There was a catastrophic failure of the port side main engine oil coolers during a cruise ship's inaugural cruise which was several weeks after completion of the works for the maintenance and repair of the cruise ship. The coolers had been significantly corroded, but this did not raise a red flag with the shipbuilder during the refurbishment contract, that this corrosion could cause failure of the coolers.
The matter was brought before the High Court to decide on the liability of the shipbuilder. The Court held that the shipbuilder had been duty-bound to report anything material to the question of retubing the coolers to the ship owner but had failed in that duty.
The Court ordered that the ship owner was entitled to €770,000 in liquidated damages due to delay in completing the refurbishment works but the shipbuilder was not held liable for damages for cancellation of the cruise because its breaches did not cause the cooler failure. The shipbuilder was responsible for a delay in completing the works and could not rely on the ship owner’s delays to “stop the clock” running under the liquidated damages clause.
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