IMT Shipping & Chartering GmbH v Chansung Shipping Company Ltd, Owners of the "Zenovia"

A time charterer’s approximate redelivery notice does not, without more, operate as a contractual option or impose an implied term preventing later changes of employment. The notice must at least be given honestly or in good faith, but its commercial purpose does not justify implying a wider restraint on the charterer’s freedom of action. A promissory estoppel requires a clear and unequivocal representation intended to affect legal relations, reliance, and circumstances making it inequitable to insist on strict rights. Qualified language such as “without guarantee” may negate contractual or promissory content. The notice and surrounding communications must be assessed together; a court cannot extract an unqualified promise by disregarding qualifications in the notice.

IMT was a sub-time charterer of the Zenovia. The charter chain permitted redelivery between 20 September and 22 November 2007 and required successive notices of approximate and definite redelivery. After a notice indicating redelivery in early November, the charterers revised the approximate date to about 20 November. The owners withdrew the vessel before the contractual latest redelivery date.

The arbitrators held that the revised notice was ineffective because of promissory estoppel and an implied term, and upheld the withdrawal. IMT appealed under section 69 of the Arbitration Act 1996. The issues were whether the charterers had made a binding representation, whether an implied term constrained their conduct, and whether the owners could rely on communications outside the notice.

1. The appeal was allowed. The arbitration award was set aside. An award of US$741,194.55 was substituted in favour of IMT, together with an order that the owners pay the charterers’ costs of the reference and the arbitrators’ fees and expenses.
2. The charter did not contain, and the court would not imply, a term preventing charterers from deliberately doing anything which might prevent an approximate redelivery date from being met. The implication of a term was a question of law. The arbitrators had addressed commercial convenience and the owners’ future employment plans, rather than whether the contract lacked business efficacy without the proposed term. The repeated regime of approximate notices followed by definite notices also militated against the proposed absolute restraint.
3. An approximate notice had to be given honestly or in good faith. The court did not decide whether it also had to be based on reasonable grounds. The charterer’s right to use the vessel until the latest contractual redelivery date was not displaced merely because the owner made plans in reliance on an approximate date.
4. Promissory estoppel required a clear and unequivocal representation intended to affect the parties’ legal relations, understood as a promise likely to be acted upon, followed by reliance making it inequitable to insist on strict rights. The arbitrators’ findings that the charterers had made no unequivocal abandonment of rights, and that the notice was too uncertain to have contractual content, were inconsistent with their conclusion that an estoppel arose.
5. The totality of the communications had to be considered. The approximate notice, including its qualifications and the words “without guarantee”, could not be separated from the voyage orders and hire material so as to create an unqualified promise that the Noble voyage would be the final employment. The owners’ cross-appeal on election therefore failed in substance.

• Arbitration: The arbitrators upheld the owners’ withdrawal of the vessel, relying on promissory estoppel and an implied term.
• High Court (Commercial Court): On an appeal under section 69 of the Arbitration Act 1996, the award was set aside and judgment substituted for IMT.