Owners and Charterers had entered into a time charter on an amended Baltime 1939 form. Owners treated Charterers’ failure to pay hire as repudiatory conduct, which was accepted as bringing the charter to an end. At the time when the charter was terminated, the vessel had a full cargo on board. The vessel proceeded to its destination and discharged the cargo.
Owners claimed against Charterers for unpaid hire, bunkers and other sums due at the time of termination. In addition, they brought a claim for a “quantum meruit” in respect of hire and bunkers consumed between the time when the charter was terminated and the discharge of the cargo. Owners relied on the principle that where, after a charter comes to an end, an owner performs further services at the request of the charterer, they may become entitled to remuneration for those services under a new contract. The key point here is whether the services performed were performed at the request (whether express or implied) of the charterer.
In the present case, Charterers expressly asked Owners to “at least” carry the cargo to its intended destination. Whilst this message had been sent before the charter was brought to an end, it was sent at a time when Charterers were already in breach for non-payment of hire. Charterers must, therefore, have been aware that there was a danger of the charter coming to an end before the vessel reached its destination and discharged its cargo. The Tribunal therefore treated Charterers’ request as an ongoing one which survived to the end of discharge.
This case exemplifies the importance of taking care with commercial correspondence. If Charterers had not requested that Owners discharge the cargo, they may not have been found liable to pay the quantum meruit claimed. In particular, parties must be aware that if they request a service from their counterpart, then they may well be required to pay for that service.
London Arbitration 12/11