Notes on legitimate last voyage orders


Checklist:

• What is the charter period?

• What additional margin should be allowed?

• Can the proposed final voyage reasonably be expected to allow delivery by the end of the charter period including any margin?

• Have circumstances changed since the orders were given?

• Has the right to refuse the orders been waived?

• Does the charter provide for what is to happen if the ship is not redelivered by the end of the charter period?

Supplementary Comments:

1. Where the charter period is for a specific period (e.g. “x months”) or a range (e.g. “x to y months”) or a range of dates is given for redelivery then usually a reasonable margin will be implied.

2. Where the charter period is expressed as a “minimum” or “maximum” then a margin will not be implied.

3. Where a charterparty contains an express margin (e.g. “x days more or less”) then a further or additional margin will not be implied beyond the express margin.

4. Use of the word “about” is consistent with a presumption of an implied margin but may not operate to increase an express margin. Conversely, the absence or deletion of the word “about” would not necessarily prevent a margin from being implied but might do so in some circumstances.

5. The length of margin that it would be reasonable to imply would depend upon all the circumstances, including the length of the original charter period. Typically a few days margin might be implied but there is no hard and fast rule.

6. Voyage orders are legitimate in the sense that owners are not entitled to refuse them if the orders can reasonably be expected to allow redelivery before the end of the charter period (as extended by any express or implied margin). But orders given in advance are contingent only and their legitimacy is primarily to be judged at the time they come to be performed.

7. Even if voyage orders are legitimate at the time they are given, a change in circumstances may entitle the owner to refuse to perform and to call for alternative orders.

8. Whether partial performance of an illegitimate order amounts to a waiver by the owner of the right to refuse further performance depends upon whether the owner has full knowledge of the facts and illegitimacy of the order.

9. Performance of a voyage order does not normally prevent the owner from claiming damages for late redelivery (even if the order was legitimate at the time it was given).

10. The basic position is that the owner is entitled to continue to receive hire until redelivery.

11. The owner may be able to prove a loss recoverable as damages if the hire rate is below the market rate. Damages normally being assessed as the difference between the hire rate and market rate for the period from the end of the charter (as extended by any margin) to redelivery.

12. A charterer is normally regarded as not having assumed the risk of the owner’s loss of profit on a following charter.

13. If the time charter is expressed to be for a specific trip or trips then orders may be legitimate in the sense that the charterer must send the ship on the specified voyage. A right to damages for late redelivery would not arise unless statements as to the duration of the trip either render the charterparty a period charter on its true construction or, amount to a warranty or, can be shown to have not been given in good faith.

These notes reflect the author's opinion at the date of publication of the typical issues relevant to this topic from an English law perspective. The notes are only a general guide, they are not comprehensive. These notes do not contain or constitute any representation of fact. Individual circumstances vary and other features of English law may be relevant. It is recommended that you contact us and take detailed advice before taking any decisions. If you would like to be added to the mailing list for these notes then please write to us with your name and mailing address. Comments and suggestions for further topics are welcome. Contact: info@morgans-law.com Copyright © 2006 Morgans. Pursuant to s.78 Copyright Designs & Patents Act 1988, Morgans asserts the right to be identified as author of this work.