Case: Skyros Maritime Corporation and Anor v Hapag-Lloyd [2025] EWCA Civ 1529
Guests:
Emmanuel Michelakakis Howe, Barrister of Lamb Chambers
Andriy Shalennyy, Associate, Floyd Zadkovich
This week, Luke Zadkovich is joined by Andriy Shalennyy and Emmanuel Michelakakis-Howe (Lamb Chambers) to discuss the decision of the Court of Appeal in Skyros Maritime Corporation and Anor v Hapag-Lloyd [2025] EWCA Civ 1529.
The case concerned an all-too-common scenario, albeit with an unusual twist. It raised questions going to the heart of contractual damages, including what it means to compensate for breach, how loss is identified, and when a claimant’s own commercial arrangements must be ignored as collateral or res inter alios acta. While the factual background will be familiar to those working in shipping, these issues resonate far beyond shipping and commodities.
The dispute arose out of the late redelivery of two vessels by their time charterers. The owners claimed damages under the orthodox measure for such a breach, namely the difference between the agreed daily rate of hire and the market rate of hire prevailing at the time for the period of the overrun.
The key factual feature of the case was that it was common ground that even if the vessels had been redelivered on time, the owners would not and, under the terms of the sale contracts, could not have rechartered them or earned any further hire. Instead, the vessels would have been delivered directly to their buyers upon redelivery under the time charters. The issue was therefore whether a shipowner can recover substantial damages assessed by reference to the market rate for late redelivery where the breach has caused no actual loss of a chartering opportunity.
The arbitral tribunal answered that question in the affirmative, awarding damages by reference to the market rate. On appeal, Bright J disagreed, holding that the owners had suffered no compensable loss and were entitled only to nominal damages. The Court of Appeal, however, restored the award.
Giving the leading judgment, Lord Justice Males reaffirmed the orthodox measure of damages for late redelivery, namely the difference between the charter rate and the market rate during the overrun period. The owner’s arrangements for the vessel’s future employment, including a sale, were collateral matters which could properly be disregarded as res inter alios acta.
Luke, Andriy and Emmanuel examine the decision from both the owners’ and charterers’ perspectives, asking whether the outcome delivers an unwarranted windfall or instead reflects a principled preference for certainty over factual precision. The discussion considers the policy tension between compensation and predictability, and the commercial attraction of clear, easily applied measures of loss. The trio also grapple with the Supreme Court’s judgment in The Achilleas, and the long shadow which that decision continues to cast over debates on remoteness, assumption of responsibility, and the assessment of contractual damages.
