'The Amer Energy': Views On 'The Achilleas' And Remoteness Of Damage In Contract

The case Note Asm Shipping Ltd. of India v TTMI Ltd. of

England ("The Amer Energy") [2009] 1 Lloyd's Rep

293 is of particular interest as one of the first to provide

judicial consideration of the key decision in "The

Achilleas" [2008] 2 Lloyd's Rep. 275 (reviewed in our

November 2008 update). Mr. Justice Flaux in the Commercial Court

had to consider whether a Shipowner's request for permission to

appeal from an arbitration award would be granted pursuant to the

Arbitration Act 1996.

The arbitrators had not considered the then very recently

decided case of "The Achilleas" before publishing their

July 2008 award. Although Owners' solicitors had invited

reconsideration by the arbitrators of their award, immediately

after its publication, Charterers had not agreed and the Tribunal

declined to engage in any discussion about the award or its

contents.

Flaux J's view was that the majority of the House of Lords

in "The Achilleas" had not intended to lay down

a completely new test for recoverability of contractual damages and

had not departed from the classic rule in Hadley v

Baxendale (1854) 9 Exch 341, 156 ER 145, refined in subsequent

cases and in particular the House of Lords' decision in C

Czarnikow Ltd v Koufos ("The Heron II") [1967] 2

Lloyd's Rep. 457; [1969] 1 AC

350.1

The two limbs of Hadley v Baxendale are that recoverable damages

are those which:

"...should be such as...