CA-2025-000005 - [2025] EWCA Civ 1227

The grounds of appeal

The Owners’ overall contention on this appeal was that the Judge’s interpretation of clause 29 was wrong and that the Tribunal’s decision should be reinstated. To the extent that it was necessary to identify specific errors in the Judge’s approach, the Owners advanced three grounds.

First, the Owners contended that the Judge had purported to construe clause 29 in the context of the facts of the present case, whereas he should have construed it, as a standard provision in a widely used form, in a manner which was universally applicable irrespective of the factual scenario. I see no merit in that criticism. The Judge did express the view that the exercise of interpretation should be confined to that which arose on the facts of the case, but that was not an indication that he was limiting his consideration of the issue which did so arise to the particular facts. Indeed, a central plank of the Judge’s analysis was that clause 29 could apply in each of the termination scenarios provided for in clause 28.

Second, the Owners asserted that, because he viewed the bargain arising from the natural meaning of clause 29 as unfair to the Charterers, the Judge “sought to create” ambiguity in its language without identifying that ambiguity and where there was none. Again, I see no merit in that criticism of the Judge. He was plainly right to say that the meaning of the clause is neither clear nor precise (the Tribunal noting that its views had “fluctuated”). His reference to the “highly prejudicial” consequence for the Charterers of the Tribunal’s interpretation was an entirely appropriate consideration of the commercial effect of such an interpretation in the iterative process of determining which of competing interpretations was correct.

Third, the Owners contended that the Judge wrongly made factual findings, inconsistent with those properly made by the Tribunal. The specific criticism relates to the Judge’s comment at [29] that it was reasonably practicable for the Owners to have boarded the Vessel in Stockton and “more quickly than by requiring it to be sailed to Trogir”. The Owners complained that the Tribunal had not made a finding as to how long it would have taken the owners to board the Vessel at Stockton (other than that it would not have been on or shortly after 14 May 2021) and that the Judge himself found, improperly, the additional fact that it would have been quicker than sailing to Trogir. Again, I reject that criticism. The Tribunal found that it would have been reasonably practical for the Owners (using a management company) to have placed a crew onboard at Stockton in May 2021, notwithstanding Covid 19, albeit not on 14 May or shortly thereafter. In fact the obligation was not to place a crew on board, but only a single authorised representative. Whilst the Tribunal did not state how long that (or indeed, boarding an entire crew) would have taken, it is implicit in the finding of reasonable practicability that it would not have been as long as two months, the potential duration of the full voyage from California to Croatia. The concept of reasonable practicability only arises in the context of repossessing the Vessel as soon as reasonably practicable. If it could have taken as long as two months to arrange for an authorised representative to board the Vessel in port in California, that could hardly have been regarded as a reasonably practicable course of action and the Tribunal would not have so found.

In the event the above grounds did not feature significantly in the oral arguments on appeal. The Owners, rightly in my judgment, focused its arguments on the issue of law before us, namely, how clause 29 should be interpreted, rather than a critique of the Judge’s approach below.

In that regard Mr Akoni, for the Owners, made the following submissions:

The nature of a bareboat charter is that full possession and control is given to the Charterers, who assume the obligation to crew, operate, maintain and repair the Vessel, as well as paying hire. There are only limited obligations on the Owners.

It follows that most defaults leading to early termination will be those of the Charterers, in particular, in failing to pay hire or in failing to maintain or repair.

In those circumstances clause 29 should be approached on the basis that it will mainly be applicable where the Charterers are in breach of the Charterparty, and will primarily be designed with the interests of the Owners in mind.

Further, the fact that clause 29 was introduced (there being no express provision for repossession in the 1989 version of the standard terms) to “strengthen the Owners’ position” is supported by the BIMCO Explanatory Notes for Barecon 2001, which state in relation to clause 29 as follows:

“This new clause tackles the potentially thorny issue of repossession of the vessel following termination of the Charter in accordance with Clause 28. A situation might arise where the charterers terminate early and do not pay outstanding crew wages and/or repatriation costs when abandoning ship. The Repossession Clause attempts to strengthen the owners’ position when the bareboat charter is terminated and the owners cannot take immediate physical repossession of the vessel. This issue is dealt with by requiring the charterers to act as “gratuitous bailees only” to the owners, whereby the charterers must care for the vessel without compensation until the owners can physically repossess her. Clause 29 also requires the owners’ representative to board the vessel and take physical repossession “as soon as reasonably practicable following the termination of the Charter”.”

The same point is recognised in Bareboat Charters 2^nd ed (2005), the leading practitioner text, in the section on clause 29 at §29.1:

“This is a new provision in Barecon 2001 which is designed to clarify and strengthen the position of the owners if/when the charter is terminated under Clause 28, and to address some of the practical difficulties that may occur in such circumstances. Because under a bareboat charter the owners give up possession of the vessel to the charterers, the owners are placed in a potentially vulnerable situation where they terminate the bareboat charter and are unable to retake possession of the vessel, if for example the vessel is on the high seas. Clause 29 seeks to address when and how the owners are to retake possession of the vessel following termination of the charter, and to set out the responsibilities of the charterers following termination but pending repossession….”

In that context, it is understandable that the language of the first sentence of clause 29 gives the Owners an express right to elect the location for repossession, including at a place “convenient to them”. That gave the Owners the clear contractual right to require that the Charterers sail to the place that was objectively convenient for the Owners, provided it was not an irrational or arbitrary choice. The fact that that might be a lengthy journey is inherent in the clause in any event, given that the Vessel’s “next port” might be far distant.

The first sentence of clause 29 therefore deals with the location for repossession, whilst the second sentence addressed the status of the Charterers whilst they sailed to that location after termination and the third sentence provided for the timing of repossession at the chosen location.

The obligation of the Owners to repossess “as soon as reasonably practicable” is a separate provision, with its own purpose, which comes after, and arises in the context of, the Owners’ prior choice of location.

The Tribunal was therefore right to find that the Owners were entitled to repossess the Vessel at Trogir, a place that was objectively convenient to them for the purpose of taking possession as soon as reasonably practicable, taking into account the insolvency process in which BDOO was engaged and that the Vessel could be cared for in BDOO’s shipyard without the need to engage a crew overseas through a ship management company.