Quiana Navigation SA v Pacific Gulf Shipping (Singapore) PTE Ltd "Caravos Liberty"

Under a contractual anti-technicality clause, references to “the hire”, “the payment due” and “the due date” ordinarily concern the hire instalment falling due on the relevant date. They do not ordinarily create successive rights to withdraw for historic arrears which were not pursued when first due. The continuing right to recover unpaid hire as a debt is distinct from the contractual right to withdraw, which is a carefully conditioned remedy. A clause requiring notice within specified running hours must be construed consistently with the commercial objective of speedy certainty. An earlier decision does not establish a binding proposition where the point was not argued or decided and the contractual wording and notice regime materially differ.

The claimant owners appealed under section 69 of the Arbitration Act 1996 against a partial final award concerning the withdrawal of the vessel “Caravos Liberty”. The charterers had underpaid one hire instalment, then paid the next two instalments without clearing the shortfall. The owners later served an anti-technicality notice and withdrew the vessel for non-payment of the accumulated balance.

The tribunal held that the BIMCO Non-Payment of Hire Clause applied only to the hire falling due for the first time on the relevant due date. It therefore found the withdrawal unjustified. The appeal concerned whether the clause also covered earlier unpaid arrears, and, alternatively, whether failure to give an earlier notice waived the right to withdraw.

1. Appeal dismissed. The BIMCO Non-Payment of Hire Clause did not entitle the owners to withdraw the vessel on 10 August 2017 for the unpaid balance of the 11 July instalment. The expressions “the hire”, “the payment due” and “the due date”, read together, referred to the particular hire instalment due on the relevant date. Treating an historic shortfall as becoming due again on each later payment date would be strained and unnatural (paras [35]–[54]).
2. The clause had to be construed as a coherent whole. Its tightly timed anti-technicality regime, including the 24-hour notice period and 72 running-hour cure period, pointed towards a remedy linked to the particular default and its due date. The owners’ construction would leave a continuing, periodically renewable right of withdrawal for years, inconsistent with the commercial need for certainty (paras [61]–[66]).
3. The right to recover unpaid hire as a debt was distinct from the right to withdraw. The owners retained remedies including debt proceedings and, subject to feasibility, suspension. The fact that withdrawal was unavailable for a later date did not require the owners to perform on credit (paras [53], [58], [65]).
4. The Libyaville did not alter the result. It involved different contractual provisions, a different anti-technicality regime and a shortfall relating at least partly to the relevant payment. The proposition now advanced by the owners was not argued or decided in that case and was not part of its ratio (paras [67]–[83]).
5. The waiver issue was unnecessary to determine. The judge nevertheless indicated obiter that the owners would have succeeded on it. The right to withdraw under clause 37 accrued only after the contractual notice and cure requirements had been satisfied, so the right had not arisen merely because an earlier underpayment had occurred (paras [84]–[88]).

This was an appeal under section 69 of the Arbitration Act 1996 from a partial final award dated 7 March 2019. Permission to appeal had been granted by Teare J. The High Court dismissed the appeal.