Mixing apples and pears

The early redelivery of a vessel named New Flamenco has triggered a question about mitigation of damages which has been batted about in the English legal system for some time.

The background was as follows: The charterparty for the vessel should have come to an end in 2009, but the charterers redelivered the vessel prematurely in 2007. As a consequence, owners submitted a claim for damages for two years’ lost hire income. However, it transpired owners sold the vessel after the redelivery in 2007 for USD 28 million. Had they sold the vessel in 2009 they would only have received about USD 7 million due to the falling second hand market. Charterers therefore argued that the early redelivery in 2007 created a profit that should be set off against owners’ claim for lost income. Read the full article on page 31 in Triton 2-2017

Click here for more legal articles in the Legal Corner section»