Shipping Newsletter - August 2011, Issue 28

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In this issue: The Effect of Insolvency on a Charterparty; The Bribery Act 2010; Federal Maritime Commission Eases Rate Filing Requirements; Update: Sanctions Regimes; Case Study: Refusal of Orders to proceed to Yemen; Case Notes; Welcome to…; and Q&As with David Handley.

Excerpt from 'The Effect of Insolvency...":

The insolvency of a party, the commencement of insolvency-related proceedings or the appointment of liquidators or receivers will not on its own amount to a repudiation or a renunciation of a contract subject to English law (see for example Re Agra Bank (1867) LR 5 Eq 160). There will, therefore, be no right to terminate a charterparty because of an event of insolvency affecting an owner or charterer. That is unless, of course, such an express right is reserved in the contract.

In order to have a right to terminate, the innocent party will either need to be able to show that the inevitable consequence of the event of insolvency is a repudiation of the charterparty, i.e. that there has been an anticipatory repudiatory breach, or that a liquidator (or similar officer or court) has stated clearly and unequivocally that a charter will not or cannot be performed in some respect going to the root of the contract i.e. there has been a renunciation (see Pacific and General Insurance Co. Ltd v. Hazell [1997] 1 L.R.L.R. 65 at 83).

Please see full publication below for more information.

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