TTMI Sarl v Statoil ASA [2011] EWHC 1150 (Comm)

The Claimant Disponent Owner, who had time chartered the vessel in question, instructed shipbrokers to sub-charter the vessel to the Defendant. In the fixture recap, the shipbrokers mistakenly named the Claimant’s parent company, rather than the Claimant itself, as disponent owner of the vessel.

The voyage under the charter between the two parties was fully performed. The notices of readiness, all of which were correctly tendered and accepted, referred to the terms and conditions of the charterparty and identified the Claimant as disponent owner. The freight invoice stated that an amount was due to the Claimant, and specified the Claimant’s bank account details for payment.

The Claimant brought a demurrage claim in arbitration, but the arbitrator held that he had no jurisdiction and struck out the claim on the grounds that there was no contract between the parties, and thus no arbitration agreement.

The Claimant appealed, and argued that the Defendant had contracted with the Claimant and/or its parent company which had instructed the shipbrokers to negotiate the subcharter, and the shipbroker’s mistake in recording the disponent owner’s name in the fixture recap did not mean that there was no contract. The Claimant also submitted that in any event a contract had come into existence by conduct: the voyage had been performed by, and the freight paid to, the Claimant, and not the entity named in the fixture recap. Finally, the Claimant submitted that it was entitled to sue as an undisclosed principal.

The Court noted that it is common for charterparties to be concluded by an exchange of communication, with the terms being set out again in a fixture recap. Charterparties could also be concluded orally and recapitulated in this way. In this case, however, there was no evidence of an oral contract coming into existence prior to the recap. Indeed, the charterparty had not been agreed, either fully or substantially, before the issue of the name of the disponent owner arose.

Even if a written fixture recap was preceded by an oral agreement, the terms of the fixture recap itself were still very important. In this case, the fixture recap was the main, indeed possibly the only, expression of the agreement between the parties. It could, therefore, for all material purposes be regarded as the charterparty. The identity of the vessel’s owner was specifically set out in that document, and the Claimant’s argument was at odds with and undermined by the express terms of the fixture recap.

As regards the Claimant’s ‘undisclosed principal’ argument, the Court held that it was the position of the party named in the contract which determined whether or not a person who claimed to be an undisclosed principal could take the benefit of the contract. Here, there was no evidence that the parent company was authorised to act as the Claimant’s agent.

Finally, the Court held that a contract had been formed by the parties’ conduct. This contract was formed when the freight was paid, although other possible points of formation included when the first NOR identifying the Claimant as disponent owner was accepted, or when the cargo was loaded. The contract so created was on the terms set out in the correspondence, and the arbitration agreement was insufficiently evidenced in writing for the Arbitration Act 1996 to apply.  

The arbitrator’s award was set aside, and the matter remitted to the arbitrator.