MSC Mediterranean Shipping Company SA v Cottonex Anstalt

MSC Mediterranean Shipping Company SA v Cottonex Anstalt

Demurrage was payable up to 1 February 2012, after which the commercial purpose of the contract was frustrated due to the shipper's continuing breach and inability to redeliver the containers. From 2 February 2012, the contract was at an end and the carrier was entitled to damages for the loss of the containers, assessed at their replacement value. The carrier could not claim demurrage indefinitely as it had no legitimate interest in affirming the contract beyond that date.

Parties
Claimant/appellant: MSC Mediterranean Shipping Company S.A.; Defendant/respondent: Cottonex Anstalt
Jurisdiction
England and Wales
Judgment Date
27 July 2016
Procedural Posture
Civil Appeal / Appeal From High Court Judgment
Outcome
Appeal allowed in part; judgment below varied.
Legal Topics
Demurrage, Repudiatory Breach, Frustration of Contract, Liquidated Damages, Penalty Clauses, Mitigation of Loss
Contract Law Shipping Law Commercial Law Demurrage Repudiatory Breach Frustration of Contract Liquidated Damages Penalty Clauses +1 more

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Parties

MSC Mediterranean Shipping Company S.A.

Claimant/appellant

Cottonex Anstalt

Defendant/respondent

Procedural Posture

Civil Appeal / Appeal From High Court Judgment

Legal Issues

  1. 1 Whether demurrage became payable under the bills of lading.
  2. 2 Whether the shipper's inability to redeliver the containers amounted to a repudiatory breach and/or frustration of the contract.
  3. 3 Whether the carrier was entitled to affirm the contract and claim demurrage indefinitely.

Ratio Decidendi

Demurrage was payable up to 1 February 2012, after which the commercial purpose of the contract was frustrated due to the shipper's continuing breach and inability to redeliver the containers. From 2 February 2012, the contract was at an end and the carrier was entitled to damages for the loss of the containers, assessed at their replacement value. The carrier could not claim demurrage indefinitely as it had no legitimate interest in affirming the contract beyond that date.

Court Disposition

Appeal allowed in part; judgment below varied.

Orders

  • Carrier entitled to recover demurrage up to and including 1 February 2012.
  • Carrier entitled to damages for loss of containers calculated at US$3,262 per container as at 2 February 2012.