Key Facts
- •Claimants (Owners) sought to enforce three Letters of Indemnity (LOIs) against Defendants (Forests and Exporters) after misdelivery claims and ship arrests related to New Zealand logs.
- •LOIs were issued in the absence of bills of lading and contained English law and jurisdiction clauses.
- •Defendants challenged the English court's jurisdiction, arguing there was no good arguable case that they were principals to the LOIs.
- •The dispute involved questions of undisclosed agency, election, and the interpretation of various contracts, including the Ship Service Agreement (SSA) and Log Marketing and Sales Agency Agreements (LMSAAs).
- •Defendants argued Forests acted as an agent, not principal, in chartering vessels and issuing LOIs.
- •Owners argued Forests and Exporters were undisclosed principals, bound by the LOIs due to their involvement and approval.
Legal Principles
Good arguable case test for jurisdiction
Seaconsar v Bank Markazi [1994] 1 AC 438; Kaefer Aislamientos SA de CV v AMS Drilling Mexico SA de CV [2019] EWCA Civ 10; Goldman Sachs International v Novo Banco SA [2018] UKSC 34; Clifford Chance v Societe Generale SA [2023] EWHC 2682 (Comm)
Undisclosed principal liability
Sui Yin Kwan v Eastern Insurance [1994] AC 199; Playboy Club v Banca Nazionale del Lavoro LPV [2018] 1 WLR 4041; The Magellan Spirit [2017] 1 All ER (Comm) 241; Bowstead & Reynolds on Agency
CPR Part 6.33: Service outside the jurisdiction
CPR Part 6.33
Outcomes
Application to set aside service succeeded.
The court found the Claimants lacked a good arguable case that Forests and the Exporters were principals to the LOIs. The judge analyzed the contractual arrangements (SSA and LMSAAs), correspondence, and financial evidence, concluding that Shipping acted as principal in the charterparties and that Forests and Exporters did not authorize the LOIs.