Lansat Shipping Co Ltd v Glencore Grain BV [2009] EWCA Civ 855 (31 July 2009)

Lansat Shipping Co Ltd v Glencore Grain BV [2009] EWCA Civ 855 (31 July 2009)

Clause 101 is unenforceable as a penalty because it stipulates payment of an amount that is unconscionable and extravagant compared to the actual loss suffered by the owners, and its predominant purpose is to deter breach rather than compensate for actual loss. The proper measure of damages remains the market rate...

Source-derived case information.

Citation
[2009] EWCA Civ 855
Parties
Claimant/appellant: Lansat Shipping Co Limited; Defendant/respondent: Glencore Grain B.V.
Jurisdiction
England and Wales
Judgment Date
31 July 2009
Procedural Posture
Appeal From High Court (commercial Court) / Judgment on Appeal
Outcome
Appeal dismissed
Legal Topics
Penalty Clauses, Charterparty, Damages for Late Redelivery, Liquidated Damages, Breach of Contract
Commercial Law Maritime Law Contract Law Penalty Clauses Charterparty Damages for Late Redelivery Liquidated Damages Breach of Contract

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Parties

Lansat Shipping Co Limited

Claimant/appellant

Glencore Grain B.V.

Defendant/respondent

Procedural Posture

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

Legal Issues

  1. 1 Whether clause 101 of the charterparty is an unenforceable penalty clause
  2. 2 Proper measure of damages for late redelivery under a time charter
  3. 3 Whether an illegitimate last voyage entitles owners to market rate hire for a period prior to actual late redelivery

Ratio Decidendi

Clause 101 is unenforceable as a penalty because it stipulates payment of an amount that is unconscionable and extravagant compared to the actual loss suffered by the owners, and its predominant purpose is to deter breach rather than compensate for actual loss. The proper measure of damages remains the market rate for the period of late redelivery.

Court Disposition

Appeal dismissed

Orders

  • Owners' appeal dismissed
  • Owners to pay charterers' costs, subject to submissions