SK Shipping Europe Ltd v Capital VLCC 3 Corp [2022] EWCA Civ 231 (25 February 2022)

SK Shipping Europe Ltd v Capital VLCC 3 Corp [2022] EWCA Civ 231 (25 February 2022)

The appeal was dismissed because the Charterer failed to prove that the negligent misrepresentations induced it to enter into the charterparty on the same terms; the Charterer affirmed the contract by its conduct after knowledge of the misrepresentation; and in any event, the court would have exercised its discretion under section 2(2) of the Misrepresentation Act 1967 to declare the contract subsisting and award damages in lieu of rescission.

Citation
[2022] EWCA Civ 231
Parties
Respondent/claimant: SK Shipping Europe Limited; Appellant/defendant: Capital VLCC 3 Corp; Appellant/defendant: Capital Maritime and Trading Corp
Jurisdiction
England and Wales
Judgment Date
25 February 2022
Procedural Posture
Appeal (civil) / Court of Appeal Judgment on Appeal From High Court (commercial Court)
Outcome
Appeal dismissed
Legal Topics
Misrepresentation, Charterparty, Affirmation, Rescission, Damages, Inducement, Performance Warranties
Commercial Law Contract Law Maritime Law Misrepresentation Charterparty Affirmation Rescission Damages +2 more

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Parties

SK Shipping Europe Limited

Respondent/claimant

Capital VLCC 3 Corp

Appellant/defendant

Capital Maritime and Trading Corp

Appellant/defendant

Procedural Posture

Appeal (civil) / Court of Appeal Judgment on Appeal From High Court (commercial Court)

Legal Issues

  1. 1 Whether negligent misrepresentations by the Owner induced the Charterer to enter into the charterparty
  2. 2 Whether the Charterer affirmed the contract after knowledge of the misrepresentation
  3. 3 Whether the Charterer was entitled to rescind the charterparty

Ratio Decidendi

The appeal was dismissed because the Charterer failed to prove that the negligent misrepresentations induced it to enter into the charterparty on the same terms; the Charterer affirmed the contract by its conduct after knowledge of the misrepresentation; and in any event, the court would have exercised its discretion under section 2(2) of the Misrepresentation Act 1967 to declare the contract subsisting and award damages in lieu of rescission.

Court Disposition

Appeal dismissed

Orders

  • The appeal is dismissed; the Charterer is not entitled to rescind the charterparty; the Owner is entitled to damages for repudiation; damages in lieu of rescission would be calculated by reference to a reduction in hire of US $500 per day if applicable.