On 28 November 2025, the Court of Appeal of England and Wales handed its judgment in the case; it ruled in favour of the appellant owners and restored the arbitrators’ award. The significance of the judgment was that the owners were entitled to the difference between the market rate and the charter rate for the period of delay, and this applies regardless of whether the owners actually re-chartered the vessels. Also, this judgement reaffirmed that the damages should be assessed according to predictable market-based principles, the individual commercial decisions, preserving certainty and consistency by reinforcing established principles. Hapag-Lloyd AG applied for permission to appeal to the UK Supreme Court, and the permission was granted.

Citations for the judgments below:‍

• Commercial Court: Hapag-Lloyd AG v. Skyros Maritime Corporation and Agios Minas Shipping Company [2024] EWHC 3139 (Comm)

Case History

The dispute between Hapag-Lloyd AG against Skyros Maritime Corporation and Agios Minas Shipping Company (the “Parties”) arose from “MV Skyros” and “MV Agios Minas” (the “Vessels”) being returned late and paid at then charter rates during this overrun period, by two days and seven days, respectively, although the charter market rates experienced a sharp increase.

Skyros Maritime Corporation and Agios Minas Shipping Company (the “Owners”) commenced arbitration, and they claimed the difference between market rates and the charter rate (standard market measure of damages), or alternatively, quantum meruit (a reasonable sum regarding the services provided), user damages, and negotiating damages. Whereas Hapag-Lloyd AG (the “Charterer”) claimed that the Owners were only entitled to nominal damages since they already agreed not to charter the Vessels due to the sale of them upon redelivery. The tribunal ruled in favour of the Owners and awarded substantial damages on the primary basis of quantum meruit and user damages.

Upon the appeal of the Charterer, the Commercial Court found that the Owners were entitled to only nominal damages since they did not lose an opportunity. Permission to appeal to the Court of Appeal was granted only regarding whether the Owners were entitled to recover user damages and the Owner’s plans for the Vessels should be considered while ruling on the damages.

Summary of the Court of Appeal’s Decision

The Court of Appeal ruled that the Owners were entitled to normal damages and there was no need to seek quantum meruit, user damages, or negotiating damages. Accordingly, it upheld the long-settled principle (The Achilleas [2008] UKHL 48, [2009] 1 AC 61) since assessing the extent of the charterer’s liability would not be possible if otherwise is accepted. Consequently, it stated that the damages are assessed by calculating the difference between the market rate and the charter rate, and it was never a point of discussion that any owners’ plans were related to deciding on the entitlement to recover damages in line with the normal measure.      

Additionally, the Court of Appeal drew a distinctive line between remoteness and res inter alios acta principle by explaining that there are two stages while assessing damages: determining the loss and concluding how much of that loss is recoverable. It stated that res inter alios acta principle is related to the first stage, where the loss is outlined, while remoteness is related to the second stage, where it is questioned whether the loss was in “reasonable contemplation” when the parties entered the contract. In accordance with the res inter alios acta principle, the fact that the Owners agreed to sell the Vessels after their return was considered independent from the Charterer’s breach, and it was decided that it should not be deemed relevant while assessing the damage.

Lastly, the Owner’s user damages claim was expressly rejected on the basis that the Owners agreed to use of the Vessels regardless of the last voyage’s legitimacy, especially when no loss occurred.

Conclusion

Owners are entitled to the damages that amount to the difference between the charter rate and market rate, regardless of the illegitimacy of the last voyage and collateral agreements, and Charterers cannot avoid liability due to the existence of those collateral agreements. Hapag-Lloyd AG applied for permission to appeal to the UK Supreme Court, and the permission was granted.