In Ferryways NV v Associated British Ports - Butterworths Law Direct 14.2.08 the Claimant was a Belgian shipowner or operator, and the Defendant an English port owner or operator. At an English port, the chief officer on board the vessel was hit by a tugmaster vehicle driven by an employee of a sub-contractor of the Defendant, and died. The vessel’s P&I Club paid sums to his family in respect of the chief officer’s death and the cost of repatriating his body, and the Claimant, as demise charterer of the vessel and a member of the Club, sought to recover those sums from the Defendant. The question was whether such sums were recoverable, which in turn depended on whether the Claimant was the employer of the chief officer.

The Claimant had entered into a Crew Management Agreement (CMA) with Ambra Shipmanagement Limited Cyprus (“Ambra”) on the BIMCO Crewmen A Costs Plus Fee Form. Under the CMA the Claimant was described as the owner and Ambra was described as the crew manager. In the CMA, reference was made to the company, which was defined as “the Owner of the vessel or any other organisation or person who has assumed the responsibility for the operation of the vessel from the owner and who, on assuming such responsibility, has agreed to take over all duties and responsibilities imposed by the ISM Code.”

The relevant contract of employment was between Ambra as the employer and the chief officer as the employee.

Factual evidence was given that whilst the Claimant allowed Ambra to select crew, the Claimant would get involved with the selection of junior officers, and was responsible for the selection of the master, chief officer, chief engineer and second engineer. The Claimant was entered with the P&I Club as the “senior member” whilst Ambra and the registered owner were “joint members”.

The main issue to be decided was whether the Claimant was the employer of the chief officer, ie whether the Claimant was the undisclosed principal of Ambra.

Reference was made to BIMCO’s commentary on the two standard forms of Crew Management Agreements published by BIMCO in 1999, in which it was said that in Crewmen A “the crew managers act as agents for and on behalf of the owners and in Crewmen B the crew managers employ the crew and act in their own name”. The precise the Crew Managers shall carry out the Crew Management Services in respect of the Vessel as agents fowording of Crewmen A in clause 3 provides that “… r and on behalf of the Owners”.

The judgment refers to the principle of the law of agency that where intervention by the undisclosed principal would be inconsistent with the terms of the contract he cannot take the benefit of the contract as an undisclosed principal. Consideration was given to whether the terms of the contract of employment were inconsistent with the intervention of the Claimant as principal. The contract of employment described Ambra as entering into the contract “as the Employer”. The court considered authorities where, for example, reference to one party “as charterers” led to a person who claimed to be the undisclosed principal not being allowed to intervene in the charterparty as principal. In this case it was held that although Ambra was described as the employer there was no express provision that it was the only person to have the rights and obligations of an employer under the contract of employment. This was held to be an indication that the Claimant was able to intervene as an undisclosed principal. Reference in this regard was also made to the fact that the applicable law of the contract of employment depended upon the flag of the vessel upon which the crew member served, this being more suggestive of the shipowner or operator being entitled to the rights and obligations of the employer than of Ambra. Consideration was given to the whole of the contract of employment to see whether the parties intended that only Ambra could take the benefit of the rights and obligations of the employer, and a detailed analysis was made of the specific clauses of the contract of employment, including three specific clauses relating to the grievance procedure, the code of conduct, and company policy, all of which indicated that, rather than Ambra, a small manning agent, being the employer, the true employer of the crew was in fact the owner or operator of the vessel upon which the employee agreed to serve.

Reference was also made to the briefing given by the manning agent to the crew which indicated that the crew would be willing to treat as a party to the employment contract the shipowners or operators on whose behalf Ambra had been authorised to contract. The court was also of the view that the chief officer’s contract of employment, although a personal contract, was within the class of personal contracts where the obligations of the employer could be performed vicariously. It was therefore held that the words “as the Employer” in the contract of employment did not amount to a term that the contract was only with Ambra as the employer, and the Claimant was therefore entitled to intervene.

It was further held that the Claimant had suffered a loss, since it had incurred liability to pay a death benefit and repatriation expenses. Liability for the death benefit and repatriation expenses were losses which were the direct and natural result of the Defendant's (assumed) breach of contract, and were not excluded by cl 9 of the stevedoring contract. The Defendant was entitled to rely on the limitation provision in cl 10, but on the facts the Claimant had indeed given notice within the requisite time.