A UK court has rejected an appeal by Star Bulk Carriers over whether Hyundai Heavy Industries & Construction’s Philippines should pay for more than the physical damage to a capesize that suffered an engine failure.

High Court Justice Jeremy Cooke that the newbuilding contract between the New York-listed bulker owner and HHIC-Phil does not allow any claim against the shipyard group for lost revenue and lower vessel value as a result of the problems on the 180,000-dwt Star Polaris (built 2011).

In 2012, the Star Polaris (pictured below) was towed to STX Shipbuilding & Offshore’s Gosung yard in South Korea for repairs after the engine problems, and Star Bulk took an earnings hit from the lost charter revenue.

But HHIC denied liability for the incident, leading Greek shipowner to launch arbitration to recover repair costs, towage fees and the lost profit. Star Bulk, which is led by Petros Pappas, has also been planning to file a claim for the ship’s drop in value as a result of the incident.

A three-member London arbitration tribunal decided in November 2015 that HHIC-Phil breached its warranty for the vessel. But the arbitrators also found that the ship’s chief engineer was negligent because he did not react soon enough to various alarms, since slowing or stopping the ship earlier could have prevented some of the damage.

The tribunal has yet to quantify how much Star Bulk will receive as a result of the problems.

The appeal centres on how to interpret the shipbuilding contract’s provisions for damages in such situations, and whether they cover a drop in value.

Cooke agreed with the arbitrators that the contract language does not allow for a claim for damages above and beyond the cost of repairing physical damage to the ship.

“The reality is that there is no express provision that the buyer can point to which gives rise to a claim for financial loss, lost profit or diminution of value,” the judge wrote.

Star Bulk executives declined to comment for this story.

The shipowner is represented in the case by barrister Christopher Hancock and Socrates Papadopoulos of 20 Essex Street and solicitors at Ince & Co. HHIC-Phil is represented by barristers Luke Parsons and Gemma Morgan of Quandrant Chambers and solicitors at Clyde & Co.