Lansat Shipping Co Ltd v Glencore Grain BV

Lansat Shipping Co Ltd v Glencore Grain BV

Clause 101 of the charterparty is a penalty and unenforceable because it provides for payment far in excess of the actual loss suffered by the owners, is not a genuine pre-estimate of damages, and its predominant purpose is to deter breach rather than compensate for loss. The owners are only entitled to damages at the market rate for the period of overrun.

Parties
Claimant/appellant: Lansat Shipping Co Limited; Defendant/respondent: Glencore Grain B.V.
Jurisdiction
England and Wales
Judgment Date
31 July 2009
Procedural Posture
Civil Appeal (commercial) / Appeal From High Court (commercial Court) to Court of Appeal
Outcome
appeal dismissed
Legal Topics
Penalty Clauses, Charterparty, Damages for Late Redelivery, Liquidated Damages, Breach of Contract
Contract Law Maritime Law Commercial Law Penalty Clauses Charterparty Damages for Late Redelivery Liquidated Damages Breach of Contract

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Parties

Lansat Shipping Co Limited

Claimant/appellant

Glencore Grain B.V.

Defendant/respondent

Procedural Posture

Civil Appeal (commercial) / Appeal From High Court (commercial Court) to Court of Appeal

Legal Issues

  1. 1 Whether clause 101 of the charterparty is an unenforceable penalty clause
  2. 2 Whether the owners are entitled to enhanced hire under clause 101 for late redelivery
  3. 3 Proper measure of damages for late redelivery under a time charter

Ratio Decidendi

Clause 101 of the charterparty is a penalty and unenforceable because it provides for payment far in excess of the actual loss suffered by the owners, is not a genuine pre-estimate of damages, and its predominant purpose is to deter breach rather than compensate for loss. The owners are only entitled to damages at the market rate for the period of overrun.

Court Disposition

appeal dismissed

Orders

  • Owners' appeal dismissed
  • Owners to pay charterers' costs, subject to further submissions