The "Chem Orchid": Is Physical Redelivery Necessary To Terminate A Bareboat Charter?

The Singapore High Court, in the recent judgment of The “Chem Orchid” [2015] SGHC 50, considered the requirement of redelivery in the termination of a bareboat charter. This is important in the context of admiralty law, given the crucial implications on the court’s jurisdiction to order the arrest of bareboat or demise chartered vessels.

Facts

By a Lease Agreement (Agreement) on 1 February 2010, owners Han Kook Capital (Owners) leased the "Chem Orchid" (Vessel) to Sejin (Charterers) for a period of 108 months. Charterers defaulted on their payment obligations shortly after, and made no payments to Owners from October 2010.

In December 2010 Owners incorporated a new entity HK AMC (HKA) to recover bad debts and transferred to HKA the credits that had accrued under the Agreement.