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Bunge SA v Kyla Shipping Company - The Kyla

220 bytes added, 16:26, 18 June 2013
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'''Summary'''
The “Kyla” suffered a casualty whilst on a time charter. Repairs would have cost more than its sound market value but less than its insured value, a fixed figure which had been agreed in the charter . Owners contended that the time charter was frustrated because the cost of repairs exceeded the sound market value (but not the agreed insured value) and suggested that there was a principle of law to that effect. Owners’ claim succeeded in arbitration.
Charterers appealed on a question of law and were successful before Flaux J, who rejected the principle contended for by Owners and, applying general principles of frustration, decided that the charter had not been frustrated, because it provided for H&M insurance in an amount greater than the cost of repairs. Where the cost of repairs did not exceed the agreed insured value, Owners were obliged to repair the ship and ocntinue with the charter.
This case note has been contributed by Justin Gan Boon Eng, LLB (Hons) (NUS), an advocate and solicitor of the Singapore Bar

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