Alcan Aluminum Ltd. v. Unican International S.A.

In Carriage of Goods by Sea on (Updated )

In this matter the Plaintiff claimed damages against the owner and time charterer of the "CarryBulk" for breach of a booking note contract. Due to engine problems the vessel did not have sufficient power to make its way through the ice to the agreed port of loading and the time charterer ordered the ship to another port where it loaded other cargo. The Plaintiff then made alternate, and very costly, arrangements to have other vessels carry its cargo. The time charterer also claimed damages from the Plaintiff arguing that it was the Plaintiff that breached the booking note contract by shipping its cargo on these other vessels. The Court held that the time charterer and not the Plaintiff was in breach of the booking note contract. The Court found the conduct of the time charterer was anticipatory breach and the Plaintiff was justified in making alternate arrangements to ship the cargo. The time charterer argued, in the alternative, that the substitution clause gave it a defence to the Plaintiff’s claim but the Court held the substitution clause could offer no defence where the named vessel had already begun to perform under the agreement. The time charterer was therefore held liable. The owner, however, was not found liable as the Court held the booking note was signed by the charterer on its own behalf and not as agent on behalf of the owner. Although successful on the issue of liability, the Plaintiff was not completely successful on the matter of damages. Most of the damages claimed were disallowed on the basis that time was not of the essence and the Plaintiff could have waited and chartered another ship at a later date at a much more reasonable price. The Plaintiff’s claim for compound interest was also disallowed. The trial Judge held that compound interest should only be awarded where the Plaintiff demonstrates that his or her loss cannot be fairly compensated without an award of compound interest.