Stocznia Gdynia SA v Gearbulk Holdings Ltd [2009] EWCA Civ 75 (13 February 2009)

Stocznia Gdynia SA v Gearbulk Holdings Ltd [2009] EWCA Civ 75 (13 February 2009)

Article 10 of the contract does not exclude Gearbulk's right to recover damages at common law for loss of bargain following repudiatory breach by the Yard. Exercising the contractual right of termination and recovering under the refund guarantee does not constitute affirmation of the contract or preclude a claim for damages. The contract's termination provisions and common law rights to damages for repudiation are not mutually exclusive unless expressly stated.

Citation
[2009] EWCA Civ 75
Parties
Claimant/respondent: Stocznia Gdynia S. A.; Defendant/appellant: Gearbulk Holdings Ltd
Jurisdiction
England and Wales
Judgment Date
13 February 2009
Procedural Posture
Appeal From Arbitration Award (commercial Court, Queen's Bench Division) / Court of Appeal Judgment
Outcome
Appeal allowed; judgment of Burton J. set aside; arbitrator's award restored in favour of Gearbulk.
Legal Topics
Repudiatory Breach, Termination of Contract, Damages for Loss of Bargain, Construction of Exclusion Clauses, Election Between Remedies
Contract Law Commercial Law Arbitration Repudiatory Breach Termination of Contract Damages for Loss of Bargain Construction of Exclusion Clauses Election Between Remedies

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Parties

Stocznia Gdynia S. A.

Claimant/respondent

Gearbulk Holdings Ltd

Defendant/appellant

Procedural Posture

Appeal From Arbitration Award (commercial Court, Queen's Bench Division) / Court of Appeal Judgment

Legal Issues

  1. 1 Whether Article 10 of the contract excludes common law rights of termination and damages for repudiatory breach
  2. 2 Whether exercising contractual termination precludes a claim for damages at common law
  3. 3 Whether recovery under a refund guarantee constitutes affirmation of the contract

Ratio Decidendi

Article 10 of the contract does not exclude Gearbulk's right to recover damages at common law for loss of bargain following repudiatory breach by the Yard. Exercising the contractual right of termination and recovering under the refund guarantee does not constitute affirmation of the contract or preclude a claim for damages. The contract's termination provisions and common law rights to damages for repudiation are not mutually exclusive unless expressly stated.

Court Disposition

Appeal allowed; judgment of Burton J. set aside; arbitrator's award restored in favour of Gearbulk.

Orders

  • Set aside the High Court judgment precluding Gearbulk from claiming damages at common law.
  • Restore the arbitrator's award in favour of Gearbulk.