With tumbling oil prices and projects being mothballed or
cancelled, knock-on effects are to be expected. Offshore
contractors with vessels or rigs under construction in yards are
less likely to be tolerant of construction delays than they would
otherwise be, and may consider cancellation. The recent Commercial
Court decision in Zhoushan Jinhaiwan Shipyard Co Ltd v Golden
Exquisite Inc & Others [2014] EWHC 4050 provides a timely
look at cancellation rights in the context of delay.
Facts
In Zhoushan, the buyer had purported to exercise its
right to cancel under a series of materially identical shipbuilding
contracts, on account of periods of accumulated delay in delivery.
Article VIII.3 of the contract permitted the buyer to cancel if the
total accumulated delay exceeded a certain number of days, but
certain categories of delay could not be included in the
calculation. One of the excluded categories was for delays
"....due to default in performance by the
buyer".
