Lloyd's Maritime and Commercial Law Quarterly
SMUGGLING MITIGATION INTO WHITE & CARTER v MCGREGOR: TIME TO COME CLEAN?
Jonathan Morgan*
This article considers the controversial decision in White & Carter (Councils) Ltd v McGregor that there is an absolute right to reject a repudiation and keep a contract on foot, and the even more controversial limits on that right, derived from Lord Reid’s speech in White & Carter. The article contends that the best way to reform this problematic area of law is to use the mitigation rule explicitly to limit the right to affirm the contract. It considers the benefits of the mitigation policy generally, and the recent use made of it in the White & Carter context in MSC v Cottonex.
I. THE PERSISTENCE OF THE WHITE & CARTER PROBLEM
Writing recently in this Quarterly,1 David Winterton observed that most of the cases considering the House of Lords’ notorious decision in White & Carter (Councils) Ltd v McGregor
2 have arisen in the shipping context; Dr Winterton concluded that, notwithstanding a recent “rigorous review of the authorities” by Cooke J,3 the limits of the White & Carter doctrine remained “highly uncertain” and the uncertainty was unlikely to be dissipated without significant reform of the law. Dr Winterton’s perceptiveness has rapidly been confirmed by yet another shipping case considering White & Carter, namely MSC Mediterranean Shipping Co SA v Cottonex Anstalt.4 Leggatt J’s approach to the White & Carter problem in MSC v Cottonex is in any many ways admirable, although (with great respect) his Lordship’s enthusiasm for applying the penalty doctrine to demurrage clauses, and for airing once more the question of good faith, might be questioned.
Yet, notwithstanding Leggatt J’s valuable analysis, MSC v Cottonex will surely not be the final word on the topic. It is respectfully suggested that Leggatt J’s approach, because
* Fellow of Corpus Christi College and Senior Lecturer in Law, University of Cambridge. I have benefited enormously from the unpublished papers given by Dr Janet O’Sullivan and Dr Andrew Dyson at the conference “Commercial remedies: Resolving controversies” (Cambridge, 2015). I am also indebted to Benjamin Parker of 7 KBW; he should not be taken to agree with any of the arguments.
1. D Winterton, “Reconsidering White & Carter v McGregor” [2013] LMCLQ 5.
2. [1962] AC 413.
3. Isabella Shipowner SA v Shagang Shipping Co Ltd (The Aquafaith) [2012] EWHC 1077 (Comm); [2012] 2 Lloyd’s Rep 61.
4. [2015] EWHC 283 (Comm); [2015] 1 Lloyd’s Rep 359.
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