A legal battle that will set a precedent on cargo damage and demurrage has taken another twist in the High Court in London.

The Court of Appeal overturned a decision that would allow shipowners to recover losses after delays in addition to standard demurrage payments.

But the case could yet go to a final legal stage at the Supreme Court.

The row arose from a voyage charter on Norgrain terms for a 70,133-tonne cargo of soybeans that was carried on board K Line's 82,100-dwt bulker Eternal Bliss (built 2010) in 2014.

Congestion and lack of onshore storage at the discharge port in China forced the panamax to wait at anchorage for 31 days after arriving from Brazil.

The charterer, Priminds Shipping (HK), subsequently failed to discharge the vessel within the laytime specified in the charterparty.

When the cargo was finally discharged, it was found that some of the cargo was damaged with mould and caking, which led to claims against K Line for cargo damage.

Lively debate

Justice Andrew Baker allowed the additional claims in a ruling last year.

He held that shipowners were entitled to recover losses that were different from the loss of use of the vessel, without needing to identify a separate breach of contract.

K Line settled the cargo interests' claim for $1.1m and then sought to recover those losses from the charterer in arbitration.

The Court of Appeal has now ruled that demurrage liquidates the whole of the damages arising from a charterer's breach in failing to complete cargo operations within the laytime.

"The appeal raised a point on which there was no previous binding authority and which has, for almost 100 years, divided eminent judges and commentators. The leading textbooks were split on the issue," Quadrant barristers Simon Rainey QC and Tom Bird wrote on the company's website. The barristers acted for K Line.

"This is a significant judgment on a major point of shipping law.

"But this may not be the last word on the issue, which, given the lively debate, would benefit from clarification from the Supreme Court."