OCM MARITIME GAS 3 LLC v Pencarter Demis Terdahulu PAROS SPECIAL MARITIME ENTERPRISE (No Syarikat Maritime Greek 4838) Dan Semua Pihak-Pihak Yang Mendakwa Mempunyai Kepentingan Terhadap Kapal Atau Vesel PAROS (IMO NO 9711511) Dari Pelabuhan Piraeus PENCELAH ELETSON HOLDINGS INC

Case Significance

Illustrates the effect of the termination of a bareboat (demise) charter on the charterer's right to possession, reducing it to that of a bailee, and an admiralty court's power to decree possession and control of a vessel to its owner once the charter has ended.

This High Court decision in the Commercial Division at Kuala Lumpur is the companion admiralty action in rem, heard together with a related suit, over the same vessel. In this suit the party asserting ownership of the vessel proceeded against the former demise charterers and all other persons claiming an interest in the ship, seeking to establish its rights over the vessel after the bareboat charter came to an end. The dispute engaged the same questions as the related suit: whether the bareboat charterparty had been terminated, whether the former charterers retained any right to possession of the vessel, and whether their corporate control over the charterer could confer any proprietary interest in the ship. The court held that the bareboat charter had been terminated on multiple breaches and events of default, so that the former charterers no longer had any right to possession; they were, at most, bailees of the vessel rather than demise charterers, and the ship remained vested in its owner. Having resolved the related suit by setting aside the arrest the former charterers had obtained, the court in this suit granted the owner's application and decreed that the possession and control of the vessel be given to the owner as its sole owner, awarding costs. The court's reasoning shows that a demise or bareboat charter transfers possession of the ship to the charterer only for so long as the charter subsists; once it is lawfully terminated for default, the charterer's right to possess the vessel falls away and any continued holding is that of a bailee accountable to the owner, so that the owner may look to the admiralty court to recover possession and control of its ship and a former charterer cannot use the machinery of an arrest to assert rights it no longer holds. The judgment is a useful illustration of the effect of the termination of a bareboat charter on the charterer's right to possession, and of an admiralty court's power to decree possession of a vessel to its owner once the charter has ended.