It is rare that the owner or charterer under a charterparty is not expressly identified in the recap or engrossed charterparty. The judgment of HHJ Pelling QC in Americas Bulk Transport Ltd v Cosco Bulk Carrier Ltd  EWHC 147 (Comm) considers the legal approach to be taken in such a case and, indeed, any case where a party to a written contract is not expressly identified.
In May 2008, the Grand Fortune was on time charter from Cosco to Britannia Bulkers A/S ("Bulkers"). A sub-charter was concluded for the vessel. Negotiations for that sub-charter were conducted by phone and email by a Mr Lees and the exclusive broker of the sub-charterer, ABT. Mr Lees was a freight trader employed by, and working from the offices in London of, Britannia Bulk PLC ("Bulk") a related company of Bulkers. However, he concluded charterparties on behalf of both Bulk and Bulkers.
The fixture was concluded rapidly and the recap was very short. The evidence was that there was no discussion about the identity of the owner under the sub-charter prior to the conclusion of the recap. The recap incorporated terms of the head charter between Cosco and Bulkers and the head charter had been provided to the broker prior to fixing.
In September 2008, a draft charterparty was sent to ABT, at ABT's request, which named Bulk as the owner under the sub-charter. That draft charterparty was never agreed by the parties but ABT never objected to the characterisation of Bulk as owners.
Both Bulk and Bulkers subsequently entered insolvency proceedings and a claim arose under the sub-charter against ABT. Cosco obtained an assignment of Bulkers' rights but could not obtain an assignment of Bulk's rights. Cosco commenced arbitration against ABT as assignee of Bulkers. ABT disputed jurisdiction contending that Bulkers was not the owner under the sub-charter; Bulk was.
The tribunal rejected that argument but ABT exercised its right to have a further hearing of the jurisdiction question before the Commercial Court under s. 67 of the Arbitration Act 1996.
The issue which fell for determination was: who was the owner under the sub-charter?
There was a dispute between the parties as to the legal approach to be taken to resolve that issue. ABT submitted that ascertaining the identity of the parties to a contract was a question of fact to be determined by reference to all the relevant evidence even if it post-dated the contract and even if it was not something known to both parties but only to one of them. Cosco, by contrast, submitted that the identification of a party was a matter of contractual construction to be supported by admissible extrinsic evidence known to both parties at the time the contract was made.
The legal test was particularly important given ABT's obvious desire to rely upon the draft charterparty circulated some 4 months after the recap had been concluded.
The Judge held that the applicable principles were as follows at paragraph 19:
- The first question which arises is whether the document sufficiently identifies the parties to the contract. If it does, then the question is one to be determined by construction of the relevant document and is not a question of factual investigation and evaluation.
- Where the document or documents containing or evidencing the agreement do not enable the parties to be ascertained, then recourse to extrinsic evidence is permitted of what the parties said to each other and what they did down to the point at which the contract was concluded for the purpose of determining who the parties to the agreement were intended to be.
- When (2) above applies, the approach that should be adopted is objective not subjective so the question for the Court was what a reasonable person furnished with the relevant information would conclude.
The Judge, therefore, rejected the contention that post-contractual material was admissible.
Applying the principles set out above, the Judge identified the relevant parts of the extrinsic background to the recap as follows:
- Bulkers was the charterer of the vessel;
- Bulkers, therefore, had the power to sub-charter the vessel;
- Mr Lees had not suggested that any entity within the Britannia Group other than the entity which had chartered the vessel under the head charter was to be the disponent owner - there had been no discussion of an internal sub-charter form Bulkers to Bulkers.
He held that a reasonable person, furnished with the relevant information set out above, would have concluded that Bulkers was the disponent owner.
Paul Toms acted on behalf of Cosco, instructed by Mark Sachs, Pennington Manches Cooper. Mark Stiggelbout acted on behalf of ABT, instructed by Jonathan Steer, MFB.
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