CA-2024-002194 - [2025] EWCA Civ 1210

This appeal concerns the quantum of damages recoverable by Buyers under a contract for the sale of a ship made on the Norwegian Saleform 2012. By Clause 14 of this form of contract, if Sellers fail to give Notice of Readiness by the Cancelling Date and the failure is due to proven negligence, Sellers are liable to make due compensation to Buyers for their loss whether or not Buyers cancel the agreement. The question raised by the appeal is whether, if Buyers do cancel the agreement, this clause entitles them to damages for loss of bargain.

In the present case Sellers were the Respondent, Orion Shipping and Trading LLC (then called Orion Shipping and Trading Ltd) (“Orion”) and Buyers were the Appellant, Great Asia Maritime Ltd (“Great Asia”). By a Memorandum of Agreement made on the Norwegian Saleform 2012 and dated 4 June 2021 Orion agreed to sell MV Lila Lisbon, a Capesize bulk carrier, to Great Asia for US$15m. (All references hereafter to $ are to US $). Great Asia cancelled the contract following Orion’s failure to give Notice of Readiness by the (extended) Cancelling Date, and commenced an arbitration. By its Partial Final Award dated 7 September 2023 (“the Award”) the Tribunal, among other things, answered the question Yes and awarded Great Asia $1.85m, being the difference between the market price of the vessel at the date of cancellation ($16.85m) and the contract price ($15m).

Orion appealed to the High Court under s. 69 of the Arbitration Act 1996. The appeal was heard by Dias J (“the Judge”). She handed down judgment on 9 August 2024 at [2024] EWHC 2075 (Comm) (“the Judgment”) in which she reversed the Tribunal, holding that Great Asia was not entitled to damages for loss of bargain.

Great Asia now appeals to this Court (with permission granted by the Judge). The appeal was ably argued on both sides, by Mr David Lewis KC(who appeared with Ms Eliza Bond) for Great Asia, and by Mr Alexander Wright KC (who appeared with Mr Robert Scrivener) for Orion. For the reasons that follow I prefer the submissions of Mr Lewis and would allow the appeal and restore the Award of the arbitral Tribunal.