The purpose of damages in both contract and tort is to “put the party who has been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation”.1 This difference between the claimant’s actual and hypothetical positions is ordinarily measured by comparing the market value of the goods or services that the claimant would have got with the market value of the goods or services with which, as a result of the wrong, they did get.

In Hapag-Lloyd v Skyros Maritime Corp (The Skyros and The Agios Minas),2 the shipowners sought damages from two time-charterers, which had redelivered two vessels late, reflecting the difference between the charter rate and market rate for the periods of overrun. The critical issue was whether they were entitled to substantial damages even though, had the vessels been redelivered on time, the owners would not have earned any hire, as they had already agreed to sell the ships to third parties.

The arbitral tribunals said “yes”. On appeal, Bright J said “no” and set the awards aside, but he also granted permission to appeal to the Court of Appeal. Although the respondent shipowners defended the arbitrators’ reasons on a number of other bases, such as user damages and quantum meruit, the judge treated this as a case of delayed delivery3 and held that the owners were not entitled to substantial damages, because they were “no worse off because of Charterers’ breach”.4 Whether he was right to do so is a question of public importance on which the Court of Appeal is unlikely to have the last word.