Damage recovery for unlawful cancellation of Charter Party by the Shipowner

Damage recovery for unlawful cancellation of Charter Party by the Shipowner

Prompt, professional, and in compliance with all the Clients’ interests: this is settlement of two similar disputes upon damage recovery for unlawful cancellation of Charter Party by the Shipowner.

Two different Clients, acting as two Charterers under Voyage Charter Parties, applied to Interlegal almost simultaneously, in order to settle similar problems arising from premature canceling Charter Parties by Shipowners without justified reasons.

In both cases, Shipowners failed to deliver the vessel to the loading port within prescribed laycan, while each Charterer incurred losses in the amount exceeding 15,000 USD which included both price difference between initial freight and freight for substitute vessel, and expenses for cargo storage at the terminal until full loading on board of substitute vessel.

Disputes had similar features, such as identical laycan, dates of signing Charter Parties (one day difference), loading ports nearby, and dispute amount.

But there were different ways to solve the problem:

In the first case, dispute settlement took place at the stage of negotiations. Having obtained a claim indicating the option of ship arrest at her destination port, in order to settle demands and discrepancies and to avoid ship arrest, the Shipowner initiated negotiations via the Broker. With regards to both parties’ interests, Interlegal lawyers arranged mutually profitable terms for dispute settlement, such as admissible payment deferral. First payment, in the sum of essential claim amount, was made next morning after signing the Settlement Agreement.

In the second case, since the Shipowner neither kept contact nor tried to settle the conflict amicably and voluntarily, Interlegal lawyers, for the purpose of forced damage recovery, facilitated arrest of the Debtor’s vessel. Due to prompt vessel detention in Black Sea region, the Debtor had the only chance – to recover indebtedness which included (apart from losses arising from Charter Party) legal/court fees and expenses incurred by the Client under such circumstances.

Under the results of such actions, the Client received damage recovery in due time and to the full extent, including legal support fees.

Due to prompt actions of Interlegal team, the parties to both case proceedings could settle the dispute as soon as possible, in avoidance of undesired costs and time-consuming for arbitration proceedings, as well as could preserve business relations.

Interlegal lawyer Mykola Kozachenko and junior lawyer Diana Mykhailova held negotiations and finally settled disputes, while associate attorney Vitalii Tolstik and lawyer Karina Shakhbazian succeeded in ship arrest under the supervising of partner Alexey Remeslo