1. Cancellation, Deadfreight and Commercial Issues
By
Andrew Bicknell,
Partner, Clyde & CO
June 2011

2. Introduction
 Presentation will consider:
 Cancellation
- Cancelling clause
- Exercise of the right to cancel
- Practical issues and examples
 Deadfreight
- Principles
- Overlap with other issues: ‘The Archimidis’

3. The Cancelling
Clause
 The general position
 Purpose of the cancellation clause
 Nature of the right to cancel

4. Gencon 1994 “(a) Should the vessel not be ready to load (whether in
berth or not) on the cancelling date indicated in Box
(Clause 9) 21, the Charterers shall have the option of cancelling
this Charter Party.
(b) Should the Owners anticipate that, despite the
exercise of due diligence, the Vessel will not be ready
to load by the cancelling date, they shall notify the
Charterers thereof without delay stating the expected
date of the Vessel’s readiness to load and asking
whether the Charterers will exercise their option of
cancelling the Charter Party, or agree to a new
cancelling date.
Such option must be declared by the Charterers
within 48 running hours after receipt of the Owners’
notice. If the Charterers do not exercise their option
of cancelling, then this Charter Party shall be deemed
to be amended such that the seventh day after the
new readiness date stated in the Owners’ notification
to the Charterers shall be the new cancelling date.
The provision of sub-clause (b) of this Clause shall
operate only once, and in case of the Vessel’s further
delay, the Charterers shall have the option of
cancelling the Charter Party as per sub-clause (a) of
this Clause."

5. Exercise of the  When can the right be exercised?
right to cancel
 Anticipatory right to cancel.
 Latest time for exercise of right.
 Mode of exercise of right
 Burden of proof

6. Readiness and
cancellation  Role of the Notice of Readiness
 How “ready” need the ship be?
 Supervening unreadiness.
 Breach by the charterer

7. Cancellation:
Practical
implications
 Cancelling clause provides the charterer
with an option.
 Until cancellation, Owner remains obliged
to perform.
 Much may depend upon movements in the
freight market.
 Cancellation example.

8. Deadfreight
 Principles
 Practical example
 'The Archimidis' [2008] EWCA Civ 175

9. Conclusion
 Delay prior to NOR
 The impact of fluctuating freight rates.
 Does it always make sense to cancel?

10. Cancellation, Deadfreight and Commercial Issues
By
Andrew Bicknell,
Partner, Clyde & CO
June 2011