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United Kingdom

Injunction upholding demolition-only covenant; negotiating (Wrotham Park) damages unavailable; nominal damages only: Priyanka Shipping v Glory Bulk (English Commercial Court)

Published on: 31 October 2019

Published by a LexisNexis Dispute Resolution expert
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Article summary

Priyanka Shipping Ltd v Glory Bulk Shipping Pte Ltd [2019] EWHC 2804 (Comm), [2019] All ER (D) 176 (Oct)

What are the practical implications of this case?

This judgment neatly distils the rules on enforcing negative covenants through injunctive relief. It cautions parties against attempting to sidestep such restrictions by paying damages instead. The court emphasised the strong policy of holding parties to their bargains, and the authorities confirm that a defendant cannot simply buy the ability to trespass on the claimant’s contractual rights by paying compensation. The court also recapped the framework for negotiating damages (formerly termed Wrotham Park damages), concluding that such awards arise only where the breach causes the loss of a valuable asset that is created or safeguarded by the right infringed, as opposed to the contractual right in the abstract.

What was the background?

In April 2019, Priyanka Shipping Ltd (buyer) agreed to buy a vessel from Glory Bulk Shipping Pte Ltd, the seller, under a memorandum of agreement dated 26 April 2019 (the MOA). Under clause 19 of the MOA (clause 19), the...

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