Voyage Charter performance: legal support from A to Z

The Client, acting as vessel Voyage Charterer, applied to Interlegal for legal support at the stage of signing the Charter Party on sea transportation from Chornomorsk to one of the Chinese sea ports.

First and foremost, the Client applied for mitigating potential risks of losing control over the goods and bearing extra costs just at the stage of entering into sea carriage contract. At the first stage of legal support, Interlegal lawyers analyzed in detail the draft Charter Party and correspondence between the Parties, carried out due diligence of the counteragent’s status and relation both to the Vessel and the original Shipowner, jointly with granting recommendations upon adjustments in the framework of arranging the draft Charter Party.

The Parties agreed as per Charter Party, inter alia, freight prepayment amounting to 1 million USD by cost remittance to deposit account within 3 days from the moment of signing the Charter Party, which should be released in favor of the Shipowner after issuing Bills of Lading. Due to such circumstance, the Client was eager to cooperate with Interlegal in order to meet requirements both of the Deposit Agreement and the Charter Party itself by the Parties.

At this stage, Interlegal lawyers highlighted all the possible nuances and risks for the Client, developed the detailed plan of further actions, provided legal support in the process of signing and performance of the Deposit Agreement by the Parties, as well as agreed with the Shipowner text of the agreement, all the necessary amendments and additional terms, having settled misunderstanding regarding the moment of prepayment release due to changing some circumstances for the Parties.

Lately, the Vessel sailed on voyage, but the dispute arose between the Parties concerning extra war risk insurance (EWRI) just in the process of transportation.

As per the Charter Party, extra war risk insurance for the first 7 days shall be payable at the Shipowner’s expense, while for the later period it shall be payable at the Charterer’s expense, based on invoice issued by the Shipowner’s P&I Club. The dispute concerned the following: the Charterer desired to pay only H&M insurance war risks, while the Shipowner insisted on additional insurance payments, such as Loss of Hire and Crew Allowances, having significantly increased the claim amount.

At the present stage, Interlegal lawyers provided to the Client necessary legal advice and materials aimed at proper correspondence with the counteragent, with regards to actual case circumstances and English law aspects.

Such negotiations resulted, first of all, in vessel unloading without any additional delays caused by the Shipowner’s intention to detain the cargo, since the Charterer made the recognized payments, while the Shipowner had no right on cargo detention due to unpaid insurance costs. In parallel, the Parties reached a compromise regarding the disputed amount in order to save time and costs for arbitration proceedings.

Interlegal associate attorney Mykola Kozachenko and junior lawyer Diana Mykhailova, by means of their full-scale legal support, facilitated Voyage Charter performance in full and helped the Client to achieve its goal, having mitigated all the possible risks arising during performance.