JIANGSU GUOXIN CORPORATION LTD (formerly known as SAINTY MARINE CORPORATION LTD) V PRECIOUS SHIPPING PUBLIC CO LTD

[2020] EWHC 1030 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Butcher, 30 April 2020

Contracts – Shipbuilding – Ship sale – Prevention principle – Buyer rejecting hulls causing them to occupy space at shipyard delaying subsequent builds

This appeal arose out of two partial final arbitration awards relating to disputes as to two vessels, hulls 21B and 22B, which the claimant seller had contracted to build pursuant to shipbuilding contracts made with the respondent buyer, dated 26 February 2014. The contractual delivery date for the hulls was 31 August 2015 and on 29 January 2016, the buyer terminated the contracts by reason of “non-permissible delays”. Previous hulls had been rejected by the buyer, and the seller contended that the “prevention principle” applied because the rejection of those hulls had caused them to occupy berths at the seller’s yard, delaying the launch and construction of hulls 21B and 22B. An arbitration tribunal held in partial final awards that there was no room for application of the prevention principle; and that the delay of 151 days in delivery was a “non-permissible delay” under the contract. The seller appealed.