Hyundai Merchant Marine Company Ltd v Americas Bulk Transport Ltd M.v "pacific Champ"

JurisdictionEngland & Wales
CourtQueen's Bench Division (Commercial Court)
JudgeMr Justice Eder
Judgment Date08 Mar 2013
Neutral Citation[2013] EWHC 470 (Comm)
Docket NumberClaim No.2011 Folio 1544

[2013] EWHC 470 (Comm)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Mr Justice Eder

Claim No.2011 Folio 1544

Between:
Hyundai Merchant Marine Company Limited
Claimant
and
Americas Bulk Transport Limited
Defendant
M.v "pacific Champ"

Peter MacDonald Eggers QC (instructed by Stephenson Harwood) for the Claimant

Mr Michael Davey (instructed by MFB Solicitors) for the Defendant

Hearing dates: 22–23 January 2013

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.

Mr Justice Eder

Introduction

1

This judgment deals with three applications by Hyundai Merchant Marine Company Ltd ("HMM") under ss. 67, 68 and 69 of the Arbitration Act 1996 (the "1996 Act") challenging an arbitration award dated 22 November 2011 (the "Award").

2

The focus of the proceedings is the alleged fixture of a vessel, the mv Pacific Champ (the "vessel"), in February 2008 between HMM as disponent owners and Americas Bulk Transport Limited ("ABT") as charterers. The negotiations for the present alleged fixture were conducted by phone and emails between two individuals who were based in New Jersey, USA i.e. on behalf of HMM by Mr Ho Jong Baek (HMM's General Manager and Head of their HandyMax Team) and on behalf of ABT by Mr Charlie Song (a chartering broker at Eastmark Shipping). In summary, it is ABT's case that a binding contract (or at least a binding arbitration agreement) was contained in or evidenced by an e-mail sent by Mr Song to Mr Baek at 1527 on Tuesday, 12 February 2008 (the "second recap"). (There is some confusion as to the precise timing of this email. It might have been sent at 1627 rather than 1527; but the parties agree that this difference in timing is not crucial and, for present purposes, I shall refer to it as having been sent at 1527.) It is HMM's case that no binding contract or arbitration agreement ever came into existence. That is the basis of the three applications now before the court.

Outline of facts

3

At all material times, HMM was the bareboat charterer of the vessel under an amended Barecon Charterparty (the "Bareboat Charterparty") dated 14th July 2006 whereby HMM bareboat-chartered the vessel from the registered owner, Iris Owning Company Limited ("Iris") for approximately 8 years from the date of delivery on 1st August 2006. Importantly, additional clause 19 of the Bareboat Charterparty set out the vessel's trading limits, namely "Wor[l]d wide trading always afloat, always within IWL and always via safe ports and ice free areas excluding … Orinoco River…" (emphasis added).

4

In January 2008, HMM sent open messages to the market with a view to trying to fix new business for the vessel. There were some preliminary discussions between Mr Baek and Mr Song. However, detailed negotiations did not commence until Monday 11 February 2008.

5

On 11 February 2008, detailed negotiations commenced on the phone between Mr Baek and Mr Song for the possible charter of the vessel by ABT for the carriage of a cargo of HBI (hot-moulded briquettes of direct reduced iron) from Houston via the Orinoco River, Venezuela, and back to the US Gulf. It is HMM's case that during these discussions, Mr Baek informed Mr Song that the vessel was bareboat-chartered by HMM; that he (ie Mr Baek) would have to check with HMM's head office in South Korea that the proposed carriage — HBI via the Orinoco River — was permitted by the Bareboat Charterparty; that the proposed fixture would have to be based on a proforma time charterparty which he was to obtain from HMM's head office; and that after their telephone conversation, during the evening of 11 February 2008 (which was the following morning in Seoul), Mr Baek called Mr Young-Dong Ma at HMM's head office in Korea to inform him of these discussions and requested that he (i.e. Mr Ma) send Mr Baek a copy of the Bareboat Charterparty and a time charterparty form which could be used as the basis for negotiations with Mr Song.

6

Although it is common ground that Mr Song was indeed aware that HMM was the bareboat charterer, it is ABT's case that Mr Baek never suggested that he needed to check the Bareboat Charterparty to see if HMM could comply with the proposed business; and that this never happened.

7

In any event, at 2036 on 11 February 2008, Mr Song sent an email to Mr Baek which was in material part as follows:

"AS PER TLECONV FIXED ASF

M/V PACIFIC CHAMP……

OPEN HOUSTON 17 FEB 2008

ACCT AMERICAS BULK TRANSPORT LIMITED, MONROVIA, LIBERIA.

1: DELIVERY DLOSP HOUSTON, USA ATDNSHINC

2: LAYCAN 16/21 FEB, 2008 (00:00/24:00) — ETD 16/17 TH FEB, 2008, IAGW W/P

3: REDELIVERY WWR MISS RIVER ATDNSHINC

4: FOR ONE T/C TRIP VIA SBS SPS SAS AAAWIWL WITH HBI IN BULK, DUR ABT 20/25 DAYS WOG.

5: USD 35,000 DIOT

6: BOD IFO ABT REVERTING (BUT HAVE SUFFICIENT QTTY PERFORM HOUSTON VIA ORINOCO REIVER TO MISSREVER) BOR ABT SAME QNTY AS ON DELY

7: BUNKER PRICES SAME BENDS REVPERT

8: ILOHC — BTB

9. VICTUALLING, ETC — BTB

10. ENGLISH LAW AND ARBITRATION TO APPLY

11. HOLD CONDITION CLAUSE ASPER HEAD C/P

12. SUB REVIEW OWNRS HEAD CP BTB

13. SUB CHTRS RECONFIRMATION COB NYT FEB 12,2008

14: 3.75 ADC + 1.25 EASTMARK"

8

As to this email, two main points should be noted. First, although this email as drafted by Mr Song stated in its opening "AS PER TLECONV FIXED ASF" and was referred to as the "first recap", Mr Davey accepted that there was no binding fixture at this stage because the parties were not then agreed on item 3 ie the place of redelivery. Thus, Mr Davey also accepted before me that the assertion by Mr Song in this email that the vessel was at that time "fixed" was untrue and must have been known to be untrue by Mr Song when he sent the email. Second, one of the central disputes between the parties concerns the meaning of Item 12 i.e. "SUB REVIEW OWNRS HEAD CP BTB". I revert to this dispute further below.

9

Mr Baek saw the "first recap" the following morning i.e. 12 February. In addition, he saw what he had received overnight from Mr Ma i.e. an email attaching what was described in the heading of the email as "Pacific Champ — proforma CP" (i.e. the Proforma Charterparty). The Proforma Charterparty was an unsigned time charter on the NYPE form with additional typed clauses and provided for a single time charter trip of 20–30 days. In the Proforma Charterparty, HMM was named as charterer. At first sight, this is difficult to understand given that HMM was, as I have said, the bareboat charterer under the Bareboat Charterparty. However, the explanation may be that it (i.e. the Proforma Charterparty) is dated 28th April 2003 (i.e. long before the date of the Bareboat Charterparty). Under clause 51, "DRI/HBI and their products" were excluded from carriage. In addition, the Proforma Charterparty included (in clause 17) an arbitration clause providing for arbitration in London and English Law to govern; and also clause 54 entitled "Hold Condition on Delivery/Redelivery".

10

It is common ground that Mr Baek forwarded the Proforma Charterparty by email to Mr Song shortly thereafter i.e. at 0858. However, there are important disputes between the parties with regard to the phone calls which took place during the day. I consider these disputes further below.

11

In any event, later that afternoon at 1527, Mr Song sent to Mr Baek the second recap as referred to above. This was in substantially similar form to the first recap Mr Song had sent the night before save that Item 3 stated: "REDELIVERY DLOSP USG ATDNSHINC"; and Item 13 stated: "SUB CHTRS RECONFIRMATION 0900 HRS NYT FEB 13, 2008". As stated above, it is this email which ABT submitted contained or evidenced the "binding contract" — although this requires some explanation. In effect, it was ABT's case that at latest after that e-mail was sent, HMM was contractually bound in the sense that it (i.e. HMM) was not entitled unilaterally to withdraw from the fixture or to vary the terms which had been agreed but that ABT was not bound unless and until it (i.e. ABT) had provided its "reconfirmation" as referred to in Item 13 of the second recap. This was disputed by HMM. In particular, it was HMM's case that there was, in any event, no binding contract nor any arbitration agreement unless and until the subjects were lifted and ABT had given its "reconfirmation"; and that until that time, HMM was entitled unilaterally to seek to vary the terms set out in the second recap and indeed withdraw from the proposed fixture. I deal briefly with this aspect further below.

12

Following receipt of the second recap, it is HMM's case that at around 1700 hours, Mr Baek spoke to Mr Ma (which would have been around 0700 hours the following day i.e. 13 February in Korea) and was informed that, although the Bareboat Charterparty contained no restriction on the carriage of HBI, it did not permit trading via the Orinoco River; and that at around 1800 hours, Mr Baek then spoke to Mr Song on the telephone and told him that although the carriage of HBI was permitted under the Bareboat Charterparty, trading via the Orinoco River was not. This is disputed by ABT. In particular, it is ABT's case that (i) Mr Baek informed Mr Song about HBI being a permitted cargo under the Bareboat Charterparty before, not after, the second recap; and (ii) there was no discussion between Mr Baek and Mr Song about the Orinoco River restriction in the Bareboat Charterparty, at least before Mr Baek's email at 1941 as referred to below.

13

At 1941, Mr Baek sent Mr Song an email which set out what he described in the body of that email as "CP comments". These were, in effect, proposed amendments to the Proforma Charterparty, including (i) the deletion and replacement of clause 51 ("Cargo Exclusions") so as to...

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