Southeaster Maritime Ltd v Trafigura Maritime Logistics PTE. Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Jacobs |
| Judgment Date | 08 February 2024 |
| Neutral Citation | [2024] EWHC 255 (Comm) |
| Court | King's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2023-000215 |
[2024] EWHC 255 (Comm)
Mr Justice Jacobs
Case No: CL-2023-000215
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Charles Holroyd (instructed by Hill Dickinson International) for the Claimant
Timothy Hill KC and Michal Hain (instructed by Schjødt) for the Defendant
Hearing dates: 30 th January 2024
Approved Judgment
This judgment was handed down remotely at 9.30am on 8 th February 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives (see eg https://www.bailii.org/ew/cases/EWCA/Civ/2022/1169.html).
A: Introduction
The Claimant (“the Owners”) in these proceedings is the owner of the vessel Aquafreedom (“the Vessel”). The Defendant (“Trafigura”) contends that it was the charterer of that vessel. Both claim and counterclaim in these proceedings concern whether a 4 year time charterparty was concluded between the parties during negotiations in late January and early February 2023. The Owners contend that there is no real prospect of Trafigura resisting their claim for a declaration that no binding charterparty was concluded. Trafigura's case is that there is a real prospect of showing that a binding charterparty was concluded either on 30 January 2023, or 6 February 2023.
The Owners contend that whether a charterparty was concluded turns on the construction and legal effect of the written communications passing between the parties, and that the case is appropriate for summary judgment.
The evidence in the case consists principally of a bundle of written communications which passed between the parties. The communications were both by e-mail and WhatsApp messaging. In addition, there are three principal witness statements which have been served. On behalf of the Owners, witness statements have been provided by Mr Timon Karamanos-Cleminson, a partner in the firm of Hill Dickinson International which acts for the Owners. His principal witness statement provides a detailed chronological account of the communications exchanged between the parties. He has also served a short reply statement. On behalf of Trafigura, Mr Jeremy Biggs (a partner in the firm of Schjødt LLP) has provided a witness statement, much of which is based on information received from the chartering broker who was acting for Trafigura in the negotiations, Mr Tim Sorensen.
B: The facts
The Vessel is a 2022 built Suezmax oil tanker of 157,747 DWT. In late January and early February 2023, the parties conducted negotiations through Arrow Tankers P/S (“Arrow”), who acted as brokers for both parties. There is no dispute as to the messages which were sent by the parties in relation to the negotiation, and the following account is based on those messages.
The relevant individual brokers at Arrow were Mr Kenneth Hoeg (dealing with Owners) and Mr Tim Sorensen (dealing with Trafigura). On the client side, the relevant individuals were Mr Adamantios Lemos (for Owners) and Mr Anders Jensen and Mr Andrea Olivi (for Trafigura). For present purposes, it was accepted on both sides that although they were in the same broking firm, Mr Sorensen was acting for Trafigura, and Mr Hoeg for Owners. Accordingly, a message from Mr Lemos to Mr Hoeg, and which got no further, would not be a message to Trafigura.
The negotiations fell broadly into four phases, as follows:
(1) Initial negotiations culminating in a “recap” circulated by Mr Sorensen at 10:55 on 30 January 2023 (“the recap”).
(2) A sequence of exchanges through which the parties sought to agree further terms, ending with proposals made by Trafigura in its emails of 17:09 on 1 February 2023 and 06:41 on 2 February 2023.
(3) A hiatus of 4 days during which Owners failed to respond to Trafigura's proposals, despite being chased.
(4) Communications in the morning of 6 February following Owners' cancellation of a Teams call scheduled for 10:00 that morning.
Phase 1: The recap
The initial phase of negotiations, leading to the 30 January recap, began on 25 January 2023 in WhatsApp messages passing between the brokers. These led to a firm e-mailed offer on 26 January 2023 which came from the Owners, and which was then passed by Mr Sorensen to his principals at Trafigura.
In describing the e-mail and WhatsApp communications, I have sometimes, for ease of understanding, expanded abbreviations that were used. I have also followed the parties' approach of using London time. The e-mail containing the firm offer stated that the Owners were “pleased to offer firm as follows for reply 10.00 hrs London time tomorrow”. The offer was for a 48 months charter with two 1 year extensions at charterers' option. It is apparent from a number of aspects of the recap that there were further terms which needed to be discussed and agreed between the parties. The offer also contained two “Subs” (i.e. “subjects”) at the end of the e-mail. These clauses were as follows.
“ Trading:
WW trade with exclusions to be agreed
Cargo:
Normal DPP / Crude – wording to be mutually agreed
…
Terms:
As per previously agreed terms sub review both sides.
Subs:
Owners BOD subs latest 1 working day after all terms agreed.
Charterers management approval latest 2 working days after all terms agreed.”
With one exception, all of the above elements in the initial offer were later contained in the recap. The one exception was the “sub” concerning Owners BOD (i.e. board of directors) approval. In Trafigura's response to the Owners' firm offer, on 27 January, they deleted that provision. They commented: “As you know we are strongly against owners subs”. The Owners accepted this deletion without argument: stating in a subsequent e-mail “OK”. The deletion of the requested provision for this “Owners sub” played a significant part in the argument of Mr Hill KC, on behalf of Trafigura, as to the effect of the “Charterers management approval” or “CMA” sub which remained.
It is not necessary to describe in detail the course of negotiations between the Owners' first firm offer on 26 January and the recap on 30 January. However, there are a number of features which are relevant to the parties' arguments as they developed.
First, it is clear that messages as to the negotiating position of the Owners were conveyed not only through e-mails, but also via WhatsApp messaging. Thus, Mr Holroyd on behalf of the Owners was able to identify a number of examples of positions communicated by WhatsApp which were then reflected in the e-mails that were exchanged between the parties in which the parties were seeking to reach agreement on outstanding matters.
A significant example concerned the charter rates. The recap on 30 January contained daily rates of US$ 33,400 for the firm 4 year period, and US$ 34,500 and US$ 35,400 for each of the two optional 1 year periods. Although these rates are contained in the recap, the prior e-mail correspondence had different rates, when the parties were putting forward different positions. Thus, in the final e-mail (dated 27 January) prior to the recap, Trafigura was offering rates lower than those contained in the recap, and Owners were asking for higher rates. Mr Holroyd was able to refer me to the point at which the parties reached agreement on rates. This was in a WhatsApp message from Mr Hoeg to Mr Sorensen at 9:48 am London time on 30 January (i.e. just under an hour before the recap was sent) in which Mr Hoeg says:
“Have spoken to Adamantios Lemos just now and can do the following 33400/34400/35400. Best he will do.”
Ten minutes later, again by WhatsApp message, Mr Sorensen said: “ok, confirm”. This was followed by a thumbs up emoji from Mr Hoeg.
It was therefore these rates, communicated by WhatsApp and where agreement was reached in the WhatsApp, which were then included in the recap. There was no suggestion, at the time, by Mr Sorensen that WhatsApp was in some way an unofficial channel of communication, and that Mr Hoeg therefore needed to put his proposal and Mr Sorensen his acceptance into an e-mail. Indeed, earlier in the negotiations Mr Sorensen actually passed on to Mr Hoeg two screenshots of WhatsApp exchanges which Mr Sorensen had had with Mr Olivi. These were relevant for the negotiation of rates and terms.
A second example concerns the identification of the previous terms that were to be used and which were “sub review both sides”. The question of what terms to use was discussed on WhatsApp between the brokers on 28 January 2023, but the discussion was inconclusive. The question of terms was raised by Mr Hoeg by WhatsApp at 10:04 on 30 January, shortly before the recap. It did not elicit a response at that time. At 13:53, Mr Hoeg told Mr Lemos by WhatsApp that Trafigura were suggesting that they should use:
“the terms we had agree last time (June 2021).. this was on the fixture that was failed. ofc sub review”.
There is no e-mail in the hearing bundle, prior to that WhatsApp exchange, in which Mr Sorensen tells Mr Hoeg by WhatsApp what terms Trafigura were proposing to use. Nor is there any e-mail subsequent to that exchange or prior to the time when, at 14:40 on that afternoon, Mr Hoeg e-mailed Mr Lemos stating:
“ref telcon this is the terms/ recap we agreed last last when had below deal on subs..
Trafi said offhand still looks good but they are reviewing trading and sanctions clauses..”.
Accordingly, this illustrates how the important matter of the prior terms was first raised in a WhatsApp message between the brokers. Whilst it is true that the identification of the prior terms is not to be found in a later WhatsApp, it is also not found in a...
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