Contract analysis

I. Executive Summary This memorandum analyzes the critical interpretive question regarding Clause 28 of the NYPE 2015 time charter-party (as amended) between Thalassa Shipping & Logistics SA, acting through its wholly owned subsidiary, Aegean Fortuna Shipholding Ltd. (as the registered owner of the vessel), and Northwind Maritime Corporation (as the charterer), dated December 3, 2020, Charter-Party Reference No. NW-T

II. Question Presented Whether the phrase "for any single continuous period of breach" in the liquidated damages provision of Clause 28 of the Charter-Party limits the $4,500,000 cap to each discrete breach episode — thereby permitting the application of multiple independent caps for multiple incidents during the charter period — or whether the clause establishes an overall aggregate cap on total liquidated damages r

III. Brief Answer The cap language most likely operates as an aggregate limitation on total liquidated damages recoverable under Clause 28 of the Charter-Party. Under New York's strict textual approach to contract interpretation, the phrase "for any single continuous period of breach" functions primarily to define what constitutes a breach event for purposes of triggering the liquidated damages formula — that is, it

IV. Factual Background A. The Charter-Party On December 3, 2020, Aegean Fortuna Shipholding Ltd. ("Aegean Fortuna" or "Owner"), a wholly owned subsidiary of Thalassa Shipping & Logistics SA ("Thalassa"), entered into a time charter-party with Northwind Maritime Corporation ("Northwind" or "Charterer") on the NYPE 2015 form, as amended by rider clauses negotiated between the parties (the "Charter-Party," Reference No.

Clause 28 is a bespoke rider clause that was not part of the standard NYPE 2015 printed form. It was added by the parties during the negotiation of the Charter-Party and is the provision at issue in this memorandum. The full text of Clause 28, as relevant to the interpretive question, provides: "28. Liquidated Damages for Breach of Maintenance and Seaworthiness Obligations. In the event of Owner's material breach of

1. Incident 1: Turbocharger Failure (March 12 – April 2, 2022) On or about March 12, 2022, while the vessel was loading cargo at the Port of Santos, Brazil, the main engine turbocharger suffered a catastrophic failure, rendering the vessel unable to proceed on her voyage. The vessel was placed off-hire on March 12, 2022. Repairs were conducted by Ashgrove Group technicians at Santos under the supervision of the Owner

2. Incident 2: BWTS Malfunction and Auxiliary Boiler Failure (July 8 – July 29, 2022) On or about July 8, 2022, while the vessel was in ballast passage in the Gulf of Mexico en route to the Port of New Orleans, the ballast water treatment system ("BWTS") experienced a significant malfunction, preventing compliance with applicable ballast water management regulations. Concurrently, the auxiliary boiler experienced a t

3. Incident 3: Cylinder Liner Failure and Drydocking (November 15 – December 10, 2022) On or about November 15, 2022, while the vessel was discharging cargo at the Port of Antwerp, Belgium, a cylinder liner in the main engine cracked, necessitating significant engine repairs. Due to the nature and extent of the damage, the vessel required drydocking. The vessel was towed to Keppel Verolme Shipyard in Rotterdam, the N

4. Aggregate Calculation The total off-hire period across all three incidents is 68 days. The total formula-based liquidated damages across all three incidents amount to: $486,750 + $464,625 + $553,125 = $1,504,500 This amount is consistent with the aggregate formula calculation of 68 × $14,750 × 1.5 = $1,504,500.

5. The Parties' Competing Positions Northwind's Position: Northwind contends that each of the three incidents constitutes a separate "single continuous period of breach" within the meaning of Clause 28, and that the $4,500,000 cap applies independently to each such period. Under this reading, Northwind's potential liquidated damages exposure for Thalassa/Aegean Fortuna could reach up to $13,500,000 (three caps of $4,

V. Applicable Legal Framework A. New York Contract Interpretation — General Principles Under New York law, the interpretation of an unambiguous contract is a question of law for the court, to be resolved without reference to extrinsic evidence. W.W.W. Assocs., Inc. v. Giancontieri, 77 N.Y.2d 157, 162 (1990). The Court of Appeals has consistently held that "when parties set down their agreement in a clear, complete do

1. Contracts Read as a Whole. A contract must be "read as a whole, and every part will be interpreted with reference to the whole; and if possible it will be so interpreted as to give effect to its general purpose." Bramwell Bancorp v. Sommer, 8 N.Y.3d 318, 324–25 (2007). An interpretation that renders a clause or word superfluous is disfavored. Two Guys from Harrison-N.Y., Inc. v. S.F.R. Realty Assocs., 63 N.Y.2d 39

2. Specific Controls Over General. Where a contract contains both general and specific provisions relating to the same subject matter, the specific provision will be given effect and the general provision will be construed consistently with it. Muzak Corp. v. Hotel Taft Corp., 1 N.Y.2d 42, 46 (1956). This rule may be relevant insofar as Clause 28 (a specific, bespoke rider clause addressing liquidated damages) may be

3. Cap and Limitation Language. New York courts have addressed the distinction between "per-occurrence" and "aggregate" caps in range commercial contexts, including indemnification provisions, insurance policies, and liquidated damages clauses. The general principle is as follows: where a cap or limitation is stated "for" a defined event or occurrence, the cap is typically construed as applying to each instance of th

4. Strict Construction of Liquidated Damages Provisions. New York courts construe liquidated damages provisions strictly and will not expand their scope beyond the parties' expressed intent. Kestrel Corporation, 4 N.Y.3d 373, 380 (2005). This principle of strict construction favors the narrower reading of a cap provision where the language is genuinely ambiguous. Because the aggregate cap reading is the narrower cons

5. Anti-Surplusage Principle Applied to Dollar Caps. Where a contract specifies a particular dollar amount as a cap, and that cap is never reached under the formula-based calculation of damages, the cap has been given no practical effect. Courts disfavor interpretations that render contractual provisions meaningless. See Two Guys from Harrison-N.Y., 63 N.Y.2d at 403. This principle cuts both ways in our case: Thalass

VI. Analysis A. Thalassa's Interpretation: Aggregate Single Cap

1. Textual Arguments The strongest textual arguments supporting Thalassa's interpretation that the $4,500,000 cap in Clause 28 operates as a single aggregate ceiling are as follows: a. The Singular Article "A Cap." The clause states that the liquidated damages formula is "subject to a cap of USD $4,500,000." The use of the singular, indefinite article "a" — rather than "caps" or "respective caps" — naturally implies

2. Structural Arguments The structural context of Clause 28 within the Charter-Party as a whole provides further support for the aggregate-cap interpretation. a. Unified Category of Obligation. Clause 28 addresses "Owner's material breach of maintenance and seaworthiness obligations under Clauses 2 and 6" as a unified category of contractual obligation. The clause does not differentiate among different types of mecha

3. Commercial Reasonableness Under New York law, courts may consider the commercial reasonableness of competing interpretations as an aid to construction, particularly where the contract is between sophisticated commercial parties. See Greenfield, 98 N.Y.2d at 570. The aggregate-cap interpretation is significantly more commercially reasonable than the per-incident alternative. a. Proportionality to Charter Value. The

4. Case Law Support Several lines of New York authority support the aggregate-cap interpretation: a. Aggregate-Cap Presumption for Unqualified Limitations. In Consolidated Edison Co. of N.Y. v. Allstate Insurance Co., 98 N.Y.2d 208 (2002), the Court of Appeals distinguished between per-occurrence and aggregate policy limits in the insurance context, emphasizing that the specific language of the limitation provision m

1. Textual Arguments a. The Phrase "For Any Single Continuous Period" Contemplates Multiple Periods. Northwind's strongest textual argument is that the phrase "for any single continuous period of breach" inherently contemplates the possibility that multiple "single continuous periods" may exist during the charter. If the drafters had intended the cap to be purely aggregate — applicable once, regardless of the number

2. Structural Arguments a. The Formula Is Inherently Per-Incident. The liquidated damages formula itself — 150% of the aggregate off-hire days multiplied by the daily hire rate — is inherently calculated on a per-incident basis. Off-hire days are tallied for each period the vessel is off-hire, and the formula produces a damages figure for each such period. Northwind will argue that the cap should track the same per-i

3. Industry Practice Northwind may seek to introduce evidence of maritime industry custom and practice regarding the structuring of liquidated damages and penalty provisions in time charter-parties. The argument would be that, in the maritime industry, off-hire events are treated as discrete commercial disruptions, and liquidated damages provisions tied to off-hire periods are commonly understood to operate on a per-

1. Negotiation History As noted above, preliminary information from Markos Theodorakis indicates that Clause 28 was originally proposed by Northwind's brokers (Boreal Maritime Brokers AG) as part of a rider clause package submitted during the fixture negotiations in November 2020. If discovery confirms this, the negotiation history could support Thalassa's position in two ways: • Contra proferentem: If the cap langua

2. Course of Dealing If the parties have a prior chartering history — i.e., if Thalassa/Aegean Fortuna and Northwind have entered into previous charter-parties containing similar liquidated damages provisions — the interpretation given to those provisions in practice could be relevant. We should investigate whether any prior charters exist and, if so, whether any prior LD claims were made and how the cap was applied.

3. Industry Custom Expert testimony on standard maritime industry practice regarding the construction of liquidated damages caps in time charter-parties may be admissible and could be influential. We should consider engaging a maritime law or commercial practice expert — potentially Dr. Erik Sørensen of the Scandinavian Institute of Maritime Law, or a comparable authority — to provide opinion testimony on industry no

VII. Application to Thalassa's Position A. Recommended Argument Structure Based on the analysis set forth above, I recommend that Thalassa advance the following argument structure in its briefing on the Clause 28 cap issue: Primary Argument: The Cap Is Unambiguous and Operates as an Aggregate Ceiling. Thalassa should argue that the language of Clause 28, read in context, unambiguously establishes a single aggregate c

1. Negotiation Correspondence: Request production from Northwind and its brokers (Boreal M