England and Wales High Court (Commercial Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		14/09/2009

Mr Justice Hamblen :

Introduction

1. The Defendants apply by an Application Notice dated 6 May 2009 for a declaration that the Court does not have jurisdiction to hear the claim in this action and an order setting aside the Claimant's Claim Form or setting aside its service.
2. The First Defendant is the owner of the fishing vessel "CATONE" and the Second Defendant is the vessel's hull and machinery insurer. The dispute in this case arises from an incident on 4 February 2009 when "CATONE" was proceeding to the port of Lampedusa, Italy with a cargo of fish in order to tranship that cargo to another vessel. When she was outside the port she grounded due to adverse weather conditions and attempts to refloat her were unsuccessful.
3. In those circumstances various tug companies, including the Claimant (who is the owner of the tug "POSEJDON"), were contacted during 4 February 2009 with a view to hiring a tug to assist in refloating "CATONE". It is common ground that a contract was eventually concluded on 4 February 2009 between the Claimant and the First Defendant for the hire of "POSEJDON". What is in dispute is the terms of that contract.
4. "POSEJDON" arrived at Lampedusa on the morning of 5 February 2009. The First Defendant contends that she then proceeded to pull "CATONE" in a manner contrary to the instructions which had been given to her by the First Defendant's local representatives and in such a way as to cause "CATONE" to be pulled over, suffer a list of 90 degrees to starboard and to become partially flooded. This allegedly not only caused additional damage to "CATONE", but it also caused her to lose her cargo of fish. This is disputed by the Claimant which contends that the instructions given were at all times followed and that the further capsize was due to a lack of residual stability in the already flooded vessel.
5. The Claimant issued its Claim Form on 18 February 2009 seeking a declaration that it is not liable for breach of contract or duty to either the First or the Second Defendant in respect of loss or damage suffered by "CATONE" at or off Lampedusa on 5 and 6 February 2009. The Claimant has subsequently served that Claim Form on both of the defendants out of the jurisdiction.
6. Both of the Defendants are domiciled in an EU Member State, Italy, and so this is a case governed by the "Brussels Regulation". The Defendants say that as a result, if they are to be sued, they are to be sued in the Italian Courts and that they are not subject to the jurisdiction of the English Court. This follows from Article 2(1) of the Brussels Regulation, which provides that "Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State".
7. The Claimant contends that this Court does have jurisdiction because the parties agreed that the English Courts were to have jurisdiction to settle any disputes which might arise in connection with the hire of "POSEJDON" within the meaning of Article 23 of the Brussels Regulation. It says in this regard that the parties' contract included the terms of the pro-forma TOWHIRE form which contains an English Courts jurisdiction agreement at clause 25. The Defendants dispute that there is any such agreement conferring jurisdiction on this Court and for that reason the Court should decline jurisdiction over the Claimant's claim.

The evidence

8. The Defendants filed a witness statement dated 6 May 2009 from their solicitor, Mr Robert Parson of Reed Smith, in support of their application. They have also very recently served three further short factual statements from individuals involved in the negotiations for the hire of "POSEJDON" (Mr Margiotta and Mr Rallo of the First Defendant and Mr Genna of the Second Defendant).
9. The Claimant has provided factual witness statements from its brokers during the negotiations, Mr Leeraar and Mr Heath of Marint (Offshore Services) Limited ("Marint"). It has also served an expert's report from Mr Halfweeg of Princess Marine BV who has 50 years working experience of the salvage and towage business. His statement discusses market practice in relation to the conclusion of towage contracts.
10. The Defendants have also very recently served an expert's report of their own from Ms Barucco, not on market practice, but on certain issues of Italian law. The Claimant objected to the admission of this evidence but, as the arguments have developed, it has not proved necessary to refer to or rely on this evidence and there is therefore no need to rule on its admissibility.

The facts

11. The issues before the Court focus on the negotiations which took place on 4 February 2009 for the hire of "POSEJDON". These negotiations were conducted via the following chain of communication: the Claimant dealt with their brokers, Marint (Mr Leeraar and Mr Heath); Marint dealt with the brokers, Cambiaso Risso Service Srl ("CRS") (Mr Palumbo); and CRS dealt with the Defendants. Although the Defendants claim that CRS were acting as "intermediate" brokers, on the material before the Court I am satisfied that CRS were instructed to act on the First Defendant's behalf, that they had a broking role rather than merely a role as a conduit, and that they acted as the First Defendant's brokers.
12. After the initial attempts to re-float "CATONE" had failed, it appears that the First Defendant contacted a number of tow companies to find a suitable tug to assist. This included, at the suggestion of the Second Defendant, contacting Mr Palumbo of CRS. Mr Palumbo then telephoned Mr Leeraar at Marint at 09.00 GMT on 4 February to ask if Marint had a tug available. Mr Palumbo called back again at 09.18 GMT to provide further details about "CATONE" and where she was aground. He followed this up with an email to Mr Leeraar in which he asked "Can you please let us know if the M/tug "Posejdon" is available and in case which offer they are ready to propose".
13. Mr Leeraar passed this request and the details of "CATONE" to the Claimant in two emails. The Claimant responded shortly afterwards by an email timed at 10.07 GMT indicating that it was willing to put forward "POSEJDON" for the job.
14. Mr Leeraar then telephoned the Claimant to check on the position and availability of "POSEJDON". His evidence is that during this conversation the Claimant's Mr Borowski said that the Claimant required a contract on TOWHIRE terms. This is supported by Mr Leeraar's telephone log of this conversation.
15. Mr Leeraar then emailed Mr Palumbo at 10.09 GMT with an indication of terms on behalf of the Claimant. No reference was made in this email to English Court jurisdiction or to the TOWHIRE form.
16. Mr Palumbo passed on this indication to the First Defendant's accountant, Mr Margiotta.
17. It appears that there were then discussions between the First Defendant and Mr Palumbo because at 13.30 GMT Mr Palumbo and Mr Leeraar had a further telephone conversation in which Mr Palumbo said that the First Defendant was short of funds and would not be able to pay for the Claimant's services immediately. Mr Leeraar reported this to the Claimant at 13.54 GMT.
18. Following a further exchange of emails, a solution was found to the funding issue, based on the Second Defendant guaranteeing the payment of 80% of the sums due to the Claimant. The Claimant emailed Mr Leeraar at 15.07 GMT saying "All accepted. We are interest in 20pc as an upfront payment and we would be appreciate to get guarantee from Generali. We are waiting your confirmation".
19. Mr Leeraar called Mr Palumbo at 15.20 GMT to discuss the terms of the deal and the solution to the First Defendant's funding problems. Mr Leeraar's unchallenged evidence is that in addition to these terms he raised with Mr Palumbo the fact that it would be a TOWHIRE charter. This was consistent with previous dealings between Marint and CRS and Mr Leeraar says that this would have been expected by Mr Palumbo and that he "accepted" this, although he also states that the call ended on the basis that Mr Palumbo would revert to his principals for instructions. The reference to TOWHIRE terms is supported by Mr Leeraar's telephone log of this conversation.
20. Following this conversation Mr Leeraar sent a further email to the Claimant at 15.44 GMT reporting on the developments in the negotiations and stating that the Defendants "are keen to move forward on a Bimco Towhire basis". A few minutes later (at 15.56 GMT) Mr Leeraar and Mr Palumbo had a further conversation. Mr Leeraar's evidence is that Mr Palumbo indicated in this conversation that the First Defendant was interested in accepting the offer. He also says that he again mentioned the TOWHIRE form and having a no claim for salvage clause. The matter was left on the basis that Mr Palumbo would revert after taking final instructions on the contract. In this regard it is to be noted that Mr Leeraar's entry in the telephone log reads "Towhire No clm for slv ??".
21. Mr Palumbo then reverted to the First Defendant. He sent an email at 16.02 GMT setting out the revised financial terms for the proposed contract for "POSEJDON". This email makes no reference to English Court jurisdiction or to the TOWHIRE form and it is the evidence of Mr Margiotta, Mr Genna and Mr Rallo that no mention was made of these orally at any stage during 4 February. There is no evidence from Mr Palumbo on this or any other issue.
22. It is the Claimant's evidence that Mr Palumbo then called Marint at about 19.30 GMT and spoke to Mr Heath who was manning the Marint desk. Mr Heath's unchallenged evidence is that he received a call from Mr Palumbo "to confirm that the "CATONE" owners wished to go ahead with the fixture on the basis of the terms discussed earlier that day".
23. There was then an email from Mr Palumbo to Mr Heath timed at 19.37 GMT. In that email Mr Palumbo stated "As discussed by phone few minutes ago, please find here below the order received from Owners / Underwriters". He then set out below the text (and translation) of the email he himself had received from Mr Genna at 18.53 GMT in which Mr Genna stated "as agreed over the phone, please immediately, arrange the dispatch of a suitable tug, according to our last agreement, below reported…". He also set out in full the terms of the email he himself had sent to the First Defendant at 16.02 GMT; namely:

"M/Tug: Posejdon, 40tbp (se attached spec)

Delivery / Redelivery: Malta Roads

Daily Hire Rate: Euro 20.000 per day pro rata excluding fuel and lubes

2 day minimum

Tugowners advice tug could depart within approx 1 hour of confirmation

Refloating Bonus of Euro 60.000,00

Payment term:

Euro 20.000,00 to be paid on mobilization of the tug from Malta Roads

Balance payment to be paid after two weeks from the refloating of the unit.

Underwriters to guarantee the balance payment (i.e. minimum Euro 80.000,00 as 1 day hire + Refloating Bonus)"

24. Mr Heath wrote to the Claimant at 19.51 GMT stating "Herewith confirmation of fixture as discussed. Please instruct Posejdon to sail as soon as possible and advise ETA to the casualty location…" At 21.00 GMT, "POSEJDON" heaved anchor and sailed for Lampedusa. This would have constituted delivery under the towage hire contract.
25. Mr Heath meanwhile sent Mr Palumbo a recap of the parties' contract at 20.26 GMT on 4 February and a corrected version at 20.42 GMT. Both messages stated as follows:

"Further to our telephone conversation of 1930 gmt today we are pleased to recap terms agreed on your behalf for the charter of the Tug 'Posejdon'

….

Contract: Bimco Towhire, suitably amended to include following clauses:

It is clearly understood that there is to be no claim for salvage by the tugowner, or their managers, or their master, officers or crew of the tug or any other persons onboard the tug and/or any other party associated with the tugowner against the hirer or the tow or cargo, bunkers, stores or freight onboard the tow and the tugowner hereby indemnifies the hirer and the owners of all the above property against such claims for salvage.

….

Trust you find above recap acceptable which kindly confirm by signing over your company stamp and faxing a copy back to this office please".

26. On Thursday 5 February at 15.55 GMT Mr Leeraar sent CRS a drawn up TOWHIRE form. The covering email stated:

"Herewith attached, 'Pro Forma' Bimco Towhire Agreement.

Kindly check and advise on the Hirers side of things for the 'to be advised' items and have them sign over their company stamp and return a copy to this office please.

A copy will also be sent to the Tugowners and we shall advise you when they have signed and returned same to us."

27. No documentary or other evidence has been provided by the Defendants as to when the recaps were passed on to them but Mr Leeraar's unchallenged evidence is that on 5 February he spoke to Mr Iguera and Mr Mignone of CRS. He says that he was assured that the recap had been passed by CRS to their principals but they would be unlikely to get back a signed version immediately as the "CATONE" owners were somewhere in Lampedusa harbour. He says he was further assured that a signed version would be returned as soon as practical.
28. In the meantime the "POSEJDON" was performing services under the towage contract.
29. On Friday 6 February, at the latest, CRS requested the First Defendant sign the TOWHIRE form, but on Monday 9 February the First Defendant objected to the TOWHIRE form on the basis that it had not been agreed - "In this connection, in order to clarify the matter, we had to point out that the contract form submitted to us today…does not contain the (only) agreed terms for the service indicated above, terms which are specified in your email dated 4^th February 2009…but contains other terms which have never been discussed nor agreed…". This was after the dispute between the parties had arisen.

Relevant legal principles

30. Article 23 of the Brussels Regulation, on which the Claimant relies, provides as follows:

1. If the parties, one or more of who is domiciled in a Member State, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. Such an agreement conferring jurisdiction shall be either:

(a) in writing or evidenced in writing; or

(b) in a form which accords with practices which the parties have established between themselves; or

(c) in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned.

2. Any communication by electronic means which provides a durable record of the agreement shall be equivalent to "writing"…

31. The question for the Court on this application is whether the parties agreed to confer jurisdiction on the English Courts within the meaning of Article 23.
32. As stated in Briggs and Rees Civil Jurisdiction and Judgments (2005) 4^th Edition at paras 2.02 to 2.07 & 2.105:

(1) The fundamental rule is that if a case falls within the Brussels Regulation, the Regulation alone allocates jurisdiction over the defendant;

(2) There are 3 overriding principles of interpretation:

(i) The wording of the regulation should so far as possible be given a meaning which is common and uniform across the various Member States;

(ii) Provisions which allow a defendant to be sued against his will in a Member State other than his domicile are to be construed narrowly;

(iii) The risk of inconsistent decisions should be kept to a minimum.

33. Since Article 23 is a provision that allows a defendant to be sued in a Member State other than that of his domicile, the Defendants place particular reliance on the second of these principles of interpretation.
34. The burden of proof in the present case rests on the Claimant. It must establish a good arguable case that the parties concluded the alleged jurisdictional agreement. The Privy Council has given detailed guidance as to the meaning of this standard of proof in the context of Article 23 in Bols Distilleries BV v Superior Yachts Services Ltd [2006] UKPC 45, [2007] 1 WLR 12 at [28]:

"The rule is that the court must be satisfied, or as satisfied as it can be having regard to the limitations which an interlocutory process imposes, that factors exist which allow the court to take jurisdiction. In practice, what amounts to a "good arguable case" depends on what requires to be shown in any particular situation in order to establish jurisdiction. In the present case, as the case law of the Court of Justice emphasises, in order to establish that the usual rule in article 2(1) is ousted by article 23(1), the claimants must demonstrate "clearly and precisely" that the clause conferring jurisdiction on the court was in fact the subject of consensus between the parties. So, applying the "good arguable case" standard, the claimants must show that they have a much better argument than the defendants that, on the material available at present, the requirements of form in article 23(1) are met and that it can be established, clearly and precisely, that the clause conferring jurisdiction on the court was the subject of consensus between the parties."

35. In this regard, Article 23 has two elements. First, there must be an agreement between the parties to confer jurisdiction on the court. Secondly, that agreement must also satisfy the requirements as to formality set out in sub-paragraphs (a), (b) or (c).
36. As to the need for agreement - the Claimant must show that both the parties "clearly and precisely" consented to the alleged jurisdictional agreement. In a case, such as this, where a party alleges that it never accepted the clause, the task of the Court is to determine if there was sufficient consensus between the parties as a question of fact, without recourse to any rules of national law: see Dicey, Morris & Collins The Conflict of Laws (2006) 14^th Edition para 12-108.
37. In this connection it is sufficient for a party to agree to standard terms that contain a jurisdiction clause. It is not necessary for there to have been an agreement specifically as to the jurisdiction clause.
38. The "real consent" required by Article 23 "exists where there is an express reference to the terms and conditions which include the jurisdiction clause. It is not necessary for there to be a specific reference to the jurisdiction clause itself. . . . . the fact that the relevant party does not have a copy of the terms and conditions or the jurisdiction clause in his possession is not relevant." - see, 7E Communications Ltd v Vertex Antennentechnik GmbH [2007] 1 WLR 2175, 2185, para [32] (CA) (per Sir Anthony Clarke M.R); Credit Suisse Financial Products v Société Générale d'Entreprises [1997] CLC 168, 171 – 172 (CA) (per Saville L.J.).
39. As to the requirements as to formality, these requirements are to be construed strictly because their purpose is to ensure that parties have indeed consented to a clause derogating from the ordinary jurisdictional rule: see The Conflict of Laws para 12-100 and 12-111 to 12-115 and Civil Jurisdiction and Judgments para 2.92 to 2.95.

Was there an agreement that the Court has jurisdiction?

40. Dealing first with the position of the First Defendant, it is its case that the only terms it ever agreed to were the terms set out in Mr Palumbo's message of 1937 GMT on 4 February – i.e. the basic contract terms. It is pointed out that no reference was made to TOWHIRE terms or to a jurisdiction agreement in either of the two emails sent to it by Mr Palumbo or in the email in response to him which are in evidence. It is also said that the evidence of Mr Margiotta, Mr Genna and Mr Rallo is that Mr Palumbo did not raise the matter orally with them, although there is no evidence from Mr Palumbo on this.
41. Although it is acknowledged that Mr Leeraar's evidence is that he discussed the TOWHIRE form with Mr Palumbo, it is said that Mr Palumbo did not agree to the use of that form in those discussions and that on Mr Leeraar's own evidence on both occasions when the issue was raised the matter was left on the basis that Mr Palumbo would have to discuss the matter with the First Defendant and revert. It is said that this is also reflected by Mr Heath's evidence in that he says that his understanding of the situation prior to his conversation with Mr Palumbo was that the contract had not been formally confirmed.
42. It is further said that Mr Heath's evidence about the conversation he had with Mr Palumbo is extremely thin and does not, for example, suggest that he and Mr Palumbo discussed the question of the TOWHIRE form, let alone English jurisdiction, and that the most compelling evidence is provided by Mr Palumbo's email of 19.37 GMT. This email set out the precise terms the First Defendant was agreeing to. Those terms did not include anything to do with jurisdiction agreements or the TOWHIRE form.
43. As the Claimant points out, the Defendants' case results in an unusual, uncommercial and indeed surprising agreement.
44. It is unusual because one would reasonably expect any towage contract to be agreed by reference to standard terms, and indeed it is Mr Halfweeg's evidence that it is "unheard of" for this not to be done.
45. It is uncommercial because it results in a contract which simply does not address a number of fundamental issues which need to be addressed in any towage contract, as reflected in the TOWHIRE form itself. These include who pays for additional charges and costs (clause 3); who provides and pays for towing gear (clause 10); who arranges and pays for permits and certificates (clause 11); the requisite toworthiness of the tow (clause 12); the requisite seaworthiness of the tug (clause 13); responsibility for third party liabilities (clause 18) etc.
46. It is surprising because it results in a contract which does not address two major issues raised during the negotiations which were in the interests of the First Defendant, namely the need for a no salvage clause and the fact that the hire and refloating rates agreed included a significant element of address commission.
47. Against this, it is said that the First Defendant is the owner of a fishing vessel and therefore cannot be expected to have any particular knowledge of towage industry terms and practice. However, the First Defendant was acting in concert with the Second Defendant, a very large insurance company which would be expected to have some such knowledge. Moreover, it was being advised by specialist brokers in the towage industry, CRS.
48. One would therefore reasonably expect the towage contract to address the question of standard terms or their equivalent and on the material before the Court I am satisfied to the requisite standard of proof that the parties did so and agreed a contract on the TOWHIRE form. In particular I am satisfied of the following:

(1) Commercial parties and their brokers would expect towage contracts to be concluded on standard terms.

(2) All the charters previously negotiated between Marint and CSR had been on TOWHIRE or TOWCON forms.

(3) The Claimant told Mr. Leeraar at 9.59 GMT on 4 February that it required the charter to be on TOWHIRE.

(4) During the telecon between Mr. Leeraar and Mr. Palumbo at 15.20 GMT on 4 February, Mr. Leeraar proposed the use of TOWHIRE and a "no claim for salvage" clause and Mr Palumbo "accepted this".

(5) That acceptance was contemporaneously communicated by Mr. Leeraar to the Claimant at 15.44 GMT, explaining that the Defendants were "keen to move forwards on a Bimco Towhire basis" .

(6) The use of TOWHIRE was reiterated during the telephone conversation between Mr Leeraar and Mr Palumbo at 15.56 GMT.

(7) At about 19.30 GMT on 4 February Mr Palumbo telephoned Mr Heath and confirmed that the "CATONE" owners wished to go ahead with fixture on the basis of the terms discussed earlier that day with Mr Leeraar.

(8) Those terms included the use of the TOWHIRE form and thereby the standard English Courts jurisdiction clause.

(9) It was thereby agreed by CRS on behalf of the First Defendant that the towage contract would be on the TOWHIRE form.

(10) This agreement was confirmed by the terms of the recap sent to CRS shortly thereafter. It was on the basis of the standard terms set out in this recap that towage services were thereafter tendered and accepted.

(11) Although Mr Palumbo's email of 19.37 GMT did not refer to the TOWHIRE form, this is because it was directed at the main aspects of the agreement rather than its detailed terms.

(12) The fact of agreement to the TOWHIRE form is borne out by the striking and unexplained failure of CRS and the Defendants to raise any objection to the terms of the recap. That recap was received by CRS on the evening of 4 February and I am satisfied that it would have been passed on to both Defendants by early on the morning of 5 February. CRS has never objected to its terms, and the Defendants did not so until 9 February, well after services had been performed and disputes had arisen.

49. I am therefore satisfied to the requisite standard of proof that there was an agreement between the Claimant and the First Defendant that the Court has jurisdiction. That agreement was made orally when Mr Palumbo telephoned Mr Heath and confirmed that the "CATONE" owners wished to go ahead with the fixture on the basis of the terms discussed earlier that day with Mr Leeraar, which included the use of the TOWHIRE form and thereby the standard English Courts jurisdiction clause.
50. The Claimant's alternative case was that the agreement was made by Mr Palumbo when he "accepted" the T OWHIRE terms in his conversation with Mr Leeraar at 1520 hours. The Claimant's further alternative case was that the agreement was made by virtue of the Defendants' acceptance of services under the contract with knowledge of the terms of the recap. I make no finding in relation to these alternative cases of agreement, both of which are more problematical than, and to an extent inconsistent with, the primary case which I have accepted.
51. As to the position of the Second Defendant, it had at no time during the oral discussions between Mr Laareer and Mr Palumbo been suggested that they should contract as hirers, and indeed it would be unusual for an insurer to do so. All that had been discussed was that they would guarantee payment of 80% of the sums due, which is a contractual undertaking of a different nature and indeed an unnecessary undertaking if they were contracting as hirers.
52. It follows that when Mr Palumbo confirmed the Defendants' agreement to what had been discussed earlier, it cannot and did not include agreement to the Second Defendant being a hirer since that had never been discussed.
53. Although the recap and the proforma charter did include the Second Defendant as hirer, in the absence of any prior discussion of this or identification of this potentially significant change I am not satisfied that this was ever agreed. Indeed in Mr Palumbo's message of 19.37 GMT it was stated in terms that the First Defendant was to be the hirer. Further, both recaps and the proforma included an agreement that the Second Defendant would act as guarantor, as had been discussed.
54. I am not therefore satisfied to the requisite standard of proof that there was an agreement between the Claimant and the Second Defendant that the Court has jurisdiction.

Formal requirements

55. Even if the parties did agree to confer jurisdiction on the English Court, the Defendants say that the requirements as to formality in Article 23 are not satisfied in this case. They contend that there is no agreement in writing or even evidenced in writing within Article 23(a). They point out that the Defendants did not produce any document indicating that they had agreed to confer jurisdiction on the English Courts and did not sign any such document produced by someone else. Moreover, they say that such documents which were produced by Marint, namely the recap and the pro forma TOWHIRE, were quickly challenged by the Defendants on the basis that the documents sought to include terms which had not been agreed.
56. Under Article 23(a) all that is required is that an oral the agreement be "evidenced in writing". There is no need for the agreement to be signed: Powell Duffryn Plc v. Wolfgang Petereit [1992] I.L.Pr. 300 (ECJ). The writing relied on need not emanate from the party against whom the jurisdiction clause is being enforced: Berghoefer GmbH & Co KG v ASA SA 1 CMLR 13 [1986] 1 CMLR at 20, para [14] (ECJ). Further, a failure to raise an objection within a reasonable time to the terms of a written confirmation following an oral agreement may establish the formalities required by Article 23: Berghoefer [1986] 1 CMLR at 21, para [15]; Iveco Fiat SpA v. Van Hool S.A. [1986] 1 CMLR 57, 70 – 71, para [9] (ECJ).
57. Here, the towage contract was finally agreed and concluded orally over the telephone at 19:30 GMT, when Mr. Palumbo confirmed the fixture to Mr. Heath. That agreement was then confirmed by Mr. Heath by the revised recap sent 20.42 GMT on 4 February.
58. I am satisfied to the requisite standard of proof that the Defendants failed to raise any objection within a reasonable time to the terms of the recap and the TOWHIRE form incorporated thereby.
59. This was a situation of urgency. Instructions to mobilize the tug had to be given almost immediately whereupon the tug would be delivered under the tow contract. The tow itself was to be attempted on 5 February.
60. It was the evidence of Mr Halfweeg that, as in this case, towage contracts are commonly negotiated and agreed over the telephone under considerable time pressure. In such circumstances, if a recap does not correctly reflect the deal, the practice is for the broker receiving the recap (here, CRS) to respond "immediately with a refusal, knowing that at that time the tug was mobilising". The burden is on the receiving broker (CRS) and the party (the Defendants) "to immediately point out any error or omissions in the terms set out in the recap, absent which the recap is accepted as correctly setting out the terms of the contract."
61. The First Defendant contends that it was engaged in dealing with the situation on the ground and could not be expected to respond immediately. However, their brokers, CRS, could be so expected and in any event there were likely to be responsible people in the First Defendant's offices, such as their accountant Mr Margiottta.
62. I am accordingly satisfied to the requisite standard of proof that the recap, expressly incorporating Bimco TOWHIRE, provides the evidence in writing required by Article 23(a).
63. The Claimant advanced an alternative argument under Article 23(c). I make no finding in relation to that argument, although it is far from clear that this is a case in which that provision would be applicable.

Conclusion

64. For the reasons outlined above, it follows that the First Defendant's application fails but that of the Second Defendant succeeds.