Facts
Golden Strait Corp chartered a ship to Nippon Yusen Kubishka Kaisha from 10 July 1998. The earliest contractual date for termination was 6 December 2005. The only exception (in clause 33 of the charterparty) for cancellation was if war broke out between Iraq, the United States, the United Kingdom and a number of others. Nippon, nevertheless repudiated the charter on 14 December 2001, redelivering the ship to Golden. Golden accepted this three days after.
They took the case to an arbitrator to consider how much Nippon should pay in damages. By that time, America had started the Iraq War, in March 2003. This was just the event that would have allowed Nippon to cancel the charter, if stayed with it.
The arbitrator, Mr Robert Gaisford, reluctantly decided that the outbreak of war had created a limit on the payable damages. Nippon was liable for no damages after 21 March 2003. Golden appealed, the question being, in what circumstances could a party in breach rely on subsequent events to show that the contractual rights lost were not valuable?
Golden argued that where there was an available market, the loss should be measured at the date of acceptance of breach. It said that this created finality in contractual negotiations, and certainty because events subsequent to the date of acceptance of a contractual breach would become irrelevant.
Read more about this topic: Golden Strait Corporation V Nippon Yusen Kubishka Kaisha
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