Tonzip Maritime Ltd v Coral Energy Pte Ltd
[2024] EWHC 1970 (Comm)
Southeaster Maritime Ltd v Trafigura Maritime Logistics Pte Ltd mv "Aquafreedom"
8 February 2024
[2024] EWHC 255 (Comm)
High Court
Two companies were negotiating a ship rental deal. They summarized their agreement but added conditions. Before those conditions were met, one company changed its mind and said it didn't want the deal anymore. The court said the deal was never official because the conditions weren't met, and the company that wanted out was allowed to do so.
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.
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