Shipbuilding Law Blog

There is still no unanimous definition in the English law context for the term “consequential or indirect loss”. Exclusion clause which excludes liability for “indirect or consequential losses” followed by various types of losses, like loss of business, in parentheses, must be understood to mean that the losses named in parentheses are mere examples of indirect or consequential losses.   The use of the phrase "including but not limited to" is a strong pointer that the specified heads of loss are but examples of the excluded indirect loss. Some recent cases: In GB Gas Holdings Ltd (Centrica) v Accenture (UK) Ltd & ors [2010] EWCA Civ 91, GB claimed for: ·           Gas Distribution charges (in the region of) of £18,700,000 ·           Compensation paid to customers: £8,000,000 ·           Additional Borrowing Charges: £2,000,000 ·           Cost of chasing debt not due: £387,287 ·           Additional stationery and correspondence costs: £107,120

Some salient examples of the continuing saga, more or less: Sea-Cargo Skips As v State Bank of India [2013] EWHC 177 Held: Invalid demand Wuhan Ocean and Nantong v Schiffahrts-Gesellschaft [2012] EWHC 3104 (Comm) Held: Failure to extend validity of refund guarantee within a reasonable time is a breach of innominate term. Buyers entitled to damages but not the right to terminate the shipbuilding contract (which they purported to do so). Rainy Sky S. A. v Kookmin [2011] UKSC 50 Held: Even if there are two possible constructions, the court is entitled to prefer the construction which is consistent with business common sense and to reject the other. (Buyers’ contented that the bonds guaranteed repayment of pre-delivery instalments under Article XII.3 in the case of any insolvency). WS Tankship II BV v Kwangju Bank Ltd [2011] EWHC 3103 Held: That the refund guarantees were “demand” guarantees rather than “see to it guarantees” which attracted primary liability.