Imamovic v Cinergy Global Trading Ltd

A co-operation agreement between separate companies does not create a partnership merely because the parties pursue a common commercial objective or share profits. The court must examine whether they carry on a business in common with a view to profit, including the parties’ express agreement and the legal structure contemplated.

A holding out as a partner or agent must be sufficiently clear and unambiguous, and the claimant must rely on it before giving credit. A contractual duty to co-operate has limited scope. It requires only the co-operation necessary to make the contract workable, assessed by the express and implied obligations and surrounding circumstances. It does not generally require a party to act reasonably or accept commercial risks which it did not undertake.

The claimant, Dr Imamovic, claimed damages from CGTL under a written agreement made with Energa SA concerning the proposed sourcing and sale of electricity from former Yugoslavia to Greece. He alleged that Energa, CGTL and the Agricultural Bank of Greece were partners, alternatively that Energa acted as CGTL’s agent, and further that CGTL had held out Energa as its partner or agent.

He also alleged that CGTL had ratified or adopted the agreement and had failed to co-operate in pursuing electricity supply proposals. CGTL denied any contractual relationship with him and relied on written co-operation agreements which expressly excluded partnership and agency.

1. Contractual liability. The agreement was made by Energa on its own behalf with Dr Imamovic. Its terms identified Energa and ICG as the parties and required Energa to procure that any future joint venture company would assume the obligations. Nothing in the agreement made CGTL liable.
2. Partnership. The written co-operation agreements did not establish a partnership within the Partnership Act 1890. The parties intended to form a joint venture company or other corporate vehicle in the future, expressly excluded partnership and agency, and did not carry on a business in common with a view to profit. The later oral agreement for sharing profits on business introduced by Energa had the same effect. The non-binding memorandum involving ATE did not alter that conclusion.
3. Holding out and agency. References to a consortium, joint venture or partners, and the use of the three entities’ names together, were loose commercial descriptions. They did not unambiguously represent an English-law partnership or authority to bind CGTL. There was no reliance by the claimant in any event: he understood that he had contracted with Energa alone. Energa had neither actual nor ostensible authority to bind CGTL, and no ratification, adoption or recognition of the agreement by CGTL was proved.
4. Duty to co-operate. Applying the limited approach described in Mona Oil Equipment & Supply Co Limited v Rhodesia Railways Limited [1949] 2 All E R 1014, and considering Luxor v Cooper [1941] AC 108 and Mackay v Dick (1881) 6 App. Cas. 251, any duty extended only so far as necessary to make the agreement workable. CGTL was entitled to require guaranteed delivery at the Greek border at a price allowing a profit and to avoid unassumed transmission and market risks. None of the claimant’s proposals amounted to a viable offer which CGTL was obliged to pursue.
5. Disposition. The claim failed. The claimant had no entitlement to CGTL’s profits. Any claim for expenses also failed because the agreed reimbursement was conditional on proper invoices and receipts, which were not supplied. There was no separate entitlement to the alternative annual remuneration claimed.