JIANGSU SHAGANG GROUP CO LTD V LOKI OWNING CO LTD

[2018] EWHC 330 (Comm), Queen's Bench Division, Commercial Court, Mrs Justice Carr, 1 March 2018

Arbitration (jurisdiction) - Agency - Whether charterer had actual authority to bind guarantor - Arbitration Act 1996, section 67

In November 2008 LOC, the owners of the vessel Pounda, entered into a charterparty with SSC for 118 to 122 months. The contract was made by an exchange of emails and a formal charter was issued thereafter. The charter stated that SSC's commitments were guaranteed by JSG, and that disputes were to be resolved by arbitration in London. The charter was signed by LOC, but not by SSC or JSG. Arbitration proceedings were commenced by LOC against SSC based on SSC's default in paying hire. The arbitrators found SSC liable for the sum of US$68 million. SSC was insolvent and LOC then commenced arbitration proceedings against JSG on the guarantee. JSG denied that it had not been aware of the charter when it was entered into, that JSG was not a party to the guarantee and that SSC had no authority to bind JSG by the charter. The tribunal concluded, on the hearing of a preliminary issue, that the charter was concluded by brokers HRS on behalf of JSG following the instructions of SSC. The award was challenged by JSG under section 67 of the Arbitration Act 1996.