Late Redelivery, MOAs, and the Long Reach of Res Inter Alios Acta: The Court of Appeal in The Skyros and The Agios Minas

In Skyros Maritime Corporation & Agios Minas Shipping Co v Hapag-Lloyd AG (The “Skyros” and The “Agios Minas”) [2025] EWCA Civ 1529, the Court of Appeal has restored what most shipping practitioners would have regarded as the orthodox measure of damages for late redelivery — market less charter rate for the period of the overrun — and has done so in circumstances that would, at first blush, have made it tempting to say that the owners had suffered no real loss at all. The case is now headed for the Supreme Court, permission having been granted on 23 February 2026. Whatever the outcome there, the Court of Appeal’s judgment is required reading for anyone advising on charterparty damages, and for anyone whose practice involves the often awkward intersection between time charter disputes and the owner’s downstream sale and purchase arrangements.

The facts

The relevant facts are short. The owners of the Skyros and the Agios Minas — two container vessels — had time-chartered them to Hapag-Lloyd on NYPE terms. Both charterparties were due to expire at the end of May 2021. During the currency of the charters, the owners contracted to sell each vessel under memoranda of agreement (MOAs). Each MOA contained the conventional non-recharter undertaking: the owner agreed that the vessel would not be fixed for any further employment before delivery to the buyer. The vessels were redelivered late — the Skyros by approximately two days and the Agios Minas by approximately seven days. By the time of redelivery, the market rate for comparable tonnage had risen significantly above the charter rate.

The case proceeded on the assumed facts that the owners would not, in any event, have re-chartered either vessel during the overrun period, because the MOAs precluded it. The dispute was about whether, in those circumstances, the owners were nevertheless entitled to recover damages on the conventional market-less-charter-rate measure.

The arbitration and the Commercial Court

The tribunal found for the owners on three independent bases. First, on a quantum meruit: that the charterers’ continued use of the vessels past redelivery was outside the scope of the charterparty and gave rise to a restitutionary entitlement to be paid the going market rate. Secondly, on the basis of user damages: a measure rooted in the wrongful use of a valuable asset belonging to another. Thirdly — and most familiarly — on the orthodox compensatory measure, with the MOAs treated as res inter alios acta and so irrelevant to the assessment of the owners’ loss.

On appeal under section 69 of the Arbitration Act 1996, Bright J ([2024] EWHC 3139 (Comm)) reversed the tribunal on all three grounds and substituted an award of nominal damages. His reasoning on the res inter alios acta point was, in essence, that the principle is engaged where one is asking whether a collateral benefit should reduce the claimant’s recovery; but it does not preclude the court from looking at the owner’s actual contractual position when identifying the loss in the first place. Once one looked at the MOAs, there simply was no loss — the owners had bargained away their ability to take advantage of the market.

The Court of Appeal

The Court of Appeal unanimously allowed the owners’ appeal and restored the tribunal’s award, though it did so by a narrower route than the tribunal had taken. The Court declined to support recovery on the user-damages basis: the compensatory principle, on its proper reading, did all the work that needed to be done. There was no need to graft a user-damages overlay onto a charterparty case.

Two of the three judges, with Males LJ giving the leading judgment, reasoned that Bright J had read res inter alios acta too narrowly. The principle is not confined to the exclusion of collateral benefits in the strict mitigation sense — that is, benefits which would otherwise reduce a claimant’s recovery. It extends to collateral arrangements more generally: matters which arise independently of the circumstances giving rise to the breach are to be disregarded for the purposes of assessing damages. The MOAs were such an arrangement. They were a separate commercial bargain between the owners and the buyers, made before the charterers committed any breach, and made for reasons that had nothing to do with the charterers’ performance or non-performance. Whether the owners would or could have re-chartered the vessels in fact was therefore beside the point.

The third member of the panel reached the same destination by a different route, preferring to characterise the MOAs as an “accidental circumstance” which had nothing to do with the breach and so should be excluded from the damages calculus as a matter of remoteness and causation. The Court of Appeal accordingly did not need to resolve the doctrinal question whether the broader reading of res inter alios acta sits comfortably alongside the more confined statements in recent Supreme Court authority on collateral benefits. That is, no doubt, one of the questions the Supreme Court will now be asked to grapple with.

Why it matters

For practitioners, three points stand out.

First, Skyros restores the orthodox market-rate measure of damages for late redelivery and brings welcome certainty back to the area. Charterers’ counsel will not now be able to defeat a substantial claim by pointing to the owners’ downstream commercial arrangements, whether MOAs, repositioning fixtures, or anything else short of a direct mitigation benefit. The measure is, in the leading judgment’s framing, an objective one, designed to give predictability — and it does its work without an intrusive inquiry into what the owner did with the vessel once it was finally redelivered.

Secondly, and as a useful corollary, MOA terms are now firmly ring-fenced from disclosure in charterparty disputes about late redelivery. Owners who feared that bringing a claim for the overrun would expose the commercial detail of their sale negotiations can take some comfort from the judgment: those terms are simply not relevant to the calculation of loss. From a litigation strategy point of view, this is significant. Disclosure battles over MOA terms, side letters, and broker correspondence have historically been a feature of these cases; Skyros should reduce them.

Thirdly, the doctrinal scope of res inter alios acta is now squarely teed up for the Supreme Court. The broader reading of the principle adopted by the majority below — that it captures collateral arrangements generally, not just collateral benefits — is a real shift in emphasis. That broader reading was not addressed in any depth by the Court of Appeal and sits in some tension with recent Supreme Court authority. Whether the Supreme Court adopts the broader reading, prefers the narrower “collateral benefits” framing of the trial judge, or finds refuge (as the third judge did) in the language of “accidental circumstance”, will matter well beyond this case. It will reach into procurement disputes, commodity sales, and any other context in which a claimant’s damages claim is met by the argument that some external arrangement has, in the real world, neutralised the loss.

The appeal

Permission to appeal to the Supreme Court was granted on 23 February 2026. The court will be asked, in substance: where a time-chartered vessel is redelivered late, by which time the owner is contractually committed to selling the vessel and is precluded from chartering it again, are the owners entitled to recover substantial damages assessed by reference to the market rate for the overrun period?

The Court of Appeal’s answer is “yes”, and on the orthodox compensatory measure. The Supreme Court will have to decide whether to endorse that answer, and — perhaps more importantly — on what doctrinal footing.

For now, owners can take the measure as restored, and charterers will need to think carefully before reaching for Golden Strait-style “later-known facts” arguments based on the owner’s actual disposition of the vessel post-redelivery. The pendulum has swung back. Whether it stays there is now a matter for the Justices.