[1996] Vol.

2 LLOYD'S LAW REPORTS 604

QUEEN'S BENCH DIVISION (2) If so did the plaintiffs' telex of Jan. 24, 1996 nevertheless opt to
(COMMERCIAL COURT) reject the charterers' repudiation and/or (b) to affirm the existence of
the charter?
June 27; July 1, 1996 (3) If the plaintiffs did affirm the contract on Jan. 24, 1996 or
otherwise were they nevertheless still entitled on Feb. 1, 1996, to
____________________
accept the repudiatory breach as determining the charter?
YUKONG LINE LTD. OF KOREA -Held, by Q.B. (Com. Ct.) (MOORE-BICK, J.), that (1) the Court should
v. not adopt an unduly technical approach to deciding whether the
RENDSBURG INVESTMENTS CORPORATION injured party had affirmed the contract and should not be willing to
hold that the contract had been affirmed without very clear evidence
OF LIBERIA AND OTHERS
that the injured party had indeed chosen to go on with the contract
Before Mr. Justice MOORE-BICK notwithstanding the other party's repudiation; the Court should be
generally slow to accept that the injured party had committed himself
Charter-party (Time) - Repudiation - Affirmation - Construction of irrevocably to continuing with the contract in the knowledge that if,
telexes exchanged by parties - Charterers advised owners they without finally committing himself the injured party had made an
would be unable to perform charter - Whether charterers in unequivocal statement on which the party in repudiation had relied,
repudiatory breach - Whether owners affirmed charter. the doctrine of estoppel was likely to prevent any injustice being done
(see p. 608, col. 1);
On Mar. 31, 1994 the plaintiffs Yukong (disponent owners) chartered (2) it was rightly conceded that the fax of Jan. 23, 1996 amounted to
the new building Rialto on the New York Produce Exchange form a repudiation of the charter; the owners' telex of Jan. 24 giving 20
from her owners Mizar Shipping Corporation for a period of three days' notice for the delivery of the vessel was essentially concerned
years. with administrative matters; it did not carry the implication that the
On June 8, 1995 Yukong sub-chartered the vessel on the New York owners intended to continue with the charter notwithstanding the
Produce Exchange form to the charterers, Rendsburg, for a period of charterers' repudiation and so could not be understood as an
three years. unequivocal election to affirm the contract (see p. 608, cols. 1 and 2);
On Jan. 23, 1996 the charterers sent the following message to the (3) the owners' telex of Jan. 24, 1996 read as a whole, could only be
owners through the brokers: read as a cry of protest at what the owners regarded as a dishonourable
. . . Regret to say that charterers for reasons beyond their control are attempt by the charterers to abandon their obligations; far from
unable to perform any further. rejecting the idea that the charter might be discharged the owners were
On Jan. 24, 1996 the owners gave 20 days' notice of delivery and here saying that they regarded the charterers' conduct in seeking to
later on the same day responded to the charterers' message stating inter abandon it as totally unacceptable behaviour; and the only meaning
alia: that could sensibly be given to the final sentence was that the owners
were asking the charterers to withdraw their repudiation and confirm
. . . It is really upset to receive notice of non-performance from their willingness to perform the contract (see p. 609, col. 1);
charterers. Charterers' cancellation of charterparty is totally
unacceptable and charterers are strongly requested to honour their (4) it was impossible to find in the telex an unequivocal statement on
contractual obligations according to the charterparty. . .In case of the part of the owners that they would proceed with the contract and
non-performance all damages, loss and any other costs incurred await performance in due course regardless of the position adopted by
directly or indirectly to be for charterers' responsibility and liability. the charterers; the argument that the owners affirmed the contract by
sending this message failed (see p. 609, col. 1);
Look forward to receiving honourable confirmation from charterers
... (5) there was nothing in the message of Jan. 29 to suggest that it was
or could reasonably have been understood as a statement by the
On Jan. 25, the charterers' brokers responded inter alia regretting owners that they would continue with the contract regardless of the
non-performance by the charterers. charterers' attitude; nor was it a step which was consistent only with
On Jan. 29, 1996 the owners gave 12 days' notice of delivery of the the continuation of the contract; in sending this message the owners
vessel. did not affirm the contract (see p. 609, col. 2);
Having had no further response to their request for confirmation (6) the owners had not previously elected to affirm the contract when
from the charterers that they would perform the charter, on Feb. 1 the on Feb. 1, 1996 they accepted the charterers' repudiation as
owners advised the charterers they were accepting the repudiation. discharging it, and they were entitled to take that step; the preliminary
A writ was issued by the plaintiffs and on June 20, 1996 Mr. Justice issues would be answered (1) (a) "Yes"; (1) (b) "No"; (1) (c) "Does not
Mance ordered the trial of the following preliminary issues: arise"; (2) "No"; (3) "Does
(1) Were the defendants in repudiatory breach of the charter (a) by
reason of the charterers' fax of Jan. 23, 1996; (b) by reason of the
charterers' brokers' fax of Jan. 25? (c) by reason of the failure of the
charterers prior to Feb. 1, 1996 to confirm that they would perform
their obligations under the charter?

[1996] Vol. 2 LLOYD'S LAW REPORTS 605

Yukong Line v. Q.B. (Com. Ct.) Moore-Bick, J.
Rendsburg Invt.

not arise" (see p. 610, cols. 1 and 2). pursuant to an order made by Mr. Justice Mance on June 20,
1996. I should say at once that the second defendants have not
____________________
been present for the hearing and are not represented before me.
The following cases were referred to in the judgment: The order itself refers to O. 14(a) and/or O. 33, r. 3. However,
Bremer Handelsgesellschaft m.b.H. v. Deutsche Conti- different consequences flow from the adoption of the
Handelsgesellschaft m.b.H., [1983] 2 Lloyd's Rep. 45; procedures provided for in these two orders. That which proved
to be of most immediate concern when the matter was called on
Cobec Brazilian Trading and Warehousing Corporation v. Alfred
 C. Toepfer, [1983] 2 Lloyd's Rep. 386; for hearing was whether the hearing should take place in open
Farnworth Finance Facilities Ltd. v. Attryde and Another, [1970] Court or in Chambers, but the choice of procedure has other
1 W.L.R. 1053; more significant consequences, including in the case of a trial
under O. 33 the need for directions for trial, setting down and so
Fercometal S.A.R.L. v. Mediterranean Shipping Co. S.A. (The
on. It also affects the position with regard to leave to appeal,
Simona), (H.L.) [1988] 2 Lloyd's Rep. 199; [1989] 1 A.C. 788;
and there may well be other consequences which were not
Howard v. Pickford Tool Co. Ltd., (C.A.) [1951] 1 K.B. 417; canvassed before me.
Johnson and Another v. Agnew, (H.L.) [1980] A.C. 367; The parties themselves understood that there was to be a trial
Motor Oil Hellas (Corinth) Refineries S.A. v. Shipping of preliminary issues under O. 33, r. 3 and agreed that that
Corporation of India (The Kanchenjunga), [1990] 1 Lloyd's course was appropriate in this case. Having regard to the nature
Rep. 391; of the issues to be decided, I agreed with their view and
Nitrate Corporation of Chile Ltd. v. Pansuiza Compania de therefore ordered that the matter should be heard as a trial of
Navegación S.A. (The Hermosa), (C.A.) [1982] 1 Lloyd's Rep. preliminary issues and in open Court.
570; [1980] 1 Lloyd's Rep. 638; Originally this action began life as a simple claim for damages
Peyman v. Lanjani and Others, (C.A.) [1985] Ch. 457; for repudiation of a time charter. Its scope was subsequently
Scarf (Benjamin) v. Alfred George Jardine, (H.L.) (1882) 7 App. widened, however, by amendment based on information
Cas. 345. obtained by the plaintiffs following the grant of a Mareva
injunction and it now includes claims against the second and
____________________ third defendants as well. These are made on the basis that they
were parties to the matter as undisclosed principals of the first
This was a trial of preliminary issues ordered by Mr. Justice defendants and, in the alternative, that they were engaged in a
Mance in the action between the plaintiffs Yukong Line Ltd. of conspiracy to injure the plaintiffs. There is also a claim to
Korea and the defendants, Rendsburg Investments Corporation recover property from the defendants which is said to belong to
of Liberia, Ladidi Investment Corporation of Liberia and the plaintiffs. The plaintiffs intend to widen these issues still
Dimitrios Nicholas Yamvrias, the plaintiffs claiming damages further by a further amendment to the points of claim alleging
for repudiation of a charter-party by the defendants. repudiation by impossibility of performance, but I am not
Mr. Peter Gross, Q.C. and Mr. D. Foxton (instructed by concerned with that matter on this hearing.
Messrs. Ince & Co.) for the plaintiffs; Mr. Charles Sussex The background to this dispute lies in a time charter of Mar.
(instructed by Messrs. Clyde & Co.) for the first and third 31, 1994 made between Yukong Line Ltd. of Korea, who
defendants. The second defendants did not appear and were not chartered the new building Rialto on the New York Produce
represented. Exchange form from her owners Mizar Shipping Corporation
The further facts are stated in the judgment of Mr. Justice for a period of three years. On June 8, 1995, Yukong sub-
Moore-Bick. chartered the vessel, again on the New York Produce Exchange
form, to Rendsburg Investments Corporation of Liberia, the first
JUDGMENT
defendants in the action, for a period of three years.
Mr. Justice MOORE-BICK: This matter comes before me by Clause 66 of the sub-charter provided as follows:
way of the trial of preliminary issues Owners to narrow laycan to 30 days spread by 30 days prior
to first day of 30 days narrowed

[1996] Vol. 2 LLOYD'S LAW REPORTS 606

Yukong Line v. Q.B. (Com. Ct.) Moore-Bick, J.
Rendsburg Invt.

laycan. Owners to give 30/20/15/12 days approximate notice We are very much concerned by Yukong's remarks and we
and 10/7/5/3/2/1 days definite notice of delivery. have no other option other than appoint our defence club to
By a fax sent on Jan. 8, 1996 Yukong narrowed the laycan to look at this remark seriously. Kindly relay above to Yukong.
30 days. On Jan. 18, Marcan Shipping, the London agents for Kind regards.
the charterers, Rendsburg, proposed on their behalf a On Jan. 29 the owners gave 12 days' notice of delivery of the
renegotiation of the hire rate, but by a telex sent on Jan. 23 that vessel pursuant to cl. 66 of the charter. The message reads in
suggestion was rejected by Yukong as owners in peremptory this way:
terms.
Re MV Rialto/Rendsburg charterparty dated 8th June 1995.
On Jan. 23, 1996 the charterers sent the following message to
Due to weekend owners herewith give 12 days approximate
the owners through the brokers:
notice of vessel's delivery at 9th February 1996 on dropping
Reference Rialto - Rendsburg. outward sea pilot Mizushima ex shipyard. Please advise
We are in receipt of your telex dated 23rd January 1996. charterers accordingly.
Regret to say that charterers for reasons beyond their control Having heard no further in response to their request for
are unable to perform any further. confirmation from the charterers that they would perform the
Charterers advised that their financial situation has charter, on Feb. 1 the owners sent the following message to the
deteriorated for the last months, they are very much involved charterers:
with Nigerian trade and cannot receive funds from the Re MV Rialto - Rendsburg/Marcan.
Nigerian Government due to them. We refer to your fax dated 23rd January 1996 and your
On Jan. 24, 1996 the owners gave 20 days' notice of delivery advice that charterers will not perform their obligations under
pursuant to cl. 66 of the charter, and later on the same day they terms of the charterparty.
responded to the charterers' message to which I have just Despite our repeated requests that charterers confirm they
referred in the following terms: will fulfil their contractual obligations and take delivery of the
 Reference MV Rialto/Rendsburg - Marcan. vessel in accordance with the terms of the charterparty,
It is really upset to receive notice of non-performance from charterers have failed to do so. Charterers are therefore in
charterers. Charterer's cancellation of charterparty is totally repudiatory breach of the charterparty and we have no option
unacceptable and charterers are strongly requested to honour but to accept their breach as repudiation of the contract.
their contractual obligation according to charterparty. We reserve all our rights in this regard.
Otherwise, all attitude and actions taken by charterers to be A writ was issued by the plaintiffs endorsed with statement of
circulated widely to BIMCO together with the name of claim early in February, 1996 and subsequently amended in the
Marcan Shipping. In case of non-performance all damages, manner I have indicated. On June 20, 1996 Mr. Justice Mance
loss and any other costs incurred directly or indirectly thereby ordered the trial of preliminary issues. Paragraph 2 of his order
to be for charterers' responsibility and liability. sets out the following questions:
Look forward to receiving honourable confirmation from (1) Were the defendants in repudiatory breach of the
charterers. Best regards. charterparty: (a) by reason of the fax from the First
Marcan responded on Jan. 25 in the following terms: Defendants' brokers dated 23rd January 1996? (b) by reason of
Rialto/Rendsburg. the telex from the First Defendants' brokers of 25th January
1996? (c) by reason of the failure of the First Defendants or
We have received Yukong's telex with its comments and we
their brokers prior to 1st February 1996 to confirm that they
are astonished to have read that Yukong will report Marcan
would perform their obligations under the charterparty?
Shipping to various shipping organisations.
(2) If so, did the Plaintiffs by their brokers' telex of 24th
We respectfully remind charterers that Marcan is a broker
January 1996 or otherwise nevertheless opt (a) to reject the
and acting as broker for the last 20 years the same way as
First Defendants' repudiation of the charterparty and/or (b) to
Jangsoo and various other broking houses. It is with regret
affirm the continued existence of the charterparty?
however that the charterers introduced by Marcan to Yukong
have failed to honour their obligation.

[1996] Vol. 2 LLOYD'S LAW REPORTS 607

Yukong Line v. Q.B. (Com. Ct.) Moore-Bick, J.
Rendsburg Invt.

(3) If the Plaintiffs did affirm the contract on 24th January In other words, if a person says he will not perform, the law
1996 or otherwise, were they nevertheless still entitled, on 1st allows the other to take him at his word and act accordingly.
February 1996, to accept the repudiatory breach as (2) In such a case the injured party is not ordinarily bound to
determining the charterparty. treat the contract as discharged; the law gives him a choice. He
The preliminary issues raise a simple question: whether the may treat the contract as discharged or he may disregard the
charter was terminated by repudiation on the part of the repudiation and treat the contract as continuing in full effect,
charterers which was accepted by the owners. It turns on the notwithstanding what has occurred. He can, in other words,
construction of no more than half a dozen documents. Since the elect to affirm it.
charterers concede that the fax sent by their brokers on Jan. 23 (3) If the injured party elects to affirm the contract, both
was a repudiation of the charter, attention has been focused parties' rights and obligations under it remain completely
mainly on three questions: Whether the plaintiffs affirmed the unaffected; the renunciation is "writ in water", to use the well-
contract following that repudiation; whether there was a further known expression of Lord Justice Asquith in Howard v.
repudiation by telex sent on Jan. 25; and, if so, whether the Pickford Tool Co. Ltd., [1951] 1 K.B. 417 at p. 421.
plaintiffs again affirmed the contract. (4) The choice placed before the injured party is between
The parties cited a good deal of authority, mainly directed to inconsistent rights, and once the choice has been made and
the issue of affirmation, but in fact little, if any, dispute communicated to the other party to the contract, it is
appeared to exist between them as to the principles involved. irrevocable. Unlike estoppel, election does not depend upon any
The authorities were cited to exemplify and reinforce particular change in position by the party to whom it is communicated.
aspects of the principles on which each relied. The real dispute (5) Although the injured party is bound by his election once it
in this case concerned the application of those principles to the has been made, the fact that he has affirmed the contract does
communications between the parties. Ultimately the matter not of course preclude him from treating it as discharged on a
turns primarily on the construction of just one document, that is subsequent occasion if the other party again repudiates it.
the telex sent to the charterers on Jan. 24, although other
(6) The injured party will not be treated as having elected to
documents also have to be considered.
affirm the contract in the face of the renunciation unless it can
The authorities relied on by the plaintiffs included Peyman v. be shown that he knew of the facts giving rise to his right to
Lanjani and Others, [1985] Ch. 457; Benjamin Scarf v. Alfred treat the contract as discharged and of his right to choose
George Jardine, (1882) 7 App. Cas. 345; Bremer between affirming the contract and treating it as discharged.
Handelsgesellschaft m.b.H. v. Deutsche Conti-
(7) A binding election requires the injured party to
Handelsgesellschaft m.b.H., [1983] 2 Lloyd's Rep. 45; Cobec
communicate his choice to the other party in clear and
Brazilian Trading and Warehousing Corporation v. Alfred C.
unequivocal terms. In particular, he will not be held bound by a
Toepfer, [1983] 2 Lloyd's Rep. 386; Farnworth Finance
qualified or conditional decision.
Facilities Ltd. v. Attryde and Another, [1970] 1 W.L.R. 1053;
Johnson and Another v. Agnew, [1980] A.C. 367; and Nitrate (8) Election can be express or implied and will be implied
Corporation of Chile Ltd. v. Pansuiza Compania de Navegación where the injured party acts in a way which is consistent only
S.A. (The Hermosa), [1980] 1 Lloyd's Rep. 638 and [1982] 1 with a decision to keep the contract alive or where he exercises
Lloyd's Rep. 570. rights which would only be available to him if the contract had
been affirmed.
In addition, the defendants referred me to Fercometal S.A.R.L.
v. Mediterranean Shipping Co. S.A. (The Simona), [1988] 2 As I say, none of these principles was in dispute.
Lloyd's Rep. 199; [1989] 1 A.C. 788; and Motor Oil Hellas Two observations in the authorities cited to me strike me as
(Corinth) Refineries S.A. v. Shipping Corporation of India (The being of particular significance in the context of this case in
Kanchenjunga), [1990] 1 Lloyd's Rep. 391. which the argument has turned mainly on the proper
From that array of authorities, one can deduce the following construction to be placed upon the owners' response to the
principles which are applicable to the present case and which charterers' original message that they could not perform. In
were not in dispute: Johnson and Another v. Agnew Lord Wilberforce said, at p.
398E of the report:
(1) A renunciation of the contract by one party prior to the
time for performance is not itself a breach but it gives the other
party, the injured party, the right to treat it as a breach in
anticipation and thus to treat the contract as discharged
immediately.

[1996] Vol. 2 LLOYD'S LAW REPORTS 608

Yukong Line v. Q.B. (Com. Ct.) Moore-Bick, J.
Rendsburg Invt.

Election, though the subject of much learning and the vessel which was the owners' principal obligation next due
refinement, is in the end a doctrine based on simple for performance. It does not carry the implication that the
considerations of common sense and equity. owners intend to continue with the contract notwithstanding the
charterers' repudiation and so cannot, in my view, be understood
And in Peyman v. Lanjani and Others, Lord Justice Slade,
as an unequivocal election to affirm the contract.
having held that actual knowledge of the right to choose is
essential to support an election, pointed out, at p. 501B of the In the event, the argument concentrated almost entirely on the
report, that the doctrine of estoppel will often operate to prevent owners' telex of Jan. 24. Mr. Sussex reminded me of the
any injustice in a case where the repudiating party has relied on passage in the speech of Lord Ackner in The Simona where he
an apparent election by the injured party. said at p. 203, col. 2; p. 799 of the reports:
These comments seem to me to provide strong support for the When one party wrongly refuses to perform obligations, this
view that the Court should not adopt an unduly technical will not automatically bring the contract to an end. The
approach to deciding whether the injured party has affirmed the innocent party has an option. He may either accept the
contract and should not be willing to hold that the contract has wrongful repudiation as determining the contract and sue for
been affirmed without very clear evidence that the injured party damages, or he may ignore or reject the attempt to determine
has indeed chosen to go on with the contract notwithstanding the contract and affirm its continued existence. Cockburn C.J.
the other party's repudiation. In my view, the Court should in Frost v. Knight put the matter thus:
generally be slow to accept that the injured party has committed And then, omitting part of the citation:
himself irrevocably to continuing with the contract in the ...
knowledge that if, without finally committing himself, the
The promisee, if he pleases, may treat the notice of intention
injured party has made an unequivocal statement of some kind
as inoperative, and await the time when the contract is to be
on which the party in repudiation has relied, the doctrine of
executed, and then hold the other party responsible for all the
estoppel is likely to prevent any injustice being done.
consequences of non-performance.
Considerations of this kind are perhaps most likely to arise
He submitted that in their message the owners quite clearly
when the injured party's initial response to the renunciation of
rejected any cancellation of the charter and made it clear that as
the contract has been to call on the other to change his mind,
far as they were concerned the contract was going ahead. They
accept his obligations and perform the contract. That is often
demanded that the charterers should perform their obligations
the most natural response and one which, in my view, the Court
and threatened to hold them liable in damages if in the event
should do nothing to discourage. It would be highly
they failed to do so. This, Mr. Sussex submitted, was a plain
unsatisfactory if, by responding in that way, the injured party
case of the owners "rejecting the attempt to determine the
were to put himself at risk of being held to have irrevocably
contract" in the words of Lord Ackner, and "choosing to treat
affirmed the contract whatever the other's reaction might be,
the charterers' notice as inoperative", to use the words of
and in my judgment he does not do so. The law does not require
Cockburn, C.J. Accordingly, he said, they affirmed the charter.
an injured party to snatch at a repudiation and he does not
automatically lose his right to treat the contract as discharged Mr. Gross, Q.C. submitted that the telex cannot properly be
merely by calling on the other to reconsider his position and read in that way at all. What it amounted to, he said, was an
recognize his obligations. expression of outrage and a demand that the charterers
withdraw their repudiation and perform their obligations. The
With these principles in mind, I turn to the messages that
threat to hold them responsible in damages if they did not do so
passed between the parties in this case. It was rightly conceded
was, he said, wholly consistent with the retaining of the option
that the fax of Jan. 23, 1996 amounted to a repudiation of the
to treat the contract as discharged, and the final sentence
charter. Mr. Sussex for the defendants did not submit that the
containing the request for "an honourable confirmation" made it
telex sent by the owners on Jan. 24 giving 20 days' notice for
clear that their willingness to proceed with the contract
the delivery of the vessel was sufficient on its own to constitute
depended on their receiving confirmation from the charterers
an affirmation of the contract. In my view, he was right not to
that they would honour their obligations.
do so. That telex is essentially concerned with administrative
matters. It was sent pursuant to the requirements of cl. 66 in This telex, of course, has to be read as a whole. It would be
order to prepare the way for the delivery of quite wrong to take it apart and seek to attach a particular
meaning to one section while

[1996] Vol. 2 LLOYD'S LAW REPORTS 609

Yukong Line v. Q.B. (Com. Ct.) Moore-Bick, J.
Rendsburg Invt.
ignoring what precedes and follows it. And it must also be have rejected Mr. Gross' submission that this constituted a fresh
remembered that it is not a formal document but one drafted by repudiation by the charterers.
businessmen whose native language was not English. Finally, there is the owners' telex of Jan. 29 giving 12 days'
In my view, this message, read as a whole, can only be read as notice of delivery. Mr. Sussex argued, though not, I thought,
a cry of protest at what the owners regarded as a dishonourable with a great deal of enthusiasm, that even if the owners had not
attempt by the charterers to abandon their obligations. Far from previously affirmed the contract they did so by sending this
rejecting the idea that the charter might be discharged, as Mr. message, which he said was consistent only with the contracts
Sussex suggests, what the owners are here saying is that they remaining in force. However, I am unable to accept that this
regard the charterers' conduct in seeking to abandon it as totally telex will bear the weight the charterers seek to put upon it.
unacceptable behaviour. Likewise, I cannot read the final Like the message sent on Jan. 24, it was sent simply to enable
sentence as simply inviting the charterers to confirm that if in the owners to preserve the position, but in this case there was
due course their failure to perform the contract they would be the additional circumstance that they were still waiting for a
liable in damages. The threat to report the charterers' attitude as response to their telex protesting at the charterers' conduct.
well as their actions shows clearly that it is their present There is nothing to suggest that this message was or could
conduct which concerned the owners. The only meaning one reasonably have been understood as a statement by the owners
can sensibly give to the final sentence of this telex is that the that they would continue with the contract regardless of the
owners were asking the charterers to withdraw their repudiation charterers' attitude. Nor was it a step which was consistent only
and confirm their willingness to perform the contract. However with the continuation of the contract. I therefore reject the
one reads this telex, it is impossible, in my view, to find in it an argument that by sending this message the owners affirmed the
unequivocal statement on the part of the owners that they will contract.
proceed with the contract and await performance in due course Finally, I must mention briefly a further point raised by Mr.
regardless of the position adopted by the charterers. That being Gross, although in the light of the findings I have already made
so, the argument that the owners affirmed the contract by my view about it will not affect the outcome of the proceedings.
sending this message must fail. He submitted that the charterers' case on affirmation could not
As an alternative, Mr. Gross submitted that even if he were succeed because they had failed positively to allege and prove,
wrong on the meaning and effect of the telex of Jan. 24, the in accordance with the dictum of Lord Justice Slade in Peyman
charterers repudiated the contract again in the telex sent by v. Lanjani and Others, that the owners had actual knowledge of
Marcan on Jan. 25. He submitted that that should be read as their right to choose between affirming the contract and treating
sent on behalf both of Marcan and the charterers themselves it as discharged. I should say that if I had been satisfied that the
and that the reference in it to the charterers "having failed to charterers had made out the other requirements of affirmation, I
honour their obligations" was a repetition of the original should not have decided against them on this particular ground.
renunciation, particularly in view of the fact that Marcan was Mr. Gross complained that if the matter had been properly
already known to be connected in some way with the charterers. raised the owners might have wished to call evidence about it.
I find it difficult to accept that view of this message. Although However, notwithstanding the uncertainties that might have
the owners say that they have since discovered a much closer arisen from the form of Mr. Justice Mance's order, both parties
link between Marcan and the charterers than they appreciated at did in fact prepare for the hearing before me on the
the time, the position of Marcan at this time was simply that of understanding that it would involve a trial of preliminary issues.
a broker. As the opening paragraph makes clear, this message At the time the order was made, points of defence had not been
was sent by Marcan primarily in response to the owners' threat served, so the charterers had had no opportunity to make a
to report them to BIMCO, and, in my judgment, this was a formal allegation of knowledge on the part of the owners. They
message sent by Marcan in a purely personal capacity. I quite did, however, make it clear in correspondence in advance of the
accept that it would have done nothing to satisfy the owners that hearing that they intended to argue that the owners had elected
the charterers had changed their mind, but equally I do not think to affirm the contract and, in my judgment, they did enough to
that it could be read as a positive statement on behalf of the put the owners on notice that the question of their knowledge
charterers themselves that they adhered to their original would be in issue. If the owners had wished to adduce evidence
repudiation. If necessary, I would therefore on the question, they ought, in my view, to have ensured that
they were in a position to call that evidence at the

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Yukong Line v. Q.B. (Com. Ct.) Moore-Bick, J.
Rendsburg Invt.

hearing, but in fact they did not do so, and are therefore left fulfil the contract. That, in my view, was an understandable
simply with the documents, which in my view support the reference back to their telex of Jan. 24 in which they had asked
inference that the owners were aware of their right to make the for an honourable confirmation of the charterers' intention to
choice which in fact lay before them. However, since I am perform. Whatever might have been the effect of a failure to
satisfied that they did not elect to affirm the contract before respond to such a request under other circumstances, it was not
treating it as discharged on Feb. 1, this point is ultimately not of suggested that in the absence of an affirmation it added
significance. anything to the repudiation contained in the original fax of Jan.
It follows that, in my judgment, the owners had not previously 23.
elected to affirm the contract when on Feb. 1 they accepted the I therefore answer the questions set out in par. 2 of Mr. Justice
charterers' repudiation as discharging it and that they were Mance's order as follows: Question 1(a): "Yes". Question 1(b):
entitled to take that step. When doing so, they referred expressly "No". Question 1(c): "Does not arise". Question 2: "No".
to the charterers' failure to confirm that they would Question 3: "Does not arise".