This
is a case dealing primarily with the validity of a contract and, specifically,
whether the contract in question actually existed. While the case is of general
interest to all parties conducting business, it will be of particular interest
to the shipping community because the issue of concluding an agreement by way
of recap was examined. As Beatson J points out (at paragraph 27): “it
is common for charterparties to be concluded by an exchange of emails or faxes,
with the terms being recapitulated in a “fixture recap”, and they can be
concluded orally and recapitulated”.
The
underlying dispute involved a claim by disponent owners, TTMI, against
charterers, Statoil, for unpaid demurrage following a voyage from Norway to
Texas on the basis of a fixture recap email dated 17 October. Arbitration was
commenced. Statoil rejected the claim, stating that there was no contract in
existence with TTMI because on drawing up the recap, the brokers had mistakenly
identified the parent company as the vessel’s time chartering owner, rather
than the tanker chartering arm of the company who were actually the disponent
owners with whom the charterers would do business.
The
case came before the Commercial Court. TTMI applied under s.67 Arbitration Act,
to strike out the decision of the arbitrator: as there was no valid contract,
there was, therefore, no arbitration clause incorporated and, as such, the
dispute was not within his jurisdiction to determine. Beatson J was asked to
determine whether a contract had been validly formed and considered, inter
alia: (i) the effect of the error in naming the parties (ii) conclusion of a
contract by performance and (iii) in the event that a contract was concluded,
the inclusion of terms.
1. Was the error
in naming the correct parties fatal to the validity of the contract?
In
the circumstances, Beatson J was unable to conclude that there was a contract
formed between TTMI and Statoil on 17 October. At para 31 he states:
“In
the present case, it is not possible to say that the bargain had been made in
all its essentials prior to 17 October and at a time when “Sempra” was named as
the time-chartering owner. Even where a written recap is preceded by an oral
agreement, the importance of the terms of the written recap should not be underplayed.”
The
“Rhodian River” and The
“Rhodian Sailor” [1984] 1 Lloyd’s Rep. 373 and The “Double
Happiness” [2007] 2 Lloyd’s Rep. 131 could also be distinguished
because in these cases the charter-party had been agreed or substantially
agreed before the mistake as to the name the time-chartering owner.
The
overriding problem in this case was that it was not possible to infer that an
oral contract had been made prior to the recap of the 17 October because there
was no evidence as to when such a contract could have been concluded. There was
simply no reference in the documents to the parties’ negotiations and, since
the recap was the charterparty and it named the wrong party, it was not
possible to conclude that Statoil had contracted with the vessel’s disponent
owner.
He
also held that TTMI were not able to bring the claim against the charterers as
“undisclosed” principal of the parent company actually named in the recap,
because there was no evidence that the parent company had any such authority to
enter the charterparty as agent for TTMI. Furthermore, in the absence of any
evidence to the contrary, Beatson J was unable accept the arguments of TTMI
that a contract between TTMI and Statoil was in existence where such assertion
was fundamentally at odds with, and undermined by, the express terms of the
recap email before him.
2. Was the
contract concluded by performance?
Notwithstanding
his decision that there was no written contract between the parties to the
dispute, Beatson J held that a contract had been concluded by the performance
of the voyage. The documents clearly demonstrated the essential elements of
performance; the lifting of the cargo by TTMI, the Notices of readiness
tendered on behalf of TTMI, the payment by Statoil of the freight and the
invoicing of the transactions as between TTMI and Statoil. In particular, the
payment of the freight by Statoil to TTMI was considered a ‘relevant factor’ by
the Judge, and he stated at para 43:
“It
is common ground between the parties that courts have regarded the fact that
services are rendered, work undertaken, or payment is made as “a very relevant
factor” in deciding whether a binding contract is made.”
3. If a contract
is in existence, does it incorporate an arbitration clause?
Counsel
for the Charterers had submitted that in respect of any contract which came
into existence by performance there could be no arbitration agreement in
writing entitling TTMI to seek to rely on the relief provided under section 67
of the Act but Beatson J rejected this assertion (as set out at para 49): “…both
parties proceeded on the basis that the terms recorded in the recapping emails
applied and that they were performing the transaction reflected in them.”
The
recapping email stated that the vessel was to be chartered on Shellvoy5 terms,
which contained at clause 43 a provision for disputes to be resolved in London
arbitration, and the Navion amendments to Shellvoy July 2002 which, against the
clause which provided for London arbitration, stated “ok”.
The
difficulty though was Statoil’s argument that the recap mistakenly referred to
the parent company of the disponent owner and not TTMI.
However,
the Notices of Readiness tendered referred to “the terms and conditions
of the recap email dated 17 October 2005”. Those terms made express
reference to the arbitration clause in the standard Shellvoy 5 form and that
clause was expressly agreed in the recap. Counsel for TTMI was thus successful
in arguing that it was not necessary to have the arbitration agreement in
writing. Rather, there could be a wide concept of “agreement in writing”.
Thus
the Judge held that TTMI’s application to set aside the Award would be upheld
and the claim would be referred back to the arbitrator for review. The case
demonstrates the need for accurate recording and conclusion of charterparties.
This is a statement which one might consider obvious, but in an industry in
which there are intense time pressures and which often relies on email recaps,
perhaps it is a statement which bears repeating.
More details at,
Δεν υπάρχουν σχόλια:
Δημοσίευση σχολίου