In this action the Claimant, Navig8, claimed damages of around US$10.9 million from the First to Fourth Defendants, the Registered Owners of four Aframax vessels, for breach of a charterparty which had, so Navig8 contended, been concluded on behalf of the Registered Owners by an agent called SMMC. The Registered Owners had withdrawn the vessels from Navig8’s service while the charterparty still had more than a year to run, on the basis that they were not parties to the contract. Navig8 contended that this was a repudiatory breach of contract, and sued for damages. In the alternative, Navig8 sued SMMC for breach of warranty of authority.
The first question which arose in the case was whether SMMC had purported to contract on behalf of the Registered Owners at all (paras 91ff). The terms of the charterparty said that it was between Navig8 on the one hand, and SMMC, who were described as “Disponent Owners Signatory in Contract”, on the other. The Registered Owners contended that, in circumstances where the vessels were on bareboat charter at the relevant time, this meant either that SMMC were contracting on behalf of the bareboat charterers, or were contracting on their own behalf, but could not mean that SMMC were acting on behalf of the Registered Owners. The Judge rejected that argument. He held that the identification of the parties to a contract is a question of fact, albeit one which must be approached on an objective basis (para 94). On the facts of this case, it was held that the term “Disponent Owners” was intended to signify that SMMC were acting as the commercial managers on behalf of the Registered Owners (following O/Y Wasa Steamship Co.Ltd. v and NV Stoomschip Hannah v Newspaper Pulp & Wood Export Ltd. (1949) 82 Lloyd's List Rep. 936, 954).
The second question was whether SMMC had authority to contract on behalf of the Registered Owners (para 99ff). It was held, on the evidence, that they did not. It followed that Navig8’s claim against the Registered Owners failed, but that instead, SMMC were liable to Navig8 for breach of warranty of authority.