Unaoil Ltd v Amona Ranhill Consortium Sdn Bhd

On an application to set aside service out of the jurisdiction, the claimant must show a serious issue to be tried, meaning a claim with a real prospect of success. Contractual identity is determined objectively from the agreement read with its admissible background. The identity of the contracting parties is fixed when the contract is made; later conduct cannot alter construction, although it may bear on agency or sham. A company named as principal remains the contractual principal despite its lack of assets or previous business as a principal, unless the evidence shows a common intention that it should act only as agent or nominee. A sham requires a common intention among all parties to create apparent rights and obligations different from those actually intended. An estoppel requires an unambiguous representation.

Unaoil sought payment of commissions under an Agency Agreement relating to a Libyan construction project. The agreement named Ranhill Middle East FZE as principal, although the services benefited Amona Ranhill and payments were expected to be funded from sums received by Amona Ranhill. Unaoil claimed that Amona Ranhill, alternatively Ranhill Engineers & Constructors, was the true contracting party; alternatively, that Ranhill FZE acted as Amona Ranhill’s agent or bare nominee, or that Amona Ranhill was estopped by a later side letter.

Amona Ranhill and Ranhill Engineers & Constructors applied to set aside service. The court had to decide whether Unaoil had a real prospect of establishing liability against either defendant.

1. Application granted. Service of the proceedings on Amona Ranhill and Ranhill Engineers & Constructors was set aside. Ranhill FZE was the only party liable under the Agency Agreement.
2. For the jurisdiction application, the agreed test was the summary-judgment test: whether Unaoil’s claim had a real prospect of success. The court accepted that factual disputes could not be resolved finally at this stage, but the claimant still bore the burden of showing a serious issue to be tried.
3. As a matter of construction, the Agency Agreement identified Ranhill FZE as the Principal and repeatedly distinguished it from Amona Ranhill as the Contractor. The objective construction of the agreement was determined at the date of conclusion. Pre-contractual negotiations could not be used to infer the meaning of the contractual language, and subsequent documents could not retrospectively alter that construction.
4. The supplementary agreements did not raise a triable issue that the contracting party had been changed. They were expressed to supplement and clarify the existing agreement, and contained no clear indication of the substantial change in contractual identity alleged by Unaoil. Mr Metcalf’s signature of the fourth supplementary agreement was plainly on behalf of Ranhill FZE, not Ranhill Engineers & Constructors.
5. The agency and bare-nominee cases also had no real prospect of success. The agreement’s terms were inconsistent with agency, the negotiations showed that Unaoil’s request to name Amona Ranhill as principal had been rejected, and the contemporary evidence showed continuing discomfort with Ranhill FZE as counterparty rather than an agreed agency arrangement. The use of Ranhill FZE for tax purposes required it to be a genuine principal.
6. Applying Snook v London & West Riding Investments Ltd [1967] 2 QB 786, a sham required a common intention by all parties that the apparent legal rights and obligations should not be created. No such common intention was shown. The side letter was convoluted and did not clearly state that Amona Ranhill was the true principal or liable for payment. The estoppel case was therefore bound to fail.
7. The judge noted obiter that, had an agency case been sufficiently arguable, there was at least a real prospect that any initial lack of authority could have been cured by subsequent ratification, particularly through the third and fourth supplementary agreements.

First-instance decision. No earlier or appellate decision is stated in the judgment.