Public today: an important judgment handed down by the English High Court this morning has re-opened the door to recovering damages in addition to demurrage for losses caused by exceeding laytime in cargo operations.
In today’s 43 page judgment in K Line Pte Ltd vs Priminds Shipping (HK) Co Ltd (The Eternal Bliss)  EWHC 2373 (Comm), Mr Justice Andrew Baker thoroughly surveys almost 100 years of law and commentary on a question that has never been properly resolved and which has divided the opinion of academics and practitioners alike.
In reaching the “firm and clear view” that The Bonde (1990), thought by some to have settled the issue 30 years ago, was wrongly decided the Court found that, quite apart from demurrage, damages can be also recovered for other losses caused by a failure to load or discharge within the allowable laytime. No separate breach of charter is required.
Recognising the significance of the decision, Andrew Baker J said: “From time to time, a case provides the opportunity to resolve a long-standing uncertainty on a point of law of significance in a particular field of commerce. This is such a case.”
The judge added: “It is a strong thing for a judge of first instance to refuse to follow a prior decision at first instance that has stood without direct criticism in later case-law for a substantial period of time.”
This is a significant decision for the shipping industry. It could have far reaching consequences where owners suffer losses unrelated to the vessel’s earning potential (in this case, liability to cargo interests following deterioration of the cargo) as a result of a failure to load or discharge within the laytime. Whether this will be an end to the controversy remains to be seen, but today’s judgment is the first to consider the issue, and grapple with the difficulties of previous decisions dating back to Reidar v Arcos in 1927, in this level of detail.
Nick Austin and Mike Adamson of Reed Smith, and Tom Bird of Quadrant Chambers, represented the successful claimants K Line Pte Ltd in a question of law referred to the Court under s.45 Arbitration Act 1996. Full commentary and analysis will follow.