Owners Held Not Liable Under Charterparties Signed By Manager In Breach Of Implied Warranty Of Authority

Navig8 Inc v South Vigour Shipping Inc [2015] EWHC 32 (Comm)

The claimant had chartered four vessels, the charterparties for which had been signed by the vessels' commercial manager. Each charterparty contained the phrase "the disponent owners signatory in contract", followed by the manager's name. During the negotiations, the manager had made it apparent that it was acting on behalf of Owners, and had said that Owners were being kept informed of the progress of negotiations.

When the vessels were withdrawn from service, Charterers brought a claim against the manager and the registered owners of the vessels, arguing that in fixing the charterparties the manager had been acting as the Owners' agent, that Owners were bound by the charterparties, and that they were in breach by withdrawing the vessels. Charterers said that the phrase "disponent owners" in the charterparties was used in the sense of the manager having the power to fix charterparties on behalf of Owners. Owners denied that they were party to the charterparties and, if they were, that the manager had authority to act on their behalf.

The Court held first that the manager had signed the charterparties as disponent owner, in the sense of being the manager of the vessels. The phrase "disponent owner" could be used to refer to a party who was the agent of the registered owner, if he was a manager with very wide powers (although the court acknowledged that the use of the phrase in this context is...