CH Offshore Ltd v Internaves Consorcio Naviero SA
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Moulder |
| Judgment Date | 01 July 2020 |
| Neutral Citation | [2020] EWHC 1710 (Comm) |
| Docket Number | Case No: CL-2019-000561 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 01 July 2020 |
[2020] EWHC 1710 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
THE HONOURABLE Mrs Justice Moulder
Case No: CL-2019-000561
Nigel Jacobs QC and Claudia Wilmot-Smith (instructed by Brookes & Co.) for the Claimant/Arbitration Respondent
Christopher Hancock QC and Matthew McGhee (instructed by Waterson Hicks Solicitors) for the Defendants/Arbitration Claimants
Hearing date: 16 June 2020
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
THE HONOURABLE Mrs Justice Moulder
Introduction
This is the reserved judgment on the appeal (the “Appeal”) by CH Offshore Ltd (“CHO”) under Section 69 of the Arbitration Act 1996 (the “Act”) brought by an arbitration claim form dated 9 September 2019 against an arbitration award in favour of the defendants dated 14 August 2019 (the “Award”).
Leave to appeal was granted by Bryan J on 15 November 2019 in relation to 3 questions of law identified in the Particulars of Arbitration Claim. An application was made in the course of the hearing of the Appeal to amend the second question of law. It was not opposed by the defendants and permission is accordingly granted. This judgment proceeds to consider the questions of law as amended and set out below.
The hearing of the appeal was held remotely in light of the current pandemic but the court had the benefit of written and oral submissions by leading counsel to CHO and the defendants respectively.
Background
The background to this matter, so far as relevant to this Appeal, is taken from the Award and is as follows:
CHO was the owner of two Tug Supply vessels “AMETHYST” and “TURQUOISE” which were chartered to PDV Marina SA (“PDV Marina”) the chartering arm of Petroleos de Venezuela SA, the state-owned Venezuelan oil and gas company, pursuant to charterparties dated 22 January 2008. References in this judgment to “PDVSA” are to PDV Marina or its parent as the context may require.
The claimants in the arbitration (and the defendants in this Appeal) were Internaves Consorcio Naviero SA (“Internaves”), Maritima Altair Petromar SA, a Panamanian company, (“Maritima”) and Lamat Offshore Marine Inc. (“Lamat”). References in this judgment to the “Brokers” are to Internaves, Maritima and Lamat both individually and together, as the context may require.
The sole owner of Internaves is Ms Daphne Grek (“DG”) and the sole owner of Maritima is Mr Christobel Schlaubitz (“CS”). Lamat is jointly owned by DG and CS.
In late November 2007 PDVSA invited tenders to enter into charterparties for two vessels from a number of entities which it considered might be interested and which included Maritima Altair-Petromar CA, a Venezuelan company controlled by CS. When CS, on behalf of Maritima, received the invitation to tender from PDVSA, he passed it on to DG on behalf of Internaves and DG in turn passed the invitation to tender on to Mr Malvisi of Seascope/Braemar (“Seascope”), shipbrokers.
In response to the invitation to tender passed on to it by Seascope, CHO provided Seascope with an initial bid for “AMETHYST” at a daily rate of US$46,000 with 1.00% commission payable to Seascope, the daily rate to include tax and the social contribution. Seascope informed CHO that Seascope would require 2.5% commission “for division”, the assumption being that Seascope would have to pay commission to another broker as well as receiving its own commission.
In its response to Seascope, CHO amended its proposed bid, stipulating a daily rate of US$47,000 including commission of 2.5%, with an increased mobilisation fee of US$2,100,000 and a demobilisation fee of US$2,600,000 to “accommodate” the increased commission.
On 12 December 2007 Mr Malvisi received an email from DG telling him that “the tender was not quite conclusive” but that he had been asked (it appeared by CS/Maritima) whether the Vessel was still available and whether CHO would accept a daily rate of US$43,310. Internaves/DG advised Seascope further that “we are doing this outside of the tender procedure, via our local office”.
According to Mr Malvisi, he notified CHO that there had been some tentative interest from PDVSA at a fixing level of US$42,850 and CHO indicated that it could accept this rate, inclusive of 2.5% commission, Venezuelan income tax and social contributions but that it would require payment of both the mobilization and demobilization charges on mobilization.
Mr Malvisi passed CHO's offer on to DG on 14 December 2007 and she responded shortly thereafter with a counter, accepting the rate of US$42,850 per day inclusive of 2.5% commission to Seascope for division, agreeing the tax and social contribution requirements and payment of the mobilization fee up-front, but proposing that the demobilization fee be paid only on completion of the charter.
Negotiations continued. On 15 December 2007 all bids pursuant to the tender expired as none of the bids complied fully with the requirements of the tender.
However CS enquired whether PDVSA was still interested in the bid from CHO which had expired. Having obtained confirmation from CHO that it was interested in renewing its proposal to PDVSA, Seascope provided a proposal to Internaves who passed it on to Maritima and it was then submitted to PDVSA. The terms of this revised proposal were very similar to the offer made by CHO pursuant to the tender but the hire rate was increased from US$47,000 to US$47,600.
Mr Malvisi's evidence was that on 18 December 2007 he was informed by DG that the actual charterer would be “PDV Marina S.A.”. He passed this information on to CHO. CHO's reaction was said to have been that it would not lift the availability subject until PDVSA provided written confirmation of their acceptance of the charter party terms. At about the same time, PDVSA informed Maritima that its offer (i.e. the offer which Maritima had made on behalf of CHO) had been accepted subject to details.
Following the confirmation given by PDVSA/ PDV Marina that they wanted to conclude the “AMETHYST” charter at the agreed rate of hire, negotiations began on the full terms of the charter, the position at that stage being that the charter was still ‘subject to availability’. These negotiations continued throughout the remainder of December 2007.
At the beginning of January 2008, Maritima learned that PDVSA was looking to charter a second vessel and CHO offered the second vessel to Internaves, through Seascope and Internaves passed the offer onto PDVSA. Negotiations for the charter of the two vessels then proceeded in tandem.
The agreements for commission between CHO and Internaves and CHO and Maritima respectively (the “Brokerage Commission Agreements”) and the consultancy agreements between CHO and Lamat (the “Consultancy Agreements”, together with the Brokerage Commission Agreements the “Agreements”) were signed on 24 January 2008. CHO signed the charter parties for the vessels on 23 January 2008 and PDVSA signed them on 1 February 2008.
Each of the Brokerage Commission Agreements and the Consultancy Agreements provided for English law and disputes to be referred arbitration in London.
In mid-January 2008 it emerged that another company within the PDVSA organisation had entered into an agreement for two different vessels with another company, Astilleros de Venezuela C.A. (“Astivenca”) and the vessels were therefore not needed. An assignment was therefore entered into with Astivenca in March 2008 (although the hire rate payable was subsequently reduced) and PDVSA acted as guarantor.
Instalments of hire were not made and in November 2012 CHO demanded redelivery of both vessels which took place in January 2013.
CHO commenced proceedings against PDV Marina, Astivenca and PDVSA in the courts in London which were settled by an agreement dated 16 April 2015 (the “Settlement Agreement”) and a lump sum payment of US$60 million was made by PDV Marina to CHO in June 2015.
Disputes arose under the Agreements in relation to unpaid commission and by agreement of the parties six arbitrations under those agreements were consolidated.
An oral hearing took place in April 2019 before three arbitrators.
According to the Award at paragraphs 10 and 11:
“10 CHO's primary case in these arbitrations was that the terms of the settlement agreement (“the Settlement Agreement”) ‘captured’ or precluded the claims brought in these arbitrations. However, a secondary case was that the commission and consultancy agreements were unenforceable. In essence, CHO alleged that the rate of hire paid by PDV Marina under the charter parties was “inflated” by “secret commissions” which were “siphoned off” by Internaves, Maritima and Lamat in breach of the obligations which these three parties owed to the parties to the charter parties.
“11 A key issue in the arbitration was whether Maritima and Internaves were to be treated as CHO's agents (either because they were CHO's brokers or because they were joint intermediary brokers). If they were, then CHO argued that the commission and consultancy agreements were unenforceable because they had been procured in breach of the duty which Internaves and Maritima owed to CHO…...
To continue reading
Request your trial
-
Are Intermediary Brokers Regarded As Agents And Owe Fiduciary Duties To The Parties To A Charterparty?
...of his principal. In CH Offshore Limited v Internaves Consorcio Naviero SA, Maritima Altair Petromar SA, Lamat Offshore Marine Inc. [2020] EWHC 1710 (Comm), the court discussed whether intermediaries are agents and whether they owe any fiduciary Case background The Plaintiff in the case was......