In TTMI Sarl v Statoil ASA  EWHC 1150 (Comm), the Court was required to consider whether the Defendant Voyage Charterers had contracted with the Claimant Disponent Owners, or with the Claimant’s parent company. In the fixture recap which fixed the terms of the charterparty, the shipbrokers had mistakenly named the Claimant’s parent company, rather than the Claimant itself, as disponent owners of the vessel.
The Claimant argued that the shipbrokers’ mistake did not mean that there was no contract between it and the Defendant. In any event, it submitted, a contract had come into existence by conduct (in that the voyage had been performed by, and freight paid to, the Claimant and not its parent company). The Defendant argued that it was not aware that the charterparty was being performed by the Claimant as disponent owners, rather that that role was being performed by the Claimant’s parent company.
While the Court found in favour of the Claimant, it would not have done so had its judgment been based solely on the fixture recap. On the facts, this document was the only expression of agreement between the parties, and the disponent owner was specifically named, even if the name given was incorrect. The Claimant’s argument that the Defendant had contracted with the Claimant and/or its parent company was at odds with, and undermined by, the express terms of the recap.
The Claimant was ultimately successful because the Court found that a contract had been formed by the parties’ conduct. The Claimant and Defendant dealt with each other throughout: in instructing the vessel to take on cargo, in tendering and accepting notices of readiness, in performance of the voyage, and in the demanding and payment of freight.
What can we learn from this case?
This case exemplifies two important points:
1. A contract can be created by conduct, regardless of what is contained in the written documentation. Parties to a commercial transaction should always bear this in mind, and remember that contractual relations formed in this way bring with them certain rights and consequences. A party may find itself liable to a different counterparty to that which is identified in any written contract.
2. It is crucial to accurately identify all relevant parties in contractual documentation. Had a contract not been created by conduct in this case, the Claimant’s appeal to the Court may well have been unsuccessful and it would have been unable to pursue its claim for demurrage.