Armagas Ltd. v. Mundogas S.A. (The Ocean Frost) - Court of Appeal (Stephenson, Dunn & Robert Goff L.JJ.) - 18 October 1984

Chartering manager has no ostensible authority to say that top management approved charter-back arrangement

Armagas bought the vessel Ocean Frost from Mundogas and chartered her back to Mundogas. Mr. M. was Mundogas’s Vice President (Transportation) and Chartering Manager. He negotiated the charterparty with Mr. J., a friend and broker. Mr. M. signed a three year charterparty with Armagas on behalf of Mundogas. In fact, Mr. M. had no authority to conclude such a charterparty. Mundogas subsequently repudiated the charter on the ground that it knew nothing about the three year charter, and that Mr. M. was acting without authority.