Greek boxship owner Euroseas is pursuing legal action against Singapore-based Continental Shipping Line (CSL) for not honouring a time charter deal agreed upon last year.
The Nasdaq-listed company re-fixed its smallest and oldest vessel, Aegean Express, to CSL in February 2022 for a period of 36 to 39 months at a rate close to 257 percent of the previous rate.
, to CSL However, in its quarterly results on Wednesday, in addition to revealing a Q4 net profit of $20.3m, Euroseas said CSL had in January 2023 “repudiated its charter as the vessel was completing its scheduled drydock.”
The Aristides Pittas-led company added it was looking to re-fix the ship, which means the previous deal will most likely be settled in court.
According to West of England P&I Club, in the event of a long-term charter, an early termination of the charter party allows owners to claim for a potentially large sum of damages, representing the lost profit for what would have been the remaining period of the cancelled charter party.
“In this scenario, owners have the burden of proving that they have suffered losses that cannot be adequately compensated by re-fixing the vessel, e.g. where the charter party rate has decreased since the original charter was fixed,” West of England explained.
The 25-year-old, 1,439 teu ship, which started its contract in April 2022, was fetching $41,000 per day. Meanwhile, container freight and charter markets softened during the second half of 2022 and into the fourth quarter from their previously exceptionally high levels. Rates returned to more normalised levels, meaning it is highly unlikely Euroseas will be able to fix the same ship at the same dayrate.
