchase; it paid no more sums in Hong Kong but offered to pay to a blocked account elsewhere. GTLK declared Gravelor in default, gave notice cancelling the charter and rejected Gravelor’s notice exercising the option. It also put in a formal demand for payment under Clause 18; it did disingenuously offer to transfer the vessels against payment to a Russian Gazprom account nominated by it, no doubt hoping that if Gravelor could not do so, this might enable it to get the vessels into its own hands.

Gravelor now sought specific performance of the purchase agreement, arguing either that GTLK had exercised its option to sell under Clause 18 and thereby given them the right to buy, or (which was more advantageous to them) that they themselves had validly exercised their option under Clause 19. Accepting that the latter claim raised triable issues, in the present proceedings they concentrated on the former and sought an immediate interim order for transfer of the vessel.

Despite what might look like serious obstacles, they were largely successful. Foxton J accepted that there was no objection to such an interim order (rightly so: see The Messiniaki Tolmi (No 2) [1982] Q.B. 1248, esp at 1265-1269), if necessary on the basis of paying the higher of the sums due under Clause 18 or 19. By cancelling the charter under Clause 18 the owners had implicitly given notice to Gravelor requiring it to buy the vessels, thus creating a contractual obligation to transfer them, and their demanding payment of sums due had had the same effect.

GTLK then fell back on payment arguments. First, they said that once they had demanded payment into the Gazprom account, this was what was required under the charter, and if for what ever reason Gravelor could not make it (which they clearly could not), then any right of theirs to a transfer of the ship disappeared. Foxton J neatly disposed of this by pointing to clause 8.10, saying that if the owner was sanctioned and payment as stipulated could not be processed as a result, the parties would negotiate another means of payment. This, he said, applied to (in effect) any impossibility of payment, whether by Gravelor or to GTLK. Furthermore, the fact that payment might have to be in Euros rather than dollars did not affect the matter (a point previously decided in the slightly similar case of MUR Shipping BV v RTI Ltd [2022] EWHC 467 (Comm).

Secondly, GTLK then argued that if the only payment open to Gravelor was to a blocked account (which in EU law was the case), this could not amount to payment triggering a right to the vessel. Despite cases like The Brimnes [1973] 1 WLR 386 holding that payment was not payment unless immediately cashable by the payee, his Lordship rejected this too: payment meant payment that would be available to a payee in normal circumstances, even if this particular one had been sanctioned.

GTLK’s last line of defence was that specific performance was inappropriate and damages more appropriate, but this too was quickly disposed of. A distinct line of authority held that if damages might be difficult to extract from a defendant, that itself might make them an inadequate remedy: the judge applied that here, pointing out that quite apart from any credit risk encashing a money judgment against a sanctioned entity would be fraught with difficulty under the sanctions legislation.

Subject to a minor matter of no real importance here, he therefore said in effect that the order should go.

The news is therefore good for Gravelor. But there is an element of luck here. Had the provisions as to payment, or possibly the options to sell or purchase, been different, there might not have been the same result in the Commercial Court. There is something to be said for some general rules about the effects of sanctions on contracts, for example dealing with the effect of payment to a blocked account on contractual rights. But that is a medium to long-term idea.

Meanwhile, both vessels, presumably still manned by Gravelor crews, seem at the time of writing to have been on the high seas in the Baltic, a comfortable distance from the nearest Russian territory (at Kaliningrad). So not only does Gravelor now have an English judgment: it might even have its ships back.

In Rem Action- Demise Charterer or Not?

‘Statutory liens’ or ‘statutory rights in rem’ come into existence on commencement of in rem proceedings (The Monica S [1967] 2 Lloyd’s Rep 113). In practice, this means that, if a ship is sold to a third party before the jurisdiction has been invoked or if a charter by demise is terminated before such time, then the potential claimant may be unable to benefit from the in rem proceedings and the accompanying right of ship arrest. The most recent judgment of the Admiralty Court in Aspida Travel v The Owners and/or Demise Charterers of the Vessel ‘Columbus’ and The Owners and/or Demise Charterers of the Vessel ‘Vasco Da Gama’ [2021] EWHC 310 (Admlty) highlights that.

In this case, Aspida Travel claimed against the proceeds of sale of the vessels ‘Vasco De Gama’ and ‘Columbus’ in respect of travel agency services for the transport of crew to and from the vessels which took place between 1 January 2020 to 31 July 2020 when the vessels went to lay-up due to the pandemic. At that time the vessels ‘Vasco De Gama’ and ‘Columbus’ were demise chartered to Lyric Cruise Ltd and Mythic Cruise Ltd respectively to whom Aspida provided the relevant services and rendered the resulting invoices. The claim forms were issued on 13 November and 20 November 2020. The basis of the claims was Section 21 of the Senior Courts Act 1981, paragraph 4 of which provides that:

‘In the case of any such claim as is mentioned in section 20 (2) (e) to (r), where –

  • the claim arises in connection with a ship; and
  • the person who would be liable on the claim in an action in personam (‘the relevant person’) was, when the cause of action arose, the owner or charterer of, or in possession or in control of, the ship, an action in rem may (whether or not the claim gives rise to a maritime lien on that ship) be brought in the High Court against –
    • that ship, if at the time when the action is brought the relevant person is either the beneficial owner of that ship as respects all the shares in it or the charterer of it under a charter by demise; or
    • any other ship of which, at the time when the action is brought, the relevant person is the beneficial owner as respects all the shares in it.’

The main objection to the claims was that they do not meet the requirements of Section 21 (4) of the Senior Courts Act 1981, in that Lyric Cruise Ltd and Mythic Cruise Ltd as the ‘relevant persons’ (i.e. the persons who would be liable in personam on the claims) were the charterers at the time when the cause of action arose, but not the demise charterers at the time when the action was brought. In fact, Mythic Cruise Ltd and Lyric Cruise Ltd terminated their charters on 7 October 2020 and 9 October 2020. As the claims were brought more than a month later, it was held that the third require of the Section 21 (4) of the Senior Courts Act 1981 was not fulfilled. By the time the claims were issued, Mythic Cruise Ltd and Lyric Cruise Ltd were no longer the demise charterers.

The murky world of anti-suit injunctions — with a new twist

When it comes to remedies in international litigation, what matters in most cases is not whether the court can give them, but when it will. The point is nicely illustrated in a decision yesterday from Cockerill J about anti-suit injunctions (see Times Trading Corporation v National Bank of Fujairah [2020] EWHC 1078 (Comm)). Essentially the issue was this. A person who sues abroad in blatant breach of an arbitration or jurisdiction agreement will be enjoined almost as of course on the basis of The Angelic Grace [1995] 1 Lloyd’s Rep 87 and Donohue v Armco Inc [2002] 1 All ER 749. But what if this is not so (for instance, where the injunction defendant is an assignee, or where the existence of a direct contract between the two is controverted)? Jurisdiction is not in doubt: but does the ASI run almost as of course as before, or does the person seeking it have to jump the fairly high hurdle of showing oppression? Cockerill J plumped for the former solution.

To over-simplify, a cargo of coal carried in the 57,000 dwt bulker Archangelos Gabriel was delivered without production of the bills of lading, which were held by NBF, a Fujairah bank financing the buyer. It was common ground that the bills incorporated a London arbitration clause. NBF, mindful that the twelve-month Hague-Visby time-bar expired in June 2019, intimated a claim to the vessel’s owners R in December 2018; they issued in rem proceedings in Singapore in January 2019 and served them ten months later. In addition they issued arbitration proceedings in London against R in June, just within the time-bar. Then came a bombshell: after some procedural skirmishing R alleged with considerable plausibility that the vessel had actually been bareboat chartered to T, with which it seemed to have fairly close relations, and that the relevant bills, issued on behalf of the master, were charterers’ bills and not theirs.

Caught on the hop, and with a claim against T now out of time, NBF made it clear that they would add T to the Singapore proceedings and attempt to add them as a respondent to the London arbitration. T, fairly confident that it could resist the latter attempt, sought an ASI to prevent continuation of the Singapore proceedings against it, relying on the arbitration clause.

Had it been admitted that T and NBF were both party to a contract containing the arbitration clause, the case would have been easy: but it was not. However incongruously given its claim against T in Singapore under the bill of lading, in London NBF put in issue the question whether T was party to that document at all. Was this a case where the ASI should normally run as of course? T said it was: NBF that it was not. Having discussed the authorities, Cockerill J fairly unhesitatingly supported T’s position. The claim for the ASI here was “quasi-contractual” in the same way as if the injunction defendant were an assignee of some sort seeking to enforce an obligation without respecting an arbitration clause in it (as in cases like The Yusuf Cepnioglu [2016] 1 Lloyd’s Rep 641); true that here the claim was that T rather than NBF was a technical third party, but that was irrelevant. And in all such cases, she said, the rule in The Angelic Grace [1995] 1 Lloyd’s Rep 87 applied. And rightly so in our view; what should matter in international litigation cases is a clear illegitimate attempt to make an end-run around a clear contractual arbitration or jurisdiction clause, not technical questions of rights to enforce, or duties to perform, a particular contractual obligation.

Not that this mattered in the event. Had push come to shove, her Ladyship would, in a no-nonsense way reminiscent of Bertie Wooster’s Aunt Agatha, have decided T was the carrier under the bill of lading and so applied The Angelic Grace anyway (see at [80]). But that is beside the point for our purposes.

We should add the final twist to the story. In the event T’s victory on this point was for another reason entirely Pyrrhic, the only gainers being the lawyers. NBF had acted fairly reasonably in proceeding against R, and T’s merits were not entirely sparkling. In the circumstances the judge, while clearly willing to injunct NBF, did so only on terms that T would not take any time-bar points in the London arbitration. Ironically these were exactly the terms on which NBF had offered to discontinue the Singapore proceedings in the first place. But at least we now know that their judgment was right; and in addition we have some very useful clarification on the subject of ASIs generally.

Maintaining class under a bareboat charter. Condition or innominate term?

 

This was the question before the Court of Appeal in Ark Shipping Company LLC v Silverburn Shipping (IOM) Ltd (The Arctic) [2019] EWCA Civ 1161. In October 2012 a tug was bareboat chartered for 15 years on Barecon 89 form. Clause 9(a) require the demise charterers to “….keep the Vessel with unexpired classification of the class indicated in Box 10 and with other required certificates in force at all times….”. The tug arrived at Astrakhan for repairs and maintenance on 31 October 2017, and the class certificates expired on 6 November 2017, before entering dry dock for repairs, some five years after her last special survey. The Court of Appeal held that the clause was an innominate term and not a condition and therefore did not give owners an automatic right to terminate the contract if it were breached.

Gross LJ gave various reasons for concluding that the term was not a condition. The term in question was not expressed to be a condition, it was not a time clause, and there was no interdependence of the parties’ obligations which weighed so heavily in Bunge v Tradax.           The term was found in the middle of cl. 9A headed “Maintenance and Operation” which set out the distinct but closely connected obligation on Charterers, as to maintaining both the physical condition of the vessel and its class status. The obligations as to the former were not conditions and the structure of cl. 9A, in an industry standard contract, strongly suggested that the term was not to be construed as a condition.

Although cl 9 (A) required Charterers to keep “…other required certificates in force at all times”, this could not be limited, as owners suggested, to the certificates required by class in order to issue the main classification certificate. Charterers’ obligation covered a range of matters, from the trivial to the those of serious consequence. A condition analysis would mean, for instance, that a 15 years’ charterparty could be terminated by Owners if Charterers committed any breach in respect of the certificates required under the BWM or AFS conventions. Breach of the term could result in trivial, minor or very grave consequences, so suggesting that the term was innominate rather than a condition. Although a time charter term that a vessel was in class at the date of delivery was likely to be a condition, per dicta of Rix LJ in The Seaflower, [2001] 1 Lloyd’s Rep. 341, that was not the position with an obligation to maintain class throughout the charter.

Bareboat charters — keep your paperwork up to date

Life can be demanding for bareboat charterers, whether they are simply chartering in, or using a bareboat charter from a bank as a financing device.

In Silverburn Shipping v Ark Shipping [2019] EWHC 376 (Comm) owners under a Barecon1989 charter had suspicions as to their Korean charterers’ ability and intention to look after the vessel properly, and terminated the charter. One reason they gave was that the charterer had allowed the BV classification to lapse a short time before the vessel went into dry dock, thus breaking its obligation under Clause 9 to “keep the Vessel with unexpired classification of the class … and with other required certificates in force at all times”. Arbitrators refused to order the immediate redelivery of the vessel, holding that the duty to maintain class was not absolute, but rather to renew any expired entry in a reasonable time, and in adition that the duty to maintain the vessel in class was an intermediate term and not a condition.

On a s.69 appeal, Carr J disagreed. She saw no reason to read the obligation to keep the vessel in class as anything other than an absolute duty. Further, while accepting that the oft-emphasised requirement of commercial certainty could be over-used and could not “be deployed as some trump card” (a bon mot at para.[53] that is likely to find its way quickly into textbooks and counsel’s argument), she decided that the duty to keep in class was a condition of the contract, Breach of it could be serious in respect of the tradeability of the ship, and affect insurance, ship mortgage and flag: entry in class was moreover a black-and-white criterion with no shades of grey which was redolent of the idea of a condition.

This is something that needs to be taken seriously by charterers. Although the wording of Clause 13 of Barecon2017 differs slightly from the 1989 version, any discrepancy is minor and Carr J’s reasoning would, we suggest, continue to apply. Moreover, the right to terminate a bareboat charter can have considerable effects, particularly in the case of a financing charter with a purchase option: once the charter goes, so does the option. True, if the grounds for termination were wholly technical, in theory the court would have a right to relieve a bareboat charterer from forfeiture (The Jotunheim [2005] 1 Lloyd’s Rep. 181); but this is a difficult jurisdiction to persuade it to exercise, particularly in the face of an agreement for termination entered into by commercially-savvy parties. Charterers and borrowers, you have been warned.

What constitutes a ‘claim’ under stakeholder proceedings? The CV Stealth (again).

 

 

The CV Stealth involved the lengthy detention of the vessel in Venezuela while waiting to load cargo, pursuant to time charterers’ orders. This resulted in claims for  hire during this period by head owners against the bareboat charterers and indemnity claims by the bareboat charterers against the time charterers.  The bareboat charter remains in force, although the vessel was redelivered under the time charter in 2015. The case has already come before the Commercial Court on two occasions (reported in this blog on May 24th 2016  and  November 16th 2017).  It has now come back for a third time, ST shipping and Transport Pte Ltd & Ors v. Space Shipping Ltd, Psara Energy Ltd [2018] EWHC 156 (Comm), with an issue as to what constitutes a ‘claim’ for the purposes of stakeholder proceedings under CPR Rule 86.1 which provides: “ This Part contains rules which apply where — a person is under a liability in respect of a debt or in respect of any money, goods or chattels; and competing claims are made or expected to be made against that person in respect of that debt or money or for those goods or chattels by two or more persons.”

The time charterers had become subject to an award under which they were to pay $6.4m to disponent owners. They then became notified by head owners of an assignment in their favour by disponent owners of $1,787,375 reflecting 181 days’ hire under the bareboat charter. Disponent owners subsequently made a claim for the full of the award of $6.4m  under a letter of undertaking that had been issued by Glencore, as guarantors for time charterers. The demand took no account of the assignment effected in favour of head owners, and Glencore and time charterers issued stakeholder proceedings in respect of US$6.4m held by time charterers’ solicitors. Disponent owners then accepted that the sum representing 181 days hire which had been the subject of the assignment could be paid out to head owners.

However, charterers did not accept that they had now received the “all clear” to pay the balance to disponent owners. First, a dispute remained between head owners and disponent owners as to the scope of the assignment although this was swiftly decided against head owners in the third arbitration. Secondly, the head owners then obtained from the US District Court of Connecticut a Rule B attachment order which attached or garnished “the debts of [the charterers] to [the disponent owners]”, in support of their claims against the  disponent owners totalling some US$19.6m. The head owners then gave notice of the order to the time charterers pursuant to which they said that the charterers were directed to “attach and freeze and all tangible or intangible property and/or assets held for the benefit of [the disponent owners]”.  Head owners claimed that this gave then a proprietary claim over time charterers’ debt to the disponent owners. The order was subsequently vacated on charterers’ application of the grounds that as the court could not exercise personal jurisdiction over charterers, property held by the charterers were outside the jurisdiction of the court. Head owners appealed against the decision. Charterers resisted the payment out of the sums in the stakeholder account because there was still the risk of a double payment, if head owners’ appeal in the Rule B proceedings were successful.

The matter came before the Commercial Court and Teare J had to decide whether there was a stakeholder claim within CPR Part 86. The disponent owners submitted that this stakeholder claim was not within CPR Part 86 because there were no “competing claims ”.  First, the disponent owners did not have a claim, but, rather, an arbitration award. The disponent owners relied on Stevenson & Son v Brownell [1912] 2 Ch 344 and the note in the White Book at 86.1.2 based upon that case to the effect that “claim” in interpleader or stakeholder actions did not extend to concluded claims where judgment has been obtained . Second, Part 86 requires or envisages proceedings in the English court, whereas here the Rule B proceedings had been commenced in Connecticut, not in in England. Teare J rejected both contentions and held that there was a ‘claim’ within CPR Part 86. The context of Part 86 did not require ‘claim’ to be limited to proceedings before an English court and a competing claim could be one that was made in another jurisdiction. The present case was distinguishable from Stevenson, a case involving two competing claims to royalties, one of which had ripened into a judgment. The present case did not concern rival claims by two persons claiming to be entitled to be paid hire under the time charterparty. Rather, head owners claimed a proprietary right by way of lien on the chose in action represented by the disponent owners’ right to payment of the award by the charterers. Furthermore, although the disponent owners were the beneficiaries of several arbitration awards they were not judgment creditors.

A further issue was whether Glencore were entitled to claim stakeholder relief as they had only been subject to one claim under the LOU, from the disponent owners. Teare J found that as the LOU was a contract of surety it was sensible that both the primary obligor and the surety were made party to the stakeholder claim.

Teare J then decided that the sum in the stakeholder account should be paid out to the disponent owners. There was no risk of time charterers being later ordered to pay the same sum to head owners if their Rule B appeal were to succeed. As party to the stakeholder claim, head owners were bound  by reason of the doctrine of res judicata by any order the court makes. The court’s order would estop them  from contending that they, rather than the disponent owners, were entitled to the debt owed by the charterers.

BARECON 2017 out now.

 

In December 2017 BIMCO published the new version of its bareboat charter form, BARECON. The main changes to its predecessor, BARECON 2001 are:

 

  • The shipowner now owes an absolute obligation to deliver the vessel in a seaworthy condition, as opposed to being obliged to exercise due diligence to make the vessel seaworthy on delivery. If the charterer has inspected the vessel before delivery, the owner must deliver the vessel to the charterer in the same condition, fair wear and tear excepted. (Cl 3(a)).

 

  • An option to extend the charter period at a pre-agreed rate is now included (cl.2).

 

 

  • Charterer and owner are given the right to place representatives on board before delivery and redelivery (cl.6) and have the option to arrange for an underwater inspection of hull, rudder and propeller in the condition survey on delivery and redelivery (cl.7).

 

  • Charterers remain liable for undertaking any structural changes mandated by compulsory legislation but two options are provided for allocating their costs. The default position is that all costs are for charterer’s account. The second option is to provide a pre-determined formula for the apportionment of the costs.(Cl 13(b).

 

  • The words ‘in respect of which time shall be of the essence’ have been removed from the provision relating to payment of hire and this now provides a prescribed grace period of three banking days (cl.15).

 

 

  • The insurance provisions in cl. 17 have been amended so as to take account of the decision in The Ocean Victory, so as to provide that payment of insurance to cover the owners loss does not prevent the owners or their insurers from claiming against the charterer, nor the owner or the charterer, or their insurers, from claiming against third parties. Cl.19(a) provides that the bareboat charterers are to become liable to damages if the vessel becomes a total loss. Clause 17 provides two for taking out insurance. First, charterers to insure for Hull and Machinery, war, and P&I risks. Second, owners to insure for Hull and Machinery and war risks, charterers to insure against P&I risks.

 

  • The charter now contains anti-corruption (cl.28) and sanctions clauses (cl.29) based on the existing BIMCO clauses, amended for a bareboat charter context.

 

 

  • The owner’s right to withdraw is now described as a right to terminate, and the war risk clause has been deleted from the termination provisions (cl.31).

 

  • The optional provisions in relation to newbuildings in Part III now include a right on the part of charterers to request a change order to the vessel’s specifications in accordance with the terms of the building contract, with charterers bearing any additional costs, and the termination provisions are amended so that the owner has the right to terminate the charter in the event it becomes entitled to cancel the building contract.

 

 

Unsafe ports. The Ocean Victory in the Supreme Court.

The Ocean Victory involved a Capesize vessel which became a constructive total loss at the discharge port of Kashima. The quay at Kashima was vulnerable to long waves which can result in a vessel being required to leave the port. The only route in and out of Kashima is by a narrow channel, the Kashima Fairway, which is vulnerable to northerly gales. There was no meteorological reason why these two events should occur at the same time, but on this occasion the two events did coincide when the vessel had to leave port due to long waves, and subsequently became a constructive total loss. The vessel was demise chartered on Barecon 89 form and sub-time chartered. Both charters contained a safe port warranty.  One of the vessel’s hull insurers took assignments of the owners’ and demise charterer’s rights and claimed for breach of the safe port warranty.

The Supreme Court which gave judgment yesterday, [2017] UKSC 35,  held that there had been no breach of the safe port undertaking.  The test for breach of the safe port undertaking was whether the damage sustained by the vessel had been caused by an “abnormal occurrence”, and the date for judging the breach of the safe port warranty was the date of nomination of the port. The Supreme Court unanimously upheld the decision of the Court of Appeal. The combination of long waves and the exceptional nature of the storm at Kashima constituted an abnormal occurrence. Accordingly, there had been no breach of the safe port warranty under the demise charter and the sub-time charter.

The Supreme Court also dealt with two further questions that would have arisen if there had been a breach of the safe port undertaking under the two charters.  The first was whether the provisions for joint insurance in clause 12 of the Barecon 89 form precluded rights of subrogation of hull insurers and the right of owners to recover in respect of losses covered by hull insurers against the demise charterer for breach of an express safe port undertaking. The majority view was that clause 12 did preclude such a claim and provided a comprehensive scheme for an insurance funded result in the event of loss of the vessel by marine risks. This scheme was not altered by the safe port undertaking.  The second was whether liability under the two charters could be limited under art. 2(1)(a) of the LLMC 1976. The Supreme Court unanimously agreed with the Court of Appeal in The CMA Djakarta [2004] 1 Lloyd’s Rep 460 that Article 2(1)(a) of the 1976 LLMC  which allows owners or charterers to limit liability for loss or damage to property “occurring on board the ship” or “in direct connexion with the operation of the ship” did not include loss or damage to the ship itself.

Keep right on to the end (of the charter). No constructive redelivery under bareboat charter.

The termination of a demise charter pursuant to the shipowner’s right of withdrawal is a more complex process than with an ordinary time charter. The charterer still has its crew on board the vessel and some time may elapse before the shipowner is able to retake physical possession of the vessel. In the interim charterers may have entered into commitments with bunker suppliers and with cargo owners, pursuant to bills of lading.

In The Chem Orchid Lloyd’s Law Reports , [2014] 1 Lloyd’s Rep. 520, the High Court of Singapore had to decide whether the bareboat charterer, the “relevant person” who would be liable in personam, was the demise charterer when the cause of action arose, so as to found jurisdiction under s.4(4) of the Singapore High Court (Admiralty Jurisdiction) Act, which is in identical terms to s.21(4) of the UK Senior Courts Act 1981. The Assistant Registrar struck out the writs in rem on the grounds that the charter had been terminated prior to the issue of the writs. Accordingly, the vessel could not be arrested in relation to claims arising in the interim between the notice of termination being given and physical redelivery of the vessel to the shipowners.

The decision has now been reversed by Steven Chong J, [2015] 2 Lloyd’s Rep. 666, who held that the charter had not been validly terminated, but even it had, there was no concept of constructive delivery applicable to the termination of bareboat charters which continue until physical redelivery. Therefore, at the time the in rem writs were issued by the bunker suppliers and the cargo claimants, the vessel was still in the possession of the charterers.

On 20 January 2016 the Singapore Court of Appeal held that it had no jurisdiction to hear an appeal from this decision. [2016] SCGA 04.