The commercial court addressed the removed clauses in the charter contract and their impact on contractor rights in the case of Olam International Ltd v Pacific Basin Supramax Ltd (Grande Island). This case highlights the challenges in negotiating charter contracts and the effects of removing certain provisions on the rights of the parties involved.
Background and Contract Conditions
The Grande Island vessel was chartered under a modified NYPE form for a voyage from Ghent to Nigeria. This contract included Clause 81 (c) of the BIMCO Piracy Clause 2013, in which Clauses 81 (a) and 81 (b) were explicitly removed. Clause 81 (a) allowed owners to refrain from entering dangerous areas due to piracy at their reasonable discretion.
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With the removal of this clause, determining whether the temporary departure of the vessel from the port of Varari under Clause 81 (c) was permissible became a central issue. The parties in this case examined whether the removal of Clauses 81 (a) and (b) meant the loss of owners' rights regarding departure from dangerous areas.
Positions of the Parties in the Case
The contractor argued that the removal of Clauses 81 (a) and (b) meant the loss of their rights concerning departure from dangerous areas. They believed that Clause 81 (c) only encompassed actions taken during operations in these areas and did not address overall departure from them. Therefore, the vessel's return towards Lagos was outside the protection of Clause 81 (c).
In contrast, the vessel owners claimed that the removal of these clauses did not eliminate the protections provided in Clause 81 (c). They emphasized that Clause 81 (c) allows them to take reasonable preventive measures, even if those measures include departing from a dangerous area. In this regard, the court concluded that the temporary departure of the vessel from the port of Varari was a reasonable action, and thus the vessel remained under charter.
Conclusion and Implications
The commercial court, emphasizing the clarity and breadth of Clause 81 (c), stated that this clause allows owners to leave the area in the presence of piracy threats. This decision not only helped preserve the rights of the owners but also reminds contractors that they must consider all aspects and impacts when amending contracts.
This case also demonstrates the importance of comprehensive review of contracts and the effects of removing or amending clauses on the rights of the parties. Given the complexities involved in charter contract conditions, it is essential for parties to carefully examine how the removal of a right may affect their other rights during negotiation and drafting of contracts.
