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English Court of Appeal confirms Mackay v Dick: preventing a condition precedent to accrual cannot avoid liability; deposits recoverable as debt (King Crude Carriers v Ridgebury November)

Published on: 19 July 2024

Published by a LexisNexis Commercial expert
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Article summary

King Crude Carriers SA and others v Ridgebury November LLC and others [2024] EWCA Civ 719

The opposing position put forward in this case—and endorsed by the Commercial Court at first instance—was that, in this situation, the other party’s sole remedy is damages for breach of contract, rather than a claim in debt. On that footing, recovery would be confined to compensation for proved loss.

The distinction between debt and damages is critical:

  • Damages: the claimant must prove loss and satisfy the principles of causation, mitigation and remoteness.
  • Debt: the claimant need only show that a contractual sum is due and has become payable, and does not have to prove loss.

In addition, damages are compensatory, whereas debts are not.

Background

The case concerns contracts for the sale of four vessels under the 2012 Norwegian Saleform. The sales were governed by four separate contracts, but the material terms of the underlying contracts were identical. The buyers were obliged to put down a deposit of 10% of the purchase price with escrow holders...

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