'EVER GIVEN' In The Suez Canal: When Is A Binding Contract Concluded?

• Jurisdiction: European Union
• Law Firm: Quadrant Chambers
• Subject Matter: Corporate/Commercial Law, Transport, Contracts and Commercial Law, Marine/ Shipping
• Author: Andrew Carruth
• Published date: 03 April 2023

OVERVIEW

Smit Salvage BV & Ors v Luster Maritime SA & Anr (The 'Ever Given') [2023] EWHC 697 (Admlty)

At about 05:40 UTC on 23 March 2021, the Ultra Large Container Vessel 'EVER GIVEN' (the 'Vessel') grounded in the Suez Canal. She remained aground for about six days and the Canal was blocked in both directions for that entire period. The incident caused significant disruption to global trade and made headlines around the world.

Almost two years to the day since the Vessel was re-floated, the Admiralty Court has handed down judgment on a preliminary issue in a claim brought against the Vessel's registered owners by SMIT Salvage BV ('SMIT'), a leading maritime salvage company based in the Netherlands, and certain other parties who had participated in the salvage effort (the 'Claimants').

The Court held that, contrary to what was argued by the defendant owners, no contract was concluded between the parties. The corollary is that the Claimants can claim salvage under the International Convention on Salvage 1989 (the 'Convention') and/or at common law.

On the day of the grounding, the Vessel's owners sought assistance from SMIT, initially in the form of technical advice. By the time the Vessel re-floated on 29 March 2021, SMIT was contributing to the salvage effort by way of a salvage team on board the Vessel; remote assistance from a team onshore including naval architects; and two tugs, 'ALP GUARD' and 'CARLO MAGNO'.

No sooner had the Vessel re-floated than a dispute arose as to whether a binding contract had been concluded between the Claimants and the Vessel's registered owners, Luster Maritime SA ('Luster') and Higaki Sangyo Kaisha Limited ('Higaki').

SMIT contended that no binding contract had been concluded and that they were entitled to claim salvage under the terms of the Convention and/or at common law. Luster and Higaki contended that a binding contract had been concluded on 26 March 2021, such that SMIT could not claim salvage because it had not acted as a volunteer.

A claim for salvage was commenced in the Admiralty Court by SMIT. The defendants to the action were Luster and Higaki (the 'Defendants'). The Court directed the trial of a preliminary issue as to whether or not a binding contract had been concluded on 26 March 2021 as alleged by the Defendants.

The contract was said to have been concluded by an exchange of e-mails on the morning of 26 March 2021 between Mr Richard Janssen, SMIT's Managing Director, and a claims handler acting on...