Fulton Shipping Inc of Panama v Globalia Business Travel S.A.U. (Formerly Travelplan S.A.U.)

Parties

Procedural Posture

Civil Appeal (contract/commercial) / Appeal From High Court to Court of Appeal

Legal Issues

1. 1 Whether the benefit from the sale of a vessel following early redelivery under a time charterparty should be brought into account in assessing damages for breach of contract
2. 2 Whether the difference in value between the sale price at early redelivery and the value at the contractual end date constitutes a benefit arising from mitigation

Ratio Decidendi

Where a vessel is sold following early redelivery under a time charterparty, and the sale arises out of the consequences of the breach in the ordinary course of business and by way of mitigation of loss, the benefit of the difference between the sale price and the value at the contractual end date must be brought into account in assessing damages. The arbitrator’s finding that the sale was caused by the breach and was in reasonable mitigation was sufficient; the benefit was not independent or collateral, and there is no requirement that the benefit be of the same kind as the loss. The judge’s more restrictive approach was wrong in law.

Court Disposition

Appeal allowed. Arbitrator's award restored.

Orders

• The benefit arising from the sale of the vessel in mitigation is to be brought into account in assessing damages.
• The question of law is answered: Yes, provided the acquisition of the benefit arose out of the consequences of the breach in the ordinary course of business and by way of mitigation of the claimant’s loss.