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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Internaut Shipping GmbH & Anor v Fercometal Sarl [2003] EWCA Civ 812 (17 June 2003) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2003/812.html Cite as: [2003] 2 All ER (Comm) 760, [2003] 2 LLR 430, [2003] 2 Lloyd's Rep 430, [2003] EWCA Civ 812 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Mr Justice David Steel
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE SEDLEY
and
LORD JUSTICE RIX
____________________
(1) INTERNAUT SHIPPING GmbH (2) SPHINX NAVIGATION LIMITED OF LIBERIA |
Claimants/ Respondents |
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and - |
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FERCOMETAL SARL |
Defendant/Appellant |
____________________
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr Simon Bryan (instructed by Messrs Ince & Co) for the Claimant/Respondent
____________________
AS APPROVED BY THE COURT
CROWN COPYRIGHT ©
Crown Copyright ©
Lord Justice Rix:
The problem
"Thank you for the message left on my answering machine earlier today.
"I would be very pleased to and do hereby accept appointment on LMAA terms as Arbitrator to be appointed by your Clients, the Disponent Owners of this vessel."
"M/V Elikon – Gdansk/Oran – C/P DD 27.12.94
Demurrage at discharge port – USD 148,916.67
…Pursuant to Clause 39 of the governing charterparty we hereby give notice that we have appointed Mr John Schofield as owner's arbitrator."
It will be observed that that notice did not refer to Gard's member as a "disponent owner".
"We refer to our previous correspondence in this matter which appears to rest with your fax of 23rd November 1995. You will recall that Owners appointed Mr John Schofield and Charterers appointed Mr Bruce Harris as arbitrators in this matter. Our clients have decided to pursue their claim for demurrage by way of arbitration in London against your clients."
"As a result of investigating the questions raised by Mr Schofield, it has come to light that although the arbitration was commenced by us, on behalf of disponent owners, Internaut, another party (i.e. Sphinx) was named as the Claimants in the claim submissions. This is a misnomer and our proposals for rectifying the position are set out below…
A. For the avoidance of any doubt, Internaut request that Mr Schofield act in respect of Internaut's claim in the existing arbitration against Fercometal.
B. Amendments to the Points of Claim so that the Claimants are identified as Sphinx Navigation and Internaut are now necessary. Although we believe that it is clear from the terms of our appointment of Mr Schofield that he was appointed on behalf of disponent Owners, and it has been known to the parties throughout that we were acting on behalf of and are instructed by Internaut, we consider that the course to be adopted is for Internaut to be named as claimant in addition to Sphinx to cover the eventuality that Sphinx are held to be the disponent owner under the charter with Fercometal. Internaut/Sphinx therefore seek permission from the Tribunal to amend the Points of Claim to add Internaut firstly on the basis that there has simply been a misnomer and in the alternative on the basis that they are being joined to the proceedings…
In any event, in order to protect Internaut's position, (without prejudice to application for leave to amend the Points of Claim/joinder application), we intend to appoint Mr Schofield on behalf of Internaut and call upon Penningtons to appoint Mr Harris."
"Elikon – C/P 27.12.94
"Further to our earlier fax [sc the letter of the same day], we write to appoint you on behalf of our clients, Internaut Shipping GmbH in relation to their dispute with Charterers, Fercometal…
"This appointment is made without prejudice to our application to amend the Points of Claim and Joinder application in the existing application.
"Since the limitation period is approaching, we would be grateful if you could confirm by return whether you accept this appointment."
By return fax of the same date Mr Schofield said he "would be pleased to accept this further appointment on LMAA terms".
"23. If this be the case then the naming of Sphinx Navigation in the Points of Claim was a misnomer, as the actual name of the disponent owners (the disponent owners being the party to the arbitration agreement and this arbitration) was Internaut and it would be appropriate for the Points of Claim to be amended to reflect this. Equally it remains possible (though less likely) that Sphinx might ultimately be found by the Tribunal to be the disponent owners…If Sphinx are found to be the disponent owners, then there has, of course, been no misnomer and the Points of Claim accurately state the name of the disponent owners. It would not therefore be appropriate to amend the Points of Claim to remove Sphinx's claim, and the most sensible course is to amend the Points of Claim to add the name of Internaut in addition to the name of Sphinx to address both eventualities, and permission is sought to do so.
"24. To the extent that permission to join Internaut is necessary (and Internaut's primary case is that only leave to amend is required on the basis that Internaut falls within the category of disponent owner in the original appointment of Mr Schofield) permission to join Internaut is also sought, without prejudice to Internaut's primary position which is that Internaut is already a party to the arbitration." (emphasis added).
"28. Finally, and for the avoidance of doubt, I can confirm that Sphinx Navigation have ratified our commencement of the arbitration in their name and my firm is authorised to proceed with the arbitration on their behalf."
"I refer to last Friday's hearing of the application to re-amend the Points of Claim so as to add Internaut shipping GmbH as second Claimant in these arbitration proceedings. [emphasis added]
"While we see the attraction of acceding to the application, we have reluctantly come to the conclusion that we do not, in the circumstances, have power to make such an order, which would have the effect of including two different companies as claimants in the capacity of principal parties to the charterparty (and the arbitration agreement) when only one of them can have been such a party.
"In the absence of any agreement giving us power to decide the issue as to which of those companies was the owner (or disponent owner) under the charterparty and therefore party to the arbitration agreement, we cannot but think that the parties' interests would be best served in seeking a decision from the Court as to this, and sooner rather than later."
The court proceedings
1. Whether Internaut or Sphinx or both are party to the charterparty.
2. As to which of Internaut and Sphinx are party to the original arbitration.
3. As to whether the arbitrators have power to grant permission to amend the points of claim in the original arbitration to substitute the name of Internaut for the name of Sphinx if Internaut applies to do so, and the arbitrators in the exercise of their discretion see fit to do so.
The first issue: Who is party to the charterparty?
"3. Owners/Place of business (Cl. 1) [the printed heading]
SPHINX NAVIGATION LTD, LIBERIA C/O INTERNAUT SHIPPING GMBH
STAVENDAMM 4A
28195 BREMEN" [the typed insertion]
"14. Freight payment (state currency and method of payment; also beneficiary and bank account) (Cl. 4) [the printed heading]
FULLY PREPAID IN
USD CURRENCY
AS PER CL 20" [the typed insertion]
"21. Additional clauses covering special provisions, if agreed. [the printed heading]
ADDITIONAL CLAUSES NO. 18 TO 41 ARE FULLY INCORPORATED AND IN FORCE" [the typed insertion]
"It is mutually agreed that this Contract shall be performed subject to the conditions contained in this Charter which shall include Part I as well as Part II. In the event of a conflict of conditions, the provisions of Part I shall prevail over those of Part II to the extent of such conflict."
"1. It is agreed between the party mentioned in Box 3 as Owners of the steamer or motor-vessel named in Box 5…and the party mentioned as Charterers in Box 4 that:…"
"Clause 20
Fully prepaid on signing/releasing Clean on Board Bills of Lading
Frt to be paid to:
Sparkasse in Bremen…
Beneficiary: Owner c/o Internaut shipping GmbH, Bremen
Under ref. M/V Elikon voy 613."
"Clause 26
Bills of Lading to be signed by or on behalf of Master/Owner…"
"Where a person signs the charter in his own name without qualification, he is prima facie deemed to contract personally, and, in order to prevent this liability from attaching, it must be clear from the other portions of the charterparty that he did not intend to contract personally."
"Prima facie, when a man signs a contract in his own name, he is a contracting party; and there must be something very strong upon the face of the instrument to prevent that liability attaching to him. I find no circumstances of that sort in this case…It is true, the words "on behalf of the Geelong, Melbourne Railway company," are added…a company existing abroad…But the plaintiff, residing in London, professes to make the contract; and he signs it with his own name."
"I have always understood the law to be that, if a man signs a written contract, he is to be considered as the contracting party, unless it clearly appears that he executes it as agent only. There is nothing upon the face of this agreement distinctly shewing that the plaintiff was contracting as agent for others."
He then went on also to point out that the railway company was in Victoria.
"He makes the contract, using apt words to shew that he contracts; and the only ground suggested for rebutting his personal liability is that he says he is an agent for another…but on principle, and on the authorities cited, an agent is liable personally if he is the contracting party; and he may be so though he names his principal."
"He says that he is agent for E. Winlow & Sons; but that is not enough to rebut the inference of personal liability arising from the rest of the contract."
"Mere words of description attached to the name of the contractor, such as are used here, saying he is the agent for another, cannot limit his liability as contractor. A man, though agent, may very well intend to bind himself; and he does bind himself if he contracts without restrictive words to shew that he does not do so personally. It is important that mercantile men should understand that, if they mean to exclude personal recourse against themselves on contracts which they sign, they must use restrictive words, as if they sign per procuration, or use some other words to express that they are not to be personally liable."
"In such a case the intention of the parties is to be discovered from the contract itself, and the rule laid down in Smith's Leading Cases has been adopted as the rule to be followed. "That where a person signs a contract in his own name, without qualification, he is prima facie to be deemed to be a person contracting personally, and in order to prevent this liability from attaching, it must be apparent from the other portions of the document that he did not intend to bind himself as principal.""
"The identity of the parties to a contract is fundamental. It is not simply a term or condition of the contract. It goes to the very existence of the contract itself. If it is uncertain, there is no contract. Like the nature and the amount of the consideration and the intention to create legal relations it is a question of fact and may be established by the evidence. Such evidence is admissible even where the contract is in writing, at least as long as it does not contradict its express terms, and possibly even where it does: see Young v Schuler (1883) 11 QBD 651, Chitty on Contracts (28th edn, 1999) p 633."
The second issue: who is the claimant party in the original arbitration?
"since the only fair construction of the exchanges in April 1995 leading to the appointment of the Tribunal was that the Arbitrators had been appointed to determine the disputes that had arisen between the parties to the Charterparty: see Unisys v. Eastern Counties [1991] 1 Lloyd's Rep 538."
"3. The Elikon is owned by [Sphinx] and/or [Internaut] and is managed by [Internaut]. It appears from the Algerian proceedings that the Defendants draw no distinction between [Sphinx] and [Internaut] for any material purpose, and I therefore refer to them collectively as "Owners".
"4. By a voyage charterparty in the "Gencon" form…the Defendants agreed to let and [Fercometal] to hire the Defendants' vessel Elikon…
"5. …Owners then commenced arbitration proceedings…The arbitration proceedings continue but pleadings have not been served."
"…and in any event the letter dated Jan. 31, 1985 does not purport to claim arbitration against the defendants but against MSC. The fact that the plaintiffs thought that MSC were the owners, as they obviously did, might have been a ground for extending time under s. 27 of the Arbitration Act had s. 27 applied, but it cannot alter the plain meaning of the letter of Jan. 31, 1985."
"68. (1) The Establishment was Hussmann's contract partner and thus, subject to a process of novation whether by consent or statutory process under Saudi law, could be the only party against whom Hussmann could validly or sensibly invoke arbitration. There is therefore a strong inference that Hussmann intended to make the Establishment the respondent to its application for arbitration and to the reference.
"69. (2) Despite the confusion introduced by Hussmann's statement that "Al Ameen" was also known as "Al Ameen Development & Trade Co" and was a limited company, we agree with both Thomas J and Mr Brindle that the better way to read the definition of Hussmann's respondent is as a reference to the Establishment…"
"…and Mr Andrew Bird [counsel for Mr Pharaon]…asked the judge not to set it aside but to enforce it, declaring it to be an award in favour of Establishment. He submitted that although the arbitrators thought that they were making an award between Hussmann and the Company, in fact it was made between Hussmann and the Establishment. The judge could not, however, accept that view of the matter: it was clear to him both from the terms of the award itself and from the arbitrators' refusal of Hussmann's application to amend its pleadings that the arbitrators intended to make their award against and in favour of the Company only."
"We accept the submission, as Mr Brindle did below, that if the reference began life with Mr Pharaon as a respondent to it, that position never changed. Hussmann always pursued an award against its contract party. It never submitted that Mr Pharaon, if he had become a respondent to the reference, abandoned his role in the arbitration, or resigned from it (if indeed he could do so unilaterally), or abandoned or withdrew his counterclaim. There was no such submission before the tribunal at the time of the submissions leading to the second award (see para 47 above). Nor is there any sign in the third judgment that such an argument was raised before Mr Brindle."
"84…Rather [Mr Kinsky, counsel for Hussmann] placed his emphasis on what he said were the exceptional facts arising out of Mr Pharaon's opposition to Hussmann's attempt to amend and the insistence on an award for or against the Company…Thus Mr Kinsky says that an arbitration in which the respondent in a situation of conflict seeks to name its true identity will come to an end with a final award which adopts that submission. Such an award will either survive attack or may be nullified as a result of a challenge to substantive jurisdiction, but in either event the arbitration will be at an end.
"85. The trouble with this submission, however, as with the more homespun argument that Mr Pharaon was trying to have "two bites at the cherry", is that, properly analysed, it constitutes a submission that Mr Pharaon had irrevocably elected to have his rights in the arbitration determined solely on the basis that the respondent was the Company; or that he had waived the right to an award in the name of himself or the Establishment; or that the attempt to seek a second award in the name of himself or the Establishment would amount to an abuse of process (see Henderson v. Henderson (1843) 3 Hare 100, Johnson & Gore Wood & Co [2002] 2 AC 1). We are far from saying that such a submission could not succeed; but it goes either to matters of substantive law (election, waiver) which are for the arbitrators to decide, or to matters of procedure which are equally for the arbitrators…"
Conclusion
1. Internaut is, but Sphinx is not, a party to the charterparty.
2. Internaut is, but Sphinx is not and has never been, party to the original arbitration. However,
3. That arbitration, so far as it was conducted in Sphinx's name, is a nullity, but survives in its origin. The future conduct of that arbitration is a matter for the two arbitrators who were appointed to it. The third arbitrator may well have to be reappointed.
Lord Justice Sedley:
Lord Justice Mummery:
Order: 1. The issues in the action ordered to be tried pursuant to the order of Cressell J dated 30 November 2001, as re-stated in para 22 of the judgment of this court, be answered as follows:
(1) Internaut is, but Sphinx is not, a party to the charterparty.
(2) Internaut is, but Sphinx is not and never has been, party to the original arbitration.
(3) That arbitration, so far as it was conducted in Sphinx's name, is a nullity, but survives in its origin. It was invoked and commenced by and on behalf of Internaut, and is valid and has not been concluded. The future conduct of that arbitration by Internaut is a matter for the two arbitrators who were appointed to it.
2. Paragraphs 1(1) and 1(2) of the order of David Steel J accordingly be upheld, and the appeal be dismissed.
3. Paragraph 1(3) of the order of David Steel J be varied and replaced with paragraph 1(3) of this order.
4. Fercometal to pay one third of Internaut's costs here and below (assessed in this court at £19,017.50; figure assessed below to remain unchanged).