Owners negotiated for the charter of their vessel with SMI. The terms of the charter were negotiated by a sequence of emails (via a single firm of brokers acting for both parties), and proceeded on the basis of the charterers being "T fully guaranteed by SMI". T was SMI's chartering arm. SMI was controlled by Mr B and the broker negotiating for SMI acted on Mr B's instructions. No formal charter or guarantee was ever drawn up.

Owners later claimed T (charterers) had repudiated the charter and brought proceedings against SMI on its guarantee or in the alternative against Mr B for breach of warranty of authority.

The defendants applied to set aside leave to serve the claim form, arguing that the alleged guarantee was not binding, as there was no signed written memorandum of the guarantee, as required by the Statute of Frauds. The judge refused to set aside the leave, and the defendants appealed.

Held:

The defendants' appeal was dismissed.

  1. The Statute of Frauds did not require the agreement to be in one or even in a limited number of documents. The conclusion of commercial contracts by an exchange of e-mails was entirely commonplace. This was the case even if the parties expected a formal guarantee to be drawn up in the future.
  2. An electronic signature in an email (assuming the signatory had authority), however informal, authenticated the contract of guarantee referred to in the email and other documents in the sequence. If it was established that the signatory (here, the broker) had authority to conclude a contract of guarantee, there was little practical scope for the success of an argument that his signature on the e-mail was ineffective for the purposes of the Statute of Frauds.

(Golden Ocean Group Ltd v Salgaocar Mining Industries PVT Ltd and another [2012] EWCA Civ 265)