The High Court examines an anti-technicality clause and assesses whether the owners were right to withdraw their vessel from the charterparty following late payment of hire.

Owners have the right to withdraw their vessel from a time charterparty if charterers fail to make punctual and regular payment of hire.

The anti-technicality clause is designed to restrict the severity of that right by giving charterers a period to rectify their failure to pay. One such clause was recently considered by the courts in the QATAR STAR1.

Here, the charterparty was on an NYPE form, which provided for hire to be paid every 15 days in advance and, failing punctual and regular payment, gave owners the right to withdraw the vessel. The anti-technicality clause required owners to give charterers notice of three days to rectify their failure to make punctual and regular payment, "for any reason where there is absence of intention". 

The charterparty was for 48 months and,throughout, the charterers' record of payment was somewhat unsatisfactory. Seventeen of the last 30 instalments had been paid late and only after the 33rd instalment was paid late did owners resort to an anti-technicality notice.

When the 34th instalment was due on 24 August, owners withdrew the vessel at 10:11 on 25 August, without serving an anti-technicality notice.

The Court considered the evidence to see whether charterers had intended to fail to make punctual and regular payment:

  • After some delay, the charterers' hire payment calculation was finalised on 22 August and the instruction for a transfer request was ready to be signed when their Dubai office opened at 07:00 on 23 August. 
  • However, the instruction for a transfer request was only signed and faxed to the charterers' Qatar office at 14:48 on 23 August, just 12 minutes before the office closed and too late for the payment to be processed that day. 
  • Upon opening in Qatar on 24 August, it took until 12:45 for the transfer request to be signed and, because it was Thursday, it did not get to the bank before it closed at 13:00. 
  • The bank was also closed on Friday 25 August when the owners withdrew the vessel.

The Court agreed with the majority of the Tribunal whose award was appealed by the owners. The Court held that the charterers were seriously incompetent and had acted recklessly, but that they had not intended to fail to make punctual and regular payment. Whilst the charterers should have been aware that payment needed to be sent on 22 August, there was no evidence that they were aware of any deadline. 

In reaching its conclusion on the point, the Court observed that the dividing line between serious incompetence and deliberate delay amounting to intention may be a fine one.

The clause in this case is not common (and, in the Court's view, ineloquently drafted) and in this respect the decision is not of general application. However, the ruling is important as it emphasises the support that courts have for the anti-technicality clause and its important role in the owners' right to withdraw the vessel.

Footnote 

1. Ownest Shipping Ltd v Qatar Navigation QSC (The "QATAR STAR") [2010]

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