Hapag-Lloyd AG v. Skyros Maritime Corporation and Agios Minas Shipping Company [2024] EWHC 3139 (Comm)
Damages for redelivery might not always be as expected. In this recent judgment, the Commercial Court determined that the owners were not entitled to the usual measure of damages for the late redelivery of two vessels under time charterparties.
The vessels, Skyros and Agios Minas, were sold to third-party buyers under memoranda of agreements (MOAs) that prohibited the owners from chartering them again post-redelivery. As a result, even though the charterers were late redelivering the vessels (by two and seven days, respectively), the court ruled that the owners were only entitled to nominal damages instead of the expected market-based damages.
The tribunal initially found that the owners could recover substantial damages, but the charterers appealed. The court held that the owners could not claim for lost earnings since the MOAs precluded any further chartering opportunities, meaning no actual loss was incurred. The court emphasised that the assessment should focus on whether the owners lost the opportunity to earn hire, which they did not due to the MOAs.
This ruling, whilst reinforcing the basic measure of damages for late redelivery as the difference between the charter and the market rate for the period of delay, also reminds us that owners can only recover damages if they have genuinely lost the opportunity to earn hire due to the charterers’ breach.
The decision is fact-specific, so it may not be taken as a hard and fast principle but is a salient reminder of some key issues. The court granted permission to appeal on related issues, indicating the potential for further legal scrutiny. Watch this space…
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