Conflicting clauses

A shipbroker acted as the sole broker for a voyage charterparty.

The charterers and owners both had their preferred laycan clauses and instructed the broker to use their specific clause. The broker did not spot that the clauses were conflicting and inserted both into the recap. The parties did not notice either and the fixture was agreed containing both clauses.

Ultimately, the ship was facing delays at the port of discharge (of the cargo for the previous fixture) meaning owners thought they would miss the existing laycan for the port of loading in the subject fixture.

Owners therefore exercised the option of their laycan clause to re-tender a new laycan which the charterers had a specified window of time to reject.

If the charterers did not reject within the set time, then the owner’s new laycan would be deemed to be accepted. The charterers did not reject the proposed new laycan which, for the owners, constituted acceptance. However, once the charterers also realised there would be a delay, they exercised the option in their clause to simply cancel the charterparty. They found a new ship and proceeded accordingly.

With no cargo, the owners had to look for alternative employment. The best alternative would position the ship in a less favourable position for the next cargo than the subject fixture, thus causing alleged losses.

The mitigation of the ship owner was questioned and the claim negotiated down to US$100,000 from US$400,000 which ITIC reimbursed to the shipbroker.