3 May The Court considered the relationship between clauses 21, 27 and 28 of the SHELLTIME 4 standard form, which provide, amongst other things. The English High Court recently considered* whether clause 19 of the Shelltime 4 form of time charter permitted charterers to give instructions for what would. In a recent arbitration a panel of three London arbitrators gave a decision on the meaning and effect of a notice under clause 3 of the Shelltime 4 form.

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It was held that this was drafted with s 69 Arbitration Act in mind, and limited to questions of law whose determination may serve a useful purpose for the parties. Owners’ initial response was to seek a declaration from a tribunal which had already been constituted to hear other disputes under the charterparty that the Charterers were not able to compel them to carry out the repairs.

If Owners are in breach of their obligation under Clause 3 i Charterers may so notify Owners in writing; and if, after the expiry of 30 days following the receipt by Owners of any such notice, Owners have failed to demonstrate to Charterers’ reasonable satisfaction the exercise of due diligence as required by Clause 3 ithe vessel shellttime be off shellitme, and no further hire payments shall be due, until Owners have so demonstrated that they are exercising such due diligence….

The tribunal held shelltije Owners’ losses incurred due to the breach of the charterparty by Charterers were recoverable. She,ltime ShellLNGTime, the amending wording should be attached not only to sub-clauses 1 c and jbut also to sub-clauses 4 a and cand the second sentence lines to of sub-clause 4 d will require to be shellitme.

In support of their position, the charterers argued that clause 19 absolves charterers from liability for late redelivery on conclusion of a legitimate last voyage and also permits the giving of orders for what would otherwise be an illegitimate last voyage.

They then sought an arbitration award, inter alia, on the following preliminary issues: A salutary reminder of the risks which charterers need to consider. Also available in other formats:.

If and shelltume the extent that such failure affects the time taken by the vessel to perform any services under this charter, hire shall be reduced by an amount equal to the value, calculated at the rate of hire of the time so lost….

Home Uncategorized Shelltime 4 — who bears risk of arrest? December PDF Version.

Space available to charterers: Thought should be given to this provision, in particular in short term charters, to ensure co-operation of the charterers with the necessary arrangements for the attendance of SIRE inspectors. Similarly, the tribunal held, giving a clause 3 iii notice carries with it an implied promise that the conditions for the giving of such a notice are satisfied. Alternatively, if owners are not able to amend the standard forms so as to completely remove the requirement that owners must make modifications required by changes in regulations, then in the case of time charters for long periods, where there is a real chance of changes in regulations requiring modifications to the vessel, it may be appropriate to agree that owners and charterers should share the cost of the modifications which may be required, bearing in mind that any modification will both be to the advantage of charterers who will have the modified vessel for the remainder of the charter period and to owners for the balance of the expected life of the vessel after redelivery from this charter.


However, it proved impossible to obtain a speedy ruling on this question so Owners decided to take the vessel out of service and to repair it immediately.

If at any time whilst the vessel is on hire under this charter the vessel fails to comply with the requirements of Clauses 1 [description and condition of the vessel], 2 a or 10, then hire shall be reduced to the extent necessary to indemnify Charterers for such failure. Bunkers at delivery and redelivery: If the increased risk materialises in the course of a voyage, the clause comes into effect irrespective of whether it arises subsequently to the original voyage orders, ie the position is analogous to that relating to safe ports.

Time Charters

The vessel was delivered under shelltimd charterparty on 28 th July It appears, therefore, that the express provision in ShellLNGTime clause 4 drequiring owners to make at their own expense and in their own time any modifications required as a result of changes in international regulations or standards, may only be making explicit something which is already implicit in Shelltime and Shelltime September Binding Format: Changes in ownership etc.

These charterparty forms are widely used in the market by owners and charterers both within and outside the Shell Group. The Charterers had sub-chartered the vessel on an amended BPVOY form to a company which had intended to export a cargo of crude oil unlawfully from Venezuela.

Clause 28 …No voyage shall be undertaken, nor any goods or cargoes loaded, that would expose the vessel to capture or seizure by rulers or governments.

Shelltime 4 – who bears risk of arrest? | Ship Law Log

Clause 27 a …Further, neither the vessel, her master or Owners, nor Charterers shall, unless otherwise in this charter expressly providedbe liable for any loss or damage or delay or failure in performance hereunder arising or resulting from… arrest or restraint of princes, rulers or people. It provides guidance on legal aspects and discusses the wording and interpretation of charterparty clauses.


Accordingly, the redelivery window was 8 th January — 17 th February A clause 3 iii notice amounts to an allegation that at that date the Owners are guilty of a breach of their obligations under clause 3 ithat is that they had failed to exercise due diligence to comply with their obligations as to the vessel’s condition.

In response, the charterers redelivered the vessel on 14 th January The relevant terms of clause 3 are as follows: The publication provides guidance mainly on legal aspects. It does not override it. Both to blame collision clause: Pollution and emergency response Shelltime 4 III.

Clause 1 i or 1 l LNG provides there shall be no change in ownership, flag, registry, Class or management structure. In a recent arbitration a panel of three London arbitrators gave a decision on the meaning and effect of a notice under clause 3 of the Shelltime 4 form. On 16 th December charterers purported to give voyage orders for the vessel which contemplated redelivery on or about 7 th March — well outside the redelivery window.

Ship to ship transfers. A recent judgment has also drawn attention to clause 1 gwhich is the first sentence of 1 j LNG.

After some debate about the validity of these orders, the owners refused to accept them and instructed the master not to comply with them. In relation to Clause 28, it was said that the reference is to the undertaking of a voyage.

Time Charter – Shelltime 4 – Last Voyage Instructions

You must have JavaScript enabled in your browser to utilize the functionality of this website. Suspicions were aroused when the documents were presented at the loadport and the vessel was detained in September in Venezuela, where she remained at the time of judgment. It may not be necessary for all other charterers. Owners agreed with the first shelktime only.

The charterers argued that their orders were for a sheltlime last voyage by virtue of clause 19 and accordingly, that the owners were in repudiatory breach of the charterparty when they instructed the master not to comply with these orders.

First Number of Pages: Additional clauses 1