Seatrade Groningen BV v Geest Industries Ltd (Frost Express)

The issue raised by this appeal is whether Seatrade Groningen B.V. ("Seatrade") who are the respondents are liable as owners under a time-charterparty of the vessel "Frost Express" dated Hamburg, 13th January 1988, made with the appellants, Geest Industries Ltd., who were the charterers.

The document was signed by the managing director of Seatrade, Marnix James van Overklift. His signature was unqualified by any reference to Seatrade or to the disponet owners of the vessel, who were Lawin Maritime Co. of Manilla. The vessel was registered under the Philippine flag in their name, and there is no evidence who the legal owners were.

The appellants say that Seatrade is bound by Hr. van Overklift's signature and that on the true construction of the document Seatrade undertook personal liability, even if it contracted as agent for the disponet owners. They rely primarily upon the fact that the signature was in the space marked for signature by "Owners" and that box 3 of the charterparty, on Baltime 1939 form, reads:—

"3. Owners/place of business

SEATRADE GRONINGEN B.V., Groningen, Holland, as Agents to Owners or as Disponet Owners."

For the respondents, Mr Charles Sussex contends that Seatrade, if they contracted at all, contracted as agents for Lawin Maritime, their unnamed principal. This is because Seatrade are only identified in Box 3, they were not the Disponet Owners and the relevant words, therefore, are "as Agents to Owners". The only possible alternative construction, he submits, is to disregard box 3, in which case Hr. van Overklift's signature is unqualified and he should be held to have undertaken personal liability. That would not be, as Mr Sussex accepts, a sensible or commercial construction, but he keeps the possibility alive in order to demonstrate that his main submission, that box 3 must be referred to if the parties' true intention is to be ascertained, is correct.

Mr Justice Gatehouse agreed that it would be absurd to hold that Hr. van Overklift made himself personally liable, and he accepted Mr Sussex's submission. He did so on the ground that parol i.e. extra-contractual evidence was admissible to show that Hr. van Overklift was the managing director of Seatrade, and the evidence also showed, first, that Seatrade were not themselves disponet owners of the vessel, and second, that they were the managers of a pool of vessels, acting "on behalf of the various members of the pool who were themselves the Owners or Disponet Owners of each vessel chartered" (page 5F).

Having held that the respondents succeeded on the proper construction of the charterparty, it was unnecessary for the judge to consider their alternative claim that the charterparty should be rectified. The issue was not raised formally by the Respondents' Notice in this appeal, but Mr Sussex told us that the respondents would wish to pursue it, if we were to differ from the judge as to the effect of the charterparty in its present form.

These proceedings have arisen because in February 1988 during the time-charterparty the vessel carried a cargo of fresh bananas from the Windward Islands to Barry, South Wales, and as the charterers allege the cargo out-turned in poor condition. The receivers brought an action against the owners or disponet owners, presumably under the bill of lading, but we know nothing of those proceedings and for whatever reason they came to nought. Thereafter, on 18 February 1994, just within the limitation period, the appellants sought to claim under the charterparty, as they were entitled to do, subject to the arbitration clause which is incorporated by clause 23 of the printed terms, as will appear below. Notice of arbitration was given on their behalf to the representatives of Seatrade, who objected that they are not liable as principals and therefore are not bound by the arbitration clause. The appellants claim a declaration that on the true construction of the charterparty, they are.

The charterparty

Box 3 ("Owners") and the space for signature on Owner's behalf have been described above. Box 4 ("Charterers") named the appellants and the signature for Charterers is expressly qualified "for and on behalf of" the appellants. Descriptions of the vessel are made by reference to clause 27, one of the additional clauses expressly incorporated in the charterparty, and the typed clause which incorporates them continues as follows:—

"…and this Charterparty to be read subject to the relevant provisions of a Chartering Contract between Owners and Charterers dated 13th January 1988".

That date is the same as the charterparty. There are further clear indications that the charterparty was entered into pursuant to the Chartering Contract. First, box 14 ("Period of hire") and box 20 ("Hire payment") referred expressly to the relevant provisions in it. Box 20 is explicit: "(Hire payment) to be made in accordance with para. 5 of Chartering Contract". Clause 23 ("Arbitration") is amended to read "See para. 8 of Chartering Contract". Secondly, the charterparty form is headed "Schedule A" and additional clauses 26 and 27, concerned with the vessels's description, list four types of vessel including "Frost Class" to which the "Frost Express" belonged. Although the charterparty undoubtedly was for that particular vessel, these generic clauses confirm that it formed part of some overall chartering arrangement.

The Chartering Contract was expressed as being made between Seatrade and the appellants, and in this case Hr van Overklift's signature was qualified ("signed for and on behalf of Seatrade Groningen B.V."), as was the signature on behalf of the appellants. Seatrade undertook to provide and the appellants to take, either on time-charter or C.O.A. (contract of affreightment) terms, the appellants' total requirements for charter shipping from the Windward Islands to the U.K. for an initial period just in excess of one year (clauses 1 and 2). Clause 3, headed "Time charter arrangement", reads in part:—

"3.1 SEATRADE to provide and CHARTERER to take two time charter ships…."

"3.2 The terms and conditions applicable to charters under the Time Charter Arrangement to be in accordance with the amended Time Charters 'Baltime 1939', as extended and varied by this Contract, referenced Schedule A…."

The "Frost Express" charter was the first of these. Clause 5, headed 'Payment', which was expressly incorporated in the charterparty, provided for payment to Seatrade at its named account with an Amsterdam bank "In favour of" Seatrade. Clause 8 is the arbitration provision also expressly incorporated in the charterparty.

It is clear beyond doubt, in my judgment, that Seatrade is liable as a principal under the Chartering Contract. Not only is it named as such, without any reference to agency, but the signature on its behalf is likewise unqualified. Moreover, the obligation it undertakes is to "provide" unnamed vessels which are unidentified except by the general descriptions given in clause 27 of the charterparty form. Even assuming that Seatrade was known to be acting as pool manager and contracting as such, it clearly undertook an obligation as principal to provide one or another of the vessels available to it, and it would be difficult if not impossible to interpret this as an undertaking by one or other of the pool members, or by the members jointly, to provide suitable vessels for chartering as required.

Mr Sussex accepts that Seatrade is liable as principal under the Chartering Contract, although he adds the caveat, as I understand it, that there are some obligations which did not bind Seatrade personally, and these include the obligations undertaken by the Owner of Frost Express as stated in Schedule A, the form of time charter. So, he submits, the issue of construction remains.

Construction

Mr Richard Lord for the appellants submits that it cannot have been intended that Hr. van Overklift personally was contracting as the Owner of the vessel, and that he must therefore be taken to have signed on behalf of Seatrade, even though his signature was unqualified. As for Seatrade, he submits that the question whether Seatrade undertook personal liability is distinct from the issue whether Seatrade contracted as agent or as principal, because an agent can be personally liable in addition to his principal. There is, he says, what amounts to a presumption that an agent who signs for an unnamed though not unidentified principal does incur personal liability, unless it is clear either from the construction of the contract as a whole, or from an express qualification to his signature ("as agent" or "as agent only") that he does not.

The correct approach he submits, is stated in Boustead & Reynolds on Agency (16th ed.)...