Date: Wed, 28 Mar 2007 11:39

From: Robert Stevens

Subject: The Golden Victory

The decision of the House of Lords in The Golden Victory is out and well worth reading it is too.

It concerns the assessment of damages following the repudiation of a time charter by the charterer, which was accepted by the owners. Should the court take into account the fact that 15 months after the acceptance, the invasion of Iraq took place, which would have allowed the charterers to legitimately terminate at that point?

The commercial lawyers (Lords Bingham and Walker) dissent, and argue that the time for the assessment of damages is the time of acceptance, and that the subsequent event should be ignored. The majority (Lords Scott, Carswell and Brown) hold that damages are to compensate for loss and subsequent events which reduce the actual loss suffered should be taken into account.

Whilst there is a lot of citation of authority, and we hear a lot about commercial certainty, there is no real attempt to grapple as a matter of principle with the question as the appropriate moments in time for assessing different sorts of claims for damages.

For what it is worth, I think Lords Bingham and Walker are right, but I would have emphasised more emphatically that the claim was for the lost contractual right to the time charter (its value assessed at the time of breach) and not for consequential factual loss (assessed at time of trial/arbitration). 'Commercial certainty' alone is not a very strong argument.

A not so golden victory.

Robert Stevens
Barrister
University of Oxford

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