Lloyd's Law Reporter
PAN OCEANIC CHARTERING INC V UNIPEC UK CO LTD AND ANOTHER
[2016] EWHC 2774 (Comm), Queen's Bench Division, Commercial Court, The Honourable Mrs Justice Carr DBE, 10 November 2016
Contracts - Conflicts of law - Brokerage fees - Implied in law promise - Tortious interference with contract - New Jersey Law - Regulation (EC) No 593/2008 on the law applicable to contractual obligations ("Rome I") - Regulation EC 864/2007 on the law applicable to non-contractual obligations ("Rome II") - Rome Convention - Contracts (Applicable Law) Act 1990
The claimant, POC, was a ship charter brokerage firm domiciled in New Jersey. The defendants were UK and HK subsidiaries of UNIPEC, a subsidiary of China Petroleum & Chemical Corporation. The claim related to a three-year renewable contract of affreightment dated 30 April 2010 between UHK, as charterer, and Tankers International LLC ("TI"), as owner, for West African ("WAF") crude oil cargoes ("the 2010 WAF COA"). The 2010 WAF COA was on an amended Asbatankvoy form with rider clauses and governed by English law with a London arbitration clause. It provided for a minimum of eight and a maximum of 11 liftings of very large crude carrier ("VLCC") cargoes per month. The 2010 WAF COA identified POC as TI's nominated broker, with reference to 1.25 per cent brokerage commission on freight, deadfreight and demurrage payable by TI to POC. POC contended that this reflected an earlier brokerage agreement reached between POC and TI in October 2009 for the payment to POC of 1.25 per cent brokerage commission on all gross freight, deadfreight and demurrage earned by TI on the 2010 WAF COA ("the brokerage agreement"). While the 2010 WAF COA was initially fulfilled, the number of liftings gradually abated and ceased. It was common ground that UHK thus acted in breach of the 2010 WAF COA and that POC was deprived of commission from TI as a result. POC claimed damages contending that UHK acted in breach of an "implied in law" promise, and alternatively damages for tortious interference with contractual relations; both arguments being based on New Jersey law. The questions for the judge, omitting those based on New Jersey law, were: what was the applicable regime and putative proper law in relation to an implied in law promise - English or New Jersey law? It was common ground that if Rome I applied, New Jersey law did not apply and the claim based on an implied in law promise would fall away; if Rome II applied, what was the proper law of the obligation? POC contended that it was New Jersey law, UHK that it was English law. If the proper law is English, then again it was common ground that the claim based on an implied in law promise would fall away.