Port Line v Ben Line [1958]

In Port Line v Ben Line [1958] 2 QB 146, the court explicitly overruled the principles established in Lord Strathcona Steamship Co v Dominion Coal Co [1926]. This case marked a significant shift in the legal approach to the enforceability of a charterparty on a third-party purchaser with notice.

The factual background involved Port Line, which had entered into a time charter with Silver Line. Subsequently, Silver Line sold the vessel to Ben Line. During the course of events, the vessel was requisitioned by the Ministry of Transport for a period of two months. Port Line sought compensation from Ben Line based on the principles established in Lord Strathcona Steamship Co.

The High Court, in delivering its decision, ruled against Port Line. Justice Diplock, presiding over the case, held that Lord Strathcona Steamship Co had been wrongly decided. He emphasised that a time charterer, similar to a voyage charterer (unlike a demise charterer), does not possess a proprietary interest in the ship. Consequently, the foundational basis for enforcing an injunction, as established in Lord Strathcona Steamship Co, was deemed lacking.

Justice Diplock further clarified that even if Lord Strathcona Steamship Co had been correctly decided, it would only entitle Port Line to an injunction. The ruling did not confer positive rights upon the charterer, and therefore, no compensation could be granted. This case thus marked a departure from the earlier precedent, signalling a change in the legal perspective on the enforceability of charterparty obligations on third-party purchasers with notice.
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