Internaut Shipping GmbH & Anor v Fercometal Sarl

A person who signs a commercial contract in their own name and without qualification is prima facie contracting personally. The signature has predominant weight when the contract is construed as a whole. Clear language elsewhere is required to show that the signatory contracted solely as agent.

An arbitration commenced without naming the claimant may validly belong to the contracting party which authorised it. A later pleading that deliberately identifies a different legal person involves mistaken identity, rather than a mere misnomer. Proceedings conducted in the non-party’s name are then a nullity. The valid arbitration may nevertheless survive from its original commencement by the true contracting party.

Internaut signed a voyage charterparty as owner without qualification, although another company, Sphinx, was named in the owners’ box. An arbitration concerning demurrage was authorised by Internaut and commenced innominately on behalf of the owner. Points of claim were later served in Sphinx’s name, and the arbitration proceeded on that basis for nearly five years.

David Steel J held that Internaut was the contracting owner and had been party to the arbitration from its commencement. Fercometal appealed. The central questions were which company was party to the charterparty, which was party to the original arbitration, and whether the incorrect identification of Sphinx could be cured as a mere misnomer.

1. Appeal dismissed unanimously, with the order varied. Rix LJ delivered the judgment, with which Sedley and Mummery LJJ agreed. Internaut alone was party as owner to the charterparty and its arbitration agreement.

2. The charterparty had to be construed as a whole. Internaut signed without qualification beneath the designation “Signature/Owners”. The form and characterisation of a signature have predominant weight, although they do not constitute an inflexible rule of law. A person signing in that way is prima facie personally bound unless the rest of the document clearly shows that the signature was made solely as agent.

   The references to Sphinx “c/o Internaut” did not provide the required clear indication. Internaut was nowhere described as an agent. Its unqualified signature therefore established its personal liability irrespective of extrinsic evidence. Sphinx was not Internaut’s principal and was not a party.

3. The original arbitration was validly authorised by Internaut. The notice commencing it referred innominately to the owner’s arbitrator. Since Internaut was the contracting owner, the arbitration began between Internaut and Fercometal.

4. The later identification of Sphinx in the points of claim was not a mere misnomer. Sphinx and Internaut were distinct companies, and the solicitors had intentionally selected Sphinx in the mistaken belief that it was the relevant owner. This differed from a case in which the correct contracting entity was described by an obsolete or slightly inaccurate name.

5. Once Sphinx was identified and accepted as claimant, the arbitration conducted in its name was a nullity. Sphinx had never been party to the charterparty or arbitration agreement and could not ratify proceedings conducted in its name. The interim award in Sphinx’s name could not be treated as an award for Internaut.

6. The original arbitration nevertheless survived because Internaut had invoked it and it had not concluded. Its future conduct was for the two arbitrators originally appointed. Any election, waiver, estoppel or abuse-of-process arguments were matters for the tribunal. The third arbitrator might require reappointment.

1. Court of Appeal (Civil Division): The appeal was dismissed unanimously. The findings that Internaut alone was party to the charterparty and original arbitration were upheld. The order was varied to declare that the proceedings conducted in Sphinx’s name were a nullity, while the arbitration validly commenced by Internaut survived.
2. Commercial Court: David Steel J held that Internaut was the contracting owner and that the original arbitration had been commenced on its behalf. No neutral or report citation is stated.