上议院判决：长期租约的毁约
SHIPPING — Charterparty — Repudiation — Long-term charterparty containing war clause — Charterers’ repudiation — War then merely a possibility — Subsequently breaking out during charter period — Whether damages recoverable by owners to be assessed as at date of repudiation or as at date of assessment taking break-out into account
SHIPS’ NAMES — Golden Victory
Golden Strait Corpn v Nippon Yusen Kubishika Kaisha [2007] UKHL 12
HL(E): Lord Bingham of Cornhill, Lord Scott of Foscote, Lord Walker of Gestingthorpe, Lord Carswell and Lord Brown of Eaton-under-Heywood: 28 March 2007
Where by the time of the assessment of damages for wrongful repudiation of a charterparty an event that would have brought it to an end in any event had occurred, the arbitrator had been entitled to reflect that fact in the damages awarded.
The House of Lords so held in dismissing by a majority the appeal of the shipowners, Golden Strait Corpn, from the Court of Appeal (Auld, Tuckey LJJ and Lord Mance) [2006] 1 WLR 533, who had dismissed their appeal from Langley J [2005] 1 Lloyd’s Rep 443. Langley J had dismissed their appeal from the decision of an arbitrator (Mr Robert Gaisford) in favour of the charterers, Nippon Yusen Kubishika Kaisha.
LORD SCOTT OF FOSCOTE said that by a charterparty of 10 July 1998 the owners had chartered the Golden Victory to the charterers for a period ending on 6 December 2005. Clause 33 had enabled either party to terminate in the case of war between, inter alios, the USA, the UK and Iraq. Repudiation of the charter by the charterers in breach of contract on 14 December 2001 had been accepted by the owners on 17 December. They had claimed damages. War within clause 33 had broken out in March 2003, before the quantum of damages had been assessed. The charterers said that, as was now common ground, they would then in any event have exercised their right under clause 33 to terminate the charter and that, accordingly, damages fell to be assessed by reference to the period from 17 December 2001 to March 2003. The owners said that damages should be assessed by reference to the value of their rights as at 17 December 2001; assessment could take account of the chance, assessed as at that date, that war might occur, but should not take account of its actual occurrence. The answer to the question depended on contractual principles. The owners’ contention attributed to the breach date rule an inflexibility inconsistent with principle and authority. The victim of a breach of contract was entitled to damages representing the value of the contractual benefit of which he had been deprived, but no more. The owners’ arguments required the arbitrator to speculate regarding the occurrence of a clause 33 event and shut his eyes to its actual happening. Their justification for thus offending the compensatory principle was the so-called principle of certainty, but there was no such principle. Certainty was an important desideratum, but it had to give way to principle. The appeal should be dismissed.
LORD BINGHAM, dissenting, said that the existing decision undermined the quality of certainty that was a traditional strength and major selling point of English commercial law and involved an unfortunate departure from principle. He would have allowed the appeal.
LORD WALKER also delivered an opinion in favour of allowing the appeal.
LORD CARSWELL and LORD BROWN delivered opinions in favour of dismissing the appeal.
Appearances: Nicholas Hamblen QC and David Allen (Reed Smith Richards Butler LLP) for the owners; Timothy Young QC and Henry Byam-Cook (MFB) for the charterers.
Reported by: Michael Gardner, barrister
