Source: All England Reporter
Publisher Citation: [2017] All ER (D) 158 (Jun)
Neutral Citation: [2017] UKSC 43
Court: Supreme Court

Lord Neuberger P, Lord Mance, Lord Clarke, Lord Sumption and Lord Hodge SCJJ

Representation Steven Gee QC, Tom Whitehead, Daniel McCarthy and William Hooper (instructed by Gateley plc) for the owners.
  Simon Croall QC, Peter Ferrer and Ben Gardner (instructed by Clyde & Co LLP) for the charterers.
Judgment Dates: 28 June 2017


Contract - Repudiation - Charterparty - Assessment of damages - Charterers in repudiatory breach of addendum extending charterparty by two further years (extended delivery date) - Charterers redelivering vessel on previously anticipated date - Owners selling vessel upon repudiation (sale) and bringing claim in damages against charterers for loss of profit - Value of vessel at date of sale being significantly more than value of vessel at extended date redelivery, had addendum been fulfilled (difference) - Whether account should be taken of difference when calculating damages to be paid to claimant.

The Case

Contract Repudiation. The Supreme Court, in allowing the owners' appeal, ruled on the assessment of damages arising out of the repudiation of a charterparty by charterers of a cruise ship (the vessel). Concerning the quantum of damages to be paid to the owners, the court held that the charterers were not entitled to a credit of 11,251,677 to reflect the difference in the value of the vessel in 2007, when the owners had sold it shortly after the charterers had redelivered it, and its diminished value in 2009, when it would have been redelivered if the contract had not been repudiated. The court held that the benefit to be brought into account had to have been caused either by the breach of the charterparty or by a successful act of mitigation, and that, in the present case, the difference or loss had not, on the face of it, been caused by the repudiation of the charterparty.

Practice Areas

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