CHARTERING

Parties involved

Transport Broker

Generally it is neither the Ship Owner nor the Charterer who establishes the charter party and signs it, but their representative, viz. the transport broker. The tasks of the transport broker are exhaustively described in the paragraph Transport Broker. It is hereby important that the transport broker can act as Shipbroker or as chartering broker, or as cargo broker and that he only acts as agent provided that his signature is followed by the reservation "as agent only" without naming the parties concerned or "as agent for X". In the first case this can sometimes lead to difficulties, especially in court cases or disputes because it is not clear in whose name the broker has signed the charter party.

In his book on Charterparties and Bills of Lading, Mocatta, A., Mustill, J., and Boyd, C., Scrutton on Charterparties and Bills of Lading, London, Sweet and Maxwell, 1984, 31 and 32), Scrutton writes about the signing of the charter party by the broker the following:

"Whether or not a person professing to have signed the charter as agent can sue and be sued as principal, depends, apart from custom or express agreement, on the intention of the parties, to be gathered in each case as a matter of construction from the terms of the charterparty as a whole (Universal Marine S.N. Co. v. McKelvie [1923] A.C. 492).

Where a person signs the charter in his own name without qualification, he is prima facie deemed to contract personally, and, in order to prevent this liability from attaching, it must be clear from the other portions of the charterparty that he did not intend to bind himself as principal (Brandt v. Morris [1917] 2 K.B. 784; Hough v. Manzanos (1879) 4 Ex. D. 104 Cf. Gadd v. Houghton (1876) 1 Ex. D. 357 (C.A.); Hick v. Tweedy (1890) 63 L.T. 765; Tudor Marine v. Tradax Export (The Virgo) [1976] 2 Lloyd's Rep. 135 (C.A.); distinguished in Establissement Biretet Cie S.A. v. Yukiteru Kaiwan K.K. and Nissan Shipping Corpn. (The Sun Happiness [1984] 1 Lloyd's Rep. 381. A person may be a party to a contract in two capacities, both as principal and agent: ibid at p. 384, per Lloyd J).

The description of the person in the body of the document and the form of his signature are the most material matters to be considered. The fact that the signature is qualified by the words "as agent" will generally be accepted as conclusive evidence that the signatory does not intend to contract as principal. An agent wishing to protect himself from personal liability should, therefore, state in the body of the charter that it is made by him as agent for the Charterer or Ship Owner, and sign it "D, as agent for the Charterer" (or Ship Owner). In this case he cannot be sued on the charter, unless a custom exists which renders him personally liable.

Where an agent contracts for an unnamed principal, evidence of a custom that the agent is personally liable if he does not disclose his principal either at the time of the contract or within a reasonable time is admissible to render the agent liable as principal, but not to exclude the principal's liability (Per Bovill C.J. and Brett J., Hutchinson v. Tatham (1873 L. R. 8 C.P. 482. See also brokers' cases; Fairlie v. Fenton (1870) L.R. 5 Ex. 169; Gaad v. Houghton (1876) 1 Ex. D. 357 (C.A.); Southwell v. Bowditch (1876) 1 C.P.D. 100; reversed ibid. p. 374 (C.A.); Pike v. Ongley (1887) 18 Q.B.D. 708; see also Dale v. Humfrey (1858) E.B. & E. 1004; Fleet v. Murton (1871) L.R. 7 Q.B. 126; Marikar v. de Mel [1946] A.C. 108).

It was at one time believed that, by trade custom, an English agent for a foreign principal was liable as principal to the exclusion of the liability of the foreign principal. This custom no longer exists (Teheran-Europe v. Belton (Tractors) [1968] 2 Q.B. 545 (C.A.). The fact that the principal carries on business abroad is, however, a relevant circumstance in determining whether the contract on its true construction admits the foreigner as a party, and whether the agent contracts as a principal (Teheran-Europe v. Belton (Tractors) [1968] 2 Q.B. 545 (C.A.).

A person may by his conduct stop himself from denying that he is personally liable (Herman v. Royal Exchange Shipping Co. (1884) C. & E. 413).

Sometimes the Charterer or the Ship Owner wishes not to be known (generally for commercial reasons) so that the name of the broker is mentioned in the charter party. In that case the broker must also have his signature followed by the usual reservation.

In particular circumstances abroad, the master can act as broker; he must however therefore be authorized by the Ship Owner.

Conclusion

At the fixing of a charter party (or any other chartering or transport agreement) generally four persons are involved, viz.: the Ship Owner, the Shipbroker, the Charterer(s) and the cargo broker(s).

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