The Gregos [1994]: when is a last voyage illegitimate?
The House of Lords decision fixing the moment at which the legitimacy of a final time charter voyage is judged, and what the owner must and need not accept.
Torvald Klaveness A/S v Arni Maritime Corporation (The Gregos) [1994] 1 WLR 1465, decided by the House of Lords on 28 October 1994, settled the timing question in the last voyage dispute. The charter was on an amended NYPE form for about 50 to maximum 70 days between 8 January and 18 March 1988. On 9 February the charterers ordered a final voyage from Palua on the Orinoco to Fos, which was legitimate when the order was given but illegitimate by the time the voyage was due to begin.
The House of Lords held that legitimacy is judged at the time the voyage is due to begin, not when the order is given. The owner is not obliged to perform an illegitimate last voyage; it is obliged to accept a legitimate one; and late redelivery not caused by the owner’s own fault is a breach sounding in damages at the market rate for the overrun plus hire to redelivery. The decision restored the arbitrator and Evans J and reversed the Court of Appeal.
Lord Mustill added a point later picked up in The Achilleas: because the owners had secured a more lucrative substitute fixture on a rising market, the charterers’ wrongful act had produced no loss. The full article will cover the facts, the reasoning, the relationship with The Peonia which had left the timing point open, and the practical consequences for an owner deciding whether to reject a final voyage order.