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Governing contractual document between owners & charterers if carrying vessel is substituted - B/L?

If ship-owners exercise their right to substitute the carrying vessel, and the new vessel belongs to a different owner, then which document governs the contractual relationship as between the new owners and charterers – C/P or B/L? This was one of the many questions before the court in the multi-faceted case, The Thor Commander [2018].

Under ordinary circumstances (i.e. where the parties to C/P & B/L are effectively identical) it is the C/P that governs the relationship. Taking guidance from the The Dunelmia (1970), the court however held that it was the B/L since the owners of both the vessels were different and that although the charterers had agreed to the substitute vessel, they did not agree that a new party could be substituted into the C/P itself. A substitution clause does not include an implied term that, if a vessel were substituted then, her owners too would become parties in substitution for the contracting party whose ship was no longer going to perform the charter.

The court did indicate that the outcome might have been different had there been an express term in C/P providing for novation of original owner’s rights & liabilities to the new owners.

The first post on this very colourful case can be found here:

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