Rights of a vessel owner in relation to bunkers and sub time charter hire

In brief - Sub charterer awarded damages on basis of interference with contractual relations

The decision of the Full Federal Court in Daebo Shipping Co Ltd v The Ship Go Star [2012] FCAFC 156 (7 November 2012) involved a number of interesting issues concerning the rights of an owner in relation to bunkers and sub time charter hire, in circumstances in which it had withdrawn the vessel under the head charter.

Vessel chartered and further sub-chartered

The facts were that Go Star Maritime Co (SA) had time chartered, on Absatime NYPE (1981) terms, the vessel to Breakbulk Marine Services Ltd (BMS) for 36-40 months in June 2007. On 14 July 2007 BMS had further sub-time chartered the vessel on virtually back to back terms for 23-25 months to Bluefield Shipping Co Ltd (Bluefield).

Bluefield had further sub-time chartered the vessel to Daebo Shipping Co Ltd (Daebo) on similar terms for the same period from 27 July 2007. Daebo had then sub-chartered the vessel to Daeyang Shipping Co Ltd (Daeyang) in January 2008.

On 3 January 2009 the ship was redelivered by Daeyang and Daebo sub-time chartered to Nanyuan Shipping Co Ltd (Nanyuan).

Owners' intention to withdraw ship under head charter

On 4 January 2009 Daebo invoiced Nanyuan for the first hire payment and value of the bunkers.

Prior to payment Nanyuan was informed by the head owners' agents that the owners intended to withdraw the ship under the head charter, as BMS had fallen into arrears of payment of hire. The owners' agents requested that Nanyuan not make any payments under the sub-time charter.

On 8 January 2009 Nanyuan...