Category: English Maritime Cases
SALES CONTRACT -- FOB SALE -- CONTAMINATED CARGO -- DAMAGES -- HEDGING LOSSES FLOW NATURALLY FROM BREACH -- SALE OF GOODS ACT 1979 -- Buyer Award
Given that the quality of naphtha originating from the Port Harcourt Refining Company (PHRC) in Nigeria was variable, the naphtha was sold "as is" and “PHRC naphtha quality”. Thus, the Court ruled that when the naphtha was found to be contaminated with MTBE, Buyer was not obliged to accept the cargo given that it contained a contaminate not normally present in naphtha produced by PHRC.
BPVOY 4 -- SAME BERTH CALLED TWICE -- CARGO NOT READY WITHIN LAYDAYS -- WAITING TIME AND BUNKER COSTS -- DETENTION OR DEMURRAGE -- SUPPORTING DOCUMENTS -- TIME-BAR -- Charterer Award
The Vessel was required by Charterer to attend to the same load berth twice with Owner subsequently claiming for the time and bunkers consumed. At the disport, Owner invoiced for excess time used as demurrage. Charterer agreed to and paid a "final agreed demurrage invoice" which covered demurrage and then claimed that the load port expenses should have been submitted as demurrage. Owner subsequently altered the load port claim such that it was for demurrage with Charterer subsequently denying it twofold; first, demurrage had already been settled in full and secondly, the claim for demurrage at the load port was now time-barred.
SYNACOMEX 2000 -- CONSECUTIVE VOYAGE CHARTER -- UNPAID DEMURRAGE -- COMMENCEMENT OF TIME-BAR -- Owner Award
Chartered for three consecutive voyages, a dispute arose over the time bar provision which required arbitration to be commenced "within 12 months of final discharge or termination of this Charter Party".
NYPE 1946 -- TIME CHARTER -- OPTION TO ADD OFF-HIRE PERIOD TO CHARTER PERIOD -- OPTION NOT DECLARED -- VESSEL NOT DELIVERED WITHIN INITIAL CHARTER PERIOD -- Charterer Award
During the initial time charter period the Vessel was off-hire for 159 days with the charter party giving Charterer the option to add the off-hire to the charter period. Charterer, without formally advising Owner that they were exercising this option delivered the Vessel two months after the initial period. The Panel determined that either there was no need for Charterer to formally advise Owner of Charterer exercising the option or, even if there was a need, Charterer’s actions leading up to the initial redelivery date and when continuing to trade the Vessel after the initial redelivery date was Charterer advising Owner that off-hire would be added to the initial charter period.
FOB SALES CONTRACT -- REPUDIATORY BREACH -- TIME BAR --ASSESSMENT OF DAMAGES -- MITIGATION OF LOSS -- Buyer Award
When the FOB Seller failed to deliver a cargo of oil, the Court awarded Buyer damages representing the difference between the contract price and the value of the oil on the date when it should have been delivered less Buyer’s reduced hedging loss when Buyer closed out its position early due to non-delivery of the oil. The Court also ruled Buyer’s claim was not deemed time barred as there was no time bar clause in the 2007 NNPC Terms.
SEAWORTHINESS -- LOST PROFITS -- OBLIGATION TO MITIGATE DAMAGES -- Owner Award
Owner breached the contract when ship was deemed unseaworthy. Court of Appeal ruled that when mitigating damages, the aggrieved party must take all reasonable steps in order to mitigate the loss caused by the breach. The aggrieved party cannot recover damages which resulted from its unreasonable action or inaction or which were avoidable, however, the aggrieved party need not greatly inconvenience itself or incur extraordinary expenses in order to mitigate losses. And, unless the communication is impractical, the aggrieved party should inform the defaulting party of the steps being taken to mitigate damages.
NYPE -- VOYAGE CHARTER OR TIME CHARTER TRIP -- OVERTURNING ARBITRATION AWARD -- REMOTENESS OF DAMAGES -- Owner Award
In upholding the arbitration award, the Court discussed whether the Charter was a Voyage Charter or Time Charter Trip, whether Owner obtaining a Rule B attachment in New York breached the London arbitration clause and whether the arbitration Panel properly applied the "assumption of responsibility" test in regards to remoteness of damage. Damages were awarded Owner basis the minimum duration of the repudiated time charter trip.
TIME CHARTER -- EARLY REDELIVERY -- MEASURE OF DAMAGES -- Owner Award
The Court reaffirmed the tribunal’s decision that when assessing damages for early redelivery under a time charter the difference between the contract rate and the market rate is awarded. The tribunal assessed the "market rate" utilizing the Vessel’s actual fixtures as its basis and awarded damages for the remainder of the minimum charter period (despite the fact that the Disponent Owner redelivered the Vessel 22 days prior to the contractual expiry to the Head Owner). The Court ruled that early redelivery by the Disponent Owner is irrelevant when assessing damages unless the early redelivery resulted from Sub-Charterer’s breach.
TIME CHARTER -- RELIANCE DAMAGES -- EXPECTED DAMAGES -- LOSS OF PROFITS -- Charterer Award
In reversing the tribunal’s reliance damages award, the Court disallowed the Owner to be compensated for expenses incurred by Charterer-mandated Vessel modifications when, in fact, the Owner did not suffer an economic loss from Charterer’s repudiatory breach. In fact, due to a rising market, the Owner benefited by significantly higher earnings than if the contract had been performed. Reliance damages are not to put the claimant in a better position than if the contract had been performed.
NYPE -- TIME CHARTER -- UNPAID HIRE -- WHETHER WITHDRAWAL OF VESSEL WRONGFUL -- INTENTION -- Charterer Award
Charterer’s failure to pay timely hire per the terms of the contract led Owner to withdraw the Vessel from Charterer’s service. The tribunal majority held that the late payments were a matter of poor management rather than acting in bad faith and, as such, warranted an anti-technicality notice rather than withdrawal of the ship.
