Golden Strait Corporation v Nippon Yusen Kubishka Kaisha
Encyclopedia
Golden Strait Corporation v Nippon Yusen Kubishka Kaisha [2007] UKHL 12 is an English contract law
case, concerning the measure of damages for breach of contract.
from 10 July 1998. The earliest contractual date for termination was 6 December 2005. The only exception (in clause 33 of the charterparty) for cancellation was if war broke out between Iraq, the United States, the United Kingdom and a number of others. Nippon, nevertheless repudiated the charter on 14 December 2001, redelivering the ship to Golden. Golden accepted this three days after.
They took the case to an arbitrator to consider how much Nippon should pay in damages. By that time, America had started the Iraq War, in March 2003. This was just the event that would have allowed Nippon to cancel the charter, if stayed with it.
The arbitrator, Mr Robert Gaisford, reluctantly decided that the outbreak of war had created a limit on the payable damages. Nippon was liable for no damages after 21 March 2003. Golden appealed, the question being, in what circumstances could a party in breach rely on subsequent events to show that the contractual rights lost were not valuable?
Golden argued that where there was an available market, the loss should be measured at the date of acceptance. It said that this created finality in contractual negotiations, and certainty because events subsequent to the date of acceptance of a contract would become irrelevant.
The majority held that because the outbreak of war occurred before the damages fell to assessed, they could be taken into account. The most important thing was an accurate assessment of damages based on the loss actually incurred, which goes to the root of the compensatory principles that a victim of breach of contract will be compensated for the loss of his bargain. The victim should be placed in the position as if the contract were performed. The court should not ignore facts that were available. Golden was trying to argue for compensation exceeding the value of what it had lost.
Lord Bingham, dissenting, would have held that damages should be assessed on the date of the breach. That should have meant Golden got damages for four years left on the charterparty. He emphasised the importance of certainty and predictability in English commercial law and said this decision would hurt it.
Lord Walker dissented with Lord Bingham.
In tort
English contract law
English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...
case, concerning the measure of damages for breach of contract.
Facts
Golden Strait Corp chartered a ship to Nippon Yusen Kubishka KaishaNippon Yusen
Japan-based or NYK Line, is one of the largest shipping companies in the world. It is a core Mitsubishi company. The company has its headquarters in Chiyoda, Tokyo.-1870-1900:...
from 10 July 1998. The earliest contractual date for termination was 6 December 2005. The only exception (in clause 33 of the charterparty) for cancellation was if war broke out between Iraq, the United States, the United Kingdom and a number of others. Nippon, nevertheless repudiated the charter on 14 December 2001, redelivering the ship to Golden. Golden accepted this three days after.
They took the case to an arbitrator to consider how much Nippon should pay in damages. By that time, America had started the Iraq War, in March 2003. This was just the event that would have allowed Nippon to cancel the charter, if stayed with it.
The arbitrator, Mr Robert Gaisford, reluctantly decided that the outbreak of war had created a limit on the payable damages. Nippon was liable for no damages after 21 March 2003. Golden appealed, the question being, in what circumstances could a party in breach rely on subsequent events to show that the contractual rights lost were not valuable?
Golden argued that where there was an available market, the loss should be measured at the date of acceptance. It said that this created finality in contractual negotiations, and certainty because events subsequent to the date of acceptance of a contract would become irrelevant.
Judgment
Three members of the House of Lords upheld the decision of the Court of Appeal, while Lord Bingham and Lord Walker dissented.The majority held that because the outbreak of war occurred before the damages fell to assessed, they could be taken into account. The most important thing was an accurate assessment of damages based on the loss actually incurred, which goes to the root of the compensatory principles that a victim of breach of contract will be compensated for the loss of his bargain. The victim should be placed in the position as if the contract were performed. The court should not ignore facts that were available. Golden was trying to argue for compensation exceeding the value of what it had lost.
Lord Bingham, dissenting, would have held that damages should be assessed on the date of the breach. That should have meant Golden got damages for four years left on the charterparty. He emphasised the importance of certainty and predictability in English commercial law and said this decision would hurt it.
Lord Walker dissented with Lord Bingham.
See also
In contract- Bwllfa and Merthyr Dare Steam Collieries (1891) Ltd v Pontypridd Waterworks Co [1903] AC 426
- Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha [1962] 2 QB 26
- Maredelanto Compania Naviera SA v Bergbau-Handel GmbHMaredelanto Compania Naviera SA v Bergbau-Handel GmbHMaredelanto Compania Naviera SA v Bergbau-Handel GmbH or The Mihalis Angelos [1970] is an English contract law case, concerning breach of contract.-Facts:...
[1971] 1 QB 164 - Bunge Corporation v Tradax SABunge Corporation v Tradax SABunge Corporation v Tradax Export SA [1981] is an English contract law case, concerning the right to terminate performance of a contract.-Facts:...
[1981] 2 All ER 513 - L Schuler AG v Wickman Machine Tool Sales LtdL Schuler AG v Wickman Machine Tool Sales LtdL Schuler AG v Wickman Machine Tool Sales Ltd [1973] is an English contract law case, concerning the right to terminate performance of a contract.-Facts:...
[1974] AC 235 - Rice (t/a Garden Guardian) v Great Yarmouth Borough Council (26 July 2000) The Times
- BS&N Ltd v Micado Shipping Ltd (The Seaflower (No 2) [2000] 2 All ER (Comm) 169
In tort
- Baker v Willoughby [1969] 3 All ER 1528
- Jobling v Associated Dairies Ltd [1981] 2 All ER 752
External links
- Another case between the parties in the High Court, decided by Morison J