Reed Smith Client Alerts

K Line Pte Ltd v. Priminds Shipping (HK) Co Ltd (The “Eternal Bliss”) [2020] EWHC 2373 (Comm)

When a voyage charterer fails to discharge within the permitted laytime and the owner incurs liability to a cargo claimant as a result, can the owner recover damages in respect of that liability in addition to demurrage from the charterer?

The High Court has recently grappled with this question, which has divided practitioners and academics for decades, and concluded that the answer is yes. In doing so, it held that The Bonde [1991] 1 Lloyd’s Rep 136, thought by some to have settled the issue 30 years ago, was wrongly decided.

The door is now open to an owner recovering damages from charterers simply by proving a separate type of loss, unrelated to the loss of the use of the ship as a freight-earning asset. The decision means there is no need for owners to show a separate breach of charter beyond the failure to load or discharge within the laytime.

Nick Austin and Mike Adamson of Reed Smith and Tom Bird of Quadrant Chambers acted for the successful owners, K Line Pte Ltd.