Developments after Transfield: Sylvia Shipping

We had initially discussed recent developments in the law of contractual damages here and here. In particular, the posts had highlighted some observations in Transfield Shipping v. Mercator and Supershield v. Siemens. Mr. Badrinath Srinivasan, (who had earlier written a guest post for this blog) has pointed me to this litigation e-bulletin prepared by the law firm by Herbert Smith discussing the case of Sylvia Shipping Co Limited v Progress Bulk Carriers Limited [2010] EWHC 542 (Comm). The bulletin notes, “This was not a case in which either party had argued that the assumption of responsibility test should apply, and, of course, as a first instance decision, the observations of Hamblen J may not be followed in future cases. However, the judgment endorses the limiting of the assumption of responsibility test to unusual cases. This will restore order for the great majority of cases which, in Hamblen J's view, remain to be decided on orthodox principles of remoteness. Further, Hamblen J's definition of "unusual" cases in which assumption of responsibility should be applied as a stand alone test would limit significantly the use of the assumption of responsibility test. It remains to be seen how rules on remoteness are applied in future cases, but Sylvia Shipping is a step on the road to providing judicial certainty on the correct test for remoteness in a particular case…”