Right to cancel

Ship brokers fixed a charter with the common laycan provision that if it appears to charterers that the ship’s arrival at the loading port will be delayed charterers may require owners to say when they expect the ship to be ready to load. The clause goes on to provide that if the date provided by owners falls after the cancelling date the charterers have the option of cancelling the charter but must do so within ninety-six hours of receipt of the notice from owners. If the charterers don’t cancel then the new cancelling date will be as notified by the owners.

Owners sent a message which showed they would be late. Without consulting the charterers the brokers sent a message “please guide what will happen with owners’ intention of laycan extension.”

Owners replied with a laycan extension of two days. The brokers passed the laycan extension request to the charterers who did not respond. When the original laycan expired charterers said they were cancelling the fixture but owners claimed that, since they had not responded, charterers were deemed to accept the new laytime. The charterers then turned on the brokers saying that they had sent the message without authority.

Ultimately the parties reached a commercial settlement to which the brokers contributed US$ 25,000 which was covered by ITIC.