On appeal from [2015] EWCA Civ 1299

This appeal considered what the correct measure of shipowners’ damages following acceptance of a charterers’ repudiatory breach of charter is, and in particular whether a ‘benefit’ (the avoidance of a fall in the capital value on the ship over the unexpired balance of the charter period because of the vessel’s sale shortly after the repudiation) can be set of against the owners’ claim to recover loss of earnings for that period. The Supreme Court allowed the appeal, holding that the charterers were not entitled to a credit for the difference in the value of the vessel when sold in 2007, in comparison to its diminished value in 2009. This was because the Court considered that the fall in the value of the vessel was irrelevant because the owners’ interest in the capital value of the vessel had nothing to do with the interest injured by the charterers’ repudiation of the charterparty. Though the repudiation resulted in a prospective loss of income for a period of about two years, there was nothing about the premature termination of the charterparty which made it necessary to sell the vessel, at all or at any particular time and, had the market value had risen between the sale in 2007 and the time the charterparty would have terminated in 2009, the owners would not have been able to claim the difference in the market value of the vessel.

For judgment, please download: [2017] UKSC 43
For Court’s press summary, please download: Court’s Press Summary
For a non-PDF version of the judgment, please visit: BAILII

To watch the hearing, please visit: Supreme Court Website (21 Nov 2016 morning session) (21 Nov 2016 afternoon session) (22 Nov 2016 morning session) (22 Nov 2016 afternoon session) (23 Nov 2016 morning session) (23 Nov 2016 afternoon session) (24 Nov 2016 morning session)