The Court of Appeal has dismissed an Estonian ship agency’s appeal over unpaid port expenses and fees connected to the M/V Lady Magda, affirming the High Court’s dismissal of its claim against the vessel’s owners.
In a judgment delivered on 18 January 2021, Mr Justice Maurice Collins said the agents had not established a contract with the owners or any other basis for their personal liability. The court did not decide whether the agents’ invoices were owed by the charterers, Dennis Maritime Oy Ltd, which had appointed the agents and was identified as debtor on the invoices.
The dispute concerned agency services provided at ports between June and October 2016. The agents paid third parties for charges including port dues, pilotage and berth fees, and also charged agency fees. The charterers initially paid invoices but later fell behind. They entered a deferred payment agreement with the agents in April 2017, failed to follow its schedule and were declared bankrupt in August that year.
The agents later pursued the owners for €95,381.49. The Lady Magda was arrested in Drogheda on 19 July 2017, where it was then in port, and released two days later after €135,000 was lodged as security. The security was subsequently paid back to the owners after the High Court dismissed the claim.
The agents argued that the expenses benefited the vessel and that maritime law and the master’s authority supported a presumption of liability by the owners. They also argued that the owners had ratified the arrangements by accepting the benefit of the services. The owners disputed that they had any contract with the agents or were responsible for the invoices.
The Court of Appeal said the relevant statutory provisions and the 1952 Arrest Convention concerned jurisdiction and arrest, and did not create substantive liability. It found that the agents had dealt with the charterers, knew they were not the owners, and had not shown that the charterers were acting for the owners. There was also no evidence that the vessel’s master was involved in appointing the agents. The charterparty placed port and agency expenses on the charterers and put the master under their directions for agency arrangements.
The court rejected the ratification argument, finding no evidence that the charterers had purported to contract on the owners’ behalf. It also concluded that the owners had not taken any action or failed to act in a way that adopted the agents’ contract with the charterers.
The appeal was refused and the High Court judgment and order affirmed. The court proposed that the owners receive the appeal costs, giving the agents 14 days to seek a brief supplemental hearing on costs. The judgment did not state that a final costs order had already been made.