Scandinavian Trading Tanker Co. AB v. Flota Petrolera Ecutoriana (The Scaptrade) - Q.B.D. (Com. Ct.) (Lloyd J. - 3 July 1981

Charterparty - Late payment of hire - Whether owners entitled to withdraw vessel

In 1977 the plaintiffs chartered the vessel Scaptrade from the defendant owners on the Shelltime 3 form which contained the usual provision for withdrawal in default of payment of hire. Hire was due on the 8th of each month. By 1979 the market had risen steeply and the market rate was almost double the charter rate. On 8 July 1979 (which was a Sunday) the charterers failed to pay the hire due. Owners checked with the receiving bank on 9 July and, when payment had still not been made, they sent a telex to the sole brokers at 1500 on 12 July asking for charterers’ confirmation of hire. At 1546 on 12 July, having made one last enquiry, the owners sent a telex to the sole brokers withdrawing the vessel. Owners now sued the charterers for the difference between the charterparty rate and the market rate for the balance of the charter period - about $1.2 million.