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A voyage charterer fails to discharge a cargo within the time allowed. The cargo deteriorates as a result of the delay, exposing the shipowner to a claim from the receivers which it settles at a cost of US$1.1 million. Can the shipowner recover damages in addition to demurrage to compensate it for that cost?

This is the question that came before the Commercial Court in The Eternal Bliss. It is one that for many years had divided judges and commentators alike.

One school of thought held that an owner may recover damages as well as demurrage if it could prove a separate type of loss, one unrelated to the loss of the use of the ship as a freight-earning vessel. The other held that to be insufficient: on this view, an owner must prove both a separate type of loss and separate breach of contract (one other than the failure to load or discharge the ship within the laytime). 

In deciding that it is unnecessary to prove a separate breach, Andrew Baker J has resolved a long-standing debate in the owner’s favour.

Tom Bird acted for the owner, K Line Pte Ltd, instructed by Nick Austin and Mike Adamson of Reed Smith.