TTMI SARL v Statoil ASA

On a challenge under section 67 of the Arbitration Act 1996, the court must determine jurisdiction for itself by rehearing the issue. A fixture recap naming a specific contracting party will generally govern where the evidence does not establish an earlier oral agreement or a common intention to contract with an unnamed disponent owner. However, subsequent performance may objectively create a contract with the party that in fact performed the voyage and received payment. The contractual terms, including an arbitration clause, may be incorporated by reference where the parties’ conduct and documents clearly adopt them.

TTMI, the time charterer of the vessel Sibohelle, challenged an arbitrator’s decision under section 67 of the Arbitration Act 1996. The arbitrator had struck out TTMI’s demurrage claim against Statoil on the ground that the recap email named Sempra Energy, rather than TTMI, as time-chartering owner and therefore disclosed no contract or arbitration agreement between TTMI and Statoil.

TTMI relied alternatively on contract formation by performance, incorporation of the recap terms and rectification of the recap. The court considered whether a contract had been concluded before performance, whether the parties’ conduct subsequently created a contract, whether the arbitration agreement was sufficiently evidenced in writing, and whether rectification was necessary.

1. Section 67 challenge. The court was required to rehear the jurisdictional issue and reach its own conclusion, rather than review the arbitrator’s reasoning. The factual assumptions and evidential limits directed by the earlier case-management order governed the rehearing.
2. No executory contract on 17 October 2005. The recap expressly identified Sempra Energy as the time-chartering owner. The evidence did not establish a prior oral agreement, negotiations identifying TTMI as principal, or a common intention to contract with whoever was the vessel’s disponent owner. The cases concerning unnamed or misidentified owners were materially different because they contained stronger evidence that the bargain had already been made before the owner’s identity was recorded. In these circumstances the recap was, for material purposes, the principal expression of the bargain.
3. Undisclosed principal. TTMI could not enforce the contract as an undisclosed principal. The determinative question was the authority and intention of the person in whose name the contract was made. There was no evidence that Sempra Energy acted as TTMI’s agent, and the assumed facts excluded authority for Galbraith’s to contract on Sempra Energy’s behalf.
4. Contract by performance. Objectively, a contract was formed between TTMI and Statoil when the freight was paid, if not earlier when TTMI’s identity appeared in the accepted Notices of Readiness or when the cargo was loaded. Relevant factors included TTMI’s ordering of the vessel, the Notices of Readiness, full performance of the voyage, the demand for payment to TTMI’s bank account and Statoil’s payment to TTMI. The transaction was performed on the terms recorded in the recap emails.
5. Arbitration agreement. The Notices of Readiness referred to the terms and conditions of the 17 October recap. Those terms included clause 43 of the Shellvoy 5 form and its arbitration clause. This satisfied the statutory requirement for an agreement by reference to written terms. Alternatively, the court would have held that the arbitration could proceed at common law by virtue of section 81.
6. Rectification was unnecessary and probably inappropriate because the contract arose through performance, and the evidence did not establish the required continuing common intention at the time of the recap.
7. The arbitrator’s award was set aside and the matter was remitted to him to proceed in light of the court’s findings.

The judgment concerned a challenge under section 67 of the Arbitration Act 1996 to an arbitrator’s award dated 2 September 2009, revised on 12 October 2009 under section 57 of the Act. The award was set aside and the matter remitted to the arbitrator.