Pan Ocean Co Ltd v Daelim Corporation

Pan Ocean Co Ltd v Daelim Corporation

The tribunal applied the correct legal test for implication of terms but erred in finding that the vessel was immediately back on hire upon the master's request for reinspection. The implied term required both parties to exercise reasonable diligence to arrange reinspection without undue delay, not an immediate obligation or a unilateral strict obligation on the charterers. The matter must be remitted to the tribunal to determine when reinspection should have occurred and the financial consequences.

Parties
Claimant/respondent in Arbitration: Pan Ocean Co Ltd; Defendant/claimant in Arbitration: Daelim Corporation
Jurisdiction
England and Wales
Judgment Date
24 February 2023
Procedural Posture
Arbitration Appeal / Judgment on Appeal From Arbitration Award
Outcome
Award remitted to tribunal for reconsideration
Legal Topics
Implied Terms in Contracts, Time Charterparties, Obligations Under Charterparty, Remission of Arbitral Award
Arbitration Shipping Law Contract Law Implied Terms in Contracts Time Charterparties Obligations Under Charterparty Remission of Arbitral Award

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 15 Party arguments 2 Amounts and remedies 4
Sign in to unlock

Parties

Pan Ocean Co Ltd

Claimant/respondent in Arbitration

Daelim Corporation

Defendant/claimant in Arbitration

Procedural Posture

Arbitration Appeal / Judgment on Appeal From Arbitration Award

Legal Issues

  1. 1 Whether there was an implied term in the charterparty obliging the charterer to have the vessel reinspected without delay after failed holds inspection and cleaning
  2. 2 Whether the tribunal applied the correct legal test for implication of terms
  3. 3 Whether the implied term imposed a strict or reasonable diligence obligation

Ratio Decidendi

The tribunal applied the correct legal test for implication of terms but erred in finding that the vessel was immediately back on hire upon the master's request for reinspection. The implied term required both parties to exercise reasonable diligence to arrange reinspection without undue delay, not an immediate obligation or a unilateral strict obligation on the charterers. The matter must be remitted to the tribunal to determine when reinspection should have occurred and the financial consequences.

Court Disposition

Award remitted to tribunal for reconsideration

Orders

  • The award is remitted to the tribunal to determine, based on the clarified implied term, what could and should have been done by the parties regarding reinspection, whether either party was in breach, the relevant timescales, and the financial consequences, including costs of the arbitration.