Parbulk Ii A/S v Heritage Maritime Ltd SA

This is an appeal under section 69 of the Arbitration Act 1996 against an arbitration award of Edward Mocatta, Dr Colin Ong and Mark Hamsher dated 23 December 2010 pursuant to which it was awarded and adjudged that Heritage Maritime Ltd (the “Charterers”) pay Parbulk II AS (the “Owners”) the sum of US$27,031,759.04. Leave to appeal the Award was granted by David Steel J on 16 May 2011.

As set out in the Award, the parties entered into a bareboat charterparty of the Owners’ vessel “Mahakam” on an amended BARECON 2001 form dated 11 December 2007 for 60 months at a daily rate of US$38,500. The current dispute arises out of the purported termination by the Owners of that charterparty on 22 June 2009. In essence, the Tribunal concluded that the Owners were entitled to terminate the charterparty; that they had validly done so on that date; and that the Owners were entitled to compensation as set out above. The Charterers now challenge those conclusions on a number of grounds as set out below.

The charterparty provided in material part as follows:

“28.

Termination (See also Clauses 46 and 47)…

(b)

Owners’ Default

If the Owners shall by any act or omission be in breach of their obligations under this Charter to the extent that the Charterers are deprived of the use of the vessel and such breach continues for a period of fourteen (14) days after written notice thereof has been given by the Charterers to the Owners, the Charterers shall be entitled to terminate this Charter with immediate effect, by written notice to the Owners. In case of cancellation by the Charterers as set out in Clause 28(b), the vessel shall be deemed to be off-hire from the time notice in accordance with line 821 is received by Owners. ”

38 CHARTER HIRE

38.1

The Charterers shall throughout the Charter Period pay charter hire (the “Charter Hire”) to the Owners, calculated from the first day of the Charter Period, at a rate of USD 38,5000 net per day.

38.2

Subject to the terms of this Agreement, hire shall be paid continuously throughout the Charter Period;

38.3

The Charterers shall pay hire due to the Owners in accordance with the terms of this Charter punctually, in respect of which time shall be of essence. The Charter Hire shall be paid monthly in advance with the first instalment falling due on the Delivery Date in respect of a period up to the end of that calendar month and with subsequent instalments on the 1^st day of every calendar month (each, a “Payment Date”), however, where there is a failure to make punctual payment of hire due to oversights, negligence or omissions on the part of the Charterers or the Charterers’ bankers, the Charterers shall be allowed the number of Banking Days indicated in Box 34 in which to rectify the failure, and when so rectified within that number of Banking Days, the payment shall stand as regular and punctual.

38.4

Notwithstanding anything to the contrary contained in this Charter, all payments by the Charterers hereunder (whether by way of hire or otherwise) shall be made as follows:-

38.4.1

On the relevant Payment Date; and… ”

46.

EVENTS OF DEFAULT

46.1

Each of the following events and the events referred to in Clause 28(a) shall be a “Event of Default” for the purposes of this Charter:-

46.1.1

If any instalment of Charter Hire or any other sum payable by the Charterers under this Charter shall not be paid on its due date, or in the case only of sums expressed to be payable by the Charterers on demand, within five (5) Banking Days following the date of demand therefore, and such failure to pay is not remedied within three (3) Baking Days’ of receipt by the Charterers of written notice from the Owners notifying the Charterers of such failure and requesting remedial action; or

46.2

The occurrence of an Event of Default shall entitle the Owners by notice to the Charterers with immediate effect to terminate the chartering of the Vessel under this Charter by withdrawing the Vessel from the service of the Charterers, and to recover any and all amounts due and payable hereunder and/or resulting from such termination.”

47.

OWNERS’ RIGHTS ON TERMINATION

47.1

At any time after an Event of Default shall have occurred and be continuing under this Charter, the Owners may, by notice of the Charterers immediately, on such date as the Owners shall specify, terminate the Charter, whereupon the Vessel shall no longer be in the possession of the Charterers with the consent of the Owners, and the Charterers shall redeliver the vessel to the owners in accordance with Clause 15.

…

47.3

If the Owners pursuant to Clause 47.1 hereof give notice to terminate the chartering by the Charterers of the Vessel, the Charterers shall pay to the Owners on the date of such termination (the “Termination Date”) or such later date as the Owners shall specify:-

47.3.1

all hire due and payable, but unpaid, under this Charter up to (and including) the Termination Date together with interest accrued thereon pursuant to Clause 38.7 hereof from the due date for payment hereof from the date for payment thereof of the Termination Date;

47.3.2

any sums, other than hire, due and payable, but unpaid under this Charter together with interest accrued thereon pursuant to Clause 38.7 to the Termination Date; and

47.3.3

all costs, expenses, damages and losses incurred by the Owners as a consequence of this Charter having terminated prior to the expiry of the agreed Charter Period (including, but not limited to, loss of Charter Hire and expenses incurred in recovering possession of, and in moving, laying-up, insuring and maintaining the Vessel and in carrying out any works or modifications required to cause the Vessel to conform with the provisions of Clauses 15,29 and 52 hereof), provided always that the Owners shall take reasonable steps to mitigate their losses so incurred.”

47.4

When making payment to the Owners in accordance with Clauses 47.3.1 through 47.3.3 above, no deduction shall be made by the Charterers in respect of the Sellers’ Credit which, pursuant to its terms, is immediately forgiven by the Sellers upon the termination of the Charter, by the Owners following the occurrence of a Termination Event hereunder, it being understood by both parties that amount is a reasonable pre-estimate of minimum damages and is not a penalty and an amount equivalent to the Sellers’ Credit shall be deducted from the amount of any claim the Owners have against the Charterers in respect of the terminated Charter. For the avoidance of doubt, if the Sellers’ Credit does not cover the Owners’ loss, the Owners shall be able to claim further compensation for such loss.

47.5

For the avoidance of doubt, in the event of termination of this Charter by the Owners or the Charterers, each of the Owners and the Charterers shall be entitled to all contractual, legal, statutory or equitable remedies, regardless of whether the reasons for such termination would give rise to an independent right of termination as a matter of law.

47.7

Following termination of the chartering of the Vessel hereunder pursuant to Clause 47.1 hereof the Charterers (i) shall continue to comply with their obligations under this Charter until the Vessel is redelivered to the Owners in accordance with Clauses 15,29 and 52.

47.8

In the event of termination of this Charter, the Owners and the Mortgagee shall be entitled to assume and take over Charterers’ position as party to any charterparties exceeding 13 months’ (including optional periods) subsequently entered into between the Charterer and sub-charterers so that the Owners will substitute the Charterer under such charterparties. The Charterers undertake to assist the Owners and/or the Mortgagee, as the case may be, to accomplish the aforesaid substitution.”

As set out in the Award, the vessel was delivered into the service by the Owners on 14 December 2007 so that the charterparty was to run until 14 December 2012. For present purposes, the relevant facts are set out in the following extracts from the Award:

“14.

The evidence from Parbulk was that prior to March 2009 there had been no major problems with the payment of hire. Clearly Heritage were not immune to the effects of the collapse in freight rates that started in the autumn of 2008. On 20 January 2009 Parbulk agreed to Heritage’s request that for the period from February to July 2009 hire should be paid on the first and fifteenth of each month rather than monthly in advance as provided for in the charterparty. However, despite this concession, no hire was paid from 16 April 2009 until the termination of the charterparty by Parbulk on 22 June 2009. Parbulk set out their summary of the instalments of hire that were not paid in a table as follows:-

Date	Period	Outstanding hire (USD)
16.4.2009	16- 30.4.2009	577,500
1.5.2009	1-15.5.2009	577,500
15.5.2009	15-31.5.2009	616,000
1.6.2009	1-15.6.2009	577,500
15.6.2009	16-22.6.2009	7/15 x 577,500 = 269,500
Total outstanding hire up to 22 June 2009 2,618,000

15.….. In so far as it should be necessary, we find as a fact that Parbulk’s summary of the instalments that were not paid by Heritage is accurate.

16.

When the instalment that was due on 16 April 2009 was not paid, Parbulk sent the following “Notice of outstanding bareboat hire” to Heritage:-

On behalf of Parbulk II AS we hereby tender notice pursuant to clause 46.1.1 of the Bareboat Charter, and ask you to settle the Charter Hire due on 16^th April 2009, promptly. We remind you that if your failure to pay is not remedied within 3 Banking Days of your receipt of this notice, the non-payment will constitute an Event of Default under the Bareboat Charter, ref clause 46.

Please settle the outstanding Charter Hire due on 16^th April 2009 + one month’s Libor 0,448 + 2% = 2,45% per annum calculated on basis of the number of days from 16^th April 2009 until payment is made, ref. clause 38.7 pf the Bareboat Charter.

We hereby reserve all our rights under the Bareboat Charter

17.

Virtually identical notices, with only the dates and sums amended as appropriate, were sent in respect of each unpaid instalment up to and including the instalment that was due on 15 June 2009.

…..”

I pause at this stage to note that as recorded later in paragraph 45 of the Award, the dates of the notices referred to in paragraph 17 of the Award were 16 April 2009, 4 May 2009, 18 May 2009 and 2 June 2009, the last notice dated 2 June 2009 relating to the instalment of hire payable on 1 June 2009 covering the period up to 15 June 2009. The Award continued:-

“18.

Mr Wilhelm Magelssen worked for Parbulk’s managers and had been involved in the structuring of the whole scheme. He was one of the people from Parbulk who was in regular contact with Heritage and in particular their Captain B Thanabalasingam to try and obtain payment of the outstanding hire. It was Mr Magelssen’s evidence that prior to the non-payment of the instalment of 16 April 2009 Captain Thanabalasingam had been able to ensure that modest delays in the payment of hire were quickly resolved.

19.

On 26 May 2009 Captain Thanabalasingam sent the following email to Mr Magelssen:-

“Dear Mr Wilhelm Magelssen

Our circumstances have changed. As you are aware that right now the shipping companies are facing the one of the worst economic crisis. We are unable to afford the agreed monthly repayments at the present time.

Our situation was mainly due to Golden Ocean who has prematurely redelivered the vessel and had not paid us the charter hire sum.

As you can see we have no money left to pay our credit commitments. At the moment we do have enough to meet even our basic needs.

We view of our circumstances and we ask that you allow us to get the fund so that we can make payments to you. We are at the present moment trying our level best to collect all our payments due to us from other companies.

We sincerely hope you will give kind consideration to our circumstances, and of course if our circumstances do improve we will definitely make all payments.

We thank you for your attention to this matter, and we look forward to hearing from you soon.

Tks.

B Thanabalasingam.

As agents only for and on behalf of Heritage Maritime SA”.

20.

On 5 June 2009 a meeting took place in Singapore between Mr Chris Grieveson of Messrs Ince & Co (who by then had been instructed by Parbulk) and Mr Mas Gram of Parbulk’s managers on the one hand and Captain Thanabalasingam on the other hand. It was Mr Magelssen’s evidence that after the instalment of hire due on 16 April 2009 had not been paid, it became clear to him that Captain Thanabalasingam was not a true decision make within the Heritage organisation who had the power of decision over what payments were made to which creditors. Mr Magelssen’s evidence was that Mr Anton Sumarlin and Mr P Soekasah, respectively the CEO and CFO of PT Humpuss Intermoda Tansportasi TbK and clearly “decision makers”, were meant to attend the meeting but did not do so.

21.

That evening Mr Grieveson sent an email to the two Heritage representatives who had not attended which read in part:-

“The money owed by the Heritage under the bareboat Charter presently stands at a little over US$2.43 million, by the end of June this will be approximately US$2.9 million. As Heritage is in default under the bareboat Charter, it is now open to the Owners at any point to serve notice on Heritage in accordance with the Bareboat Charter that the vessel be re-delivered to owners and the bareboat Charter be terminated. In the event that the Charter is terminated because of Heritage’s default then heritage will become liable to Owners for the entirety of their losses under the bareboat Charter contract. These losses will equate to approximately US$36 million. As you know, PT Humpuss have guaranteed the entirety of these losses so PT Humpuss will also become liable to Owners for US$36m as soon as the charter is terminated.

Therefore it is undeniably in PT Humpuss/Heritage interests to make an immediate commercial proposal as to how the outstanding hire will be paid to our clients. In the event that our clients have to repossess the vessel and their claim becomes US$36million, there are number of options to our clients in order to obtain security for these claims.

….. ”

Again, I pause to note that as recorded in paragraph 45 of the Award, on 8 June 2009 the Owners issued a further invoice for hire accruing during the period of 15-30 June 2009. The Award continued:

“23.

Parbulk found out that under the time charter that Heritage were performing, the vessel had not called at Singapore as previously advised but had instead put into Port Klang for bunkers on her voyage to China. Parbulk arrested the “MAHAKAM” there on 12 June 2009. They did so in support of an admiralty action in rem against vessel “Mahakam” which named as defendants the demise charterers of the vessel. The endorsement of claim pursuant to which the warrant of arrest issued by the High Court of Malaya was as follows:-

Indorsement of claim

The Plaintiff’s claim against the Defendants, who are and were at all material times the demise charterers of the Vessel is for USD 2,348,500, being the charter hire sum due under a demise charter dated 11 December 2007 for the period between April to June, 2009, and, for damages for breach of contract and/or duty and/or negligence and/or a declaration that the Defendants are liable to the Plaintiffs in respect of any and all losses and/or damage and/or costs and/or expenses and/or claims and/or liabilities whatsoever incurred and/or to be incurred arising out of and/or in connection with the Defendant’s breach of the demise charter and/or duty and/or negligence but not limited to all hire and other earnings due and payable by Defendants under the demise charter including interest and costs. ”

Once more, I pause to note that as recorded in paragraph 45 of the Award when the hire for the period 16-30 June 2009 was not received on 15 June 2009, on 16 June 2009 the Owners issued a notice of outstanding bareboat hire under Clause 46. 1.1 of the charterparty in the same terms as the notice recited in paragraph 16 of Award. The Award then continued as follows:

“24.

On 17 June 2009 Heritage filed an application to the Malaysian court for an order that all further proceedings be stayed pending reference to arbitration in London in accordance with clause 30(a) of the bareboat charterparty, that the arrest be set aside and an enquiry be made into Heritage’s losses due to the wrongful arrest of the vessel. The main grounds for the application were that all disputes between the parties were to be referred to arbitration. It was also alleged that the warrant of arrest was not executed validly because the vessel was outside port limits at the time.

25.

While matters were pending before the Malaysian court, there were apparently no meaningful discussions between the parties either as to the settlement of Parbulk’s claims or the provision of security.

26.

On 22 June 2009 the chairman of Parbulk, Mr Christian Due, faxed the following letter to Heritage:-

“To: Heritage Maritime Ltd S.A.

C/o Humpuss Sea Transport TbK

C/o Granadi Building 7^th -8^th Floor

Jln.HR Rasuna Sald Kav. X-1 No 8-9

Jakarta 12950, Indonesia

Attention: Tatok Hardiono

22^nd June 2009

Telefax no+62-21-252-4477

We refer to our notices for outstanding bareboat charter hire dated 16 April 2009, 4 May 2009, 18 May 2009 and 2 June 2009 under the Bareboat Charterparty for the vessel “MAHAKAM” (“Vessel”) dated 11 December 2007 between Charterers and Owners (“Charterparty”).

In breach of your obligations under Charterparty, you have failed to pay charterhire and your guarantors, PT Humpuss Transportasi TbK (“Guarantors”) has failed to make payment despite our notices of 21 April 2009, 8 May 2009 and 27 May 2009 to them. You have further failed to remedy your default to date.

Your actions and/or those of the Guarantors clearly constitutes Events of Default under Clauses 46.1.1, 46.1.3 and 46.1.7. Accordingly, we hereby withdraw the Vessel from your service and terminate the Charterparty with immediate effect.

Charterers are to redeliver the Vessel to Owners at Port Klang, Malaysia, immediately and make payment of all outstanding charterhire pursuant to clause 47.3.

Please confirm immediately to Owners and the vessel’s agents at Port Klang:

Veerasamy Muniratnam, Assistant Operation Manager-West Malaysia

Wilhelmsen Ships Service Malaysia Sdn Bhd Port Klang

Tel: +603 3101 2331 (Ext 168) Fax: +603 31012313/Mobile: +60123987212

Email: muniratnam.veerasamy@wilhelmsen.com

that Charterers crew will now facilitate a proper handover of the vessel to owners crew who are now standing by in Port Klang including providing a full familiarisation of the vessel, as required by the ISM code.

Take notice that Owners will be conducting an off-hire survey later today, you are invited to send a surveyor participate on a joint survey basis. However, the owners survey will go ahead irrespective of whether you send a surveyor to participate and owners will not permit the survey to be delayed pending the arrival of Charterers appointed surveyor. Please advise owners agent immediately if a surveyor will attend on behalf of charterers.

All our rights remain fully reserved.

Kind regards

Parbulk II AS

Christian Due

Chairman.

27.

The “MAHAKAM” was redelivered to Parbulk on 23 June 2009 and was released from arrest on 24 June 2009.”

In the arbitration, the Owners sought to justify the termination on three alternative grounds:

As to the first ground, the main thrust of the Charterers’ case was that the termination notice dated 22 June 2009 specifically referred only to the notices for outstanding bareboat hire dated 16 April, 4 May, 18 May and 2 June; and that any right the Owners might have had contractually to terminate the charter for such failures to pay hire had, in effect, been waived by each successive demand for hire and, in any event, by (i) the demand for hire served on 8 June 2009 in respect of the period 15-30 June 2009 and (ii) the notice served by the Owners on 16 June 2009. In support of that case, the Charterers relied, in particular, on a line of cases in the field of landlord and tenant, to the effect, said the Charterers, that where a landlord knowing of an event of default and the right to terminate makes an unequivocal demand for rent, the landlord is taken at law to have waived the right to terminate for such breach/non-payment of rent. The Tribunal rejected the Charterers’ case and upheld the Owners’ termination on this ground. In particular, having referred to the relevant authorities in paragraphs 53-58 of the Award, the Tribunal concluded as follows:

“59.

It is therefore clear that there is no settled and established principle of landlord and tenant law that a demand for rent will constitute a waiver of the landlord’s right to terminate the tenancy for a failure to pay rent. Judgments involving charterparty disputes such as the “LIBYAVILLE”, the “MIHALIOS XILAS” and the “LACONIA” indicated that that guidance could be obtained from the principles of landlord and tenant law since time charters are analogous to leases. However, in all the shipping cases cited to us the courts considered all the factual circumstances of the cases to determine whether waiver had been established.

60.

That is scarcely surprising. In this context, waiver means the unequivocal affirmation of the continuation of a contract with knowledge of a breach justifying termination of the contract. In cases of the acceptance of rent, it has become a binding principle in landlord and tenant law that the requirements of waiver are thereby made good. However, it would require clear evidence of the existence of such a principle and its application being so automatic that a court or arbitration tribunal could not investigate the surrounding facts to satisfy itself that the requirements for waiver had been established. We were not persuaded by Heritage’s arguments that there was a principle that was so well established that it precluded investigation of surrounding circumstances in landlord and tenant cases involving demands for, as opposed to, receipts of rent, never mind its automatic and obligatory extension to charterparty disputes.

61.

We are not, for a moment, suggesting that principles relating to the waiver of contractual rights cannot be a general application and have to be compartmentalised by reference to the subject matter of the contract. Of course we accept, as indeed did the judgments in the charterparty disputes referred to above, that potentially the right to withdraw a vessel could be waived by an owner. We have simply concluded that, contrary to the position argued for by Heritage, there is no well established principle of landlord and tenant law that a mere demand for rent (as opposed to the acceptance of rent) will lead to waiver of the right to terminate a lease for breaches of it; nor is there any authority that concludes that such a principle (to the extent that it does exist) is automatically applicable in charterparty disputes without full consideration of all surrounding circumstances. In this case we had to consider the actions of the parties and their effect and the response to the other party to those actions.”

After then referring to the well known passage of Lord Goff in The Kanchenjunga [1990] 1 Lloyd’s Rep 391, 397, the judgment of Potter LJ in The Happy Day [2002] 2 Lloyd’s Rep 487 and the decision of Cooke J in The Jotunheim [2005] 1 Lloyd’s Rep 181 (in particular paragraphs 44 and 45), the Tribunal set out its further comments and conclusions as follows:

“65.

We agreed with Heritage’s case that Parbulk’s arguments as to the effect of the notices prior to that of 2 June 2009 identified in the termination letter of 22 June 2009 overlooked the evidence of Mr Magelssen to the effect that initially Parbulk understandably were anxious to keep the bareboat charter alive. The hire rate in the charterparty was above the then prevailing market rate and a substitute charterparty, if one could be concluded at all, would not have been close to the bareboat charterparty rate payable by Heritage. Parbulk hoped that Heritage, or more probably their guarantors, would be able to pay the outstanding and future instalments of hire. Finally, Parbulk had been created as a single purpose company for the purposes of performing the sale and leaseback and the bareboat charterparty; it was not structured to trade the vessel, in the spot or period bulk market.

66.

It was clear from Mr Magelssen’s evidence that despite the notices of outstanding charter hire served on 16 April, 4 May, 18 May and 2 June 2009 at the times when those notices were issued, Parbulk were still prepared to keep the charterparty contract alive. However, both from the exchanges between the parties and from Mr Magelssen’s evidence, it was clear that Parbulk’s attitude changed significantly after the meeting of 5 June 2009 to which Heritage sent no decision makers. The message sent by Mr Grieveson on 5 June 2009, in Mr Magelssen’s own words, made it clear to Heritage that:-

“…you need to pay up immediately and you need to come up with a viable commercial solution for how we take this forward unless we are free to…terminate the bareboat charter [whenever] we want”.

67.

In the event, nothing was paid and Heritage did not come forward with “a viable commercial solution” as envisaged by Mr Magelssen. Furthermore, the vessel was arrested on 12 June 2009. Again Heritage did not approach Parbulk about the provision of security but instead on 17 June 2009 Heritage filed their application to set aside the arrest, stay the Malaysian proceedings and claim damages for wrongful arrest.

68.

If there had been no communications between the parties other than the invoices for 15 day instalments of hire and the notices of outstanding bareboat hire there would have been some force in Heritage’s argument that Parbulk had waived the right to terminate the charterparty for the non-payments of hire. However, the meeting of 5 June 2009 and the email sent that evening on behalf of Parbulk by Mr Grieveson broke that pattern and the significance that could properly be attached not only to the invoice of 8 June 2009 and the notice of outstanding bareboat hire of 16 June 2009 but also to the earlier notice of outstanding hire of 2 June 2009. The notice of 2 June 2009 required payment to be made within three banking days (in other words by 5 June 2009) failing which the failure to make payment constituted an “Event of Default” under the charterparty. The expiry of the three day deadline coincided with the email sent by Mr Grieveson on behalf of Parbulk. The instruction of solicitors which was explained in that email as well as the text of the email made it quite clear that Heritage could no longer assume that Parbulk would tolerate the non-payment of instalments of hire and unless Heritage or their guarantors made an immediate commercial proposal as to how the unpaid instalments of hire were to be paid Parbulk would terminate the charterparty and repossess the vessel.

69.

Far from Parbulk, making an election to keep the contract alive and communicating the election to Heritage, they were expressly telling Heritage that unless arrangements that were satisfactory to Parbulk were made to pay the outstanding hire promptly, they would elect to exercise their right to terminate the charterparty. It is often said that a party cannot “approbate and reprobate”. However, Parbulk were quite clear that whatever approbation might have gone on in the past, from 5 June 2009 onwards they would reprobate unless matters were resolved promptly to their satisfaction.

70.

Against the background of what happened on and after 5 June 2009, we considered that the invoice of 8 June 2009 for hire payable for the period between 15 and 30 June 2009 and the notice of outstanding bareboat hire of 16 June 2009 could not be considered either objectively or subjectively by the parties as an unequivocal affirmation by Parbulk of the continuation of the charterparty with knowledge of Heritage’s breaches of the charterparty. On 8 June 2009 (the date of the invoice) and 16 June 2009 (the date of the notice) the charterparty had not been terminated. All the two documents in question did was to record Parbulk’s continuing contractual entitlements both as to hire and to the consequences of Heritage’s failure to pay the further instalment. Following the emails sent on behalf of Parbulk on 5 June 2009, they did not constitute a waiver of the right to terminate the charterparty following the notice of 2 June 2009 which was the last of the notices specifically referred to in the termination message of 22 June 2009. Under clause 46.1.1 the Event of Default occurred three banking days after service of the notice of 2 June 2009, service taking place on 3 June 2009. 3 June 2009 was a Wednesday so that the Event of Default occurred on Monday 8 June 2009. Additionally or in the alternative if it is appropriate to consider solely clause 46.1.3, the Event of Default occurred 14 days later on 17 June 2009 (Parbulk having allowed a day for delivery of the original notice).

71.

We are satisfied that the above analysis of the evidence is entirely consistent with the approach of Lord Goff set out in the “KANCHENJUNGA”. After 5 June 2009 there was no election by Parbulk not to exercise their rights to terminate the charterparty and no communication of such an election to Heritage. Furthermore, it could not be said that thereafter there had been an unequivocal representation by Parbulk that upon which Heritage had relied to their detriment. Indeed, it seemed to us that the facts in this reference were remarkably similar to those considered by Mr Justice Cooke in the “JOTUNHEIM” on the basis of which he concluded:-

“If, however, they keep on pressing for payment and threaten withdrawal, such actions could not be seen to be inconsistent with the exercise of that right when no payment is still forthcoming.

72.

We therefore concluded that Parbulk’s formal termination of the charterparty on 22 June 2009 was valid.

….. ”

As to the second ground relied upon by the Owners (i.e. the Charterers’ failure to pay the hire due for the period 16-30 June 2009), this was rejected by the Tribunal as set out in paragraphs 72-74 of the Award:

“72….. In case our conclusion that the invoice of 8 June 2009 and the notice of 16 June did not amount to waiver of Parbulk’s contractual rights is overturned on appeal, we had to consider Parbulk’s second and alternative case based on Heritage’s failure to pay in response to the invoice of 8 June 2009 or the notice of 16 June 2009. They argued that they could terminate pursuant to clause 46.1.1 and no issue as to waiver could arise because it was the last instalment of hire whose payment had been demanded. The only issue that arose in considering this alternative ground of termination was that it was not identified in the termination letter of 22 June 2009.

73.

Parbulk referred us to passages from Chitty, the decision in Dalkia Utilities v Celtech and Stocznia Gdynia v Gearbulk Holdings. They argued that the requirement for clear notices (as laid down in the “AFOVOS” and Heisler v Anglo-Dal Limited ) did not apply on the facts of this case. Indeed, since the consequences were the same, they argued that they could simply rely on the notice of 16 June 2009 and did not need to rely on the letter of 22 June 2009.

74.

We were not persuaded by Parbulk’s arguments on this point. Some of the authorities upon which they relied (such as Dalkia Utilities v Celtech) were more concerned with the separate question of whether a notice had to distinguish between contractual and common law rights of termination. It seemed to us that where a party relied on a letter of termination after the instruction of lawyers who one assumes would have had a hand in the drafting of the letter and which identified specific grounds on which it relied, it was not open to it to argue, after the event, that it could rely on a separate contractual ground which it could have but had not identified at the time. We appreciate that this conclusion may seem rather artificial in the absence of any attempt by Heritage to cure any of their breaches, whether at this time identified or not. However, clause 46.2 did require a notice of termination after an Event of Default and it was to be inferred that the notice had to be comprehensive.”

As to the third ground relied upon by the Owners, this was dealt with by the Tribunal in paragraphs 77-81 of the Award. In summary, the Tribunal accepted the Owners’ argument that the express agreement in clause 38.3 of the charterparty that “time shall be of the essence” meant that this obligation was a condition of the contract subject to a three day period of grace. The Tribunal then referred to certain passages in Wilford on Time Charters and parts of the evidence it had heard and concluded as follows:

“80.

We considered that, consistently with our findings as to the effect of Mr Magelssen’s evidence (recorded in paragraph 66 above), Parbulk had elected not to terminate the charterparty for breaches of the obligation to pay hire prior to 5 June 2009. Thereafter, as already recited, Parbulk’s position had changed radically. The failure to pay the instalment for the period 1-15 June 2009 was still a continuing breach of condition as at 8 June 2009 expired - it had not been waived. As of 5 June 2009 when the three banking day period of grace following service of the notice of 2 June 2009 and thereafter there was no waiver of the existing or subsequent breaches of condition. Furthermore, although the right to terminate for the earlier breaches might have been waived, it was legitimate to take into account all the unpaid instalments as evidence of Heritage’s inability to pay.

81.

For the above reasons we concluded that Heritage were in repudiatory breach of the charterparty. Independently of their contractual rights under the terms of the charterparty, Parbulk were entitled to accept the totality of Heritage’s conduct in not paying the instalments of hire due for the periods 1-15 June and 16-30 June 2009 and in having evidenced an inability to pay as evincing an intention no longer to be bound by the charterparty contract which they could and did accept as terminating it.”

Following publication of the Award, the Charterers issued a Claim Form in this Court seeking leave to appeal under the Arbitration Act 1996. As I have said, leave to appeal was duly granted by David Steel J. As stated in the order which he made, such leave to appeal was granted on the “questions of law identified in the claim form”. However, after receipt of the parties’ skeleton arguments for the purposes of the appeal, it seemed to me that the Claim Form did not properly set out the relevant questions of law. Further, it was the Owners’ submission that certain parts of the Charterers’ skeleton argument raised issues which went beyond the scope of the appeal in respect of which leave had been granted and that such issues could not be raised by the Owners. At my request, Mr Joseph QC on behalf of the Charterers submitted a draft of the questions of law which he said arose (or at least he wished to raise) on this appeal. These were as follows:

It was not disputed that question 1 fell within the original leave to appeal granted by David Steel J. However, it should be noted that the question as formulated focuses on the Owners’ demand on 8 June 2009 and makes no reference to the subsequent notice on 16 June 2009 which had been relied upon by the Claimants in the arbitration in support of their waiver case.

As to question 2A, the Owners submitted that this went beyond the scope of anything in the Claim Form and that it did not fall within the scope of the leave to appeal granted by David Steel J. Although there is some force in these criticisms, my view is that this question falls within the spirit if not the letter of the leave granted by David Steel J and that even if that is not the case, I should in my discretion, give the necessary leave. I should say that this difficulty would have been avoided if the Claim Form had identified (as it should have done) the particular question of law in respect of which leave to appeal was being sought. On this point, the relevant provisions of the 1996 Act and CPR PD 62 are clear. It is not sufficient for an applicant seeking leave to appeal under the 1996 Act to identify any alleged “errors of law”. What is required is a proper identification of the relevant “question(s) of law” as well as, of course, the further matters referred to in CPR PD 62 para 12.1.

As to question 2B, the Charterers accepted that that question of law was not identified in the original Claim Form nor in the Charterers’ skeleton argument which was served in support of the original application for leave to appeal; and that they required leave to appeal in respect of that question. The Owners submitted that I should refuse leave at this stage in particular because of the lateness of the application. In principle, it seems to me that the time limits imposed by 1996 Act and CPR 62 should be strictly enforced and only extended in very exceptional circumstances where proper grounds can be shown. However, in the particular circumstances of the present case, it seems to me that Mr Joseph QC is right when he says that although question 2B raises a discrete point it is properly described as a question of law. Further, it was raised in the arbitration and is closely allied to question 2A. In these circumstances, I have decided exceptionally to grant leave in respect of question 2B.

I should mention that the Owners gave notice that insofar as may be necessary they would, in the alternative, seek to uphold the Award on the point of law which was rejected by the Tribunal as referred to in paragraph 72-74 of the Award, which I propose to refer to as Question 3 viz.

It was common ground between the parties that the Owners were entitled, in the alternative, to raise this question for consideration by the Court. However, I should mention that in the course of the hearing a question arose as to the correct procedure to be adopted in these circumstances i.e. where a party seeks, in the alternative, to uphold an award on a point of law decided against that party. The position is dealt with in part by the Arbitration Practice Direction ie CPR PD 62 para 12.6(2) which requires a party opposing the grant of leave to appeal under s.69 of the 1996 Act to specify whether such party wishes to contend that the award should be upheld for reasons not expressed (or not fully expressed) in the award and, if so, state those reasons. As noted by Field J in The “Mary Nour” [2008] 1 Lloyd’s Rep 250 [12-13], the Practice Direction does not say that the reasons relied on must constitute a point of law although his view was that a respondent in such circumstances could not rely on grounds that were not points of law. That may well be so generally, although I can conceive of cases where this might not be so eg where a respondent wishes to say that a particular fact finding contained in the award is of itself sufficient to persuade the Court to uphold the award regardless of the point of law sought to be raised on appeal by the applicant. In any event, where a respondent does, in the alternative, seek to uphold an award on a point of law on which the respondent did not succeed before the arbitral tribunal, it seems to me important that a respondent ought in principle to include within the reasons stipulated by para 12.6(2) the relevant question of law.

In relation to question 1, the Charterers’ submissions were, in summary as follows:

The Owners disputed that there was any relevant applicable principle of automatic waiver at law as relied upon by the Charterers. In summary, they submitted as follows:

So far as the shipping field is concerned, the Owners accepted that there is first instance authority suggesting that the acceptance of hire, even under protest, can amount to a waiver, based on the landlord and tenant cases (see The Libyaville [1975] 1 Lloyd’s Rep. 537 at 554 per Mocatta J). However, the Owners submitted as follows:

Some at least of these submissions raise interesting and difficult questions. As submitted by the Owners, I accept that there appears to be no authority even in the field of landlord and tenant binding upon me to the effect that an unambiguous demand (as opposed to acceptance) of rent operates in law as an automatic waiver of the right of forfeiture. I am also prepared to accept that it is at least questionable whether even if such principle does exist in the landlord and tenant field, it is a principle which extends beyond that particular field and forms part of the general law of contract. If such principle did exist, it is perhaps surprising that it finds no mention in the leading general textbook, Chitty on Contracts. However, like Thomas LJ in Greenwood Reversions [27] and Neuberger J. in Yorkshire Metropolitan [82], I am content to proceed on the assumption in favour of the Charterers that such principle does indeed exist and, further, that it would apply to a demand for hire under a bareboat charterparty. Consistent with that assumption, I am also prepared to assume (again in the Charterers’ favour) that the successive demands made for hire on and prior to 2 June 2009 in effect constituted successive waivers by the Owners of their then existing rights contractually to terminate the charterparty.

However, it does not seem to me that any of the foregoing ultimately assists the Charterers here at the end of the day in relation to question 1. Even on the assumption that the Owners had effectively waived their successive rights contractually to terminate the charterparty prior to 2 June 2009, there had been no such waiver in respect of the hire due for the period 1-15 June 2009. As submitted by the Owners, timing is important. It is common ground that such hire payment was never made and that a valid notice of an Event of Default in respect of such non-payment was served on 2 June 2009. In effect, under Clause 46.1.1, the Charterers had 3 banking days following such notice to remedy their failure to pay and (as a corollary) the Owners were not entitled contractually to terminate until the expiry of such period. It is common ground that such period had not expired at the time the Owners made their demand on 8 June 2009 for the hire payment in respect of the period 16-30 June 2009. In such circumstances, it seems to me impossible to say that the demand for hire made on 8 June 2009 was an unequivocal act inconsistent with any right contractually to terminate which might arise subsequently. In particular, such demand was not an unequivocal act inconsistent with the Owners’ contingent right contractually to terminate the charterparty if the instalment of hire for the period 1-15 June 2009 remained outstanding after the expiry of the 3 banking days period. For these reasons and whatever other arguments might exist, in my judgment it follows that the Owners’ demand for hire on 8 June 2009 cannot have waived and did not waive the Owners’ right contractually to terminate the charterparty for the outstanding hire payment in respect of the period 1-15 June 2009 because, at the time when such demand was made, there was no existing right contractually to terminate for such non-payment.

On behalf of the Owners, Mr Joseph QC sought to meet this argument in two ways. First, he submitted that even if the Owners had no right contractually to terminate the charterparty on 8 June 2009, nevertheless there was at the time the demand was made on 8 June 2009 an existing “breach” by the Charterers, i.e. the failure to make due payment of hire for the period 1-15 June 2009. Second, he said that the position was to be viewed not as at 8 June 2009 but as at 22 June i.e. the date of the Owners’ notice of termination by which date the “grace period” had certainly expired. In my judgment, the first point is bad because the essential issue is whether the Owners waived the right contractually to terminate. In principle, it seems to me that the question must be determined as at the date of the conduct which is said to constitute the alleged waiver. The fact that there was as at the date of the demand for hire on 8 June 2009 an existing breach which ex hypothesi did not give rise at that date to any right contractually to terminate seems to me irrelevant. The second point is, in my judgment, equally fallacious. For present purposes, the alleged waiver relied upon by the Charterers is limited to the Owners’ conduct in making the demand on 8 June. Subsequent events seem to me irrelevant.

For these reasons, I reject the Charterers’ case under this head and, in effect, uphold the Tribunal’s conclusion albeit for somewhat different reasons. My answer to question 1 is as follows: The Owners were entitled to terminate the Charterparty at the very least on the basis of the non-payment of hire for the period 1-15 June 2009 expressed in the demand made on 2 June 2009. The demand made on 8 June 2009 in respect of hire for the period 16-30 June 2009 did not amount to a waiver of such right.

In the light of this conclusion, questions 2A, 2B and 3 do not arise and are irrelevant. However, for the sake of completeness, I deal with them briefly below.

In essence, the thrust of the Charterers’ submissions under this head was that the Tribunal erred in law in concluding that a waiver of the right to terminate for non payment of past hire could somehow be resurrected as giving rise to a right to terminate at common law. In particular, the Charterers submitted:

I cannot accept these submissions for the reasons set out below.

First, it is important to bear in mind that this is an appeal on a question of law under the Arbitration Act 1996 and to look closely at the actual conclusions and reasons expressed by the Tribunal. As I have already referred to above, the Tribunal concluded that the Charterers had wrongfully repudiated the charterparty and that the Owners were entitled to (and did) bring the charterparty to an end at common law. The crucial conclusions reached by the Tribunal with regard to such repudiatory conduct are summarised in paragraphs 80-81 of the Award which I have already quoted above. In the course of argument before me, there was some debate as to the language there used by the Tribunal and, in particular, whether the Tribunal was saying that there had been a “renunciation” rather than a “wrongful repudiation” by the Charterers or perhaps a combination of the two. In the event, it does not seem to me that the precise analysis is significant. For present purposes, what is significant is that although the Tribunal refers in paragraph 81 of the Award to what it describes as the “totality” of the Charterers’ conduct, the only conduct referred to is (i) the non-payment of the hire for the period 1-15 June 2009; (ii) the non-payment of the hire for the period 16-30 June 2009; and (iii) the Charterers’ conduct in evincing an inability to pay.

As to (i), for the reasons I have already given above, I do not consider that the Owners’ demand on 8 June constituted any relevant waiver contractually to terminate the charterparty in respect of the non-payment of hire for the period 1-15 June 2009. For similar reasons, I do not consider that there is any basis for saying that such demand waived any right to bring the contract to an end for such breach. At the risk of repetition, at that date, focussing simply on that failure to pay that instalment of hire and ignoring all previous failures to pay hire, there was no contractual right to terminate nor, in my judgment, any right to treat such non-payment as a wrongful repudiation of the charterparty.

As to (ii), the agreement that “time shall be of the essence” in respect of hire payment under clause 38.3 made the obligation to pay hire a condition of the contract, subject to the period of grace. Thus, there was in effect a specific breach of condition (ie actual repudiation) in failing to pay the instalment for 16 to 30 June 2009. That is enough to uphold the Award. For the avoidance of doubt, there is no question that the Owners waived this specific breach of condition. Nor could there be – as presented under question 1 above, the Charterers’ waiver case was based on the message sent on 8 June 2009 (i.e. before the hire for 16 to 30 June was due). Even if one were to extend the possible waiver horizon under this head to include the message sent on 16 June 2009, this would not avail Charterers in particular because it was served prior to the expiry of the “grace” period and itself specifically demanded payment of the hire for 16-30 June.

As to (iii), the high point of the Charterers’ argument is that prior to the notice on 2 June 2009, the demand for hire on 8 June 2009 and the demand/notice on 16 June 2009, the Owners knew of the Charterers’ inability to pay in particular having regard to the Charterers’ email dated 26 May 2009; and that in the light of such knowledge, such demands/notice in effect constituted a waiver by the Owners of any right to bring the charterparty to an end on that basis. I do not agree. Even on the assumption that the Owners had waived any right to bring the charterparty to an end on that basis on any of those dates (or indeed any earlier dates), it does not in my judgment follow that the effect of any such waiver(s) was to preclude the Owners from relying upon the fact of the Charterers’ inability to pay in particular after the expiry of the grace period in respect of the hire for the period 16-30 June 2009. For the avoidance of doubt, I do not say that such a waiver (or estoppel) might not arise in certain circumstances. But there is nothing in the Award which would justify such a conclusion in the circumstances of the present case.

I suppose Mr Joseph QC’s argument might have had some force if the Tribunal’s conclusion that the Charterers had wrongfully repudiated the charterparty had been based simply on the earlier failures to pay hire – which, as indicated above, is not so. However, even in such case, I would not have been able to accept Mr Joseph QC’s argument. In considering any alleged waiver, it is in my judgment imperative to focus on the alleged unequivocal act that is said to constitute any, and if so specifically what, waiver. Mr Joseph QC sought to argue that the effect of each successive waiver was that the Owners were in effect precluded forever from relying upon the fact of non-payment of each hire instalment other than to sue for the amount of hire due. I do not agree. Even assuming in the Charterers’ favour that there were here successive waivers of the right contractually to terminate for individual failures to pay hire, there is nothing in the Award to justify a conclusion that the Owners were at any stage waiving any right to bring the charterparty to an end on the basis of wrongful repudiation having regard to the totality of the Charterers’ conduct.

For all these reasons, I would also have upheld the Tribunal’s conclusion that the Charterers were in repudiatory breach as at 22 June 2009 and that the Owners were also entitled to bring the charterparty to an end at common law. It also follows that the answer to Question 2A is: “Yes”.

In essence, the Charterers submitted under this head that even if the Owners were entitled to bring the charterparty to an end at common law on 22 June 2009 on the basis of their (i.e. Charterers’) repudiatory conduct, the Owners did not do so because the notice of termination served by the Owners on that date purported to be a contractual termination only and, as such, could not and did not operate to bring the charterparty to an end at common law. In particular, the Charterers submitted as follows:

Before the Tribunal, the Owners sought to rely upon Dalkia v Celtech International [2006] 1 Lloyd’s Rep, specifically at [135-144] in support of the proposition that in an appropriate case a party with the benefit of a contractual right of termination need not elect between repudiation and contractual termination but can rely upon both. In other words in an appropriate case one letter can act both as a contractual termination and a common law acceptance of repudiation if it is clear that the owner is by the letter bringing the primary contractual responsibilities to an end [emphasis added and see paragraph 143 of the Judgment]. In the present case, however, it was the Charterers’ submission that for the reasons explained above, the termination letter under clause 47 sought to invoke the rights and consequences of clauses 46 and 47 of the charterparty which was to bring the chartering to an end by withdrawing the contractual service and did not bring the primary contractual responsibilities to an end. Further, the Charterers submitted that in the present case, the termination purportedly consisted of the contractual letter and re-delivery; and that notice given on 22 June did not of itself bring an end to the primary contractual responsibilities – see clauses 46.2 and 47.7.

These arguments raise two distinct issues. The first is whether the Owners did at least purport to bring the charterparty to an end at common law at the same time as purporting to terminate contractually the charterparty. As to this, it seems to me that the answer is plainly: yes. On a fair construction, the termination notice did say enough to communicate reliance upon a repudiation at common law: “In breach of your obligations under Charterparty, you have failed to pay hire…we hereby withdraw the Vessel from your service and terminate the Charterparty with immediate effect”. This is not a case of exclusive reliance on a particular clause as the grounds for termination. Thus, I agree with what was, in effect, the Tribunal’s conclusion in paragraph 81 of the Award and it follows that the answer to Question 2B is: “Yes”.

The second issue under this head is more problematic. The Owners in effect sought to argue that they could rely upon what they said was a general principle that a termination justified contemporaneously by one reason can be justified subsequently by a second reason that was not given at the time, provided that the consequences of termination are not inconsistent (see Force India Formula One Team v Etihad [2011] ETMR 10 per Rix LJ at 113-117, Stocznia Gdynia v Gearbulk [2009] 1 Lloyd’s Rep. 461 at 472, 44 per Moore-Bick LJ, Dalkia Utilities v Celtech [2006] 1 Lloyd’s Rep. 599 at 632, 143 per Christopher Clarke J). Further, the Owners argued that the consequences here were not inconsistent in particular because (a) termination at common law would be immediate and the Charterers would no longer have a right to possession of the Vessel – that was exactly the contractual mechanism under clause 47.1; and (b) the financial compensation payable was the same, whether at common law or under clause 47.3, as the Tribunal found at paragraph 104 of the Award.

These arguments gave rise to further debate both as to the scope of this so-called “general principle” and whether the consequences of, on the one hand, a “contractual termination” and, on the other hand, a termination at common law were inconsistent (or materially inconsistent) having regard to the particular provisions of Clause 47. My tentative view is that, as the Owners submitted, there was no or no relevant or material inconsistency and, to that extent, I was not persuaded that the Tribunal’s conclusion in paragraph 81 of the Award was incorrect as a matter of law. However, having regard to the formulation of Question 2A and in light of the conclusions which I have already reached it seems to me unnecessary to decide these matters and I decline to do so.

The Tribunal rejected the Owners’ case under this head for the reasons set out in paragraphs 72-74 of the Award as quoted in paragraph 11 above. In effect, the Tribunal held that since the termination notice did not expressly state that the Owners were relying upon the failure to pay hire in respect of the period 16-30 June as an Event of Default, the Owners could not rely upon such failure to justify contractual termination. The essence of the Tribunal’s reasoning is contained in the last sentence of paragraph 74 of The Award: “However, clause 46.2 did require a notice of termination after an Event of Default and it was to be inferred that the notice had to be comprehensive.”

In seeking to support this conclusion and as set out in their Skeleton Argument, the Charterers submitted as follows: “ The notice of termination must identify the precise default relied upon. The Owners are not entitled to supplement its notice of termination by reference to defaults not identified in the notice of termination. Clauses 46.2 and 47.1 require a notice of termination and the Charterers are entitled to restrict the Owners to the defaults identified. Clauses 46 and 47 contain a clear regime for contractual termination with specific contractual consequence. It is a regime which potentially gives rise to multiple grounds of withdrawal and termination and potentially very serious financial compensation under clause 47.3 a. One of the very few protections that the Charterers have is that the Owners must identify the precise grounds on which it seeks to terminate before doing so. This is spelt out in clauses 46.2 and 47.1. The Owners give no grounds at all for disapplying the contract wording. It would also contradict the basic guidance in relation to notice of termination given by Lord Wilberforce in The Laconia [1977] 1 Lloyd’s Rep 315 at 321- the charterer needs to be in a position to know what is being said against it and to give instructions in regard to the vessel. Moreover the consequences of termination are potentially severe including not only loss of all contractual rights but also forfeiture of the Sellers’ Credit of US$6,250,000. There is no parallel in the Dalkia v Celtech case relied upon by the Owners.”

I do not agree with the Tribunal’s conclusion under this head nor Charterers’ submissions as set out above in seeking to support such conclusion. In my judgment, the fallacy in both is the apparent premise that there is anything in the relevant wording of either clause 46.2 or clause 47.1 to require the notice of termination to identify the precise default relied upon or that any such requirement should, in effect, be implied or inferred. It is, of course, right that in order to qualify as an “Event of Default” under clause 46.1, the Owners must serve the relevant written notice notifying the Charterers of the relevant failure and requesting remedial action. However, there is no dispute that the notice served on 16 June fulfilled that requirement; and the stipulated period having expired without receipt of the relevant payment of hire, there is no dispute that there was then an Event of Default by the time of service of the notice of termination on 22 June. As I have said, there is nothing in clause 46.2 or clause 47.1 (or elsewhere) to require in the termination notice itself any further or separate identification of the precise default relied upon still less that the notice should be “comprehensive” as suggested by the Tribunal whatever that might mean. Clause 46.2 simply states, in effect, that the occurrence of an Event of Default shall entitle the Owners by notice to the Charterers with immediate effect to terminate the chartering of the vessel. In my judgment, the termination notice dated 22 June did just that and fully satisfied the requirements of clause 46.2. In other words, the failure to specify in the termination notice the non-payment of hire in respect of the period 16-30 June as an Event of Default did not invalidate the termination notice.

For the avoidance of doubt, the conclusion I have reached is based on the wording of the charterparty in the present case. Moreover, I do not accept the Charterers’ submission that there is anything in the speech of Lord Wilberforce in The Laconia to lead to any contrary conclusion. The passage cited by the Charterers at p.231 is not concerned with the contents of the notice of termination itself.

For these reasons, the answer to Question 3 is: “Yes”.

I should mention that the Owners raised a further point viz that as a matter of general principle they were in any event entitled to justify retrospectively a notice of termination for an Event of Default by reference to an Event of Default not specifically identified in the notice of termination, the Owners relying in particular upon a passage of the judgment of Moore-Bick LJ in Stocznia Gdynia v Gearbulk [2009] I Lloyd’s Rep: 461 [44]. However, in my view, it is unnecessary to express any views on that point and I decline to do so.

For the reasons stated above, I answer Question 1 as follows: “The Owners were entitled to terminate the charterparty at the very least on the basis of the non-payment of hire for the period 1-15 June 2009 expressed in the demand made on 2 June 2009. The demand made on 8 June 2009 in respect of hire for the period 16-30 June 2009 did not amount to a waiver of such right”. It follows that I uphold the Award. In light of these conclusions, it is unnecessary to consider the further questions posed but to the extent that they have any relevance I would answer Question 2A “Yes”; Question 2B: “Yes” and Question 3: “Yes”. If necessary, I would also uphold the Award on the basis of these answers.

In light of the above, Counsel are requested to seek to agree a draft Order including costs failing which I will hear argument on any outstanding issues.