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Omak Maritime V. Challenger Shipping Notes

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This is an extract of our Omak Maritime V. Challenger Shipping document, which we sell as part of our Commercial Remedies BCL Notes collection written by the top tier of Oxford students.

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OMAK MARITIME V. CHALLENGER SHIPPING (THE MAMOLA CHALLENGER) FACTS The charterers agreed to charter the owner's vessel Mamola Challenger for five years. Under the charterparty the owners were required to make certain modifications to the vessel prior to delivery which included the installation of a new crane. (ii) The owners incurred various expenses in preparation for these modifications, including the cost of removing from another vessel the crane which owners intended to install on Mamola Challenger . Ultimately the owners accepted the charterers' conduct as bringing the charter to an end (on 29 January 2007). The expenses which the owners had incurred were wasted; they had no residual value or benefit for the owners. (iv) After the repudiation of the charterparty the owners concluded a number of short-term fixtures. (The vessel arrived at Luanda, Angola, on 5 February 2007 where she was delivered into the first of such fixtures.) The tribunal has held that, over the five-year term for which the charterparty would have run, the owners have earned, or will earn, more from these fixtures than they would have earned under the charterparty, and the excess is greater than the amount of the wasted expenditure. HOLDING General Principles of damages A corollary of that principle is that an award of damages for breach of contract should not put the claimant in a better position than he would have been in had the contract been performed: see Wertheim v Chicoutimi Pulp Co [1911] AC 301, 308. British Westinghouse v. Underground Railway, Viscount Haldane: "the duty of taking all reasonable steps to mitigate the loss consequent on the breach ... when in the course of his business he has taken action arising out of the transaction, which action has diminished his loss, the effect in actual diminution of the loss he has suffered may be taken into account even though there was no duty on him to act." Reliance interest and performance interest The law of damages permits a claimant to seek damages on the reliance basis rather than upon the expectancy basis. He may "elect" to claim damages by reference to the expenses incurred by him in reliance on the contract being performed: see Cullinane v. British "Rema" Manufacturing Co Ltd [1954] 1 QB

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