The Blankenstein rides again

Alexander Wright, of 4 Pump Court, considers ship sales and lost deposits

Many shipping lawyers will be familiar with the UK’s Court of Appeal decision in The Blankenstein [1985] 1 Lloyd’s Rep 93, in which it was held by the majority that the seller of three vessels on the Norwegian sale form (NSF) 66 was entitled to claim damages equivalent to the amount of the deposit (usually 10% of the sale price) following any repudiation of the contract by the buyer, even where the formal Memorandum of Agreement (MoA) had not yet been signed. This was, the majority held, because the seller was under an existing obligation to pay the deposit within a reasonable time after the contract had been concluded.