Orion Shipping and Trading Ltd LLC v Great Asia Maritime Ltd

Hearing date: 10 July 2025

Approved Judgment

This judgment was handed down remotely at 10.30am on 2 October 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

Introduction

This appeal concerns the quantum of damages recoverable by Buyers under a contract for the sale of a ship made on the Norwegian Saleform 2012. By Clause 14 of this form of contract, if Sellers fail to give Notice of Readiness by the Cancelling Date and the failure is due to proven negligence, Sellers are liable to make due compensation to Buyers for their loss whether or not Buyers cancel the agreement. The question raised by the appeal is whether, if Buyers do cancel the agreement, this clause entitles them to damages for loss of bargain.

In the present case Sellers were the Respondent, Orion Shipping and Trading LLC (then called Orion Shipping and Trading Ltd) ( “Orion”) and Buyers were the Appellant, Great Asia Maritime Ltd ( “Great Asia”). By a Memorandum of Agreement made on the Norwegian Saleform 2012 and dated 4 June 2021 Orion agreed to sell MV Lila Lisbon, a Capesize bulk carrier, to Great Asia for US$15m. (All references hereafter to $ are to US $). Great Asia cancelled the contract following Orion's failure to give Notice of Readiness by the (extended) Cancelling Date, and commenced an arbitration. By its Partial Final Award dated 7 September 2023 ( “the Award”) the Tribunal, among other things, answered the question Yes and awarded Great Asia $1.85m, being the difference between the market price of the vessel at the date of cancellation ($16.85m) and the contract price ($15m).

Orion appealed to the High Court under s. 69 of the Arbitration Act 1996. The appeal was heard by Dias J ( “the Judge”). She handed down judgment on 9 August 2024 at [2024] EWHC 2075 (Comm) ( “the Judgment”) in which she reversed the Tribunal, holding that Great Asia was not entitled to damages for loss of bargain.

Great Asia now appeals to this Court (with permission granted by the Judge). The appeal was ably argued on both sides, by Mr David Lewis KC (who appeared with Ms Eliza Bond) for Great Asia, and by Mr Alexander Wright KC (who appeared with Mr Robert Scrivener) for Orion. For the reasons that follow I prefer the submissions of Mr Lewis and would allow the appeal and restore the Award of the arbitral Tribunal.

The contract

By a Memorandum of Agreement dated 4 June 2021 and made between Orion as Sellers and Great Asia as Buyers ( “the MoA”), Orion agreed to sell the Lila Lisbon to Great Asia. As noted on the front page, the MoA was made on the Norwegian Shipbrokers' Association's Memorandum of Agreement for sale and purchase of ships Saleform 2012, adopted by BIMCO in 1956 and revised in 1966, 1983, 1986/7, 1993 and 2012 ( “Saleform 2012”). In The Griffon [2013] EWCA Civ 1567, [2014] 1 Ll Rep 471 Tomlinson LJ said at [1] that the Norwegian Saleform was the most commonly used form of contract for the sale and purchase of second-hand tonnage.

Clause 1 provided that the Purchase Price was $15m.

Clause 2 provided for Buyers to lodge a Deposit of 10% of the Purchase Price with the Deposit Holder within three Banking Days after the agreement had been signed by the parties and exchanged, and the Deposit Holder had confirmed that the account had been opened.

Clause 3 provided for release of the Deposit, and payment of the balance of the Purchase Price (and all other sums payable on delivery by Buyers), to Sellers on delivery of the Vessel, but not later than three Banking Days after the date that Notice of Readiness had been given in accordance with Clause 5.

Clause 4 provided that Buyers had reviewed an inspection report and had accepted the Vessel and that the sale was outright and definite.

Clause 5 provided as follows:

“75 5. Time and place of delivery and notices

76 (a) The Vessel shall be delivered and taken over safely afloat at a safe and accessible berth or [77] anchorage at/ in mainland China exclude Taiwan, Macao, Hong Kong (state place/range) in the Sellers' option.

78 Notice of Readiness shall not be tendered before: 20th July 2021 (date)

79 Cancelling Date (see Clauses 5(c), 6(a)(i), 6(a)(iii) and 14): 20th August 2021

However, the Vessel shall effect delivery to Buyers immediately after present laden voyage from South Africa to Qingdao China (ETA Qingdao on or around 18th July 2021) and no more laden voyage allowed.

80 (b) The Sellers shall keep the Buyers well informed of the Vessel's itinerary and shall [81] provide the Buyers with twenty (20), ten (10), five (5) and three (3) days' notice of the date the [82] Sellers intend to tender Notice of Readiness and of the intended place of delivery.

83 When the Vessel is at the place of delivery and physically ready for delivery in accordance with [84] this Agreement, the Sellers shall give the Buyers a written Notice of Readiness for delivery.

85 (c) If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the [86] Vessel will not be ready for delivery by the Cancelling Date they may notify the Buyers in writing [87] stating the date when they anticipate that the Vessel will be ready for delivery and proposing a [88] new Cancelling Date. Upon receipt of such notification the Buyers shall have the option of [89] either cancelling this Agreement in accordance with Clause 14 (Sellers' Default) within three (3) [90] Banking Days running days of receipt of the notice or of accepting the new date as the new Cancelling Date.

91 If the Buyers have not declared their option within three (3) running days Banking Days of receipt of the [92] Sellers' notification or if the Buyers accept the new date, the date proposed in the Sellers' [93] notification shall be deemed to be the new Cancelling Date and shall be substituted for the [94] Cancelling Date stipulated in line 79.

95 If this Agreement is maintained with the new Cancelling Date all other terms and conditions [96] hereof including those contained in Clauses 5(b) and 5(d) shall remain unaltered and in full [97] force and effect.

98 (d) Cancellation, failure to cancel or acceptance of the new Cancelling Date shall be entirely [99] without prejudice to any claim for damages the Buyers may have under Clause 14 (Sellers' [100] Default) for the Vessel not being ready by the original Cancelling Date.

101 (e) Should the Vessel become an actual, constructive or compromised total loss before delivery [102] the Deposit together with interest earned, if any, shall be released immediately to the Buyers [103] whereafter this Agreement shall be null and void.”

(The italics are in the original and evidently represent tailor-made additions or alterations to the standard form; the numbers in the margins or in square brackets represent line numbers in the original).

Clause 8, under the heading “Documentation”, provided for the place of closing to be Hill Dickinson's Singapore office, and for Sellers to provide Buyers, in exchange for payment of the Purchase Price, all reasonable documentation enabling Buyers to register the Vessel in their nominated Flag State and transfer the ownership, to be listed together with Buyers' delivery documents in an addendum to the Agreement.

Clause 13 provided as follows:

“328 13. Buyers' default

329 Should the Deposit not be lodged in accordance with Clause 2 (Deposit), the Sellers have the [330] right to cancel this Agreement, and they shall be entitled to claim compensation for their losses [331] and for all expenses incurred together with interest.

332 Should the Purchase Price not be paid in accordance with Clause 3 (Payment), the Sellers [333] have the right to cancel this Agreement, in which case the Deposit together with interest [334] earned, if any, shall be released to the Sellers. If the Deposit does not cover their loss, the [335] Sellers shall be entitled to claim further compensation for their losses and for all expenses [336] incurred together with interest.”

Clause 14 provided as follows:

“337 14. Sellers' default

338 Should the Sellers fail to give Notice of Readiness in accordance with Clause 5(b) or fail to be [339] ready to validly complete a legal transfer by the Cancelling Date the Buyers shall have the [340] option of cancelling this Agreement. If after Notice of Readiness has been given but before [341] the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not [342] made physically ready again by the Cancelling Date and new Notice of Readiness given, the [343] Buyers shall retain their option to cancel. In the event that the Buyers elect to cancel [344] this Agreement, the Deposit together with interest earned, if any, shall be released to them [345] immediately.

346 Should the Sellers fail to give Notice of Readiness by the Cancelling Date or fail to be ready to [347] validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers [348] for their loss and for all expenses together with interest if their failure is due to proven [349] negligence and whether or not the Buyers cancel this Agreement.”

I will adopt the convenient terminology used by counsel and the Judge of referring to...