Yew Huoi, How & Associates | Leading Malaysia Law Firm

Menu

CHARTERPARTY AGREEMENTS – CHARTERER’S GUIDE TO FOULING CLAUSES

Summary and Facts

In Smart Gain Shipping Co Ltd v Langlois Enterprises Ltd [2024] 1 Lloyd’s Rep. 309, the English High Court reviewed an arbitration appeal over a charterparty dispute regarding a hull fouling clause. The vessel Globe Danae, chartered by Smart Gain for a voyage from India to Brazil, suffered hull fouling due to prolonged idleness in Brazilian waters. Upon redelivery, Smart Gain did not clean the hull as requested by the vessel’s owners, Langlois Enterprises, who subsequently carried out the cleaning at their own cost. The owners sought compensation at the charter hire rate for the cleaning period, referencing the hull fouling clause. Smart Gain contested this, arguing that hire obligations ceased upon redelivery.

What is a Fouling Clause?

A fouling clause in a charterparty agreement designates responsibility for cleaning and maintaining the vessel’s hull when it becomes fouled, often due to idleness or operation in biologically active waters. Hull fouling results from marine organisms like algae, barnacles, or shellfish attaching to the hull, which can reduce fuel efficiency and speed, leading to additional cleaning costs.

Legal Issues

  1. Claim in Debt vs. Damages for Lost Time: Did the hull fouling clause support a debt claim for time spent on post-redelivery cleaning, or were owners limited to a damages claim for lost time?
  2. “Always at Charterers’ Time and Expense” Provision: Did this clause require charterers to cover cleaning time costs even after redelivery?

Court Findings

  • The court ruled that the owners’ claim was valid as a debt, rather than as damages for lost time, holding that the hull fouling clause imposed a clear responsibility on the charterers to cover both time and expense for hull cleaning. Thus, the owners did not need to demonstrate any actual time lost.
  • The court interpreted the phrase “always at Charterers’ time and expense” to mean that charterers were responsible for cleaning time whenever it occurred, including post-redelivery, provided the fouling resulted from the charterers’ orders.

Practical Implications

This case underscores the importance of precise wording in charterparty clauses, especially those involving liability for post-redelivery activities. Malaysian charterers should carefully assess such clauses, as courts may interpret terms like “at charterers’ time” to extend beyond the charter period, particularly if actions arise from the charterer’s use of the vessel. Additionally, this ruling reinforces that debt claims may be triggered by charter obligations without the need to show loss, potentially influencing Malaysian courts’ approach to similar cases.

Back to Latest Legal Updates

Recent Post

LEGAL UPDATES – THE SILENT CURVE: WHY MEDICAL PREMIUMS SUDDENLY SPIKE

Medical insurance premiums do not increase gradually. They rise exponentially. For many years, costs appear manageable, giving policyholders a false sense of stability. However, once the insured reaches their mid-60s, medical charges begin to accelerate sharply, and after age 70, they often outpace the premiums by several multiples.

This happens because medical insurance is funded from a finite pool of money – an investment “bucket” – while the medical rider functions like an engine that consumes more fuel as the insured ages. When the engine grows faster than the bucket can be replenished, depletion is inevitable. The result is sudden premium hikes, demands for top-ups, or policy lapse – not due to misconduct or missed payments, but due to the structural design of the product itself.

Read More »
8 February ,2026 尚無留言

THE ‘COVER UNTIL 99’ MYTH – WHY INSURANCE AGENTS GET IT WRONG

Consumers must stop relying on what insurance agents say and start reading what insurance policies actually provide. ‘Medical cover until 99’ does not mean guaranteed coverage at an affordable premium. In reality, medical insurance charges rise exponentially after age 70, often making the policy mathematically unsustainable. By the time policyholders realise this, they are told to top up tens of thousands of ringgit or lose coverage altogether.

Read More »
8 February ,2026 尚無留言

STRATA TITLES ACT – DEVELOPER MUST ACCOUNT FOR COMMON PROPERTY COMPENSATION: HIGH COURT IMPOSES CONSTRUCTIVE TRUST

In JMB Kelana Square v Perantara Properties Sdn Bhd & Ors [2025] 12 MLJ 51, the High Court held that a developer who received compensation for land compulsorily acquired for the LRT 3 project could not retain sums attributable to common property. Although the compensation was paid entirely to the developer as registered proprietor, the Court found that part of the acquired land constituted common property, and the developer therefore held RM6.05 million on constructive trust for the Joint Management Body. The decision affirms that JMBs have proprietary standing to recover compensation for common property and that courts will intervene to prevent unjust enrichment in strata developments.

Read More »
1 February ,2026 尚無留言

UNFAIR DISMISSAL – MEDICAL LEAVE IS NOT MISCONDUCT: HIGH COURT UPHOLDS INDUSTRIAL COURT’S PROTECTION OF SICK EMPLOYEE

In Aerodarat Services Sdn Bhd v Lawerance Raj a/l Arrulsamy & Anor [2025] 11 MLJ 26, the High Court dismissed an employer’s judicial review and affirmed that prolonged medical leave does not, by itself, amount to misconduct justifying dismissal. The Court held that the employer failed to prove the critical element of intention not to return to work or unwillingness to perform contractual duties, despite high absenteeism caused by serious illness and surgery. The ruling reinforces that employers must distinguish between genuine illness and misconduct, and cannot rely on medical absence alone to terminate employment.

Read More »
1 February ,2026 尚無留言

WILL AND PROBATE – COURT OF APPEAL INVALIDATES WILL OF 97-YEAR-OLD TESTATOR: CAPACITY, SUSPICION AND UNDUE INFLUENCE PROVED

In Kong Kin Lay & Ors v Kong Kin Siong & Ors [2025] 5 MLJ 891, the Court of Appeal set aside a will executed by a 97-year-old testator, holding that there was real doubt as to testamentary capacity, compounded by serious suspicious circumstances and undue influence by certain beneficiaries. The Court emphasised that while the “golden rule” is not a rule of law, failure to obtain medical confirmation of capacity where doubt exists is a grave omission. Credibility issues with the drafting solicitor, beneficiary involvement in the will’s preparation, and suppression of evidence led the Court to declare the will invalid and order intestacy.

Read More »
1 February ,2026 尚無留言

NOT AN ‘AGREEMENT TO AGREE’: ENGLISH COURT OF APPEAL SAVES LONG-TERM SUPPLY CONTRACT DESPITE OPEN PRICE CLAUSE

In KSY Juice Blends UK Ltd v Citrosuco GmbH [2025] 2 Lloyd’s Rep 581, the UK Court of Appeal held that a long-term supply contract was not unenforceable merely because part of the price was stated as “open price to be fixed”. The Court implied a term that, in the absence of agreement, the price would be a reasonable or market price, noting that the product’s value could be objectively benchmarked against the market price of frozen concentrated orange juice. Emphasising that courts should preserve commercial bargains rather than destroy them, the decision confirms that section 8(2) of the Sale of Goods Act 1979 operates as a saving provision, not a bar to enforceability.

Read More »
1 February ,2026 尚無留言
zh_TWZH
en_USEN ms_MYMY zh_TWZH
× 联系我们