In a continuing charter when it was clear that the time of the charter will be exceeded, the contract allows an action for an anticipatory breach. Any new redelivery order was to be obtained after after it first became impossible to meet the charter terms. Time was of the essence. The correct date for assessment of the legitimacy of the order was the date on which the vessel completed discharged and was ready to proceed on her last voyage, by which time, on the facts it had become apparent that she could not complete that voyage and be redelivered in accordance with the charterparty. The order previously given then became invalid and the charterers’ persistence in requiring it to be obeyed was repudiatory.
Lord Mustill said: ‘Questions of this kind are better decided by looking at what the contract says than by speculating on the practical outcome of preferring one solution to another. Naturally, no judge will favour an interpretation which produces an obviously absurd result unless the words used drive him to it, since it is unlikely that this is what the parties intended. Where there is no obvious absurdity and simply assertions by either side that its own interpretation yields a more sensible result, there is room for error.’
. . And ‘Finally, some of the legal consequences of late redelivery have been worked out. There remain a number of unanswered questions, with some of which your Lordships are now concerned.’
and ‘At first sight, this apparently anomalous result is a good reason for questioning whether the claim for repudiation was soundly based. On closer examination, however, the anomaly consists, not so much in the size of the damages, but in the fact that damages were awarded at all. Imagine that the without prejudice agreement had not been made, and that the owners, having treated the charter as wrongfully repudiated, had accepted a substitute fixture with Navios. If one then asked what loss had the repudiation caused the owners to suffer, the answer would be – None. On the contrary, the charterers’ wrongful act would have enabled the owners to make a profit. Even if they had not accepted the substitute employment they might very well have suffered no loss, since they would have been in the favourable position of having their ship free in the right place at the right time to take a spot fixture on a rising market. In neither event would the owners ordinarily recover any damages for the wrongful repudiation.’
Lord Mustill
Independent 15-Nov-1994, Times 28-Oct-1994, [1994] 1 WLR 1465, [1995] 1 Lloyd’s Rep 1
England and Wales
Citing:
At First Instance – Torvald Klaveness A/S v Arni Maritime Corporation (The Gregos) ChD 1991
The ship was returned late from a charter. The court was asked whether or not the legitimacy of the last voyage fell to be established at the date when the order was given or at the time when the last voyage began.
Held: It was the second: . .
Appeal from – Torvald Klaveness A/S v Arni Maritime Corporation (The Gregos) CA 4-Jun-1993
The ship was returned by the charterer after the expiry of the time charter. The court was asked as to when the validity of the last order was to be tested.
Held: The legitimacy of the charterer’s final order was to be tested at the date it . .
Cited by:
Cited – Transfield Shipping Inc of Panama v Mercator Shipping Inc of Monrovia ComC 1-Dec-2006
The owners made substantial losses after the charterers breached the contract by failing to redliver the ship on time as agreed.
Held: On the facts found the Owners’ primary claim is not too remote. To the knowledge of the Charterers, it was . .
Cited – Digital Integration Limited v Software 2000 CA 16-Jan-1997
The parties had entered into a contract for the distribution of software by the plaintiff. The contract was terminated by the plaintiff and the defendant argued that this was in breach of the agreement, and that a sub-clause which apparently gave . .
Cited – Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas) HL 9-Jul-2008
The parties contracted to charter the Achileas. The charterer gave notice to terminate the hire, and the owner found a new charterer. Until the termination the charterers sub-chartered. That charter was not completed, delaying the ship for the . .
Cited – Century 2000 Enterprises Ltd and Another v SFI Group Plc CA 11-Dec-2001
The claimants appealed against rejection of their claim that an agreement entitled them to take a 35 years lease of the defendants. The contract had depended on complex conditions as to planning consents.
Held: The appeal failed: ‘Ultimately, . .
Lists of cited by and citing cases may be incomplete.
Updated: 22 August 2021; Ref: scu.89921 br>