In a recent judgment of the English Commercial Court, The M/V Smart¹, which will be welcomed by owners, Mr Justice Butcher held that a shipowner could demand direct payment of freight under a bill of lading even though the bill of lading stated that the freight was payable “as per charterparty” and the vessel’s time charterer was not in default. This point was previously undecided, but non-binding comments by the Court of Appeal in The Bulk Chile² suggested the opposite answer.
The dry bulk carrier M/V Smart was time chartered on an amended NYPE Form which was then sub-voyage chartered by the Charterers.
The vessel departed from the loadport and that same day two bills of lading were issued by the Owners stating that freight was payable “as per charterparty”. The charterparty was not identified but it was common ground that this was a reference to the voyage charterparty. Under the voyage charterparty 100% of the freight was payable within 45 days of sailing from the loadport.