The Commercial Court has considered the issue of whether Owners had waived their right to terminate a charterparty for non-payment of hire by serving a demand for future hire (Parbulk II A/S v Heritage Maritime Ltd  EWHC 2917 (Comm)).
Charterers had bareboat chartered Owners’ vessel, with hire to be paid in advance on two dates each month. Owners served notices requiring payment of outstanding hire for four specific periods, stating that non-payment would amount to an event of default under the charterparty. No payments were made. An invoice for a fifth period was sent to Charterers, which was not paid. A further notice of non-payment was served in respect of that fifth period, and again no payment was made.
Owners subsequently served a notice of termination which referred to the first four non-payment notices, but not the fifth, and commenced arbitration proceedings for the outstanding hire. The Tribunal found in favour of Owners’ holding that they had validly terminated the charterparty. Charterers appealed, arguing that the fifth demand for future hire amounted to a waiver of the right to terminate for the non-payment of hire for all preceding periods.
Charterers’ appeal was dismissed. Even assuming that an unambiguous demand for monies owed could operate as a waiver of the right to terminate, on the facts of this case (and in particular given the timings of the various notices), there had been no such waiver by Owners. Indeed at the time when the invoice relating to the fifth hire period was sent to Charterers, the right to terminate had not yet arisen and so could not be waived.
The Court also found that:
(i) Owners were entitled to terminate the charterparty as Charterers were in repudiatory breach at the date of the termination notice;
(ii) the content of the termination notice was sufficient to communicate Owners’ reliance on Charterers’ repudiation; and
(iii) the termination notice was not invalidated by Owners’ failure to specify the non-payment of hire for the fifth period as an event of default.
The full facts of the case, and the Court’s detailed findings, can be found in the judgment text which is available on Bailii.