Latvian Shipping Company and Others v Stocznia Gdanska Sa: CA 21 Jun 2002

A payment condition was just that and that a failure to pay entitled the seller to terminate at common law. Rix LJ said: ‘It is established law that, where one party to a contract has repudiated it, the other may validly accept that repudiation by bringing the contract to an end, even if he gives a wrong reason for doing so or no reason at all’.
Rix LJ set out the policy considerations of the ‘wide ranging’ tort of inducing breach of contract: ‘The tort is an economic tort designed to place limits on the self-interested rough and tumble of the business world. Its philosophical basis appears to be that contracts should be kept rather than broken. Where, as here, A (Latco) procures B’s (Latreefers’) breach of his contract with C (the yard), adopting it as his own because he is interested to do so, seeking a benefit for himself or a fortiori a detriment for C, and does so deliberately, knowingly and intending the breach to take place, then A puts himself in the way of incurring a liability, even though not himself a party to the contract, unless (i) he does not directly procure the breach, and (ii) he uses no (relevant) unlawful means, or (iii) he can claim some justification. The significance of (i) is that where A directly procures a breach of contract he makes himself as it were directly privy to the breach. The significance of (ii) is that in the absence of making himself privy to the breach, he cannot be faulted as long as he acts as he is entitled to act, but if (deliberately, knowingly and intending the breach to take place) he commits an unlawful act, by which I have in mind an unlawful act of sufficient causative relevance, then he renders himself liable. It may be that unlawful means ought to be necessary even where there is direct procurement (see the wide-ranging work by Hazel Carty, An Analysis of the Economic Torts, 2001, at 82). The significance of (iii), an area which has not been clearly worked out in the cases, appears to be that there may be moral or perhaps economic factors which may mitigate even to the point of justifying conduct otherwise incurring a prima facie liability.’


Lord Justice Aldous, Tuckey, Rix LJ


[2002] EWCA Civ 889, [2002] 2 Lloyd’s Rep 436, [2002] 2 All ER (Comm) 768




England and Wales


See AlsoStocznia Gdanska Sa v Latvian Shipping Company and others CA 23-Jul-2002
Application for leave to appeal to the House of Lords refused. . .
Appeal fromStocznia Gdanska SA v Latvian Shipping Company and Others ComC 25-May-2001
When a claimant commenced litigating several issues, but succeeded only on some of the them, the rule allowing an award of costs to the generally successful party was not dependent upon questions of whether the party was reasonable to have raised . .
ConsideredMillar and Others v Bassey and Another CA 26-Aug-1993
It was alleged that Miss Shirley Bassey had breached her contract with a record producer Dreampace (or with her own management company which had in turn contracted with Dreampace), as a result of which Dreampace had been unable to perform a contract . .
See AlsoStocznia Gdanska SA v Latreefers Inc; In re Latrefeers Inc; Stocznia Gdanska SA v Latvian Shipping Co and others (No 2) CA 15-Mar-2000
Possible claims against a foreign company for misfeasance, or wrongful or fraudulent trading might be sufficient to justify proceedings here to wind up a foreign registered company. A second requirement is that some person within this jurisdiction . .

Cited by:

CitedStocznia Gdanska Sa v Latvian Shipping Company and others CA 23-Jul-2002
Application for leave to appeal to the House of Lords refused. . .
CitedOBG Ltd OBG (Plant and Transport Hire) Ltd v Raymond International Ltd; OBG Ltd v Allen CA 9-Feb-2005
The defendants had wrongfully appointed receivers of the claimant, who then came into the business and terminated contracts undertaken by the business. The claimant asserted that their actions amounted to a wrongful interference in their contracts . .
CitedAstea (UK) Ltd v Time Group Ltd TCC 9-Apr-2003
The question of whether a reasonable time has been exceeded in performance of a contract is ‘a broad consideration, with the benefit of hindsight, and viewed from the time at which one party contends that a reasonable time for performance has been . .
CitedMainstream Properties Ltd v Young and others CA 13-Jul-2005
The claimant appealed refusal of his claim for inducing a breach of contract against the sixth defendant. It said that an intention to disturb a contract could be inferred.
Held: A mere recklessness as to whether contractual rights were . .
CitedStocznia Gdynia Sa v Gearbulk Holdings Ltd CA 13-Feb-2009
Orders were placed for the construction of ships. They were not delivered. The buyer, the defendant, cancelled the orders. The defendants sought the loss of profit. The claimants said they were entitled only to the repayment of instalments. The . .
CitedGold Group Properties Ltd v BDW Trading Ltd TCC 3-Mar-2010
The parties had contracted for the construction of an estate of houses and flats to be followed by the interim purchase by the defendants. The defendants argued that the slump in land prices frustrated the contract and that they should not be called . .
CitedJet2Com Ltd v SC Compania Nationala De Transporturi Aeriene Romane Tarom Sa ComC 15-Mar-2012
The parties had contracted for the defendant to maintain certain of the claimant’s aircraft. Each now asserted breach by the other.
Held: Neither the terms of the contract nor its character made time of the essence for the payments to be made . .
CitedPhones 4U Ltd v EE Ltd ComC 16-Jan-2018
The parties contracted for the marketing of contracts for the marketing of the defendant’s mobile phone contracts. On the claimant entering administration, the defendant exercised a clause in their contract to terminate the contract. The claimant . .
Lists of cited by and citing cases may be incomplete.

Contract, Torts – Other

Updated: 06 June 2022; Ref: scu.174117