Melsa International Inc. v. Adecon Shipping Lines Inc.

In Charters of Ships on (Updated )

This was an application by the defendant for summary judgment dismissing the Plaintiff’s action. The Plaintiff’s action was for breach of a charter-party agreement. The Plaintiff and Defendant had entered into a charter-party agreement in the Gencon form. The Defendant was not able to meet the agreed upon loading date and, as a consequence, the Plaintiff exercised its right to cancel the charter-party and found another vessel to carry the cargo. The Plaintiff claimed the difference in the freight payable under the two charter parties. The Defendant argued that pursuant to the charter-party the Plaintiff’s remedy was to cancel the charter and that it had no right to claim damages. The Court reviewed the authorities and noted that a charterer who cancels a charter-party has a claim in damages if the failure of the ship to arrive by the cancelling date was a result of a breach on the part of the shipowner of his obligation to load by a particular date. In result, the Court found that there was a genuine issue for trial and dismissed the motion for summary judgment.