Ship-sale compensation clause covers the lost bargain after cancellation

A ship buyer could recover the value of its lost bargain under clause 14 of SALEFORM 2012 after cancelling for negligent failure to deliver. The UK Supreme Court unanimously dismissed the seller’s appeal on 22 July.

The arbitrators had assessed that loss at US$1.85 million. The Court held that the express compensation wording covered the loss following cancellation, although the parties agreed there had been no accepted repudiatory breach.

The distinction was contractual: a cancellation right accompanied by a compensation clause required interpretation of both provisions. The Court did not overrule Financings v Baldock on termination under a bare contractual power. Ordinary causation, remoteness and mitigation rules still applied.

Complete official HTML judgment reviewed, paragraphs 1–99. Comparative English contract-law decision on a specific standard form, not an automatic Jamaican-law entitlement. Later treatment not checked.