Lloyd's Maritime and Commercial Law Quarterly
Damages for late or early redelivery under time charterparties
David Foxton *
The principles which determine what damages are recoverable for, respectively, late and early redelivery of a vessel under a time charter have been the subject of recent decisions in The Achilleas and The Golden Victory. Prompted by those decisions, this article reviews the principles which govern compensation for untimely redelivery under a time charterparty, and analyses the issues which arise in this commercial context by reference to more general principles of contract law.
This article has been prompted by two recent decisions of the House of Lords considering damages for non-timely redelivery under time charterparties, each of which has caused a degree of controversy. The first is Transfield Shipping Inc v. Mercator Shipping Inc (The Achilleas),1 a case which considered the damages which a shipowner is entitled to recover when a time charterer orders the vessel on a last voyage which results in the vessel’s being redelivered later than the last permissible redelivery date under the time charter. The second is the earlier decision in Golden Strait Corp v. Nippon Yusen Kubishika Kaisha (The Golden Victory),2 which considered the circumstances in which it was appropriate to have regard to events which occurred between the date of the termination of the charterparty and the date of assessment of damages, in determining the damages recoverable by the owner for early termination of a long term time charterparty. In addition to their inherent topicality, the decisions provide an opportunity to re-visit other interesting issues which arise in the same legal and factual context, and raise some fundamental questions about the relationship between the principles which govern the recoverability of damages in shipping contracts, and the general law of contractual damages.
DAMAGES FOR LATE REDELIVERY
The charterer’s obligations
The principles which determine the date when the time charterer must redeliver the vessel to the owner can be briefly stated. First, where a time charter is for a stated period, the date for redelivery will generally be regarded as an approximate date unless there is clear
* QC. This article is based on a lecture given to LLM students at the University of Nottingham on 25 February 2008.
1. [2008] UKHL 48; [2008] Bus LR 1395; [2008] 2 Lloyd’s Rep 275; rvsg [2007] EWCA Civ 901; [2007] 2 Lloyd’s Rep 555; affg [2006] 3030 EWHC (Comm); [2007] 1 Lloyd’s Rep 19 (Christopher Clarke J).
2. [2007] UKHL 12; [2007] 2 AC 353; [2007] Bus LR 997; [2007] 2 Lloyd’s Rep 164; affg [2005] EWCA Civ 1190; [2006] 1 WLR 533; [2005] 2 Lloyd’s Rep 747; affg [2005] EWHC 161 (Comm); [2005] 1 Lloyd’s Rep 443.
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