i-law

Voyage Charters

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Chapter 64

Sublet
25. SUBLET. Charterer shall have the right to sublet the Vessel. However, Charterer shall always remain responsible for the fulfillment of this Charter in all its terms and conditions.

Generally

64.1 An express liberty to sublet such as in the present clause may be important in determining whether the head owner has consented to the conferring of authority on the sub-charterer to issue bills of lading which may bind him. Although it is not clear, the cases on authority derived from liberties to sublet in time charters1 may be said to give some support for the proposition that sub-voyage charterers have similar authority to that of head charterers, but in any event, given that the Asbatankvoy form contains a stipulated form of bill of lading,2 any authority is correspondingly limited to issuing a bill of lading in that form. 64.2 When the vessel is sublet under this clause, no privity of contract is created between the owner and the sub-charterer, each of whom must look to the original charterer in the event of a failure to perform.3 If the sub-charterer is the holder of a bill of lading issued by the head owner, there will be privity of contract between them on the terms of the bill of lading,4 but the rights and obligations under the bill of lading will be additional to those that arise under the head charter and the sub-charter. There may also be a relationship of bailment or sub-bailment which may itself be on terms.5 The clause makes it unnecessary to consider whether there would be an implied right to sublet. Certain observations in Dimech v. Corlett 6 suggest that a charterparty is one of those contracts that must be performed personally. However, even in the absence of a sub-charter, there are likely to be many obligations which the charterer performs through third parties, and the conclusion that the charterer must perform personally must be debatable.7

Assigning the charter

64.3 Some charters go further than conferring liberty to sublet, and give the charterer liberty to assign the charter. The STB Voy charter, for example, gives the charterer the right

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to “assign” the charter to any of its affiliates. Whether such a clause is intended to create privity of contract between the owner and the assignee is a question of construction: it may amount to the owner conferring authority on the charterer to conclude, on his behalf, another identical charter with a class of charterers thus defined. If the liberty to assign is additional to the liberty to sublet, and if no mention is made of the original charterer remaining liable in the case of assignment, the apparent intention is that the original charterer simply drops out and is replaced by the assignee. As long as the assignee consents to becoming a party to the charter, there is no reason in law why this intention should not receive effect.8

U.S. Law

64A.1 The right to sublet a vessel is often expressly granted in a charterparty.9 Even in the absence of a clause granting the right to sublet, however, a charterer may sub-charter the vessel unless specifically prohibited from doing so in the head charter.10