DALWOOD MARINE CO V NORDANA LINE A/S (THE "ELBRUS")

[2009] EWHC 3394 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Teare, 21 December 2009

Charterparty (time) - Measure of damages - Assessment of hire - Whether permissible to calculate loss of earnings for period until vessel's next fixture instead of until end of charterparty - No available market - Mitigation of loss

The parties had concluded a charterparty for the vessel Elbrus on an amended NYPE 1993 form for a period of five to seven months with an optional further five to seven months. In late March 2005 when the vessel was at Lobito, Angola, the charter was further extended for as long as it would take to proceed to Puerto Acevedo, Argentina and then perform a voyage to Houston. On 4 April the charterers wrongfully terminated the charterparty. At that time the vessel was still at Lobito. There was no available market off the coast of West Africa for the vessel and the owners decided to sail her to Portugal in order to prepare her for the next fixture, which had a laycan date of 1-20 May. The vessel commenced employment under the subsequent charter on 6 May, earning a higher rate of hire than under the charter at issue. But for charterers' repudiation on 4 April, the vessel would have remained employed under the charterparty for some 39 days until redelivery at Houston on 13 May, which was thus the contractual redelivery date. Thereafter, owners would have sailed her to Portugal, and would certainly have missed the laycan for the next fixture but might have obtained an extension. The estimated delivery date for the next fixture in such a scenario was either 13 June or 10 July. This was the owner's appeal against the arbitration award for the charterers. They argued that the tribunal had erred in law by taking into account the actual and notional earnings of the vessel after 13 May, the notional date of redelivery. What the tribunal should have done as a matter of law, owners submitted, was to assess what the owners lost under the charterparty for the remaining 39 days of that charterparty and deduct what the owners in fact earned during that period. Charterers argued that account must also be taken of the results after the redelivery date of actions owners had taken to mitigate their losses.