Trip time charter — rate of interest on unpaid hire
A trip time charter was entered into. The vessel was registered in Panama and managed by a company registered in Greece. Neither the owners, charterers, managers or brokers were English. The charterparty was concluded in Antwerp. The voyage did not concern England. The charterparty stated that it was subject to English law and London arbitration.
Charterers withheld hire, and owners commenced arbitral proceedings. The tribunal held that the charterers were liable to pay the hire, together with interest under the Late Payment of Commercial Debts (Interest) Act 1998. The rate of interest under the act is at present fixed at eight per cent above base rate, i.e. at 12.75 per cent. Charterers appealed against the interest rate, arguing that the 1998 act did not apply.
Mr Justice Popplewell allowed the appeal: the 1998 act did not apply. Where English law applies to a contract by reason of the choice of the parties, the act will apply: (1) if there is a ‘significant connection’ between the contract and England; or (2) if the contract would be governed by English law apart from the choice of law…
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