Mondial Shipping & Chartering BV v Astarte Shipping BV
Schelde Delta Shipping BV v Astarte Shipping BV (The Pamela)
High Court
Citations: [1995] 2 Lloyd’s Rep 249; [1995] CLC 1011.
Facts
The parties entered into a charterparty for the use of a motor vessel (‘The Pamela’). The agreement stated that the charterers had to pay the fees on particular dates. If they failed to do this, the Pamela’s owners could give 48 hours notice of the failure. If the charterers did not pay within that time, the owners could reclaim the vessel.
The first fee fell due on the 6th of November. The charterers failed to pay. The owners sent notice, and the charterers paid within the 48 hour period. The next instalment became due on a Friday. The owners sent notice by telex, arriving at 11 o’clock at night. The charterers did not pay within 48 hours, so the owners reclaimed the vessel on Wednesday the following week.
A dispute arose over whether the owners’ notice was valid. If it was not valid, then the owners were in breach of contract by reclaiming the vessel. The charterers argued that they had until midnight on Friday to pay, meaning that the owners had sent the notice before the time to pay had run out. They argued that this made the notice invalid. The charterers also contended that the notice was defective because it failed to state that the owners would take the boat if they did not pay.
Issue(s)
- Was the notice valid?
Decision
The High Court held in favour of the charterers.
- The telex only counted as being ‘received’ by the charterers during business hours. Since the telex was sent outside of business hours, the charterers technically received the notice at 9:00am on Monday. By then, the obligation to pay was overdue.
- However, this kind of notice clause requires any notice to clearly state why the notice is being sent and the consequences of failing to comply. If it does not, then it is invalid. The fact that the notice did not say that the owners would withdraw the boat therefore made it invalid.
This Case is Authority For…
Instantaneous forms of communication which arrive during normal business hours are taken to have been immediately communicated to the recipient. This is true even if the recipient is not aware they have received the message or have not read it. Messages sent out of business hours count as being received on the next business day.
Other
Unless the parties have agreed otherwise, if a contract states that something must be done by a particular day then it grants the party until midnight on that day to do it. This is called the ‘midnight rule’.
