Eastern Pacific Chartering Inc v Pola Maritime Ltd

A charterparty performance warranty based on good-weather speed and consumption is ordinarily assessed by the conventional good-weather method, although that method is not exclusive. An alternative method must be reliable and consistent with the express warranty. Favourable currents are not deducted unless the charterparty provides otherwise. A performance time bar requires sufficient notice and supporting material, not complete quantification. Wrongful-arrest damages require bad faith or gross negligence implying malice.

The claimant claimed unpaid hire, bunkers and expenses under a trip time charter. The defendant counterclaimed deductions for slow steaming and hull fouling, and damages for the allegedly wrongful arrest in Gibraltar of a different vessel.

The court considered the contractual performance warranty, the time bar for performance claims, the treatment of favourable currents, the reliability of an RPM-based method, beneficial ownership for sister-ship arrest, and liability for wrongful arrest.

1. The performance claim was not time-barred. The defendant’s correspondence gave sufficient notice of the nature and basis of the claim and supplied material enabling investigation. Complete precision and documentation of every aspect of quantum were unnecessary.
2. The good-weather method was the primary method for assessing the agreed performance warranty, but was not exclusive. An alternative method had to be reliable and consistent with the warranty. A representative good-weather period established 16 hours’ underperformance. The RPM method was unreliable and inconsistent with the agreed contractual benchmark.
3. Favourable currents were not to be deducted. The words “NO ADVERSE CURRENTS” excluded adverse currents from the good-weather definition but did not exclude favourable currents.
4. The hull-fouling claim failed. The evidence did not reliably establish the extent or effect of fouling, and adding the claimed loss risked double recovery.
5. For the purposes of section 21(4)(ii) of the Senior Courts Act 1981, beneficial ownership meant equitable ownership of all shares in the ship. It did not include mere operation, management, bareboat chartering or ownership of the registered owner’s company. The defendant was not beneficial owner of the arrested vessel.
6. Nevertheless, the arrest was a genuine but understandable mistake based on unclear public information. The test in The Evangelismos, confirmed in The Kommunar (No 3), The Alkyon and Willers v Joyce, required bad faith or gross negligence implying malice, which was not established.
7. The wrongful-arrest claim and hull-fouling counterclaim were dismissed. The slow-steaming counterclaim succeeded to the extent of 16 hours’ lost time, to be deducted from hire.

First-instance decision. The judgment records an earlier jurisdiction decision in [2021] EWHC 1707 (Comm).