Key Facts
- •Southeraster Maritime Ltd (Owners) and Trafigura Maritime Logistics Pte. Ltd. (Trafigura) negotiated a 4-year time charterparty for the vessel Aquafreedom.
- •Negotiations were conducted via email and WhatsApp, primarily through brokers Arrow Tankers P/S.
- •A recap circulated on January 30th, 2023, summarized agreed terms but included 'subjects' (conditions precedent) requiring agreement on all terms and Trafigura's management approval.
- •Subsequent negotiations involved several proposed amendments and counter-proposals regarding various clauses (CII, EEXI, ETS, sanctions, drydocking).
- •Owners ultimately failed to respond to Trafigura's proposals, and then communicated their unwillingness to proceed.
- •Trafigura attempted to accept Owners' last proposal and lift the subjects on February 6th, 2023, despite Owners' clear indication they were not proceeding.
Legal Principles
A 'subject' in charterparty negotiations is a condition precedent, not subsequent, and negates contractual intent until 'lifted'.
Nautica Marine Ltd v Trafigura Trading LLC: The Leonidas [2020] EWHC 1986, DHL Project and Chartering Ltd v Gemini Ocean Shipping Co Ltd: The Newcastle Express [2022] EWCA Civ 1555
In summary judgment applications, the court assesses whether a party has a realistic prospect of success, considering evidence and potential trial evidence. The court can decide short points of law or construction if sufficient evidence is available.
Easyair Ltd (t/a Openair) v Opal Telecom Ltd [2009] EWHC 339 (Ch), ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725
Contract interpretation involves ascertaining the objective meaning of the language used, considering the contract as a whole and the factual background. Where there are two possible constructions, the court may prefer the construction that makes business common sense.
Lukoil Asia Pacific Pte Ltd v Ocean Tankers (Pte) Ltd [2018] EWHC 163 (Comm)
A counter-offer rejects the original offer, making subsequent acceptance impossible.
Stevenson, Jacques & Co. v McLean (1880) 5 QBD 345, Chitty on Contracts 34th edition, paragraph 4-124, Cartwright: Formation and Variation of Contracts (3rd edition)
Outcomes
Owners' application for summary judgment succeeded.
Trafigura had no realistic prospect of proving a binding contract existed on January 30th or February 6th. The 'subjects' in the recap were conditions precedent, not fulfilled. Subsequent communications amounted to counter-offers, and Owners clearly withdrew before Trafigura purported to lift the subjects.