Parbulk AS v Kristen Marine SA & Anor

Parbulk AS v Kristen Marine SA & Anor

Clause 14 of the MoA entitles the Claimant to recover swap breakage costs as 'breakage cost with the Buyers’ lenders' or, alternatively, as 'proven expenses,' as these costs were foreseeable, not too remote, and not unreasonably incurred given the contractual requirement to hedge interest rate exposure. The clause is not a true indemnity, so remoteness and reasonableness are relevant, but on the facts, the Defendants had sufficient notice of the financing arrangements and the associated risks. Judgment is entered for the Claimant on liability, with quantum to be assessed.

Parties
Claimant: Parbulk AS; First Defendant: Kristen Marine SA; Second Defendant: Aurele Trading Inc
Jurisdiction
England and Wales
Judgment Date
29 April 2010
Procedural Posture
Commercial Summary Judgment Application / Judgment on Summary Judgment Application
Outcome
Judgment for the Claimant on liability; quantum to be assessed.
Legal Topics
Summary Judgment, Damages for Breach of Contract, Interpretation of Indemnity Clauses, Breakage Costs, Remoteness of Damages, Sale and Leaseback Transactions
Commercial Law Contract Law Shipping Law Summary Judgment Damages for Breach of Contract Interpretation of Indemnity Clauses Breakage Costs Remoteness of Damages +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 6 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

Parbulk AS

Claimant

Kristen Marine SA

First Defendant

Aurele Trading Inc

Second Defendant

Procedural Posture

Commercial Summary Judgment Application / Judgment on Summary Judgment Application

Legal Issues

  1. 1 Whether swap breakage costs are recoverable as 'proven expenses' or 'breakage cost with the Buyers’ lenders' under Clause 14 of the MoA
  2. 2 Whether the claimed expenses were too remote or unreasonably incurred
  3. 3 Proper construction of Clause 14 of the MoA regarding remedies upon cancellation

Ratio Decidendi

Clause 14 of the MoA entitles the Claimant to recover swap breakage costs as 'breakage cost with the Buyers’ lenders' or, alternatively, as 'proven expenses,' as these costs were foreseeable, not too remote, and not unreasonably incurred given the contractual requirement to hedge interest rate exposure. The clause is not a true indemnity, so remoteness and reasonableness are relevant, but on the facts, the Defendants had sufficient notice of the financing arrangements and the associated risks. Judgment is entered for the Claimant on liability, with quantum to be assessed.

Court Disposition

Judgment for the Claimant on liability; quantum to be assessed.

Orders

  • Payment to the Claimant of US$ 14,335,647 for swap breakage costs (subject to final quantum determination)
  • Payment to the Claimant of US$ 721,312 for out-of-pocket expenses (subject to final quantum determination)