“Hi Jill … Shippers is not accepting Newcastle Express due to Rightship not rectified, kindly consider this vessel free. … Would appreciate owners can keep me posted on they received green light from surveyor, thanks … Will send official email for this.”
“Jill / James Further to various talks on skype and telecom, please find below from shippers: ++++ We prefer not to wait for the said rectification from Owners and please arrange for substitute vessel & provide below in vessel vetting and acceptance process within today.: •. Certificate of Class •. Statement of Compliance with IMSBC Code (covering Group B cargoes including Coal) •. Certificate of Registry •. Complete Certificate of Entry with International Group P&I Club (presently only Confirmation of Cover provided) ++++ We hereby release the vessel due to Rightship and not holding her any longer. Really appreciate owners’ understanding and cooperation in this respect. Best regards, James Zhan”
“So should be able to change Rightship on the website on 4th?”
“Please answer if surveyor can board vessel sooner? Shipper is asking” and “We have been chasing head charterers/shipper to confirm acceptance for the past few days”
“Let me confirm if there is any issue with receiver sub? Just left shipper? And Rightship is the only issue with shipper?”
“No mention of receiver. Rightship is the only issue with shipper”
“If receiver is clear”
“Shippers is not accepting Newcastle Express due to Rightship not rectified, kindly consider this vsl free… Will send official email for this”
“in circumstances in which the Vessel had not sailed from Zhoushan and they were not yet under an obligation to provide the results of the RightShip inspection of 3 September; the shippers and Charterers’ “release” (euphemism for rejection) of the Vessel “due to RightShip” was not reasonable as required by clause 20.1.1, 20.1.2 and 20.4 of the proforma. The Owners added that neither the Charterers nor the shippers had any other reasonable basis for rejecting the Vessel when they did and that the receivers were never said to have rejected the Vessel, reasonably or otherwise.”
“As regards the results of the RightShip inspection the Owners’ were not under any obligation to provide these to the Charterers until at the latest by the time the Vessel sailed from Zhoushan with the intention being that she would sail on 5 September”
“Separability of arbitration agreement Unless otherwise agreed by the parties, an arbitration agreement which forms or was intended to form part of another agreement (whether or not in writing) shall not be regarded as invalid, non-existent or ineffective because that other agreement is invalid, or did not come into existence or has become ineffective, and it shall for that purposebe treated as a distinct agreement.”
“If the issue between the parties is the existence of the arbitration clause itself, as opposed to the main agreement to which it relates, the separability of the arbitration clause and the main agreement under s 7 of the 1996 Act is not significant as the question is jurisdictional only: the arbitrators are able to determine the validity of the clause under the kompetenz-kompetenz principle in s 30 of the 1996 Act, although their ruling is provisional and is subject to full judicial reconsideration under s 67 of the 1996 Act. By contrast, if the issue between the parties is only the validity of the main agreement, with no challenge being made to the validity of the arbitration clause, then the separability principle governs the position and the arbitrators are free to determine the substantive validity question by virtue of s 7 of the 1996 Act.”
“So, where the arbitration agreement is set out in the same document as the main contract, the issue whether there was an agreement at all may indeed affect all parts of it.”
“There will obviously be cases in which a claim that no contract came into existence necessarily entails a denial that there was any agreement to arbitrate. Cases of non est factum or denial that there was a concluded agreement, or mistake as to the identity of the other contract party suggest themselves as examples.”
“The only question is whether the shipper’s/receiver’s approval ‘subject’ was a condition of the arbitration agreement as well as (arguably) of the fixture itself.”
“… there is a particular feature of negotiations for the conclusion of contracts for the employment of ships which should be noted. When the main terms for a charterparty have been agreed but the parties have yet to enter into contractual relations, this is generally referred to by shipowners, charterers and chartering brokers as an agreement on “subjects” or “subs”, an expression which signals that there are pre-conditions to contract which remain outstanding. The conclusion of a binding contract in respect of such an agreement is seen as dependent on the agreement of the relevant party or parties to “lift” (ie remove) the subjects.”
“The parties may agree the terms of a charterparty and one such term may be a condition precedent that unless and until the condition precedent is satisfied, no binding contract comes into being. In charterparty negotiations, such conditions precedent are often referred to as ‘subjects’ and the satisfaction of those conditions precedents is referred to as ‘lifting the subjects’.”
“In practice, parties very often indicate that they do not intend to make a binding contract by saying that their agreement is ‘subject to’ conditions. To say an agreement is ‘on subjects’ means that it is not binding until the ‘subjects’ in question have been ‘lifted’. Generally, only when all subjects are lifted does an agreement become a binding contract. At that point, the ship is ‘fully fixed’.”
“…it does not follow from the separability principle that an arbitration agreement is generally to be regarded as “a different and separate agreement” from the rest of the contract or that a choice of governing law for the contract should not generally be interpreted as applying to an arbitration clause.”
“On this basis, Mr Davey submitted that there was here, at the very least, a binding arbitration agreement; that therefore the tribunal had the necessary jurisdiction to determine whether or not there was a binding fixture; and that any challenge under section 67 of the 1996 Act is thus bound to fail.”
“[35] Although these submissions were advanced by Mr Davey most persuasively, I am unable to accept them broadly for the reasons submitted by Mr MacDonald Eggers QC. In particular: (a) Item 10 of the second recap – which makes provision for arbitration – is like all of the other terms of the recap, at the very least, conditional on the two subjects contained in Items 12 and 13. Accordingly, if Item 12 was not satisfied (as HMM contends), there can, in my judgment, be no operative arbitration agreement. … d) As the alleged charter and the alleged arbitration agreement were, on ABT’s case, contained in the same document (namely, the second recap), the submissions advanced by HMM to the effect that there was no binding charter necessarily mean that there was no binding arbitration agreement: see Fiona Trust v Privalov at paras 17 and 34.”
“The terms of the clauses which are incorporated into the parties’ contract may not always be entirely appropriate to the contract into which they are incorporated. The proper approach to interpreting an incorporated document was laid down by the House of Lords in Thomas (TW) & Co Ltd v Portsea Steamship Co Ltd, and by the Court of Appeal in Hamilton & Co v Mackie & Sons. In the latter case, Lord Esher MR took the approach of reading in the whole terms of the incorporated document, and then treating any term which was inconsistent with the incorporating document as insensible and to be disregarded. In the former case, Lord Gorell and Lord Robson approached the matter from the standpoint of reading in so much of the incorporated document as is not inconsistent with the subject-matter of the incorporating document. The two approaches may differ slightly but they usually achieve the same result. The process was described by Buckley LJ in Modern Buildings Wales Ltd v Limmer and Trinidad Ltd as follows: “Where parties by an agreement import the terms of some other document as part of their agreement those terms must be imported in their entirety, in my judgment, but subject to this: that if any of the imported terms in any way conflicts with the expressly agreed terms, the latter must prevail over what would otherwise be imported.” ”
“[E] ven if it was a condition precedent to the existence of the Charter (as to which see below) the Tribunal’s finding that the shipper’s approval had been given on1 September 2020 , with only the RightShip inspection left, was a finding that the shipper’s approval had been given. As a matter of construction of the recap, the RightShip inspection was not part of the ‘recap subject’ at all, but rather a distinct contractual obligation on the Owners: there was an express distinction in the agreed terms between the ‘shipper’s approval’ and the RightShip inspection. The ‘shipper’s approval’ was to be provided within one working day of fixing main terms and receipt of the ‘required/ corrected certs/docs’ and that was timeously given on1 September 2020 , as found (para 51). The RightShip inspection was different; it was the subject of separate stipulations in the Charter and indeed there was a separate Owners’ warranty of RightShip approval throughout the voyage (a true ‘performance condition’), but it was also specifically agreed by the parties, on the simple wording of the recap, that it was not going to be performed until3 September 2020 and thus with the result being known only some time after that, a significant time after the agreement of main terms.”