Classic Maritime Inc. v Limbungan Makmur SDN BHD & Anor

Classic Maritime Inc. v Limbungan Makmur SDN BHD & Anor

Limbungan cannot rely on clause 32 to excuse its failure to supply cargoes for the five shipments because, on the balance of probabilities, it would not have performed its obligations even without the dam burst; the 'but for' test applies to exceptions clauses. However, Classic is not entitled to substantial damages because, applying the compensatory principle, it would not have earned freight even if Limbungan had been able and willing to perform, as the dam burst would have prevented shipment.

Parties
Claimant: Classic Maritime Inc.; Defendant: Limbungan Makmur SDN BHD; Defendant: Lion Diversified Holdings BHD
Jurisdiction
England and Wales
Judgment Date
13 September 2018
Procedural Posture
Commercial Contract Dispute / Final Judgment
Outcome
Claim for substantial damages in respect of five shipments dismissed; Classic not entitled to substantial damages for those shipments.
Legal Topics
Force Majeure, Damages, Charterparty, Exceptions Clause, Causation
Contract Law Shipping Law Force Majeure Damages Charterparty Exceptions Clause Causation

Case Brief

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Parties

Classic Maritime Inc.

Claimant

Limbungan Makmur SDN BHD

Defendant

Lion Diversified Holdings BHD

Defendant

Procedural Posture

Commercial Contract Dispute / Final Judgment

Legal Issues

  1. 1 Whether Limbungan can rely on clause 32 (force majeure/exceptions clause) to excuse failure to supply cargoes after the dam burst
  2. 2 Whether the 'but for' causation test applies to clause 32
  3. 3 Whether Limbungan took reasonable steps to obtain cargo from Vale after the dam burst

Ratio Decidendi

Limbungan cannot rely on clause 32 to excuse its failure to supply cargoes for the five shipments because, on the balance of probabilities, it would not have performed its obligations even without the dam burst; the 'but for' test applies to exceptions clauses. However, Classic is not entitled to substantial damages because, applying the compensatory principle, it would not have earned freight even if Limbungan had been able and willing to perform, as the dam burst would have prevented shipment.

Court Disposition

Claim for substantial damages in respect of five shipments dismissed; Classic not entitled to substantial damages for those shipments.

Orders

  • Parties invited to agree damages recoverable in respect of two missed shipments before the dam burst, based on the court's resolution of quantum issues.