Priyanka Shipping Ltd v Glory Bulk Carriers PTE Limited [2019] EWHC 2804 (Comm) (28 October 2019)

Priyanka Shipping Ltd v Glory Bulk Carriers PTE Limited [2019] EWHC 2804 (Comm) (28 October 2019)

The court held that clause 19 was a clear negative covenant restricting the Buyer's use of the vessel to demolition only. Under established English law, such covenants are ordinarily enforced by injunction unless the defendant can show exceptional circumstances. The Buyer failed to demonstrate that an injunction...

Source-derived case information.

Citation
[2019] EWHC 2804 (Comm)
Parties
Claimant: Priyanka Shipping Limited; Defendant: Glory Bulk Carriers Pte Limited
Jurisdiction
England and Wales
Judgment Date
28 October 2019
Procedural Posture
Commercial Court Trial (qbd) / Post Trial Judgment on Injunction and Damages Counterclaims
Outcome
Final injunction granted; Seller entitled only to nominal damages for past breaches; no substantial or negotiating damages awarded.
Legal Topics
Negative Covenants, Injunctions, Damages for Breach of Contract, Negotiating Damages, Adequacy of Damages, Sale of Ships for Demolition, Exclusive Jurisdiction Clauses
Contract Law Commercial Law Equity Negative Covenants Injunctions Damages for Breach of Contract Negotiating Damages Adequacy of Damages +2 more

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Parties

Priyanka Shipping Limited

Claimant

Glory Bulk Carriers Pte Limited

Defendant

Procedural Posture

Commercial Court Trial (qbd) / Post Trial Judgment on Injunction and Damages Counterclaims

Legal Issues

  1. 1 Whether a final injunction should be granted to enforce a negative covenant restricting trading of a vessel sold for demolition only
  2. 2 Whether the seller is entitled to substantial or only nominal damages for breach of the negative covenant
  3. 3 Whether negotiating damages or damages in lieu of injunction are available in the circumstances

Ratio Decidendi

The court held that clause 19 was a clear negative covenant restricting the Buyer's use of the vessel to demolition only. Under established English law, such covenants are ordinarily enforced by injunction unless the defendant can show exceptional circumstances. The Buyer failed to demonstrate that an injunction would be unconscionable or oppressive, or that damages would be an adequate remedy. The Seller was therefore entitled to a final injunction restraining further trading of the vessel. As to damages, the Seller was not entitled to negotiating damages or substantial damages at common law, as the right breached was personal and not proprietary, and the Seller had not suffered...

Court Disposition

Final injunction granted; Seller entitled only to nominal damages for past breaches; no substantial or negotiating damages awarded.

Orders

  • Buyer restrained by final injunction from trading the vessel in breach of clause 19 of the MOA.
  • Declaration that Seller is entitled only to nominal damages for past breaches of clause 19.