Neutral Citation Number: [2011] EWHC 1819 (Comm)
Case No: 2010 FOLIO 1375
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 14/07/2011

Before :

MR JUSTICE BLAIR
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Between :

	GLORY WEALTH SHIPPING PTE LIMITED	Claimants/Charterers/
Section 69 Applicants	
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	KOREA LINE CORPORATION	Respondents/Owners/ Section 69 Respondents	

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Mr Charles Priday (instructed by Winter Scott LLP) for the Applicants
Mr David Lewis (instructed by DLA Piper UK LLP) for the Respondents

Hearing dates: 22 June 2011
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Judgment

Mr Justice Blair : 

1.	This appeal arises out of the collapse in the market experienced by the shipping industry in the wake of the financial crisis.  By an award dated 26 October 2010, an arbitral Tribunal consisting of Mr Bruce Buchan and Mr Patrick O’Donovan awarded the Owners of the M.V. Wren damages for repudiatory breach by the Charterers of a Charterparty dated 22 February 2008 which led to its termination in November 2008.  The issue is as to the measure of damages.  By order of 4 April 2011, Burton J gave the Charterers leave to appeal under s. 69 Arbitration Act 1996 on the following question: 
“What is the correct measure of damages for a charterer’s repudiation of a time charter where there is, at the date of the termination of the charter, no market for the unexpired period and such a market only revives at a much later date?”
2.	The vessel was a new-build which was delivered into charter on 21 June 2008.  The Charterparty was a time charter on an amended NYPE form for a minimum of 36 months to maximum 38 months at a daily rate of US$39,800.  In November 2008, the Charterers purported to make early redelivery, which the Owners accepted as a repudiatory breach entitling them to terminate the Charterparty.  The dispute was referred to LMAA arbitration, and the Charterers subsequently conceded that their conduct had amounted to a repudiatory breach, leaving the issue of damages to be determined.
3.	It was common ground that at the time of the termination of the contract in November 2008, there was no available market for a period charter of a duration that corresponded to the balance of the Charterparty.  So the question was how the Owners’ loss was to be calculated.  They claimed damages on what was called a “hybrid basis”, originally by reference to losses on a substitute fixture the vessel had contracted in the spot market up to January 2009, and by reference to market rates for the balance of the charter period from that time.  In the course of the arbitral proceedings, and reflecting the Owners’ expert evidence as to market conditions, the claim was amended.  The amended claim was calculated on the basis of voyage charters which the vessel entered into up to 26 July 2009, and market rates of hire from that date.  (The Charterers point out that when actual trading from January to July 2009 is taken into account, the Owners’ claim reduced by approximately US$4.47m.)
4.	As regards the revival of the market, which is the factual issue at point in the present case, the Owners’ case was that as of June or July 2009, the market for the equivalent of the unexpired period of the charter (two years at that stage) had come back to life.  The Charterers argued to the contrary that it had not revived.  It was not in dispute that (whatever the true position as regards the revival of the market) the Owners had not in fact fixed the vessel on a long term charter at that time, continuing to fix her on the spot market.
The arbitrators’ Award
5.	The findings of the arbitrators as regards the market were as follows.  The two year market in June and July 2009 “was no doubt in the early stages of recovery and was no doubt fragile, with the increase in activity ... tentative at best.  That does not mean, however, that there was no two year market at that point. … we took the view that there would have been a charterer of sufficient standing to take the vessel for two years at US$15,200.00 per day net had the Owners decided to so fix her”.  The arbitrators concluded, therefore, that there was an available market at the time in question, and their findings of fact are of course not challenged.
6.	The submissions of the parties were essentially the same as they have been before the court on the appeal.  In circumstances where there is no available market initially, but an available market arises later, there is, the Owners argued, no principled reason why a hybrid claim cannot best fulfil the object of an award of damages.  The decision not to take advantage of that market in July 2009 was an independent business decision of the Owners—it did not follow that they could not recover market-based damages from that time. Otherwise, an innocent claimant would have to wait until the end of the repudiated charter before being able to make a full recovery.
7.	The Charterers submitted that it was wrong in law to bring a hybrid claim for part actual and part market-based losses on the supposed basis that one looks to the market when it comes back to life. The only relevant date for the market is the date of termination, because this is the moment at which the innocent party can go into the market and mitigate its loss by finding a substitute fixture: see The Elena D’Amico [1980] 1 Lloyd’s Rep 85 at 89.  Where there is no available market at the date of termination, it is necessary to fall back on the broader question of asking what sum would put the claimants in the same financial position that they would have been in had the charterparty been performed. Since the Owners did not enter the long-term period charter market in July 2009, their actual trading thereafter must be the basis of the damages claim.
8.	The core of the arbitrators’ reasoning is in paragraphs 38 to 42 of the Award.  They did not agree with the Charterers that, in principle, the Owners could not put forward a hybrid damages claim based on both actual and market losses in relation to the unexpired period of the charter.  In stipulating that damages for the balance of a repudiated charter be assessed against the rate of a time charter of a duration equivalent to that balance, the law intends to facilitate comparison in so far as possible on a “like-for-like” basis.  Had there been an identifiable market for a 30-month time charter at the time it was terminated, that would have been the yardstick used to calculate damages.  As it was, there was no market at that point, and for the time being damages had to be established by using the net daily income, charter hire or time charter equivalent from charters actually performed. Given the law’s preference for the use of the market rate for a period equivalent to the unexpired period of the charter, it was logical that once a viable market could be identified, that would become the criterion for determining loss.
9.	The arbitrators explained that they were satisfied that the market-based approach to damages is favoured because it allows damages to be quantified relatively quickly after a repudiatory breach, so that there can be an end to litigation within a reasonable time.  They agreed with the Owners that in the case of a lengthy unexpired charter period, calculation of damages on the basis of actual loss will be unsatisfactory. They accepted that there was an element of artificiality in that approach, but it was no more artificial than the principle that in cases of repudiatory breach, if there is at the time of termination an available market, damages will generally be assessed on the difference between the contract rate for the balance of the charterparty period and the market rate for the chartering in of a substitute vessel for that period. The same was true of the Charterer’s suggestion of artificiality because the daily income from single voyages over a period may exceed the daily return from a time charter of comparable duration. The arbitrators did not accept that any allowance was to be made for trading vicissitudes. 
10.	In conclusion:
“Having decided that the Owners were entitled to advance a claim for both actual and market damages and that there was an available market, albeit fragile, at the relevant time, we awarded the Owners the full amount of their claim for damages for the balance of the charter period … with a deduction for accelerated payment.”
Under this head of claim, the arbitrators awarded US$15,698,591.45, and it is only this element of the total award of US$22,823,858.90 which is challenged.  I am told that nothing has yet been paid.
11.	To appreciate the arbitrators’ reasoning, it is necessary to appreciate the case as it was put to them.  On the one hand, the Owners submitted that once the market revived, actual losses were to be put on one side, and damages were to be measured by reference to market rates for a “like-for-like” replacement two year time charter (that being the period that the repudiated Charterparty would have had to run at that point in time).  The Charterers, on the other hand, submitted that the “available market measure” only applies where there is an available market at the time of termination.  It cannot be applied where there is no available market, in which case one has to ask what loss has been caused to the claimant.
12.	This explains the circumstances in which the arbitrators applied The Elena D’Amico principle as from the time the market revived, and it is clear that they did so as the best practical means of resolving the dispute they had to decide.  The question is whether they were entitled to do so as a matter of law.  Both counsel are agreed that this raises a point of principle.  They are also agreed that the same questions arose for decision, whether the issue be expressed in terms of the question in respect of which Burton J gave the Charterers leave to appeal under s. 69 Arbitration Act 1996 (which I have set out at the beginning of this judgment), or in terms of the Owners’ alternative formulation (which is also referred to in Burton J’s order) namely, is there a rule or principle of law precluding a court or tribunal from assessing damages on the basis of a combination of actual and market-based losses? 
The parties’ contentions
13.	The Charterers argue that to ask when the market for period charters has revived and then to deem the Owners to have entered that market, is almost bound to generate a windfall.  Such an approach locks in an artificially low rate, in other words the rate at which the market begins to recover, thereby ensuring maximum damages for the Owners.  The fundamental principle governing the quantum of damages for breach of contract is that damages should compensate the claimant for the loss of his contractual bargain.  The object of an award of damages is to put the claimant, as far as money can do, in the position he would have been in if the contract had been performed.  The market price on an available market at the date of breach/termination is deemed by the law to represent reasonable mitigation.  But if there is no available market at the date of termination, then The Elena D’Amico prima facie measure is inapplicable and one has to fall back on the broader question of asking what sum would put the claimants in the same financial position which they would have been in had the Charterparty been performed, by making a comparison between their “lost” and actual financial positions.  The enquiry has to be into the Owners’ actual loss.  There is no authority, it is submitted, to support the Tribunal’s approach, and it is contrary to recent authority in the Commercial Court.  The correct answer to the question raised by this appeal is, it is submitted, that damages are to be assessed by reference to the actual trading and losses (if any) of the claimant and subject to the usual rules of mitigation, including the principle that where the claimant has unreasonably failed to mitigate his losses, he may not claim his self-induced loss.
14.	The Owners argue that the rationale for the normal measure of recovery propounded in The Elena D’Amico is that where the innocent party has a free choice whether or not to avail itself of an available market, its choice is “independent” and the consequences of it are collateral, i.e. the causal nexus is broken between the breach and the innocent party’s actual loss, even when that decision is a reasonable and sensible one.  That rationale applies a fortiori when such a free choice to obtain a “like-for-like” replacement contract arises not at the time of termination but subsequently. The choice, it is argued, is even more “independent” and its consequences are collateral because the causal nexus (already weakened by the passage of time) is just as easily broken.  It is accepted that the normal measure provides for “deemed” or “assumed” conduct, but that cannot found a rule of law that precludes a tribunal from assessing damages by reference to a free choice that subsequently exists to avail of an available market for a like-for-like replacement.  It would, the Owners submit, be intellectually incoherent for the law, on the one hand, to justify the “normal measure” by reference to the innocent party’s “independent” choice while, on the other hand, precluding a tribunal from assessing damages by reference to a subsequent available market for a “like-for-like” replacement which the innocent party had a free choice whether or not to enter.  In July 2009, in the words of Mr David Lewis, counsel for the Owners, a fork in the road was reached.  The vessel was free to enter the market, and the consequences of the fact that it did not do so, he submits, for better or for worse, rest with the Owners.  The losses awarded are neither artificial nor hypothetical—they are a fair valuation of the innocent party’s loss of bargain, only excluding the consequences of the innocent party’s decision to speculate because such a decision arose.  The Tribunal therefore reasonably valued the Owners’ loss of a 30-month remaining time charter bargain by reference to the 2 year time charter market in July 2009 plus spot losses for “the time being”, and the Award should stand.   
Discussion
15.	The starting point is the authoritative formulation of the measure of damages in The Elena D’Amico [1980] 1 Lloyd’s Rep. 75, which was a case where there was a wrongful repudiation of a charter by shipowners (in other words the factual converse of the present case).  Having referred to the general principle for the assessment of damages for breach of contract, namely restitutio in integrum within the limits of Hadley v Baxendale, Robert Goff J continued at p.87 as follows:
"But as in other cases, there is, I consider, a normal measure of recovery in cases of premature wrongful repudiation of a time charter by the owners, and that normal measure is that, if there is at the time of the termination of the charter-party an available market for the chartering in of a substitute vessel, the damages will generally be assessed on the basis of the difference between the contract rate for the balance of the charter-party period and the market rate for the chartering in of a substitute vessel for that period."
16.	The relevant time to assess the difference between the contract rate and the market rate for the balance of the charter-party period is the time of termination.  This implies that the actual losses of the party not in breach may turn out to be more, or less, than that sum.  Robert Goff J goes on in his judgment to address that question as follows.  If the charterer decides not to take advantage of a market which is available at that time, that is to say a market for the chartering in of a substitute vessel for the balance of the charterparty period, this will be his own business decision independent of the repudiatory breach of contract.  It does not matter that the decision was a reasonable one, or was a sensible business decision, taken with a view of reducing the impact upon him of the legal wrong committed by the ship owners.  The point is that his decision so to act is independent of the wrong, that is, the repudiatory breach of contract that he has accepted as bringing the contract to an end (see page 89).  The Elena D’Amico was a case of repudiatory breach by owners, but it is not in dispute that the same principle applies to wrongful repudiation of a time charter by charterers (as in this case).  In that case, where there is an available market at the time of termination, damages are assessed on the basis of the difference between the contract rate and the market rate for the vessel for the balance of the charterparty period.  This is the conceptual framework that the Owners seek to develop as applicable to the present case where the market, albeit unavailable at the time of termination, later revives.
17.	It has been pointed out that part of the The Elena D’Amico process of reasoning is that damages for breach of contract such as a contract for sale are normally to be assessed as at the date of breach (see Norden v. Andre & Cie S.A. [2003] 1 Lloyd’s Rep. 287 at [43], Toulson J).  A well known example from the financial field is found in Jamal v Moolla Dawood, Sons & Co [1916] AC 175.  In that case, the buyer had defaulted on a contract to take delivery of shares on a particular date at a particular price.  By the delivery date, the shares had fallen in value.  The Privy Council held that the measure of damages for breach by a buyer of a contract for the sale of shares is the difference between the contract price and the market price at the date of breach.  At page 179, Lord Wrenbury explained the reason for the rule, saying that, “If the seller retains the shares after the breach, the speculation as to the way the market will subsequently go is the speculation of the seller not of the buyer; the seller cannot recover from the buyer the loss below the market price at the date of the breach if the market falls, nor is he liable to the purchaser for the profit if the market rises”. 
18.	Unlike a contract for the sale of shares on a particular date, a time charterparty involves performance over a period of time.  In cases where a repudiatory breach has been accepted bringing such a charterparty to an end, The Elena D’Amico principle has been explained in causation terms.  The “rationale is that in such a situation that measure represents the loss which may fairly and reasonably be considered as arising naturally, i.e. according to the usual course of things, from the breach of contract” (Norden v. Andre, ibid, at [42]).  It has further been explained as deemed mitigation: “The rationale is that acceptance of the market rate at the date of breach is deemed to constitute reasonable mitigation” (Zodiac Maritime Agencies Ltd v Fortescue Metals Group Ltd [2010] EWHC 903 (Comm) at [65], David Steel J).  Lord Bingham (who with Lord Walker was in the minority on the outcome of the case) explained it as follows in Golden Strait Corpn v Nippon Yusen Kubishika Kaisha (The Golden Victory) [2007] 2 A.C. 353 at [10]:
“An injured party such as the owners may not, generally speaking, recover damages against a repudiator such as the charterers for loss which he could reasonably have avoided by taking reasonable commercial steps to mitigate his loss. Thus where, as here, there is an available market for the chartering of vessels, the injured party's loss will be calculated on the assumption that he has, on or within a reasonable time of accepting the repudiation, taken reasonable commercial steps to obtain alternative employment for the vessel for the best consideration reasonably obtainable. This is the ordinary rule whether in fact the injured party acts in that way or, for whatever reason, does not. The actual facts are ordinarily irrelevant. The rationale of the rule is one of simple commercial fairness. The injured party owes no duty to the repudiator, but fairness requires that he should not ordinarily be permitted to rely on his own unreasonable and uncommercial conduct to increase the loss falling on the repudiator.”
Finally, the principle is also justified on the grounds of practicality, because the “availability of a substitute market enables a market valuation to be made of what the innocent party has lost, and a line thereby to be drawn under the transaction” (Norden v. Andre, Toulson J, ibid, at [42]).
19.	In The Elena D’Amico, Robert Goff J referred to the normal measure of recovery, and subsequent authority confirms that it is not an absolute rule.  In The Golden Victory (ibid), the House of Lords (by a majority) held that the principle that damages should be assessed as at the date of breach was not inflexible, and that the desirability of achieving certainty in commercial contracts was subject to the overriding compensatory principle that the damages awarded should represent no more than the value of the contractual benefits of which the claimant had been deprived.  Events between breach and the assessment of damages could therefore be taken into account. The consequence in that case was that though there was an available market at the time of breach, the owners’ damages for the unexpired period of the charterparty were nonetheless limited to the period up to the time when it would have been cancelled by reason of the outbreak of war.  See the analysis in McGregor on Damages (18th ed.) paragraphs 8-099 to 8-102.
20.	The Elena D’Amico statement of principle is explicitly concerned with the case where there is an available market at the time of the termination of the charterparty.  There are authorities which deal with the situation where there is no such market.  In The Griparion [1994] 1 Lloyd’s Rep. 533, the issue was as to damages for the premature redelivery of a vessel.  The charterers argued that damages were to be assessed by reference to the principle that the owner must be assumed to go out into the market and re-charter his vessel at the market rate.  But there was no market for re-chartering the vessel in question until she was repaired, and at p.537, Rix J said: 
“ … any such principle of damages is in any event only a prima facie rule.  If there was no market for an unrepaired vessel, whether the relevant market be the charter market or the sale and purchase market, then it is not possible to apply a prima facie test. … such prima facie rules are only, at bottom, rules of thumb relating to causation and mitigation. The underlying questions remain: what loss has this breach caused as its normal and direct consequence? and what conduct should be presumed to be unreasonable (eg failing to sell shares or a fungible commodity in an available market) in the absence of the displacement of that presumption?”
21.	Similarly, in Dalwood Marine Co v Nordana Line A/S (“The Elbrus”) [2010] 2 Lloyd’s Rep. 315, it was found that no relevant market existed when the charterparty ended through charterers’ repudiation.  It is correct (as the Owners point out) that the discussion in that case was in a context where there was not an available market at any stage.  But the Charterers rely on the passage in the judgment at [29] – [30] which sets out the reasoning of the tribunal in that case.  This was that in circumstances where there is no available market, the measure of damage “is the sum which would put the Owners in the same financial position as if the charter had been performed”.  The discussion in Time Charters, 6th Edition, 2008, at paragraph 4.44 was applied.  In his judgment at [30], Teare J described the tribunal’s reasoning in this respect as disclosing no error of law.  It is however right to say, as the Owners do, that this does not in itself resolve the question as to the effect of a subsequent revival of the market, where that happens within the remaining term of the repudiated charter.  
22.	This question was addressed in Zodiac Maritime Agencies Ltd v Fortescue Metals Group Ltd [2010] EWHC 903 (Comm), which arose out of the market collapse that gave rise to the present litigation. The facts are as follows. A consecutive voyage charter party (CVC) came to an end through repudiatory breach by charterers in January 2009. At the time, the CVC had almost four and a half years to run.  At that time, the court found that there was no available market on which the vessel could have been fixed for a four and a half year consecutive voyage/time charter on equivalent terms.  The court considered the significance or otherwise of the later emergence of a period charter market sufficient to absorb any remaining balance of the charter party period ([62]).  It was common ground that in February 2010, there was an available market for a three to three and half years charter (in other words the unexpired period of the CVC at that time).  The owners’ case was that damages should thereafter be assessed by reference to that available market. The charterers, on the other hand, submitted that the later emergence of an available market was only relevant if a reasonable owner would be bound by way of mitigation to fix on that market. 
23.	The arguments were essentially the same as those advanced by the parties in the present case.  David Steel J addressed the issue of principle as follows:
“[63] The decision in The Elena d'Amico [1980] 1 Lloyd's Rep. 75 was to the effect that the normal measure of recovery in cases of premature termination of a charterparty is the difference between the contractual rate for the balance of the charter period and the market rate. But where there is no market at the time of termination, this measure does not and cannot arise. It is common ground that the spot fixtures entered into by  Zodiac at that stage could not be the outcome of an independent decision since no alternative form of mitigation was available.
[64] As explained Zodiac [the owners] submits however that, where a market emerges at some later date on which a term charter covering the residual balance of the period could be fixed, damages for that remaining period should be assessed on the same basis since any alternative employment would constitute independent speculation. 
[65] The fact that a term market thereafter emerges for the (yet shorter) outstanding balance of the charter period does not in my judgment import with it the proposition that a decision not to take advantage of that market at that later stage becomes a business decision independent of the wrongful termination. The rationale is that acceptance of the market rate at the date of breach is deemed to constitute reasonable mitigation …
[66] By this mechanism subsequent market movements are removed from the equation. It is simply a matter of chance when the vessel completes any spot voyages after the termination date. Indeed they may overrun the emergence of an available market. In short I see no basis for requiring the owner to go back into the term market at the end of every spot voyage or for that matter to disregard short time charters in case the market for longer charters emerges in the meantime.”
24.	David Steel J then considered what income the owners had to give credit for, the question being whether the earnings from the alternative charter should be taken into account in assessing the owners’ loss, or whether the relevant earnings would be those available on the market.  He accepted the charterers’ submission that the decision to employ the vessel under the alternative charter was part of a continuous dealing with the situation in which the owners found themselves and, applying The Fanis [1994] 1 Lloyd's Rep. 633 at 636-637, Mance LJ, had to be brought into account in assessing damages.
25.	It is right to say, as the Owners point out, that the facts were different from those in the present case, in that two spot voyages were performed from January to July 2009, and thereafter the vessel was employed under an earlier term charter which had longer to run than the original CVC. The Owners say that this was an unpromising background for a submission that the later emergence of an available market was to be used to assess losses, even though, as they put it, at no relevant time did the owners have a free choice whether to enter the vessel into the market. They submit that on the facts of the case, the ratio of the decision is only that the later emergence of a market does not automatically make the innocent party’s actual loss scenario irrelevant as “independent speculation”.  But the case did not, it is said, decide the separate (and logically converse) question of whether a subsequent available market is always to be ignored.  The Charterers respond that the court approached the question of the effect of a revival in the market as a matter of principle, and that the same approach should be adopted in the present case.
Conclusions
26.	Before expressing my conclusions, there is a point to mention that arises on the facts of the present case.  In their skeleton argument, the Owners submitted that they “need say no more than that the later emergence of an available market will sometimes provide the measure of loss, when the tribunal finds the market was for a “like-for-like” replacement and the innocent party did face and take a decision as to whether or not to adopt that subsequent “like-for-like” replacement”.  The Charterers objected that there was no factual finding by the arbitrators as to whether this happened or not.  In clarification, Mr Lewis made it clear that he did not suggest that the Owners ever put evidence before the arbitrators as to their subjective deliberations.  But he did not understand the Charterers to say that the vessel did not become free in July 2009.  I do not think that this more limited factual proposition is in dispute (or was in dispute before the arbitrators).  So I proceed on the basis that as a matter of fact the vessel did come free in July 2009, albeit it was not in fact then placed on a two year charter.
27.	The Zodiac case came too late to be cited to the arbitrators.  The Owners submitted that either the decision is distinguishable, or wrongly decided, and in any case not binding on this court.  The Charterers on the other hand rely on it as containing a correct statement of principle which is applicable here.  In my judgment, the case does deal with the effect of the later emergence of an available market as a matter of principle. The owner’s submissions in that case are (in my view) in substance the same as in the present case. The court’s reasoning was that the fact that a market emerges later for the (yet shorter) outstanding balance of the charter does not mean that a decision not to take advantage of that market at that stage becomes a business decision independent of the wrongful termination (which was the analysis that ultimately underlay the principle in The Elena D’Amico).  That decision was clearly premised on the existence of an available market at the time of breach/termination.  I respectfully agree with David Steel J that whereas acceptance of the market rate at the date of breach is deemed to constitute reasonable mitigation, where there is no market at that time there is no basis for requiring the owner to go back to the term market at the end of every spot voyage, or to disregard short time charters in case the market for longer charters emerges in the meantime.  A reviving market may give rise to issues of mitigation. But mitigation was not an issue in this case—indeed the Charterers relied upon the fact that the Owners did not fix the vessel in July 2009 in support of their contention that it would not have been reasonable to do so at that stage of the market cycle. 
28.	There was some debate on the present appeal as to what this outcome might mean in practice where at the time of decision the original term of the charter has not expired (which is the position in the present case).  Mr Charles Priday, counsel for the Charterers, offered two suggestions, whilst emphasising that his clients’ concern had only been to meet the case put by the Owners to the arbitrators based on the “reviving market theory”.  He said that the arbitrators could look at the owner’s position over time, awarding damages as and when loss crystallised on each voyage.  Alternatively, they could assess actual losses to the date of the decision and assess future loss by projecting forward a forecast of actual trading results.  In this case the Owners could, he said, have advocated the latter approach, but they did not.
29.	His first suggestion seems akin to the “running assessment of the state of play” which Lord Bingham mentioned with disapproval in The Golden Victory, ibid, at [23] (see also Lord Carswell at [67]).  The alternative is for arbitrators to decide on prospective loss by taking the known facts into account, including the state of the market.  But in the event, neither party invited the arbitrators to approach the damages issue on that basis (though it is right to make clear that the Owners did reserve the right to amend the Points of Claim to claim further actual losses as they accrue). 
30.	The distinguished maritime arbitrators who decided this matter sought to reach a practical result. They did not however have the benefit of the Zodiac decision in their deliberations.  I have carefully considered whether the Award should be upheld on the ground suggested by Mr Lewis, namely it was a reasonable valuation of the Owners’ loss in the circumstances.  But the arbitrators approached the matter as one of principle, and on this appeal the court must do likewise.  Differing from them with diffidence, I have concluded that they were not entitled to assess damages from July 2009 by way of The Elena D’Amico reasoning on the basis only that the market revived at that time.  This (in my view) departs from the principle that damages recoverable by the injured party are such as will put him in the same financial position as if the contract had been performed: The Golden Victory [2007] 2 AC 353, Lord Bingham [9], Lord Scott at [29], Lord Carswell at [57], Lord Brown [83].  In my view, in a case such as this the law is correctly stated by Rix J in the passage from The Griparion which I have cited above.
31.	The question for decision is as to the correct measure of damages for a charterer’s repudiation of a time charter where there is, at the date of the termination of the charter, no market for the unexpired period and a market for then the unexpired period only revives at a much later date.  For the above reasons, in such a case my view is that damages are to be assessed by reference to the actual loss of the owner.  Assessment of such damages is subject to the usual rules, including the principle that where the owner has unreasonably failed to mitigate its losses, it may not claim its self-induced loss.  The revival of the market is obviously relevant in that regard. Mitigation apart, the revival of the market at a later date may be a factor to take into account in calculating future loss if damages fall to be assessed before the end of the contractual period, but the revival of a market for the then unexpired period of the charter does not in itself provide the correct measure of damages. 
32.	The Owners (with the permission of Burton J) put forward an alternative case based on The Golden Victory (ibid) that upon termination, some period is usually allowed to enter the market, and the replacement contract need not be immediately available, so long as it is obtained “as soon as reasonably possible” This is based on the following passage in The Golden Victory at [57] (Lord Carswell, underlining added):
“The basic rule in the case of repudiation of a charterparty, where there is an available market, is that the loss is measured as at the date of acceptance of the repudiation. The calculation is made on the basis that the injured party can mitigate his loss by going into the market and obtaining a replacement charter as soon as reasonably possible on the best terms available for the balance of the charter period: see Koch Marine Inc v D'Amica Societa di Navigazione Arl (The Elena D'Amico) [1980] 1 Lloyd's Rep 75 per Robert Goff J. His loss will then be calculated by reference to the extent to which he is worse off in consequence. This will normally be the extra cost of chartering a substitute vessel, if the owner has repudiated the original charter, and any reduction in charter rates if the repudiation was by the charterer. In either case the loss is ordinarily assessed over the remainder of the duration of the original charter”.
33.	The Owners accept that the House of Lords was not considering the case of a subsequently available market, but point out that on the facts of the case, the owners claimed losses on the spot market for three and a half months before claiming by reference to a new fixture on the time charter market (see at [81]). The distinction between time for the innocent party to arrange entry into the market and time for the market to become available is, it is submitted, a distinction without a difference.  Accordingly, the arbitrators’ decision involved a mixed question of law and fact, and was not beyond the range of reasonable decisions. Alternatively, the arbitrators “effectively” assessed loss on the basis of a replacement charter obtained “as soon as reasonably possible”.
34.	My conclusion on this point (essentially in agreement with the submissions of the Charterers) is as follows.  The effect of a gap between breach and owners re-fixing the vessel on the period charter market was not directly in issue in The Golden Victory; further, there was an available market at the date of termination, and there was no consideration of a case such as the present where there is no such market at that time, and one only arises much later.  I agree with the Charterers that the decision tends to support their contentions to the extent that it emphasises the overriding compensatory principle that damages awarded should represent no more than the value of the contractual benefits of which the claimant has been deprived.  Further, I do not think that in the present case the arbitrators “effectively” assessed loss on the basis of a replacement charter obtained “as soon as reasonably possible”.  That was clearly not the basis of their decision.  Though in some cases “time may well be needed before the injured party can reasonably be required to re-enter the market” (see Lord Brown in The Golden Victory at [80]), in the present case the Owners did not go into the period market in July 2009 (or indeed at any time).  I do not see this alternative case as arising here.
35.	In the event the appeal is allowed.  In those circumstances, the Charterers’ primary submission is that the Award should be varied so as to dismiss the claim based upon market damages, with the consequence that the Owners would recover nothing for the period from July 2009.  I reject that submission.  The factual position is that the Owners did reserve the right to amend the Points of Claim to claim further actual losses as they accrue, and provided disclosure of their actual trading up to 17 December 2009.  Their submissions to the arbitrators reserved the right to amend the Points of Claim to claim actual loss insofar as their primary claim to market-based damages was rejected, which it was not.  When the parties closed the case, there was still well over a year to run on the Charterparty and the Owners’ actual loss was not known.  As they say, therefore, the issue of prospective loss inevitably arose, unless the arbitrators were to defer final resolution until July 2011 which they did not.
36.	I agree with the Owners that the correct course is to remit the Award to the Tribunal for the Tribunal to consider the Owners’ actual losses accruing up to 21 June 2011 (the contractual date of expiry of the charterparty).  Insofar as the Charterers wish to contend that it is now too late for the Owners to recover their actual losses, that is an argument for the Tribunal and not for this court on a review on a point of law.
37.	I am grateful to the parties for their assistance and will hear them as to any ancillary matters arising.