B SAnd N Ltd (BVI) v Micado Shipping Ltd (Malta) [2000] EWCA Civ 296 (22 November 2000)

B SAnd N Ltd (BVI) v Micado Shipping Ltd (Malta) [2000] EWCA Civ 296 (22 November 2000)

Clause 46, requiring Exxon approval within 60 days, is a condition of the charterparty. The parties intended that failure to obtain such approval within the stipulated time would entitle the Charterers to terminate. The use of 'guarantee', the commercial need for certainty, and the structure of the clause support this construction. The absence of an express right to cancel in the first paragraph does not negate the conditional nature of the obligation. The appeal is allowed.

Citation
[2000] EWCA Civ 296
Parties
Owner: Micado Shipping Limited; Charterer: B. S. & N. Limited
Jurisdiction
England and Wales
Judgment Date
22 November 2000
Procedural Posture
Appeal / Court of Appeal Judgment
Outcome
Appeal allowed
Legal Topics
Charterparty Construction, Contractual Conditions and Warranties, Repudiatory Breach, Time Clauses in Mercantile Contracts
Commercial Law Maritime Law Charterparty Construction Contractual Conditions and Warranties Repudiatory Breach Time Clauses in Mercantile Contracts

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Parties

Micado Shipping Limited

Owner

B. S. & N. Limited

Charterer

Procedural Posture

Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether clause 46 of the charterparty is a condition or an intermediate/innominate term
  2. 2 Whether failure to obtain Exxon approval within 60 days entitled Charterers to terminate the charterparty

Ratio Decidendi

Clause 46, requiring Exxon approval within 60 days, is a condition of the charterparty. The parties intended that failure to obtain such approval within the stipulated time would entitle the Charterers to terminate. The use of 'guarantee', the commercial need for certainty, and the structure of the clause support this construction. The absence of an express right to cancel in the first paragraph does not negate the conditional nature of the obligation. The appeal is allowed.

Court Disposition

Appeal allowed

Orders

  • Clause 46 is a condition; Charterers entitled to terminate for failure to obtain Exxon approval within 60 days.