Classic Maritime Inc v Limbungan Makmur SDN BHD

A contractual obligation to perform a specified number of shipments is not contingent merely because some shipments are described as unscheduled. The contract must be construed as a whole, including its total-shipment provision and performance timetable. A party relying on a force majeure clause must prove that the event relied on caused the failure of performance, including that it would have performed but for the event. Uncalled witness statements are not evidence unless admitted as hearsay. In an undefended claim, the court may dispense with oral evidence where no clarification or cross-examination is required.

The claimant sought damages for unperformed shipments under a contract of affreightment. The first defendant was the charterer and the second defendant guaranteed its performance. The defendants did not participate at trial.

The issues included the construction of provisions concerning scheduled, unscheduled and index shipments; whether variations to another contract breached a requirements undertaking; whether a dam burst excused non-performance under the force majeure clause; the status of a missed 2013 shipment; and the assessment of damages.

1. Conduct of the undefended trial. Following Clarke v Lighting & Lamps UK Limited [2016] EWCA Civ 5, the court could determine what procedure was necessary in the circumstances and dispense with oral evidence where there was no witness to cross-examine and no issue requiring clarification. The claimant nevertheless had to prove its case.
2. Under CPR rule 32.5, as explained in Williams v Hinton [2011] EWCA Civ 1123, witness statements served by the defendants but neither admitted as hearsay nor supported by calling the witnesses were not evidence. The court was required to consider evidence, not adopt a wider approach to unadduced material.
3. The amended contract required 59 shipments in total, including 16 unscheduled shipments. The unscheduled shipments were not contingent on the existence of extra requirements, and shipments performed under other contracts could not count as performance under this contract. The unchanged reference to eight shipments was a drafting error.
4. The requirements undertaking prohibited extending or varying an existing third-party contract of affreightment. Extra requirements were therefore assessed by reference to the other contracts as they stood when the contract was made. The extension of the PCL contract breached that undertaking, and the relevant shipments should have been declared under the claimant’s contract.
5. The force majeure defence failed. The defendants bore the burden of proving that, but for the dam collapse, they would have performed the relevant shipments. They adduced no admissible witness or documentary evidence establishing that condition.
6. The missed 2013 shipment was not cancelled, rescheduled or reduced from the contractual total by the later addendum. It remained unperformed, giving the claimant an accrued right to damages.
7. Laycans for the seven remaining unscheduled shipments had to be declared so that they could be performed before the contractual deadline. They were to be non-concurrent and non-overlapping, except where extra requirements required concurrent or overlapping shipments. The same result would follow from an implied term necessary to give the contract business efficacy.
8. Classic was entitled to substantial damages. The court accepted the use of a 20-day assessment date, the BCI C3 index, a positional-advantage adjustment, and average historical cargo size where appropriate. Precise quantification was to be determined after submissions.

Not an appeal. The judgment records earlier proceedings concerning the same contract, including the Court of Appeal decision at [2019] EWCA Civ 1102, but those decisions were not under appeal in this action.