The Owner's Vulnerability to the Liabilities of the Demise Charterer

Abstract

The principal issues in this paper are topical because of the relatively recent judgements of The Hako Endeavour [2013] FCAFC 21; 211 FCR 369 and The Chem Orchid [2014] SGHCR 1; [2014] 1 Lloyd’s Rep 520. They concern the owner’s vulnerability to the debts of a demise charterer, particularly in the period after a notice of termination has been served but before the vessel has been repossessed by the owner. Does notice alone serve to terminate the charter, and even if it does can the ship be arrested in the possession of the erstwhile demise charterer for the liabilities of the demise charterer?