Charter Party and unilateral termination of charter party

Nowadays, the rapid growth of international trade has led to the great need for seaworthy vessels to deliver goods for both domestic and foreign customers. Shipping transportation is currently one of the most efficient means of carriage of goods, especially for the special and attention-required goods such as gas, petroleum, or wood. However, owning a ship is not a simple feat, when the costs of production, fuel, operation, and crew management could be towering into the sky to many companies. Thus, to optimize commercial benefits, hiring vessels from shipowners, as the alternative to actually owning their own vessels, to transport goods, is their go-to choice. The hiring contract for a ship is specifically called a “charter party”, making the one who hires the “charterers”. The charter party is the instrument that will rule the relationship between shipowners and charterers, a proof of vessel chartering.

Charter party is a contract that incorporates the use of a ship for a specific period (Time Charter), or for a quantity of cargo to be carried from one port to another (Voyage Charter). Generally, Charter party is a written document based upon one of the various Standard Forms devised for specific trades.

Although signing a charter party is a daily and common thing in the shipping industry, not all parties can actually aware, know or be prepared to handle all the mishaps or troubles that may occur during the performance of the charterparty. More often than not, one single breach of charterparty can result in loss counting by thousands or even millions of dollars.

For example, normally, the charter party usually contains canceling clause, which permits the charterer to cancel the contract of the vessel chartering. The cancellation may happen with mutual agreement, with no consequences to be arisen. However, in fact, there are many reasons beyond the charter party to terminate the charter party, leading to disputes arising to be sued in jurisdictions such as courts or arbitration. But taking legal action is not the actual utmost concern of the disputing parties. The demurrage, the hire and the freight of a charter party are often counted on daily basic, which means a massive loss to shipowners and charterers each day the dispute prolongs.

We ANHISA lawyers have long been the trusted counsels and lawyers for all shipowners and charterers in all forms of charter party dispute. In our practical cases, we have advised and resolved situation when the shipowner requests indemnification from the charterer for the costs arising from the delivery of the ship to the determined port just caused by a single breach of charter party of the charterer – early termination. Considering the commercial relationship and benefits for the parties, the shipowner initially tried to reach mutual amicable settlement with favorable conditions, but to no avail. After assisting the shipowner in negotiating and chasing the charterers, ANHISA lawyers consulted with shipowners to bring the case to arbitration with a claims at around a million USD .

That is only one common, run-off-the-mill case we have been assisting parties of charter parties during our course of work. Many other charter party’s disputes require not only the knowledge of shipping, but also the technical, tactics and insight of what our clients really are wishing for. That the reason why ANHISA lawyers set us apart from other counterparts. With our fundamental base and root deep in shipping practice, along with the experience of working with international and local clients, we are here to help you resolve all your charter parties dispute with efficient, puncture, and hospitable service.

If you are indeed seeking the assistance in resolving charter party dispute, please do not hesitate to contact us for consultation via:

ANHISA

Mr. Dang Viet Anh

Email: anh@anhisa.com

T: +84 28 5416 5873

M +84 983 467070

Ms. Tran Thi Thu Yen

Email: YEN@anhisa.com

T +84 2854165873

M +84 963040793