Repudiatory breach for failure to pay hire

Repudiatory breach for failure to pay hire | BDM Blog | BDM Law

This recent case1 is a nice example of the problems that arise when charterers fall behind with hire payments.

This area of law is a minefield for ship owners and operators. One wrong step or precipitant move can lead to a repudiatory breach by the ship owner. Henshaw J sets out the relevant parts of the Spar Shipping2 test in finding that there was a clear repudiatory and renunciatory breach. There was a vain attempt to argue that the owners’ suspension of performance as per their contractual rights was itself a repudiation. That was given short shrift and it was confirmed that owners were entitled to enter into an agreement with the voyage charterers pursuant to their lien.

In this case, the owners handled the situation well and successfully obtained summary judgment for the outstanding hire up to termination as well as damages for post-termination hire up to the date of discharge of the cargo when the vessel became free. The wider damages claim remains extant although it remains to be seen whether that claim will be pursued as the charterers appear to have gone to ground as happens in so many of these cases.

At BDM, we have handled many cases involving non-payment of hire. One of our most popular posts can be found here setting out the top ten things to consider when your time charterer is not paying hire.

  1. AI Gioris Oil Trading Limited v AG Shipping & Energy Pte. Limited (The “Marquessa”) [2021] EWHC 2319 (Comm)
  2. Grand China Logistics Holding (Group) Co. Ltd. v Spar Shipping AS [2016] EWCA Civ 982
Nick Burgess - author profile
Nick Burgess
Partner
Constantin von Hirsch - author profile
Constantin von Hirsch
Trainee
BDM is a specialist shipping law firm offering high quality legal advice and representation at a reasonable price. Please follow us on social media by clicking below.

Other Recent Blogs

  • Anti Suit Injunctions What are they and when can you get one | BDM Blog | BDM Law
    March 6, 2024

    Anti Suit Injunctions – What are they and when can you get one?

    Recently, we have been advising clients on a possible anti-suit injunction (ASI) against proceedings commenced in breach of an exclusive jurisdiction clause. On the back of that, we felt it might be useful to release this blog to shed more light on these injunctions, in part[...]

    Read more >
  • Red Sea To go or not to go | BDM Blog | BDM Law
    February 21, 2024

    Red Sea: To go or not to go?

    The world is adjusting to the new reality of ships refusing to run the risk of being targeted by missiles launched by Houthi rebels. Over 50 ships have now been targeted with some seriously damaged. So far, no crew have been killed or injured. However, the risks remain. It[...]

    Read more >
  • BDM partners ranked once again in Who's Who Legal Transport 2024 | BDM Blog | BDM Law
    February 19, 2024

    BDM partners ranked once again in “Who’s Who Legal: Transport 2024”

    Our founding partners have once again been listed as among the world’s leading shipping law practitioners in the Who’s Who Legal: Transport 2024 report. Congratulations to David, Nick and Bob! They commented: “We are very happy to be again recognized in this public[...]

    Read more >
+44 203 968 0500
+44 7887 710 950