Illegitimate Last Voyage Orders: The Gregos

A time charter allows the charterer of a vessel to have its use for a predetermined period of time. The charterer is entitled, subject to certain restrictions, to employ the vessel as he wishes during the charter period, but is under an obligation to redeliver it to its owner upon the termination of that period. Timely redelivery is of considerable commercial importance to the shipowner, for the vessel may have been committed to another charter commencing immediately upon scheduled redelivery. On the other hand, the charterer will wish to maximise the number of voyages undertaken during the charter period. Given the large amounts of money involved in chartering a vessel as well as the degree of profit or loss that could be at stake in a single voyage, a charterer may find himself in a position where he feels obliged to give last voyage orders knowing full well that the vessel cannot be redelivered within the contractually agreed time. In Torvald Klaveness A/S v Ami Maritime Corporation, The Gregos the House of Lords attempted to reconcile the competing commercial requirements of shipowners and charterers and considered the effect in law of a charterer ordering a vessel on a so‐called illegitimate last voyage.