Lloyd's Maritime and Commercial Law Quarterly
THE CURRENCY OF DAMAGES IN CONTRACT
The Texaco Melbourne
In a television programme a few years ago, about hyper-inflation in Germany during the early 1920s, a contributor spoke of a wheeled basket which was stolen from a queue outside a breadshop. The owners had been using the basket to carry the large bundles of high-denomination notes with which they intended to pay for their shopping. Somehow the basket was stolen, but the thief first emptied it and left the notes in piles on the ground, presumably because the basket was more valuable to him empty. From a monetary standpoint those were difficult times, but not unique. Nowadays, the expression “currency basket” generally has a different meaning, but there are still occasions when the literal concept would be more relevant.1
In the State of Ghana—formed in 1957 from the former Gold Coast Colony and associated territories—the early unit of currency was the Ghana pound, which was tied to sterling. In 1965 the pound was replaced by the cedi, of lesser value. Two years later the new cedi was introduced, representing a devaluation of 16%. From 1967 to 1970 there were 1.02 cedis to the United States dollar. During the next two years there were some variations but the rate settled down during 1973 to 1.15 and remained at that level until 1978. The cedi then lost over half of its value, but the exchange rate became stable at 2.75 until 1983, when it jumped to 30. Domestic inflation rose to 122%. From then onwards the international value of the cedi fell even more dramatically. By the end of 1984 there were 50 cedis to the dollar. At the end of succeeding years there were 60; 90; 177; 230; 303; 345; 391; 521 and then 784. The rate against the dollar is now rapidly approaching 1,000. Domestic inflation was brought down to 10% in 1992 by fiscal measures, and by an abundant home food supply which partially offset the effect of price increases in imported goods. However, inflation rose again during 1993, to over 25%. During these periods strict exchange control regulations were in force. The combination of these factors has obviously caused various problems for Ghanaian companies which incur liabilities abroad or which deal in foreign commodities.2
One such problem occurred as a result of the failure of the disponet owners of the tanker Texaco Melbourne to deliver 14,000 tonnes of oil from one Ghanaian coastal port to another.3 In November 1982 the oil was loaded at Tema, where it had been
1. In 1924 the reichsmark was introduced, one unit of which was equivalent to one thousand [American] billion (1,000,000,000,000) marks.
2. Statistics taken from publications of the International Monetary Fund.
3. The facts are from The Texaco Melbourne
[1992] 1 Lloyd’s Rep. 303 (Webster, J.); [1993] 1 Lloyd’s Rep. 471 (C.A.); and [1994] 1 Lloyd’s Rep. 473 (H.L.).
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