Ferryways NV v Associated British Ports

An undisclosed principal may intervene in and take the benefit of a contract unless the contract, expressly or by implication, makes the agent the true and only principal, or intervention would be inconsistent with the contract. The whole contract must be considered, including provisions showing which party was intended to exercise the relevant rights and perform the relevant obligations.

In an exemption clause, indirect or consequential loss ordinarily means loss which is not the direct and natural result of the breach. An illustrative list does not, without clear language, extend the clause to direct loss. A contractual notice requirement expressed to cover any claim of any kind applies according to its natural breadth.

The claimant, a demise charterer and ship operator, claimed from the defendant port operator sums paid following the death of the chief officer of one of its vessels. The death occurred when the officer was struck by a tugmaster vehicle during cargo operations.

The court determined six preliminary issues concerning breach of the stevedoring agreement, the claimant’s loss, the identity of the officer’s employer, an indemnity owed to the crew manager, contractual exclusions and limitations, and timely notice of the claim.

1. Negligence and breach. It was common ground that negligent driving by the tugmaster driver would constitute a breach of the defendant’s obligation to perform the stevedoring services with reasonable care and skill.
2. Employer and undisclosed principal. The crew management agreement authorised the crew manager to engage crew as agent for the claimant. The employment contract described the crew manager as employer, but did not expressly provide that it was the only person entitled to the rights and subject to the obligations of the employer. The court considered the contract as a whole. Its grievance, conduct and safety-management provisions indicated that the ship owner or operator was intended to exercise important employer functions. The crew member’s knowledge of the claimant’s role and willingness to serve on its vessels were also relevant. The claimant could therefore intervene as undisclosed principal and was the employer for the purpose of the claim.
3. Loss and indemnity. The claimant suffered loss because it incurred liability for the death benefit and repatriation expenses. Payment by the Club under insurance did not eliminate that loss. Alternatively, if Ambra had been liable, the claimant’s contractual obligation to indemnify it would itself have constituted a loss.
4. Exclusion clause. The liability for the death benefit and repatriation expenses was the direct and natural consequence of the assumed breach. The words “indirect or consequential” retained their ordinary contractual meaning. The following reference to liabilities owed to other parties did not clearly extend the exclusion to direct loss. The court preferred the defendant’s construction of the separate death and personal injury exception, but it was unnecessary to decide its application.
5. Notice. The clause required written notification of any claim within 14 days. The claimant’s letter of 27 October 2005 sufficiently notified a claim arising from the incident and death. The claim was therefore not extinguished for want of notice.
6. The answers to the six preliminary issues were: yes, yes, yes, yes, no in relation to clause 9 and yes in relation to clause 10, and yes.