Bitesize know how from the English Courts
Knowledge Counsel London
"“… the repossession provisions in clause 29 must be considered in the context of the legal and commercial nature of a bareboat charter…”"
Maritime
The Court of Appeal has confirmed that if a bareboat charter is terminated when the vessel is in port, the shipowner is obliged to take possession of the ship at that port unless it is impossible or impractical to do so. In interpreting clause 29 of the BIMCO Barecon 2001 standard form, the court held that if the ship was already in a safe and accessible port, the owner was not entitled to require the ship to sail to a different port. The ship in question, the Songa Pride, was at Stockton port in California when charterers terminated the charterparty and notified the owner that the vessel was ready for repossession. The shipowner insisted on the vessel being sailed to Trogir, Croatia. Charterers claimed damages of over US$2m for the additional costs of running and maintaining the vessel following owner’s breach of clause 29. Following termination the charterers have only minimum obligations to care for the vessel as gratuitous bailees and so the owner should repossess the vessel as soon as reasonably practicable to relieve them of that burden. The words “at a port or place convenient to them” are a fall back in the event that “her current or next port” is not convenient for taking possession.
Companies
The seller of shares in a company, who was also a director, has been found to be in breach of non-compete covenants in the sale and purchase agreement and an investment agreement. The director had covenanted to devote an average of two days per month on work for the company and not to be engaged or concerned with competing businesses. The court held that it was reasonable for the restraints to be imposed in the covenants – they were common in share sales and substantial consideration had been provided. Furthermore, the duration was not disproportionate. It also concluded that the director was in breach of the covenants by advancing funds, support and assistance to rival companies.
Spill Bidco Ltd v Wishart [2025] EWHC 2513 (Comm), 1 October 2025
Arbitration
The Circuit Commercial Court has rejected a challenge to an arbitration award on the basis of serious irregularity because the applicant had not first exhausted other options available to it. The dispute related to covenants that restricted the respondent’s actions after he left a limited liability partnership (“LLP”). The claimant challenged the award under section 68 of the Arbitration Act 1996 on the basis that the arbitrator had not considered all issues that were put to him and failed to act fairly between the parties. The court held that although the arbitrator dealt with the point briefly, he had given a clear answer. It was open to the LLP to request further clarification on that conclusion using the procedure in section 57 of the Arbitration Act 1996, which allows correction of clerical mistakes or errors. The fact that it had not done so prevented the LLP from bringing the current application.
MHA Advisory Ltd v Wynter [2025] EWHC 2497 (Comm), 2 October 2025
Sale of goods
The Court of Appeal has held that a buyer of face masks during the Covid 19 pandemic was entitled to terminate the contract, overturning the lower court decision. The seller was unable to meet the delivery schedule and this justified the buyer’s termination. Although masks had been available for collection that the buyer had not collected, the seller had not communicated any acceptance of the repudiatory breach to the buyer. As a result, the contract remained in force and the seller was obliged to comply with the ongoing delivery schedule. The court concluded that obligations to give notice to the buyer that goods are available for collection will vary with each contract. In this contract notification was the practice by email with an invoice and packing list so that payment could be made. The seller did not tender performance of three shipments. Further, 15% of its stock was reserved for the Jordanian government and so on the relevant dates it was in breach of its delivery obligations. The buyer was entitled to terminate the contract.
Key contacts
Knowledge Counsel London
Partner London
