CA-2025-000005 - [2025] EWCA Civ 1227

The arbitration proceedings

On 13 January 2022 the Charterers commenced LMAA arbitration proceedings against the Owners, claiming damages of US$2,190,277.81 for the Owners’ breach of clause 29 by failing to take possession of the Vessel at Stockton as soon as reasonably practicable. These comprised the costs the Charterers incurred in crewing and running the Vessel from 14 May 2001 to the date the Owners repossessed it at Gibraltar. In the alternative, the Charterers claimed those sums in bailment, on the ground that they were gratuitous bailees of the Vessel for the same period.

The Owners denied the claim, maintaining that the Charterers had not been entitled to terminate under clause 28(d) or at all, and counterclaimed damages for lost hire which would have been payable under the Charterparty (and for the costs of various repairs to the Vessel, not relevant to the issue on this appeal). The Owners’ alternative position was initially that, even if the Charterparty had been terminated, the Charterers were not entitled to recover any of their costs after such termination. During the arbitration hearing, however, the Owners accepted that, if the Charterparty was terminated under clause 28(d), the Charterers were entitled to expenses properly incurred in sailing the Vessel to Gibraltar (on route to Trogir) as gratuitous bailees, but not for expenses for the period the Vessel was anchored in Mexico, which the owners asserted were the result of the Charterers’ breach of clause 29. As I understand it, it is those latter expenses which are the primary sum at stake in these proceedings.

An oral hearing took place in London between 12 and 16 February 2024 before an LMAA tribunal comprising Ms Clare Ambrose, Mr Steven Berry KC and Mr Robert Thomas KC (“the Tribunal”). The Tribunal published a Partial Final Award on 26 March 2024, subsequently corrected in respects not material to the present appeal by a Memorandum dated 19 April 2024 (“the Award”).