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| TITLE | Supreme Court Decision 2019Da218462 Decided December 27, 2019 【Lawsuit Claiming for Charter Fees】 [full Text] |
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| Summary | |
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[1] Meaning of “redelivery” in a time charter contract concluded by specifying the applicable law as U.K. law and in a case where the said time charter contract provides that: (i) the shipowner shall take over and pay for the bunkers on board at the time of redelivery to a charterer; (ii) the charterer shall give advance notice to the shipowner of the time of redelivery and the place of redelivery on several accounts; and (ii) the requirements and procedure regarding the quality of bunker fuels on board at the time of redelivery and the minimum bunker quantity expected to be required at the time of redelivery, whether redelivery in this case includes cases in which vessels are returned because of early termination of a time charter contract, etc. (negative in principle) [2] In the case where: (a) Company A concluded a time charter contract with Foreign Corporation B, etc. with respect to each of the vessels it owns by specifying the applicable law as U.K. law, based on which it chartered vessels; (b) an administrator of Company A terminated each of the above charters upon commencement of rehabilitation procedures and returned the vessels to Foreign Corporation B, etc.; (c) thereafter, Foreign Corporation B, etc. filed a claim for payment of the charter fees pursuant to a time charter contract against Party C, Company A’s bankruptcy trustee; (d) Party C submitted a defence of setoff by using its payment claims for residual bunkers as a counterclaim against Foreign Corporation B, etc., the lower judgment concluded that: (a) in a case where the administrator of Company A terminated a time charter contract upon commencement of Company A’s rehabilitation procedures, alleging that the said contract constitutes a bilateral contract under which both parties failed to fulfill their contractual obligations, the addendum clause of the said time charter contract providing that the shipowner shall take over and pay for residual bunkers at the time of redelivery does not apply, by which Party C’s payment claims for residual bunkers against Foreign Corporation B, etc. becomes nonexistent; (b) thus, Party C’s setoff defence using the said payment claims for residual bunkers as a counterclaim is meritless, and the case holding that, the lower court, in so determining, did not err by misapprehending the legal doctrine regarding the interpretation of a contract and the ownership of bunkers |
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