DEBT, DAMAGES AND RESTITUTION

Abstract

StoczniaGdanska SA v. Latvian Shipping Co. [1998] 1 W. L. R. 574 concerned six contracts to “design, build, complete and deliver” six ships. The buyers were to pay 20 per cent. of the price after receiving notice that the keel had been laid. The contract gave the seller the right to terminate if payments were not made and to retain any instalments paid and, if it terminated, to sell the vessel whether completed or not. Keels were laid for vessels 1 and 2 but the buyers failed to pay and the seller terminated. It then renumbered the keels, gave notice for payment under the third and fourth contracts, terminated those contracts when payment was not forthcoming, and renumbered the keels again and gave notice for payment under the fifth and sixth contracts. It then exercised its right of sale, appropriating the keels to a contract with a third party. As well as damages, the seller claimed the 20 per cent. instalments under all six contracts.