In Spar Shipping1, three ships were long term time chartered on an amended NYPE 1993 form in 2010. Pursuant to the charterparties, three letters of guarantee were also issued by Grand China Logistics Holding (Group) Co Ltd (GCL) on 25 March 2010, the defendant, which was the parent company of charterers.
The charterparties were on materially identical terms for all three ships and provided:
at clause 11(a):
“Failing the punctual and regular payment of the hire,……the Owners shall be at liberty to withdraw the Vessel from the service of the Charterers without prejudice to any claims they …. may otherwise have on the Charterers.”
at clause 11(b):
“Where there is a failure to make punctual and regular payment of hire due to oversight, negligence, errors or omissions on the part of the Charterers……the Charterers shall be given 3 clear banking days….to rectify the failure…..Failure by the Charterers to pay the hire within 3 days…….shall entitle the Owners to withdraw as set forth in Sub-clause 11(a) above.”
Charterers fell behind with hire payments for all three ships and owners withdrew all three ships from hire, and terminated the charterparties.
Owners sought recovery from GCL under the three guarantees for:
- the outstanding hire owed at the time owners terminated the charterparties; and
- loss of bargain damages for the remainder of the charterparties. (It is this point upon which the decision of Popplewell J in this case focused).