What are the benefits for a Financier granting a Quiet Enjoyment Letter in favour of the Charterer?
Good question @EiriniXyla and welcome to our community !!
A QEL is an undertaking from a ship’s lender or mortgagee which establishes a direct relationship between the mortgagee and the charterer, pursuant to which the relevant mortgagee undertakes not to enforce its rights or security against the vessel, provided that the charterer continues to perform its obligations towards the owner under the charter. In other words, a QEL provides a charterer with a right to the undisturbed use and enjoyment of the vessel, independent of whether the owner in its capacity as borrower is in default of its obligations towards its lender under the facility agreement.
In my opinion, this is extremely beneficial for a Financier as the ship can continue generate earnings and pay the loan even when the borrower is technically in default, but I am happy to hear your point of view as a lawyer