152. Mareva Navigation Co Ltd v Canaria Armadora S.A. (The “Mareva A.S.”) [1977] 1 Lloyd’s Rep 368

Redelivery – reasonable overrun not attracting damages

The facts

The vessel was let on the NYPE form for the duration of five months, twenty days more or less in charterers’ option,  later extended “for a further period of two months minimum, three months maximum in direct continuation from the end of the full period of five months and twenty days.”

Pursuant to a sub-charter the vessel was ordered to load a cargo of wheat in bulk and to proceed to Algiers.

Due to unseaworthiness there was a delay of 15 days in Algeria and a further delay of three days because of slow steaming.

Because of the delay, the charterers were unable to fix the vessel for another profitable voyage to be completed within the term of the charter.

The owners requested the charterers to confirm that the vessel would be ordered to return in ballast to a port within the redelivery range with the charterers claiming to be entitled to use the vessel for a loaded voyage.

Upon the owners instructing the master that he was not to perform such a voyage, the charterers cancelled.

The unseaworthiness of the vessel related to faulty hatch covers causing  wetting.

Taking into account the delay for which the owners accepted responsibility, the vessel was redelivered five days late.

The owners claimed damages for late redelivery while the charterers claimed damages for the loss of a profitable fixture which could not take place because of the delay caused by the owners.

Two London arbitrators, Mr CAL Clark and Mr D Davies were appointed as arbitrators. They in turn appointed Mr JP Powell as umpire.

The arbitrators stated a special case for the Commercial Court.

Findings

Basing his decision on the London Explorer and the Dione, Kerr J found that the owners were not entitled to damages for the late redelivery. His reasoning was that the test for damages was to be found in the reasonableness of the final voyage orders. On the facts of this case, it was established by the arbitrators that the expectation that the final voyage would be completed within the term of the charter was reasonable when the final voyage orders were given.

With regard to the charterers’ claim for special damages, Kerr J found that these had not been within the contemplation of the parties.

Commentary

Kerr J decided two further points: charterers were entitled to demurrage and the vessel was not off-hire.

Kerr J’s willingness to entertain a claim for damages for loss of profits is support for the owners’ case in the Achilleas.

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