Assessment of damages for breach of contract of affreightment
It is a fundamental principle of English law that when assessing damages for breach of contract, any damages awarded should compensate the innocent party for the loss of its contractual bargain. In other words, the innocent party should be put in the same position that it would have enjoyed had the contract been performed.
In Flame SA v Glory Wealth Shipping Ltd  EWHC 3153 (Comm), the Commercial Court has now clarified that, when assessing damages for repudiatory breach of contract, it is necessary for the innocent party to prove its damages by showing that had the other party performed its obligations the innocent party would have been able and willing to perform its side of the bargain. An innocent party, who at the time of the repudiatory breach would have been unable to perform its side of the bargain, and therefore would have been unable to earn the contract price, is not entitled to be placed in a better position by an award of damages than it would have been in if the contract had not been repudiated.
The parties agreed, under a contract of affreightment (COA), that the owners would carry cargoes of coal between 2009 and 2011. The charterers failed to provide laycans for some of the shipments and the owners accepted the breach as a repudiatory breach, terminated the COA and sought damages from the charterers in arbitration proceedings…
If you are registered and logged in to the site, click on the link below to read the rest of the Ince & Co briefing. If not, please register or sign in with your details below.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from Ince & Co
News from The Lawyer
Briefings from Ince & Co
The Court of Appeal has confirmed the meaning of the expression “in-transit loss” in a voyage charter party in the Trafigura Beheer case.
A recent Commercial Court decision considered the position when a contract provides for the law of one jurisdiction to be applicable, but for the arbitration to take place outside that jurisdiction.