Maredelanto Compania Naviera SA V Bergbau-Handel Gmb H - Judgment


On the first issue, all three members of the court decided in favour of the charterers, Bergbau, and against the owners, Maredelanto, that 'expected ready' was a condition of the contract. On the second issue, Lord Denning held that the charterers had not repudiated the contract by cancelling on 17 July, but Edmund Davies LJ and Megaw LJ held that they had. On the third issue, Lord Denning, in agreement with the arbitrators, who were themselves agreed, held that they had suffered no damage (p 197): "Seeing that the charterers would, beyond doubt, have cancelled, I am clearly of opinion that the shipowners suffered no loss: and would be entitled at most to nominal damages."

Edmund Davies LJ agreed (p 202): "One must look at the contract as a whole, and if it is clear that the innocent party has lost nothing, he should recover no more than nominal damages for the loss of his right to have the whole contract completed."

Megaw LJ (at pp 209-210) stated:

In my view, where there is an anticipatory breach of contract, the breach is the repudiation once it has been accepted, and the other party is entitled to recover by way of damages the true value of the contractual rights which he has thereby lost; subject to his duty to mitigate. If the contractual rights which he has lost were capable by the terms of the contract of being rendered either less valuable or valueless in certain events, and if it can be shown that those events were, at the date of acceptance of the repudiation, predestined to happen, then in my view the damages which he can recover are not more than the true value, if any, of the rights which he has lost, having regard to those predestined events.

All members of the court were viewing the case as from the date of acceptance of the repudiation (although only Megaw LJ said so in terms). They were not taking account of later events. They were recognising, as was obvious on the facts as found, that the value of the contractual right which the owners had lost, as of the date of acceptance of the repudiation, was nil because the charter was bound to be lawfully cancelled three days later.

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