IMT SHIPPING & CHARTERING GMBH V CHANSUNG SHIPPING CO LTD, OWNERS OF ZENOVIA

[2009] EWHC 739, Queen’s Bench Division, Commercial Court, Mr Justice Tomlinson, 8 April 2009

Shipping – Time charter – Notice of early redelivery given by charterers – Notice later withdrawn and replaced with contractual redelivery date – Whether charterers estopped from changing date – Implied term – Arbitration – Appeal against award – Arbitration Act 1996, section 69

The bulk carrier Zenovia was chartered by Chansung to COSCO, by COSCO to WBC and then by WBC to IMT. All three charters were time charters. The last redelivery date was 22 November 2007. As the period was reaching its conclusion IMT chartered the vessel to Noble. On 5 October 2007 Noble gave notice of redelivery for about 4 November 2007, and this was passed up the chain. However, the vessel’s performance was such that an extra voyage could be squeezed in, and a further notice was sent to Chansung revising the redelivery date to 20 November 2007. Chansung refused to accept the revised date because they had already fixed the vessel for her next employment as from the date in the original notice of redelivery, and they withdrew the vessel from service on 2 November 2007. IMT claimed damages for repudiation. The arbitrators held that IMT were prevented by the doctrine of promissory estoppel from reverting to the redelivery date in the original notice, and also that there was an implied term that the charterers could not change their mind about redelivery date once notice had been given. Tomlinson J held that the award should be set aside and that damages should be awarded to IMT. (1) The notice of 5 October 2007 was given “wp” (which the arbitrators held to mean “without prejudice”) and that of itself rendered the notice not binding. (2) The arbitrators had been wrong to imply a term in the circumstances. It was not possible to predict what the parties would have agreed had the possibility been put to them when the contract was made. (3) There could not be a promissory estoppel in the absence of an unequivocal representation which was intended to be relied upon. The arbitrators had found that there was no such representation, so their conclusion on promissory estoppel was wrong in law.