QUEEN'S BENCH DIVISION
COMMERCIAL COURT
IN AN ARBITRATION CLAIM
Strand, London, WC2A 2LL |
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B e f o r e :
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Maestro Bulk Ltd |
Claimant (Charterers) |
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- and - |
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Cosco Bulk Carrier Co Ltd |
Defendant (Owners) |
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Andrew Baker QC (instructed by Holman Fenwick Willan) for the Defendants/Owners
Hearing dates: 24th and 25th November 2014
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Crown Copyright ©
Mr Justice Cooke:
Introduction
"Where a time charter party provides for charterers to give notice of redelivery, what is the correct approach to damages when redelivery takes place with insufficient notice(s)?"
"On redelivery charterers to tender 20/15/10/7 days approximate and 5/3/2/1 days definite notice."
The arbitrators determined that the margin allowed for an "approximate" notice amounted to 2 days. In the case of a 20 day notice, that represented a 10% margin whilst a 2 day margin on a 7 day approximate notice tied in with a 5 day definite notice. That finding is not and could not be the subject of any appeal.
i) The giving of valid redelivery notices is not a condition precedent to an effective redelivery.ii) The giving of a notice does not preclude the charterers from changing their minds and cancelling any such notice.
iii) There is only an actual breach of any notice provision on actual redelivery (although there may be an anticipatory breach on the giving of notices) and therefore the owners' losses as the result of any breach are to be assessed as of the date of redelivery.
iv) In consequence, the owners can be under no duty to mitigate loss before the date of breach.
v) Any notices relating to redelivery must be honestly given and on reasonable grounds.
The primary facts as found by the arbitrators
i) $30,100 on 20th March,ii) $27,200 on 9th April,
iii) $25,769 on 13th April,
iv) $25, 927 on 19th April,
v) $29,300 on 24th May.
The issues
The arbitrators' approach
The nature of the breach
Causation
"If I am told today I must go to Paris tomorrow and it costs me £100 for my air ticket, whereas I could have travelled tomorrow for only £10 on Ryanair if I had been told a fortnight ago, then the short notice has cost me £90. If I have been promised that any trips to Paris would be made on a fortnight's notice, then there is a breach of that promise and the £90 loss is caused by that breach. The breach may only occur when I travel without having had proper notice, but the loss, though based upon the breach, is a real loss and one which has been caused by the breach."
Remoteness
"71. However, in my judgment there are important differences between the claims made in the present case and in The Achilleas.
72. Unlike in The Achilleas, there is no finding of a general market understanding or expectation that damages for delay during the currency of a time charter party are limited to the difference between charter and market rates during the period of delay. On the contrary, as Wilford and The Derby illustrate, the general understanding is that damages can be recovered for loss of a fixture in such circumstances. Moreover, the measure of damages recoverable for a lost voyage fixture is a well recognised measure of damages in charterparty cases.
73. Similarly, unlike in The Achilleas, this is not a case in which it can be said that the resulting liability is likely to be unquantifiable, unpredictable, uncontrollable or disproportionate. Where a follow on fixture is made at the end of a charter it could be for any period. It is entirely possible that it could be a long term charter lasting years even though the charter breached is for a relatively short term. It is the unpredictable and unquantifiable element introduced by the various possible lengths of follow on charter that makes the potential liability disproportionate and commercially unacceptable. By contrast, loss of a sub-charter during the currency of a time charter can never be for a longer period than the time charter itself. Further, very often, as here, it will be for the loss of the specific charter voyage for which the vessel was fixed. Loss of a voyage fixture within the course of a charterparty will result in a loss within reasonable and fixed confines. It is possible that market movements may mean it is a large loss, but it will be a loss based on a trading voyage."
Conclusions
Balance of hire claimed by charterers $333,040.98
Less off hire $138,295.47
Less expenses at Pasadena $2,000.00
Less damages for uncontractual redelivery notices $216,450.00
Total sum due to owners $23,704.49