## Facts

- Wong Wing Fai Co., S.A. owned and operated the oil tanker VIRA 8, which entered Vietnamese waters in March 1975 with the owner’s knowledge that insurers considered the area a war zone.
- The vessel carried private war-risk insurance through April 27, 1975.
- On April 9, 1975, Wong Wing Fai and the United States (through the Navy’s Military Sealift Command) executed a letter agreement chartering the VIRA 8 to support Navy operations connected to the evacuation of South Vietnam; no formal long-form charter was later executed.
- The letter agreement did not set a termination date.
- On April 23, 1975, the shipowner’s representative requested cancellation, citing (i) the high cost of renewing war-risk coverage beyond April 27 and (ii) the owner’s obligation to deliver the vessel for another charter in Singapore by May 15.
- At the time of the cancellation request, the tanker was fully loaded with Navy-owned fuel oil.
- The Navy agreed to cancel the charter effective April 25, 1975, and the parties expected the cargo would be discharged by that date.
- Due to rapidly changing wartime conditions, the cargo could not be discharged; after April 25 the vessel continued to move under Navy direction in attempts to find a discharge location.
- South Vietnam fell on April 30, 1975; the vessel and cargo were later lost during the ensuing events in early May 1975.
- The shipowner sought additional charter hire through April 30 and related recovery, arguing the charter did not end on April 25 or was effectively continued by the Navy’s post-termination control.

## Issues

1. Whether the parties’ agreement to cancel the charter effective April 25, 1975 validly terminated the charter even though the Navy’s cargo was not discharged by that date.
2. Whether the Navy’s continued directions to the vessel after April 25 created ongoing liability for charter hire or other damages notwithstanding the agreed termination.

## Decision

- The Ninth Circuit affirmed judgment for the United States.
- The court held the charter was terminated by mutual agreement effective April 25, 1975.
- The inability to discharge cargo by April 25 did not negate termination because discharge by that date was an expectation, not an express condition to cancellation.
- The Navy’s post–April 25 directions aimed at disposing of Navy-owned cargo did not extend, revive, or imply continuation of the time charter.
- The United States was not liable for charter hire after April 25 or for loss of ship and cargo on a theory of continuing charter obligations.

## Legal Principles

- A time charter may be terminated by mutual agreement effective on a stated date; absent an express condition, practical expectations (such as completing cargo discharge) do not limit the effectiveness of termination.
- Post-termination cooperation and operational instructions related to a former charterer’s cargo do not, without more, create an implied extension, renewal, or new charter obligating continued hire.
- When termination is sought for the shipowner’s economic reasons in known war-risk conditions, subsequent war-related losses do not shift to the former charterer through a theory of continued time-charter hire after the agreed termination date.

## Conclusion

The court enforced the parties’ agreed April 25, 1975 termination date and rejected claims that the Navy’s continued directions while attempting to discharge its cargo imposed additional charter hire or contractual liability after termination.


Wong Wing Fai Co., S.A. v. United States, 840 F.2d 1462 (9th Cir. 1988)