Contract analysis

1. Defendant Thalassa Shipping & Logistics SA ("Thalassa" or "TSL") is a Société Anonyme (SA) organized and existing under the laws of the Hellenic Republic (Greece), with its principal headquarters located at 42 Akti Miaouli, Piraeus 185 38, Greece. TSL is an international shipping, chartering, and maritime logistics company that owns and operates a diversified fleet of approximately 34 vessels, including dry bulk c

2. Defendant Aegean Fortuna Shipholding Ltd. ("Aegean Fortuna Shipholding") is a limited liability company incorporated under the laws of the Republic of Liberia, bearing Liberian Registration No. LR-C-20167845, with a registered address at 80 Broad Street, Monrovia, Liberia. Aegean Fortuna Shipholding is a wholly owned subsidiary of TSL and was formed as a single-purpose entity for the purpose of holding title to an

3. Plaintiff Northwind Maritime Corporation ("Northwind") is a corporation incorporated under the laws of the Republic of the marshall Islands, marshall Islands Entity No. MI-94827, with its principal office located at 1700 Harbor Gateway, Suite 500, Stamford, Connecticut 06902. Northwind is engaged in the business of commodity trading, shipping logistics, and bulk cargo operations, and regularly charters vessels for

4. The M/V Aegean Fortuna is a Supramax dry bulk carrier bearing International Maritime Organization ("IMO") Number 9847231, flagged in the Republic of Liberia, with a deadweight tonnage of 58,200 metric tons, a length overall of 199.9 meters, a beam of 32.26 meters, and five cargo holds with hydraulic folding-type hatch covers. The vessel is equipped with four deck-mounted cranes, each with a safe working load of 30

5. The M/V Aegean Fortuna was classified by the Global Maritime Classification Bureau ("GMCB") under class notation +100A1, Bulk Carrier, ESP, and maintained its classification in good standing without suspension or withdrawal throughout the entire charter period from January 15, 2021 through and including January 14, 2024. All required annual, intermediate, and special surveys were completed within the time windows

6. On December 3, 2020, Thalassa, acting in its capacity as Owner and disponent owner, and Northwind, acting in its capacity as Charterer, executed a time charter-party for the M/V Aegean Fortuna on the New York Produce Exchange Time Charter form, 2015 revision ("NYPE 2015"), as amended by the parties through negotiated riders, addenda, and additional clauses (the "Charter-Party"). The Charter-Party bears Reference N

7. The Charter-Party provided for a charter period of 36 months, commencing on the date of delivery of the vessel to the Charterer, which occurred on January 15, 2021 at the port of Singapore, and expiring on January 14, 2024. The daily hire rate was fixed at $14,750 per day, payable semi-monthly in advance in United States Dollars by wire transfer to TSL's designated account at Tidewater Securities, Piraeus Branch.

8. The Charter-Party is governed by the laws of the State of New York. Clause 46 of the Charter-Party provides for arbitration of disputes in New York. However, pursuant to Clause 46(b) addendum, negotiated and agreed to by the parties, either party may, in its sole discretion, elect to litigate disputes arising under or in connection with the Charter-Party in the Supreme Court of the State of New York, New York Coun

IV. CLAUSE 28 — THE LIQUIDATED DAMAGES PROVISION

9. Clause 28 of the Charter-Party, entitled "Liquidated Damages for Maintenance/Seaworthiness Breach," provides in its entirety as follows: "Upon Owner's material breach of maintenance and seaworthiness obligations (Clauses 2 and 6), Charterer is entitled to liquidated damages equal to 150% of the aggregate off-hire days multiplied by the daily hire rate, subject to a cap of $4,500,000 for any single continuous perio

10. The phrase "any single continuous period of breach" appears exactly once in Clause 28 of the Charter-Party. This phrase is not defined in the Definitions section (Clause 1) or in any other provision of the Charter-Party, including its riders, addenda, or side letters. No other clause of the Charter-Party uses or cross-references the phrase "single continuous period of breach." (Charter-Party (entire document, inc

11. The Charter-Party does not contain any other provision that modifies, supplements, limits, or defines the term "single continuous period of breach" as used in Clause 28. No rider, addendum, side letter, or other contemporaneous writing between the parties addresses whether the $4,500,000 cap set forth in Clause 28 is intended to apply on a per-incident basis or, alternatively, as a single aggregate cap applicable

12. The Charter-Party was negotiated between sophisticated commercial parties — TSL, an international shipowner operating a fleet of 34 vessels, and Northwind, a commodity trader and shipping logistics company regularly chartering 15 to 25 vessels — each of which was represented by experienced maritime counsel throughout the negotiation process. The negotiations spanned a period of approximately six weeks, from late

13. During the negotiation of the Charter-Party, a review of the complete negotiation correspondence between the parties — including all emails, marked-up drafts, and memoranda exchanged between late October 2020 and execution on December 3, 2020 — reveals that neither Thalassa nor Northwind proposed, discussed, or introduced language specifying that the $4,500,000 cap in Clause 28 would apply on a per-incident basis

14. No prior dealings between Thalassa and Northwind involved a charter-party with a similar or analogous liquidated damages clause. The Charter-Party for the M/V Aegean Fortuna was the first and only charter-party entered into between the parties. Prior to executing the Charter-Party, the parties had no prior contractual relationship, no course of dealing, and no established course of performance with respect to the

V. NORTHWIND'S APPLICATION OF CLAUSE 28

15. In its Complaint, Northwind claims total off-hire of 68 days arising from three separate mechanical incidents that occurred during 2022, specifically: (a) 22 days of off-hire from March 12, 2022 through April 2, 2022, attributable to a turbocharger failure (hereinafter "Incident 1"); (b) 21 days of off-hire from July 8, 2022 through July 29, 2022, attributable to a ballast water treatment system malfunction and a

16. Northwind contends that each of the three mechanical incidents constitutes a separate and independent "single continuous period of breach" under Clause 28 of the Charter-Party, such that the $4,500,000 liquidated damages cap applies independently and separately to each of the three incidents. On this basis, Northwind claims aggregate liquidated damages of $4,500,000 — a figure that Northwind asserts represents th

17. However, applying the Clause 28 liquidated damages formula to the 68 total off-hire days on a combined, aggregate basis — that is, treating the 68 days as a single calculation — yields total liquidated damages of $1,504,500 (68 days × $14,750 per day × 150% = $1,504,500). This amount is well below the single aggregate $4,500,000 cap. Thus, if the cap is construed as a single aggregate cap for the entire charter p

18. Northwind does not claim — nor could it, based on the undisputed facts — that any individual incident, standing alone, would produce liquidated damages exceeding, or even approaching, the $4,500,000 cap. The per-incident liquidated damages calculations under the Clause 28 formula are as follows: • Incident 1 (Turbocharger Failure): 22 days × $14,750/day × 150% = $487,050 • Incident 2 (BWTS / Auxiliary Boiler Fail

19. Despite the fact that the per-incident calculations yield only $1,504,500 (or $1,504,800 depending on rounding), Northwind's Complaint seeks $4,500,000 in liquidated damages. Northwind's theory appears to rest on the assertion that three separate caps — totaling a theoretical $13,500,000 in aggregate cap room ($4,500,000 × 3 incidents) — should apply, and that Northwind is entitled to invoke the maximum of the fi

VI. CLAUSE 6 — MAINTENANCE AND SEAWORTHINESS OBLIGATIONS

20. Clause 6 of the Charter-Party, entitled "Maintenance and Repairs," provides in relevant part as follows: "Owners shall maintain the vessel in a thoroughly efficient state of hull, machinery, and equipment throughout the charter period, including compliance with all classification society requirements and all applicable international, flag state, and port state regulations, at Owners' time and expense. Owners shal

21. Clause 2 of the Charter-Party contains the Owner's warranty that the M/V Aegean Fortuna was, at the time of delivery to Northwind on January 15, 2021 at the port of Singapore, in a seaworthy condition, tight, staunch, and strong, and in every way fitted for the service contemplated under the Charter-Party, with her machinery, boilers, and equipment in a good and efficient working order and condition. (Charter-Par

VII. THE THREE MECHANICAL INCIDENTS A. Incident 1: Turbocharger Failure (March 12–April 2, 2022)

22. On March 12, 2022, while the M/V Aegean Fortuna was en route from Paradip, India to Mombasa, Kenya, transiting the Indian Ocean at approximately latitude 6°N, longitude 77°E, the vessel's main engine turbocharger — a Ashgrove Group model TCA77 — experienced a catastrophic bearing failure, causing the vessel to lose approximately 60% of its engine power and rendering the vessel unable to maintain her warranted ser

23. Following the turbocharger failure, the M/V Aegean Fortuna diverted to Colombo, Sri Lanka, the nearest port with adequate repair facilities, where she arrived on March 15, 2022. Repairs were performed by Fenmore Partners LLC under the supervision of GMCB surveyors. The turbocharger bearing assembly was replaced, and the vessel was released from repairs and returned to service on April 2, 2022. The vessel was off-

24. Dr. Henrik Sørensen, TSL's retained maritime engineering expert, a naval architect and marine engineer with over 30 years of experience and former Chief Surveyor of the Danish Maritime Authority, conducted a detailed root cause analysis of the turbocharger failure. Dr. Sørensen opined, to a reasonable degree of engineering certainty, that the failure was caused by a latent manufacturing defect in the turbocharger

25. The GMCB classification survey records for the M/V Aegean Fortuna confirm that the vessel passed all annual and intermediate surveys of the main engine and turbocharger assembly without any notation of defect, condition of class, recommendation, or memorandum at any time prior to the March 2022 failure. The most recent GMCB annual survey prior to the failure was conducted on November 8, 2021 in Singapore, during

26. On July 8, 2022, while the M/V Aegean Fortuna was alongside at the port of Richards Bay, South Africa, loading a cargo of approximately 52,000 metric tons of iron ore for discharge at Qingdao, China, the vessel's ballast water treatment system ("BWTS") — a BallastMaster ultraviolet treatment system manufactured by Ostrander Corporation — malfunctioned due to severe clogging of its pre-filtration unit. Simultaneou

27. Chief Engineer Petros Vlahos, who served as the M/V Aegean Fortuna's Chief Engineer throughout the charter period, testified that the BWTS malfunction was caused by contaminated ballast water loaded at the immediately preceding port of call — specifically, ballast water taken on at the outer anchorage of Maputo, Mozambique in late June 2022 — which contained abnormally high levels of sediment, silt, and particula

28. Northwind's agents — specifically, its local port agents at Maputo, acting on instructions from Northwind's operations department in Stamford, Connecticut — directed the loading of ballast water at the outer anchorage of Maputo in late June 2022 and specified the quantity of ballast to be taken on. The Master, Capt. Giannopoulos, complied with these instructions. Email correspondence between Northwind's operation

29. During the 21-day period of Incident 2, while the M/V Aegean Fortuna remained alongside at Richards Bay awaiting completion of repairs, the iron ore cargo already loaded on board the vessel was exposed to moisture ingress through the vessel's cargo hold ventilation system, which was inoperative due to the auxiliary boiler failure. This moisture exposure resulted in oxidation (rusting) of a significant portion of

30. On November 15, 2022, the M/V Aegean Fortuna, while transiting the North Sea en route from Murmansk, Russia to Rotterdam, Netherlands, experienced a failure of the main engine's No. 4 cylinder liner, which cracked circumferentially at the upper collar, resulting in cooling water ingress into the cylinder and necessitating immediate shutdown of the affected cylinder. The vessel proceeded to Rotterdam at reduced sp

31. TSL concedes, for purposes of this motion and generally, that the cylinder liner failure in Incident 3 constituted a breach of the Owner's maintenance obligations under Clause 6 of the Charter-Party, in that the No. 4 cylinder liner had accumulated excessive operational hours beyond the manufacturer's recommended replacement interval, and the failure was attributable to wear and fatigue that should have been addr

32. The total off-hire days claimed by Northwind across all three mechanical incidents is 68 days, calculated as follows: 22 days (Incident 1, March 12–April 2, 2022) plus 21 days (Incident 2, July 8–July 29, 2022) plus 25 days (Incident 3, November 15–December 10, 2022) equals 68 days. (Complaint ¶ 42.)

VIII. THE ALLEGED MAPUTO DEVIATION (SEPTEMBER 2022) A. The Agreed Voyage

33. Clause 5 of the Charter-Party, entitled "Trading Limits," permits worldwide trading of the M/V Aegean Fortuna, subject to three categories of exclusions: (a) ports and territories subject to sanctions administered by the United States Department of the Treasury, Office of Foreign Assets Control ("OFAC"); (b) ports and waters designated as war-risk zones in the London Joint War Committee Hull War Risks Listed Area

34. In September 2022, the M/V Aegean Fortuna was performing a ballast voyage from Durban, South Africa to Qingdao, China under Northwind's voyage orders dated September 8, 2022. The voyage orders instructed the vessel to proceed from Durban via the Mozambique Channel and the Indian Ocean to Qingdao, where the vessel was expected to arrive within a laycan (laydays/cancelling) window of October 1–5, 2022, in order to

35. On or about September 14, 2022, the M/V Aegean Fortuna called at Maputo, Mozambique during the Durban-to-Qingdao ballast voyage. The vessel arrived at Maputo outer anchorage on September 14, 2022 and departed on September 18, 2022, adding approximately 4 days to the total voyage duration as compared to the estimated direct passage time from Durban to Qingdao. (Espinoza Decl. Ex. N (vessel Automatic Identification

36. Capt. Nikolaos Giannopoulos, the Master of the M/V Aegean Fortuna, testified that the Maputo call was necessitated by adverse weather conditions and routing considerations in the Mozambique Channel. Specifically, Capt. Giannopoulos testified that tropical weather systems — including a developing tropical disturbance that was subsequently designated by the South-West Indian Ocean Tropical Cyclone Warning Centre as

37. Independent meteorological data and weather records from September 2022 confirm the presence of adverse weather systems in the Mozambique Channel during the period of the Maputo call. Specifically, satellite imagery and synoptic weather charts from the South African Weather Service ("SAWS") and the Météo-France Regional Specialized Meteorological Centre in La Réunion confirm the development of Tropical Depression

38. Maputo, Mozambique is not within any of the excluded trading areas listed in Clause 5 of the Charter-Party. Specifically, Maputo is not located in a country or territory subject to OFAC sanctions; Maputo is not within any area designated by the London Joint War Committee as a Hull War Risks Listed Area; and Maputo is not within ice-bound waters north of latitude 68°N. Accordingly, the Maputo call did not violate

39. Northwind alleges that the Maputo call was not weather-related but was instead directed by TSL for the purpose of loading TSL's own cargo aboard the M/V Aegean Fortuna, constituting an unauthorized deviation from the Charterer's voyage orders and a breach of the Owner's obligations under the Charter-Party. Northwind claims that the 4-day delay caused by the Maputo call resulted in the vessel missing the Qingdao l

40. TSL denies Northwind's deviation allegations and maintains that the Master exercised reasonable navigational discretion in calling at Maputo due to weather and routing conditions in the Mozambique Channel, that no TSL cargo was loaded at Maputo during the September 2022 call, and that the call was squarely within the Master's authority under the Charter-Party and applicable maritime law. TSL further contends that

41. Under the NYPE 2015 form, the Master of the vessel retains authority and responsibility for navigational decisions affecting the safety of the vessel, her crew, and cargo, including decisions regarding routing, port calls for shelter, bunkering, and provisioning, notwithstanding that the Charterer has the right to direct the employment and agency of the vessel. Clause 8 of the Charter-Party specifically provides

42. Capt. Nikolaos Giannopoulos has served as a licensed Master mariner for over 20 years, holding a Master's Certificate of Competency (Class I, Unlimited) issued by the Hellenic Republic Ministry of Mercantile Marine. He held the command of the M/V Aegean Fortuna continuously from the vessel's delivery to Northwind on January 15, 2021 through the expiration of the charter period on January 14, 2024. Capt. Giannopou

IX. NORTHWIND'S CLAIMED DAMAGES

43. Northwind's Complaint seeks total damages of $18,300,000, comprised of the following categories: (Complaint ¶¶ 49–62.)

44. Northwind sub-chartered the M/V Aegean Fortuna to Eastbourne Bulk Carriers Ltd. ("Eastbourne"), a United Kingdom-based dry bulk operator, pursuant to a back-to-back sub-charter dated January 10, 2021, at a daily hire rate of $17,200 per day for the same 36-month period as the head charter. This sub-charter yielded Northwind a daily profit of $2,450 per day ($17,200 minus $14,750). Northwind claims loss of sub-cha

45. TSL filed a counterclaim on November 17, 2023, seeking recovery of $1,620,000 in unpaid hire for the period October 1, 2022 through December 31, 2022 — a period of approximately 92 days (which, at the daily hire rate of $14,750 per day, equals approximately $1,357,000; however, TSL's counterclaim also includes $263,000 in late payment interest calculated at the contractual rate of 6% per annum, bringing the total

46. Northwind's position, as set forth in its Reply to the Counterclaim, is that the withholding of hire was proper under Clause 11 (the off-hire provision) of the Charter-Party and under principles of equitable setoff, and that Northwind was entitled to deduct from hire payments the amounts it claims as off-hire and damages arising from the three mechanical incidents and the alleged Maputo deviation. (Northwind's Re

XI. PRIOR PROCEEDINGS IN THIS ACTION

47. Northwind filed the Complaint commencing this action on October 2, 2023 in the Supreme Court of the State of New York, New York County, Commercial Division, and the action was assigned Index No. 655421/2023. The case was assigned to the Honorable Lorraine K. Chen, Justice of the Supreme Court, Part 49 of the Commercial Division. (Complaint (filed October 2, 2023, NYSCEF Doc. No. 1).)

48. TSL filed its Verified Answer, Affirmative Defenses, and Counterclaim on November 17, 2023. TSL's Answer asserted thirteen affirmative defenses, including, inter alia, failure to state a cause of action, comparative fault, contractual limitations on liability, and the doctrines of avoidable consequences and mitigation of damages. (Answer and Counterclaim (filed November 17, 2023, NYSCEF Doc. No. 8).)

49. On December 15, 2023, TSL moved to dismiss Counts III (seeking to recover, as charter-party damages, amounts paid or payable by Northwind to third-party shippers for cargo claims) and V (unjust enrichment) of Northwind's Complaint pursuant to CPLR 3211(a)(7). By Decision and Order dated March 8, 2024, Justice Chen granted the motion in part, dismissing Count V (unjust enrichment) in its entirety on the grounds th