Payment of hire: The Astra
HFW hosted a seminar in Geneva analysing this important decision.
7 November 2013
In Kuwait Rocks Co v AMN Bulkcarriers Inc (The MV "Astra")  EWHC 865 (Comm), the English High Court found that the obligation upon a charterer to make punctual payment of hire in clause 5 of the NYPE 1946 form charter, especially one containing an anti-technicality clause, is a contractual condition, a breach of which entitles an owner to terminate the charter and claim damages for future loss of earnings. Although the decision is based on the NYPE 1946 form, which is itself very common, it has wider application to other charterparty forms and is a departure from the previously widely accepted view that payment of hire is not a contractual condition. This can have potentially serious implications for charterers when considering whether to make deductions from hire.
HFW Associate Menelaus Kouzoupis explained the Court's rationale behind this potentially ground breaking decision and the possible implications for the shipping industry. In addition, Menelaus provided some guidance on steps that parties can take to protect their interests in light of the Astra decision.