The New Flamenco – UK Supreme Court clarifies the law on mitigation of damages

Introduction The decision of the UK Supreme Court in the case of The New Flamenco (Globalia Business Travel SAU v Fulton Shipping Inc of Panama [2017] 2 Lloyd’s Rep 177) was published on 28 June 2017 and has already been the subject of much comment. The decision clarifies the limits on the kinds of benefit which are to be brought into account by way of mitigation of damages for breach of contract.

Although this arose from a time charter dispute, it will also be relevant to claims under many other kinds of commercial contract under English law, including in particular contracts for the sale of goods or for the long-term hire of other assets. The case may also provide some encouragement for those who believe that the English courts should be more willing to review arbitral decisions, even in fact-sensitive cases.