Repudiation of a Shipbuilding Contract: Responses and Remedies

Abstract

The House of Lords decision in Stocznia Gdanska SA v. Latvian Shipping Co (hereafter Stocznia) was the sixth judgment to be handed out in this case, which coincidentally, involved six shipbuilding contracts. The facts of the case raise interesting questions of law, for example: (i) Where a contract is terminated under an express termination clause, and the clause provides for the rights of the parties following termination, how far do their common law rights survive? (ii) In what circumstances can instalments paid under a contract that has been terminated be recovered for total failure of consideration? (iii) If, after affirmation of a contract following an anticipatory breach, the innocent party changes his mind and wishes to terminate the contract for the anticipatory breach, can he do so? (iv) When one party is in anticipatory breach of the contract, can the innocent party refuse to accept the breach and insist on carrying on with his unperformed obligations under the contract?