Forseeability

Transfield Shipping Inc v Mercator Shipping Inc [2008] UKHL 48; [2008] All ER (D) 117 (Jul)

The claimant had let out its ship to the defendant for a period of five to seven months, to end no later than midnight on 2 May 2004. The ship was delayed on its last voyage and the claimant did not get its ship back until 11 May 2004. By then the market had fallen sharply and new charterers would only take it at a reduced price. Was the defendant liable to pay only for the use of the ship for the number of days that it was late at the market rate then prevailing or was the defendant liable to pay the difference between what the claimant would have got from the new charterer had the ship been returned in time and what it in fact got? The arbitrators, by a majority, and the Court of Appeal adopted the latter approach.