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Court awards as damages costs incurred as a result of a breach of a law and jurisdiction clause

Swissmarine Services SA v Gupta Coal India Private Limited [2015] EWHC 265 (Comm)

The Claimant and Defendant entered into a COA which contained an English law and jurisdiction clause. When the Defendant failed to comply with the terms due to difficulties in despatching and shipping the cargo, the Claimant brought a claim for breach of contract. The Defendant subsequently commenced proceedings in India, claiming damages for defamation and an anti-suit injunction to restrain the English proceedings. After almost two years, the Indian proceedings were dismissed due to lack of jurisdiction.

The Claimant alleged that it had suffered loss as a result of the Defendant’s breach of the English jurisdiction clause. It claimed as damages its costs incurred in the Indian proceedings, which the Court awarded. The Court found that the contract was clear as to law and jurisdiction, and the Defendant had been well aware of this, but had nevertheless commenced the Indian proceedings. The Claimant had demonstrated that the substantial costs incurred in India were properly incurred and had been incurred as a result of the Defendant’s breach. On that basis they were recoverable as damages.

The Claimant had also claimed for damages resulting from the Defendant’s failure to meet its shipment obligations. The Court awarded damages, and considered the correct method of assessment. There was clearly a contract between the two parties, the Defendant was in breach and the Claimant was entitled to damages. The Claimant had given the Defendant an extension of time to perform, which meant that the market price to be used in the assessment of damages was that at the time when the contract could last have been performed (i.e. when the extension granted by the Claimant expired). A further consideration in the assessment of damages was whether there was an available market at the time for the Claimant to find replacement shipments: if so, this could be set off against their loss. In this case, there was no such available market.

This case will be of assistance to parties who incur legal costs in foreign jurisdictions as a result of their counterparty’s breach of an English jurisdiction clause. Those costs will be recoverable as damages, provided that they are reasonably incurred, and that causation can be proved. However, a party which does not participate in English legal proceedings may be unlikely to pay any sums awarded, and so further costs may be incurred in enforcing the judgment.

 Article referred: http://www.jdsupra.com/legalnews/court-awards-as-damages-costs-incurred-a-59279/

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