Maestro Bulk Ltd v Cosco Bulk Carrier Co Ltd

Maestro Bulk Ltd v Cosco Bulk Carrier Co Ltd

The correct measure of damages for breach of redelivery notice provisions is the hire payable for the period between actual redelivery and the earliest date when proper notice would have expired, less any earnings in mitigation. Claims for loss of a hypothetical follow-on fixture extending beyond the notice period are too remote, unquantifiable, and not within the reasonable contemplation of the parties. The arbitrators erred in awarding damages based on a lost notional voyage; the award is varied to reflect only the hire lost during the missing notice period.

Parties
Claimant (charterers): Maestro Bulk Ltd; Defendant (owners): Cosco Bulk Carrier Co Ltd
Jurisdiction
England and Wales
Judgment Date
15 December 2014
Procedural Posture
Arbitration Appeal / Judgment on Appeal From Final Arbitration Award
Outcome
Appeal allowed in part; arbitration award varied
Legal Topics
Damages for Breach of Charterparty, Notice of Redelivery, Measure of Damages, Remoteness of Damages, Mitigation of Loss
Commercial Law Maritime Law Arbitration Damages for Breach of Charterparty Notice of Redelivery Measure of Damages Remoteness of Damages Mitigation of Loss

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Parties

Maestro Bulk Ltd

Claimant (charterers)

Cosco Bulk Carrier Co Ltd

Defendant (owners)

Procedural Posture

Arbitration Appeal / Judgment on Appeal From Final Arbitration Award

Legal Issues

  1. 1 What is the correct approach to damages when redelivery takes place with insufficient notice under a time charter party?
  2. 2 How should damages be measured for breach of redelivery notice provisions?
  3. 3 Does the loss claimed fall within the reasonable contemplation of the parties (remoteness)?

Ratio Decidendi

The correct measure of damages for breach of redelivery notice provisions is the hire payable for the period between actual redelivery and the earliest date when proper notice would have expired, less any earnings in mitigation. Claims for loss of a hypothetical follow-on fixture extending beyond the notice period are too remote, unquantifiable, and not within the reasonable contemplation of the parties. The arbitrators erred in awarding damages based on a lost notional voyage; the award is varied to reflect only the hire lost during the missing notice period.

Court Disposition

Appeal allowed in part; arbitration award varied

Orders

  • Damages for failure to serve contractual notices set at $216,450 (12 days x $18,037.50 net hire) instead of $306,639.58.
  • Final sum due to owners adjusted to $23,704.49 after set-off of claims and credits.