The recent case of Ark Shipping Co LLC v Silverburn
Shipping (IoM) Ltd (M/V 'ARCTIC') [2019] EWCA Civ 1161
caused the court to consider when a contractual term is a condition
and when it is an innominate term, that is, neither a condition nor
a warranty. The principles covered in the judgment will be relevant
to all those involved in the drafting and interpretation of
contracts.
The dispute centred on the interpretation of a particular term
in a bareboat charterparty (lease) of a vessel (M/V
'ARCTIC') on a standard form of contract by Ark Shipping
Company LLC, and whether the vessel's owner, Silverburn
Shipping (IOM) Ltd, was able to terminate immediately and seek
damages as a result of an alleged breach of that particular clause.
If the clause was a condition then as the innocent party Silverburn
would be able to terminate the contract immediately for breach and
seek damages, regardless of the consequences of that breach.
