Fixing or Unfixing a Charterparty

Abstract

This paper was presented as part of Business Session 6. It draws attention to Mr Justice Steyn's decision in Star Steamship Society v Beogradska Plovidba (The 'Junior K') [1988] 2 Lloyds Rep 583. In that case, the court determined that no binding contract existed between the parties, because while the parties seemed to have in mind a contract on the Gencon charterparty form, they had not yet considered the details, and used the expression 'subject to details of the Gencon charterparty' to show that negotiations about the details of the charterparty remained to be made. The decision was criticised by many for its lack of awareness as to shipping realities and the reason why fixtures are made 'subject c/p details' (that is, the charterparty details are especially lengthy and can be left until after the basics have been agreed to save time).

The authors contrast this position with that in the US.

The remainder of the paper is dedicated to a discussion of whether commercial justice and sterile legal application are entirely divorced from one another, and if English law on charterparties actually seeks to meet clients' commercial expectations. The authors conclude that Australian courts are likely to follow English precedent in this area, and that shipbrokers and other parties entering into these types of contracts should refrain from using the term 'subject to details' to avoid unintended consequences in court. As many terms of the contract should be agreed as possible.