Case Note Update: Firodi Shipping Limited v Griffon Shipping LLC [2013] EWCA Civ 1567

On 10 December, The Court of Appeal upheld the judgment of Mr Justice Teare in Griffon Shipping LLC v Firodi Shipping Limited [2013] 1 Lloyd's Rep 50, a matter involving a seller's remedy in the event of non-payment of the deposit under the terms of the Norwegian Saleform 1993 form (NSF 1993), dismissing the appellant Buyer's appeal, which was heard last month. The appeal arises out of the apparent controversy caused by an amendment that first appeared in the NSF 1983 form and which introduced an additional paragraph to Clause 13, the "Buyers' default" clause. The amendment appears in the NSF 1993 and NSF 2012 forms. The amendment covers the situation where a buyer has failed to pay the deposit within the time set by Clause 2, the "Deposit" clause, and the contract is thereafter terminated. On appeal, the Buyers said that this amendment had the effect of depriving the Sellers of the ability to recover and retain the unpaid deposit; a remedy which the Court of Appeal had indicated in The "Blankenstein" [1985] 1 WLR 435 would be available where NSF 1966 was used.

The leading judgment was given by Lord Justice Tomlinson, with which Sir Brian Leveson and Lord Justice McFarlane agreed. The judgment does not go much further in substance than that of the judgment of Mr Justice Teare; but does, usefully, provide further confirmation that clear language is required to strip away a party's common-law rights accrued before termination of the contract. The Court of Appeal found that, far from depriving the Sellers of the rights that were found to be available in The "Blankenstein", the amendment to Clause 13 was intended to supplement the Sellers' rights by confirming that they had a right to cancel in the event of non-payment of the deposit, and had a right to compensation which was not inconsistent with the Sellers' claim for...