Zhoushan Jinhaiwan Shipyard Co Ltd v Golden Exquisite Inc

Zhoushan Jinhaiwan Shipyard Co Ltd v Golden Exquisite Inc

Delays caused by the Buyer's breaches of Article IV are non-permissible delays under the contract, not excluded or permissible delays. The Buyer was entitled to cancel the contract and recover instalments, with interest, as the delays exceeded the contractual thresholds and the Yard failed to give the required...

Source-derived case information.

Parties
Claimant: Zhoushan Jinhaiwan Shipyard Co. Ltd; Defendant: Golden Exquisite Inc; Defendant: Golden Eye Inc; Defendant: DNB Bank ASA; Defendant: Golden Extreme Inc.; Defendant: Golden Effort Inc.
Jurisdiction
England and Wales
Judgment Date
05 December 2014
Procedural Posture
Commercial Arbitration Appeal / Judgment on Appeal From Arbitration Awards
Outcome
Yard's appeal dismissed; Buyers' appeal allowed in part; awards varied and remitted for calculation of interest.
Legal Topics
Interpretation of Shipbuilding Contracts, Right to Cancel for Delay, Set Off in Arbitration, Notice Requirements for Delay, Breach of Contract Consequences
Contract Law Commercial Law Arbitration Interpretation of Shipbuilding Contracts Right to Cancel for Delay Set Off in Arbitration Notice Requirements for Delay Breach of Contract Consequences

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Summary, issues, holding and outcome

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Parties

Zhoushan Jinhaiwan Shipyard Co. Ltd

Claimant

Golden Exquisite Inc

Defendant

Golden Eye Inc

Defendant

DNB Bank ASA

Defendant

Golden Extreme Inc.

Defendant

Golden Effort Inc.

Defendant

Procedural Posture

Commercial Arbitration Appeal / Judgment on Appeal From Arbitration Awards

Legal Issues

  1. 1 Whether delays caused by Buyer's breach are 'permissible' or 'non-permissible' delays under the contract
  2. 2 Whether the Buyer was entitled to cancel the contract and recover instalments
  3. 3 Whether the Yard was entitled to set-off damages against sums repayable

Ratio Decidendi

Delays caused by the Buyer's breaches of Article IV are non-permissible delays under the contract, not excluded or permissible delays. The Buyer was entitled to cancel the contract and recover instalments, with interest, as the delays exceeded the contractual thresholds and the Yard failed to give the required notice. The Yard's claim for equitable set-off fails as the counterclaim is not so closely connected as to make enforcement manifestly unjust, and the contract does not exclude set-off rights.

Court Disposition

Yard's appeal dismissed; Buyers' appeal allowed in part; awards varied and remitted for calculation of interest.

Orders

  • Final Awards in relation to Hulls J0051 and J0052 varied to allow Buyers' claim for interest; awards remitted to tribunal for calculation of interest.
  • Yard's appeal in relation to Hulls J0119 and J0120 dismissed; tribunal's awards confirmed.