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Available Market
Last updated: 28-Nov-2015

Dunkirk Colliery Co v Lever (1878) 9 Ch. D. 20 per James LJ at p.24:

What I understand by a market in sucha a case as this is, that when the defendant refused to take the three hundred tons the first week or the first month, the plaintiffs might have sent it in waggons somwhere else, where they could sell it, just as they sell corn on the Exchange, or cotton at Liverpool: that is to say, that there was a fair market where they could have found a purchaser either by themselves or through some agent at some particular place. That is my notion of the meaning of a market under those circumstances.

In Thompson (W.L.) Ltd v Robinson (Gunmakers) Ltd [1955] 1 Ch 177, per Upjohn J:

Had the matter been res integra, I think I should have found that an 'available market' merely means that the situation in the particular trade in the particular area was such that the particular goods could freely be sold, and that there was a demand sufficient to absorb readily all the goods that were trust on it, so that if a purchaser defaulted the goods in question could readily be disposed of.

In Zodiac Maritime Agencies Ltd v Fortescue Metals Group Ltd [2010] EWHC 903 (Comm) per Mr Justice David Steel:

60. I was fully persuaded by Mrs. Richard’s analysis of the absence of any demand for period charters in the region of 4 years. The market rate had been at record levels (US$160,000 per day) as recently as August 2008. A rate of US$24,000 or so following the collapse might have been acceptable in the short term (say up to 1 or even 2 years), but for any longer period a far higher rate would be demanded. Yet any such higher rate would not have attracted any charterers: indeed they would have pressed for a lower rate. Unlike the second hand ship sale and purchase market there was a third dimension in the form of the length of the charter period. In short it was in this context there was no match of supply and demand.

61. Her view was usefully summarised during the course of her cross-examination as follows:

in terms of determining whether there is a market or not you have to determine whether there is an appetite to do a certain class of business at a certain point in time. The appetite is improved by actual reported fixtures. But if you look at the risk profile of the way that the market was going forward there were a lot of factors that suggested that the risk profile of four years as of 2009 was too high for anybody to want to make that commitment for that particular period of fixture. So I've taken into account not only that I couldn't find anybody doing it, but I couldn't rationally argue for a charterer who would want to do it. Certainly I couldn't argue for an owner equally who would want to commit that far forward at such low rates. So the two things come together, (a) no transactions, but (b) no logical reason why either owners or charterers would actually go for that particular period at that time.

In short, in her view the fact that charterers would only have been willing to contract for the relevant period at a rate which no owner would accept demonstrates the absence of any available market. I agree.


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