CSSA Chartering and Shipping Services S.A v Mitsui O.S.K. Lines Ltd

Under a voyage charterparty, the owner’s obligation to commence the approach voyage may be absolute. The relevant date is identified by construing the charterparty, including any estimated arrival or readiness dates and, where appropriate, the cancelling date. The obligation arises when it is reasonably certain that the vessel will arrive at the loading port on or around the contemplated date. A cancelling clause ordinarily gives a right to terminate, not a promise sounding in damages, but it may help define when the approach voyage must begin. A due-diligence obligation will not be implied where the charterparty expressly requires the vessel to proceed with utmost despatch and an absolute obligation is necessary to provide commercial certainty.

The claimant charterers hired the defendant’s vessel under a voyage charterparty for a voyage from Rotterdam to the Far East. The vessel was completing an earlier charter when it suffered serious damage in the Suez Canal. The defendant advised that repairs would take months. The claimant terminated after the cancelling date and claimed agreed damages.

The charterparty contained an obligation to proceed to the loading port with utmost despatch, a laycan and cancelling date, and estimated arrival dates for stages of the previous voyage. The central issue was whether the defendant was under an absolute obligation to commence the approach voyage by a date when arrival by the relevant date was reasonably certain, or only a due-diligence obligation.

1. Monroe obligation. The obligation to proceed to the loading port with utmost despatch attached at a particular point in time. That point was to be identified by construing the charterparty and determining what constituted a reasonable time in light of its other terms. Where the charterparty contains an estimated arrival or readiness date, the owner must commence the approach voyage by a date when it is reasonably certain that the vessel will arrive on or around that date.
2. The obligation was absolute rather than merely one of due diligence. This provided certainty as to when the chartered service began and when the charterparty’s allocation of risk, together with related description and seaworthiness obligations, took effect.
3. The intermediate-port ETAs in the fixture recap were contractual estimates, although qualified by “IAGW/WP”. They served the same function as an ETA at the loading port. The owner was therefore absolutely obliged to commence the approach voyage at the end of a reasonable period for discharging at Antifer, assuming arrival there on the stated ETA.
4. A cancelling date was not itself a promise that the vessel would arrive by that date and ordinarily gave only a contractual termination right. Nevertheless, had no relevant intermediate ETAs been given, the cancelling date could have identified the date by reference to which the Monroe obligation was determined.
5. The words “despite the exercise of due diligence” in the cancellation clause concerned the owner’s right to propose a new readiness date. They did not convert the express obligation to proceed with utmost despatch into a due-diligence obligation.
6. The alternative renunciation argument did not arise. On the assumed basis that no term required timely commencement or arrival, the owners had not evinced unwillingness to perform. The termination notice would nevertheless have accepted any renunciation and the contractual termination right did not exclude common-law remedies.

The claim succeeded. Judgment was entered for the claimant for US$1,202,812.50.

First-instance decision. No prior appellate decision is stated in the judgment.