England and Wales High Court (Commercial Court) Decisions

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

		Royal Courts of Justice Rolls Building, 7 Rolls Buildings Fetter Lane, London EC4A 1NL
		16/01/2015

Mr. Justice Teare :

1. In this action Navig8 Inc., the charterers of four Aframax vessels, claim damages from the First to Fourth Defendants, the registered owners of those vessels, on the grounds that they breached the charterparties by withdrawing the vessels from service. The charterers say that the charterparties were fixed by an agent, the Fifth Defendant, on behalf of the registered owners. In response the registered owners deny that they were party to the charterparties and, if they were party to them, that the Fifth Defendant had authority to act on their behalf. The damages claimed by the charterers are of the order of US$10.9m.
2. The charterparties were fixed on 13 April 2012 by the Fifth Defendant, Star Maritime Management Co. Pte. Ltd. ("SMMC"). The following words were used to describe the owners:

"Disponent Owners Signatory in Contract:

Star Maritime Management Company Pte, Ltd."

3. The charterers say that they, their brokers ("Poten") and SMMC intended that the charterparties were fixed on behalf of the registered owners and that the phrase "disponent owners" was used in the sense of SMMC being a manager of the vessels with power to fix charterparties on behalf of the registered owners. The registered owners say that they were plainly not the disponent owners and were not intended to be bound by the charterparties. That is the first issue in the case.
4. The charterers say that the registered owners gave authority to SMMC to enter into those charters at a meeting on 21 September 2011, or by conduct or by telephone on or shortly after 13 April 2012. The registered owners deny that they gave authority to SMMC. That is the second issue in the case.
5. As a result of the long expanse of time between September 2011 and April 2012 considerable oral and documentary evidence has been adduced in order to determine the two main issues in this case. There is another reason for the volume of evidence. The authority alleged to have been given orally at the meeting on 21 September 2011 is not recorded in writing. Moreover, Mr. Rajiv Pal, the representative of SMMC who attended the meeting and who has said in one or more emails relied upon by the charterers that the registered owners agreed at that meeting that SMMC could fix vessels on their behalf did not attend the trial to give oral evidence. As a result the primary focus of the charterers' case, as presented by Mr. Andrew Baker QC, has been on the communications between the parties after September 2011 which communications, submitted Mr. Baker, can "best be explained" by authority having been given by the registered owners to SMMC at the meeting on 21 September 2011.
6. By contrast the registered owners' case, as presented by Mr. Robert Bright QC, is that the first issue in the case can be determined, shortly, by construction of the charterparties and that the second issue in the case, the question of authority, can also be determined, shortly, by consideration of (i) the evidence of Mr. Chan, who attended the meeting of 21 September 2011 on behalf of the registered owners and his manuscript notes on documents used at the meeting and (ii) the subject matter of later meetings between SMMC and the registered owners in April and May 2012 which show that by the dates of those meetings there was plainly no agreement that SMMC had authority to act on behalf of the registered owners.
7. Mr. Baker submitted that the communications between the parties between September 2011 and April 2012 were of crucial importance when considering what was or was not agreed at the meeting on 21 September 2011. In view of that submission the court must consider all of the evidence rather than consider, only, the evidence said by Mr. Bright to be the compelling evidence.
8. The evidence placed before the court can be considered under the following headings:

i) The background leading up to the meeting on 21 September 2011.

ii) The meeting on 21 September 2011.

iii) The events subsequent to the meeting on 21 September 2011.

iv) The events leading up to the fixing of the vessels on 13 April 2012.

v) The meetings on 18 April and 24 May 2012.

vi) Later events.

9. The Claimants called four witnesses to give oral evidence. Mr. Brocklesby is the chairman of Navig8 and has worked, successfully, in the shipping business for over 20 years. He was involved in the chartering of the four Aframax vessels in question. He gave his evidence with clarity and I do not doubt that he gave his evidence honestly. However, he had little relevant evidence to give beyond making it clear that from October 2011 he was not interested in chartering vessels from the demise charterers of the vessel and only wished to charter them from the registered owners. He was not present at the meeting on 21 September 2011 between SMMC and Nan Fung (the group of which the registered owners were part) and had no relevant discussions with Mr. Chan prior to the fixing of the vessels in April 2012. His evidence as to the negotiations on 13 April 2012 is very largely based upon the documents and obviously (and understandably) owes more to reconstruction than recollection. In so far as his recollection of events matters it has to be borne in mind that he was giving evidence in 2014 of events in 2011 and 2012. His recollection may not be accurate and so his evidence must be tested against the probabilities arising from the undisputed events and the contemporaneous documents.
10. Mr. Muralee is employed as a trader by the Navig8 Group. He joined them in September 2013. Before that he was employed by Star Maritime Pte Ltd. ("SMPL") as a chartering executive. The general manager of SMPL was Mr. Rajiv Pal. SMMC, a related company, was set up in July 2011 to manage Nan Fung's four Aframax vessels on behalf of their demise charterers. Mr. Muralee was involved in fixing those vessels. He appeared to be an honest and fair witness. However, he was giving evidence in 2014 of what had happened in the second half of 2011 and the first half of 2012. He had left SMPL and SMMC in August 2013 and did not have access to their files. His evidence was therefore based upon his recollection. As with any witness his recollection of events up to three years ago has to be tested against the contemporaneous documents and the probabilities.
11. Mr. Rasmus Bach Nielsen is also employed by Navig8. He joined them in September 2012 and before that had been managing director of Origoo Pte. Ltd., an investment/advisory firm. At Origoo Mr. Bach (as he was referred to in evidence) had been engaged in private equity, seeking to raise funds for investments in the tanker business. He saw an opportunity to do business with Nan Fung and in that regard had a meeting and discussions with Mr. Chan of Nan Fung in March and April 2012. He also had dealings with Navig8 at the same time. He was a careful witness who sought to be honest and accurate in his answers but his evidence had limited relevance.
12. Mr. Rexer was the chartering broker at Poten & Partners who fixed the four Aframax vessels on behalf of Navig8. Whilst he had dealings with Mr. Pal and Mr. Muralee at SMMC he had no direct contact with Nan Fung. He was at times hesitant in his answers and at other times willing to make suggestions rather than give clear answers to the questions put to him. For that reason it seemed to me that I should have particular regard to the contemporaneous documents and the probabilities when assessing his evidence.
13. The First to Fourth Defendants (the registered owners of the Aframax vessels) also called four witnesses to give oral evidence. The principal witness was Mr. Chan who is a senior manager in the shipping department of Nan Fung. He took up that role in 2008 having previously been involved in Nan Fung's textile business. He was present at the meeting on 21 September 2011 and was concerned with the four Aframax vessels at all material times. It was submitted by Mr. Baker that Mr. Chan had "a knowing smile when key points were put to him, suggesting a witness sticking to a script and remembering his lines" and that his evidence was unsatisfactory in many respects. I myself did not observe "a knowing smile" and in any event find the assessment of a witness' demeanour difficult, especially if he comes from another country or culture as does Mr. Chan; cf The Business of Judging by Lord Bingham at pp.7-13 and in particular at p.11 - "however little insight a judge may gain from the demeanour of a witness of his own nationality when giving evidence, he must gain even less when (as happens in almost every commercial action and many other actions also) the witness belongs to some other nationality…..". I respectfully agree. I find it more helpful to have regard to what a witness says in answer to the questions to put to him and to compare that with the contemporaneous documents. Mr. Chan's answers were concise, he was not argumentative and he agreed with a lot that was put to him. That might suggest that he was a helpful witness. But from time to time his evidence was shown, by reference to contemporaneous evidence, to be mistaken. Also, there were differences between his initial evidence given without the benefit of documents and his later evidence given after having seen those documents (which differences were the basis of much of Mr. Baker's criticism that Mr. Chan's evidence was "unsatisfactory in many respects"). These differences mean that his evidence may be unreliable and must be approached with caution but they do not necessarily suggest that Mr. Chan was dishonest. His recollection may genuinely have been aided by reading the contemporaneous documents. Thus, as with all witnesses, his evidence must be tested against the contemporaneous documents and the probabilities.
14. Connie Lo worked in Nan Fung alongside Mr. Chan. She attended the meeting on 21 September 2011. She expressed herself to be very clear as to what she could and could not recall. "No recollection" was a frequent response. She also had a clear understanding of what she could not agree. "Incorrect" was a frequent response. I formed the impression that she did not go out of her way to be a helpful witness. As a result I did not find myself able to regard her as a reliable witness.
15. The final two witnesses gave evidence by video link from Hong Kong. Mr. Eric Chung is the President of Nan Fung Shipping. He had no day to day involvement in shipping matters before January 2012. His involvement was in high level strategic matters but he attended the meeting on 21 September 2011. However, he had little recollection of that meeting beyond recalling that he was unimpressed by the financial proposals advanced by Mr. Pal. He seemed to be a fair and honest witness but, because he lost interest in the subject-matter of the meeting at an early stage in the meeting, he had little to contribute.
16. The final witness was Mr. Benson Chu, the chief financial officer of the Nan Fung Group. He only joined Nan Fung on 3 January 2012 and had not been involved in the shipping business before that. But he attended meetings with Mr. Pal on 18 April 2012 and 24 May 2012. He gave his evidence firmly and clearly but it is probable, since he says that nothing was agreed at those meetings, that his evidence as to what happened or did not happen at those meetings derived more from his study of the documents produced for that meeting than from his recollection.
17. The most striking fact about the oral evidence was that there was none from Mr. Pal, notwithstanding that the burden lay on Navig8 to prove its case on the balance of probabilities. Mr. Pal sent emails in October and November 2012 stating what had been agreed at the meeting on 21 September 2011 but did not attend the trial to give oral evidence. Indeed, there was not even a statement from him. If what he said in his emails was true it must follow that Mr. Chan was lying when he said that no agreement had been reached at that meeting; for it is improbable that Mr. Chan had simply forgotten that an important agreement had been made that SMMC would manage the Aframax vessels on behalf of Nan Fung. Navig8 was thus in an unusually difficult position at the trial. Its case was that Mr. Chan was lying about that meeting yet the only person who could give direct evidence that he was lying was Mr. Pal and he neither gave a statement nor attended the trial to give evidence and be cross-examined.

The background leading up to the meeting on 21 September 2011.

18. The registered owners of the four Aframax vessels, Baltic Galaxy, Pacific Galaxy, Caribbean Galaxy and Caspian Galaxy, are companies within the Nan Fung Group. The Nan Fung Group started business in 1954 as a textile company but is now an international business conglomerate with global interests in property, finance and a diverse range of businesses. Nan Fung Shipping was established in 1978. Shipping represents a small proportion of the overall group business, about 3 %.
19. The four Aframax vessels were let on long term demise charter in 2006. Shining Marine Inc. took Pacific Galaxy and Caribbean Galaxy on demise charter and Sparkle Marine Inc. took Baltic Galaxy and Caspian Galaxy on demise charter. The vessels were managed by Emirates Trading Agency LLC ("ETA") on behalf of the demise charterers, Shining and Sparkle. Baltic Galaxy and Caspian Galaxy were financed by inter-group lending. Caribbean Galaxy and Pacific Galaxy were financed by a secured loan from a syndicate of banks with BNP Paribas as the lead arranger and agent.
20. Following the market crash in September 2008 Shining and Sparkle found themselves, by October 2009, in difficulty when paying hire under the demise charters. In turn ETA suffered reputational problems which led to it being difficult for it to persuade charterers to fix the vessels. The registered owners, who I shall call "Nan Fung", reserved their rights under the demise charters but by September 2011 were owed almost US$18m.
21. In July and August 2011 SMMC were appointed commercial managers of the Aframax vessels by Shining and Sparkle in place of ETA. Management contracts on the SHIPMAN 98 form were signed in respect of each vessel. SMMC, aware of the problems in fixing the vessels on behalf of the Shining and Sparkle, sought a meeting with Nan Fung on 21 September 2011.

The meeting on 21 September 2011

22. The meeting took place in Hong Kong at Nan Fung's offices. It was attended by representatives of Nan Fung, ETA and SMMC. On behalf of Nan Fung were Mr. Chan, Ms. Lo, Mr. Eric Chung and Mr. Vincent Cheung. On behalf of ETA were Mr. Ismail and on behalf of SMMC were Mr. Pal, Ms. Chen and Mr. Harris. In addition three brokers attended.
23. SMMC prepared a presentation for the meeting. It was entitled "Feasibility Report on Re-structuring of Bareboat Rentals of Aframax". SMMC proposed that Nan Fung make a loan to the bareboat charterers equal to the overdue hire and the hire which would become due in the future. This amounted to a loan of some US$84m. by 2024. There was unchallenged evidence that this proposal was unacceptable to Nan Fung. Indeed, Mr. Eric Chung, the President of Nan Fung Shipping gave evidence that this proposal caused him to feel very disappointed and so he did not bother to focus on what was said afterwards. SMMC's further, though connected, proposal, of which Mr. Chung had no recollection because he had lost interest, was that Nan Fung enter into a commercial management agreement with SMMC pursuant to which SMMC would charter the Galaxy vessels on behalf of Nan Fung. This proposal appeared to envisage that the bareboat charters would remain in existence. The charterers' case is that this proposal for a commercial management agreement between Nan Fung and SMMC was agreed orally. Nan Fung's case is that it was not agreed.
24. The proposed commercial management agreement is evidenced by the last page of the feasibility report. Two copies were disclosed by Nan Fung bearing manuscript notes. Mr. Chan had recalled in his first statement dated 25 November 2013 that there had been no detailed discussion about this proposed agreement but when shown the manuscript notes he said in his fourth statement dated 23 October 2014 that the writing was his own. The first note was as follows:

"Addendum to the BBC – NF appoint SMPL act as ship manager with ETA indemnify NF to guarantee performance of SMPL. "

25. This note enabled Mr. Chan to recall that Mr. Pal had said that he could set out his proposal by an addendum to the bareboat charter.
26. The second note was as follows:

"Conclusion from Nan Fung after the meeting."

27. Mr. Chan recalled that he made this note at the very end of the meeting. As everyone was packing up to leave Mr. Pal said that he would like a response to his proposal whereupon Mr. Chan made the above note.
28. Without the benefit of Mr. Chan's recollection the text of the first note is equivocal. It could evidence something which had been agreed (Navig8's case) or merely something which had been proposed (Nan Fung's case). However, the second note appears to be consistent only with Nan Fung having given no response or conclusion to the proposal at the meeting but that a response or conclusion was required or expected after the meeting. Mr. Baker submitted that the note supported his case. He said, I think, that the note should be read in the sense of recording that Nan Fung had agreed or concluded what they would do after the meeting. This suggested meaning of the note was not suggested to Mr. Chan when he was cross-examined. I do not think that it is a possible reading of the note. In my judgment the manuscript note is contemporaneous evidence that Nan Fung had not agreed to the proposal at the meeting but had been requested or was expected to respond to the proposal after the meeting. The note therefore supports Nan Fung's case. Mr. Baker submitted that in the light of Mr. Chan's earlier evidence that there had been no discussion of the proposal his evidence with regard to the notes in his fourth statement "should be treated with considerable caution." I agree that it should be. However, it is improbable that the notes were made other than contemporaneously and it was not suggested in terms that they were. Moreover, it is a common human experience that a recollection can be prompted by the sight of one's own manuscript note. I was not surprised that Mr. Chan initially had no recollection that the proposal had been discussed but, when shown the manuscript note, which he recognised as his own, was able to recollect the circumstances in which the note was made. For these reasons the second of these notes is cogent evidence in support of Nan Fung's case.
29. Mr. Baker said that there was no evidence that Nan Fung had responded after the meeting or that they were chased for a response after the meeting. This is true but it does not mean that my reading of the note cannot be correct. It is consistent with Nan Fung having no interest in the proposal as a whole (because it included the making of a very large loan to the demise charterers) and with Mr. Pal recognising that and appreciating that there was no point in pressing Nan Fung for a response.
30. It is also to be observed that following the meeting Mr. Pal did not send to Nan Fung any email or other written record of the suggested agreement. Further, the correspondence reveals no discussion of the terms of SMMC's appointment after the meeting. Mr. Baker suggested that there was nothing surprising in this because the parties must have accepted that SMMC's terms of engagement were those which had been previously agreed with ETA. I consider this to be most improbable. Mr. Pal would surely want something as important as an agency agreement to be recorded in writing if only in a few words. As to the terms of such an agreement Nan Fung were not party to ETA's terms and Mr. Pal would surely wish to discuss them with Nan Fung if he wished those terms to be adopted by Nan Fung. In my judgment the absence of any written record of the suggested agreement or of its terms is further support for Nan Fung's case. Both Mr. Muralee and Mr. Brocklesby expected that there would have been something in writing concerning the terms of the suggested agreement.
31. An internal report within Nan Fung on 4 October 2011 reported on the meeting with ETA. It reported that ETA's wish to defer the payment of hire had not been agreed. No mention was made of any agreement to appoint SMMC the agents of Nan Fung.

The events subsequent to the meeting on 21 September 2011

32. There are many of these. I will mention those on which Mr. Baker placed particular emphasis.
33. The first matter relied upon by Mr. Baker was what Mr. Pal said to Mr. Muralee on his return from the meeting of 21 September 2011. Mr. Muralee gave evidence that Mr. Pal announced that agreement had been reached. There is no reason to suppose that Mr. Muralee was lying when he gave this evidence and thus Mr. Bright submitted that Mr. Muralee was either mistaken in his evidence or that, if his recollection was correct, then Mr. Pal made a statement which he knew to be untrue.
34. Although Mr. Muralee gave his evidence with clarity he was giving evidence of events over 3 years ago. It is possible that he was mistaken. He said that after Mr. Pal's return the Q88s were amended to omit any reference to the disponent owners. However, the Q88s for the Baltic Galaxy and Pacific Galaxy on 26 August 2011 and 7 September 2011 also omitted reference to the disponent owners. This suggests that his evidence was at least in part mistaken. However, there was no reason to doubt that Mr. Muralee told the truth when he said that he believed Nan Fung had agreed to SMMC being their agent. Indeed, Mr. Rexer of the brokers Poten gave evidence that as a result of what he had been told by Mr. Muralee he understood that SMMC had been appointed Nan Fung's commercial managers. Mr. Muralee can only have obtained that information from Mr. Pal and so it is likely that Mr. Pal did indeed tell him at some stage that Nan Fung had agreed to SMMC acting as their agent. The question is whether Mr. Pal was telling Mr. Muralee the truth or whether he lied to him. My decision on this question must await my consideration of the other matters relied upon by both Nan Fung and Navig8.
35. Mr. Baker next submitted that ETA dropped out of the picture after the meeting of 21 September 2011. In support of that submission Mr. Muralee said that those with whom SMMC used to talk at the demise charterers were no longer there. However, it is common ground that the demise charterers had stopped paying hire and the fact that they dropped out of the picture is consistent with other explanations, for example, that the demise charterers lacked the means to make any further contribution to the operation of the charterparties. It does not necessarily mean that at the September meeting Nan Fung agreed to the proposal that SMMC act on their behalf. I therefore do not regard this fact as cogent evidence in support of Navig8's case.
36. The further points relied upon by Mr. Baker fell into two broad categories; first, points which showed that SMMC dealt with others on the basis that they were acting for Nan Fung and, second, communications with Nan Fung which suggested that SMMC were acting on behalf of Nan Fung but which elicited no protest from Nan Fung. The first group of points confirms that Mr. Pal told persons at SMMC that SMMC were now acting for Nan Fung. They do not answer the question whether, in doing so, he told the truth. The second group of points is in a different category because, if a protest or denial was expected from Nan Fung, its absence suggests that Nan Fung had agreed to SMMC acting as their agent.

The first group of points

37. Mr. Baker relied upon the fact that SMMC purported to conclude fixtures with Navig8 on behalf of Nan Fung on 5 October 2011 and 13 December 2011. The first of these was entered into on terms which described the "Owners Contracted Party Signatory" as "Commercial Managers – SMMC" and the second was entered into on terms which named SMMC but did not describe them as commercial managers. Mr. Muralee understood that Nan Fung was party to these fixtures. There appears to be little reason to doubt his evidence since it is consistent with his evidence that he had been told by Mr. Pal that SMMC was now acting on behalf of Nan Fung. That information was also passed on to Mr. Rexer of Poten and from him to Mr. Brocklesby at Navig8. However, whilst this evidence is consistent with Navig8's case it cannot be described as cogent evidence because no emails passed between SMMC and Nan Fung before or after these fixtures. This is significant. One would expect SMMC to be in email communication with Nan Fung had SMMC been fixing vessels on their behalf. The fact that SMMC did not send any emails is supportive of Nan Fung's case that there had been no agreement reached between Nan Fung and SMMC that the latter would fix vessels on the former's behalf.
38. Mr. Baker next relied on certain letters signed by a director of SMMC and dated 29 December 2011 which were to be presented to oil majors and which stated that SMMC were the commercial managers of the Galaxy vessels and had no association with ETA. Again, this evidence confirms that SMMC was telling the market that it acted on behalf of the registered owners. But whilst it is consistent with Navig8's case it is no more cogent than other evidence which effectively confirmed that Mr. Pal had told SMMC that they were acting on behalf of the registered owners. Whether he was telling the truth is the crucial question for the court to consider after reviewing the other matters relied upon by Navig8 and Nan Fung.
39. The same comments apply to ship management agreements between the registered owners and Pioneer which were signed on behalf of the registered owners by SMMC. Much later, after the dispute between the parties had materialised, they were sent to Mr. Chan in August 2012. Mr. Chan thanked SMMC for them but did not protest. His explanation was that he did not really look into the documents. It seems to me that this exchange, after the dispute between the parties had materialised, can add little to the debate. Of course, he could have protested but in circumstances where the parties' positions had already been stated there was no real need to do so.

The second group of points

40. Mr. Baker relied upon the fact that on 20 October 2011 Mr. Chan was sent by a Mr. Ng (of Simpson Spence and Young) a Q88 which made no mention of the demise charterers and therefore suggested that SMMC was now acting as agent for Nan Fung. Mr. Chan responded by thanking Mr. Ng and did not say that SMMC were not their agents. Quite a few points of this nature were made. In judging what can be inferred from Mr. Chan's failure to point out that SMMC were not acting as Nan Fung's agents it is necessary to bear in mind that in 2011 and 2012 Mr. Chan had had relatively little experience of the shipping market or indeed of the documents exchanged between those who fixed vessels on time or voyage charters. He had been an employee of Nan Fung Textiles Limited since 1979 and was only appointed to Nan Fung Shipping Limited in 2008. From then until 2012 his knowledge of the shipping business appears to have been limited to the bareboat chartering of the Nan Fung vessels. It seems unlikely that he would have appreciated in 2011 that the Q88 suggested that SMMC was acting on behalf of Nan Fung.
41. Mr. Baker submitted that the hire rates in the charters fixed after the 21 September meeting were in an unusual figure and had been agreed by Mr. Chan. But this evidence came from Mr. Rexer of Poten who accepted that he had had no direct dealings with Nan Fung until much later. Mr. Chan said firmly that the rates did not come from him. I do not consider that Navig8 has made good its contention that the rates had been agreed by Nan Fung. As I have said there were no email communications between SMMC and Nan Fung confirming such agreement. If there had been an agreement as alleged I would expect to find some emailed confirmation of it.
42. Mr. Baker relied upon Mr. Chan's request of 13 October 2011 that Mr. Pal "provide the current status of employment of the four tankers" as evidence that he was treating Mr. Pal as his agent. This seems to me to be a very weak point. Mr. Chan knew that SMMC were fixing the vessels. It is not unnatural or unreasonable that a registered owner who is not receiving hire from his bareboat charterers should wish to know how they were currently being employed. Mr. Baker submitted that Mr. Chan's evidence on this matter was not persuasive. In his statement Mr. Chan had said that he had requested the information "so that he could keep abreast of how the Galaxy vessels were performing as this would be relevant to any decision to terminate the Bareboat Charters or otherwise restructure the arrangements with the Bareboat Charterers." When cross-examined he said that he asked for the information because his lenders sometimes wished to know about the employment of the vessels. He said he did not know whether the request was made because of the possibility of terminating the charters. It was suggested to him that his evidence was a lie. He denied that suggestion. I accept that he gave different explanations for his request and in that regard the differing explanations given in chief and in cross-examination show that his evidence as to the precise reason for his request is not persuasive. However, I find nothing surprising in the request and nothing in it which supports Navig8's case. The request is consistent with a registered owner who is receiving no hire from his disponent owners seeking information as to the vessels' employment from the person whom he expects to have that information.
43. Mr. Baker relied upon an email which was sent by Mr. Pal to Mr. Chan on 4 November 2011 in which Mr. Pal requested Mr. Chan to send an email to a broker confirming that the owning company of Caribbean Galaxy was within the Nan Fung group and that SMMC was the commercial manager. Mr. Chan accepted when cross-examined that he could now see that SMMC was seeking confirmation that SMMC was Nan Fung's agent. However, he did not send the requested reply. He explained in cross-examination that Nan Fung did not send messages directly to brokers in the market when the vessel was under bareboat charter. That evidence appears to me to be credible. It is true that he did not send a message to Mr. Pal denying that SMMC was acting on behalf of Nan Fung. But I doubt whether, in November 2011, Mr. Chan appreciated that this was the import of the message which he had been requested to send to the broker. That message merely referred to SMMC being the commercial manager. It did not say for whom SMMC was acting as commercial manager. I accept that the passage in the email from the broker which was highlighted in red implied that the author thought that SMMC was the registered owner's agent but since Mr. Chan was not concerned in the fixing of the vessel to Brightoil it is possible that he did not appreciate this at the time. So this episode is some support for Navig8's case but I do not consider that it is cogent evidence that Mr. Chan appreciated in November 2011 that brokers in the market regarded SMMC as acting on behalf of Nan Fung and did not protest at that to Mr. Pal because he knew it was true.
44. SMMC, when renewing the P&I cover for the vessels in November 2011, removed the bareboat charterers as an assured. This is consistent both the bareboat charterers being "no longer involved" (as it was put by Mr. Baker) and with those at SMMC believing that they were no longer acting on behalf of the demise charterers. On 4 February 2012 Mr. Chan, who had been advised by one of the lending banks that the P&I cover was due for renewal on 20 February, asked Mr. Pal to provide copies of the "renewal policies". SMMC forwarded copies of the P&I Club membership certificates. These referred to the registered owner as the senior member and to Pioneer and SMMC as the joint members. No mention was made of the demise charterers, unlike earlier certificates of entry. Mr. Chan thanked SMMC for its prompt response. He did not ask why there was no mention of the demise charterers. When asked about this Mr. Chan said that he did not appreciate at the time that the bareboat charterers were not mentioned. Comparison with the earlier certificates of entry would have revealed this but, having regard to Mr. Chan's then limited involvement with the business of shipping, I consider that his evidence in this regard is likely to be true.
45. On 3 February 2012 Baltic Galaxy was involved in a collision in Singapore. On 28 February 2012 Mr. Pal sent an investigation report and other documents to Mr. Chan. The email chain forwarded to Mr. Chan included an email dated 20 February 2012 which was signed by SMMC "as agents for Owners". On 1 March 2012 Mr. Chan asked SMMC to request the bareboat charterers to advise the shipyard of the registered owners' intention to send a surveyor to inspect the vessel. It was suggested to Mr. Chan that in so doing he was requesting SMMC as his agent to make a request of the demise charterers. Mr. Chan did not accept that suggestion. He said that under the terms of the bareboat charters the registered owners could appoint a surveyor but they had to inform the bareboat charterers that they were doing so. Mr. Baker said that this could be done by informing SMMC who, on the registered owners' case, were acting for the demise charterers. This is strictly true but I consider that Mr. Baker is reading too much into Mr. Chan's request. I do not consider it to be a necessary inference from Mr. Chan's request that he was regarding SMMC as his agent. The request is consistent with Mr. Chan wishing to ensure that the demise charterers were informed by their own agent of the registered owners' intention. The reference in the email dated 20 February to SMMC acting as "agent of Owners" could be a reference to either the registered or the disponent owners. In any event I doubt that Mr. Chan gave it much attention.
46. Mr. Baker also relied upon a request from Mr. Chan dated 26 March 2012 that SMMC pay certain invoices due to Holman Fenwick Willan. It appears that these were fees incurred by Nan Fung in respect of legal work in connection with a guarantee given by ETA and with regard to non-payment of hire and other issues dating back to 2010. Mr. Baker suggested that Mr. Chan was asking SMMC to pay these fees on its behalf as its agent. However, Mr. Chan – having regard to the reasons why the fees were incurred – might well have been asking SMMC, as the bareboat charterers' agent, to pay the fees. I was not persuaded that this request could only be understood on the basis that Mr. Chan was treating SMMC as his agent.
47. Next, Mr. Baker relied upon Mr. Chan's response in April 2012 to a request for a comfort letter from Navig8. It is necessary to trace the relevant communications carefully. The episode appears to commence on 30 March 2012 with Mr. Chan's email to Mr. Pal relating to two vessels, Sanko Blossom and Sanko Breeze, owned by Nan Fung but, I assume, chartered to Sanko. Mr. Chan informed Mr. Pal by email that there were rumours that those vessels would be arrested by Nan Fung's banks. Mr. Chan said that those rumours were untrue. Mr. Pal then "edited" the email and sent it to Navig8's broker Mr. Rexer. The title to the email was removed and there was no reference in the text to the Sanko vessels. On 10 April the broker requested Mr. Pal to get Mr. Chan to provide an email in the following terms:

"We understand that you are in negotiation to potentially extend the contracts or time charter one or more of our Aframax vessels (ie Caribbean Galaxy, Baltic Galaxy, Pacific Galaxy, Caspian Galaxy) from our commercial managers, Star Maritime Pte.Ltd.

We can advise you that the lenders of our shipping loans are located in Hong Kong and are aware of our financial strength.

Thus, whatever false rumours you hear in the market are not true and the vessels will not be arrested by our banks.

We hope this helps clarify the situation."

48. Mr. Chan recalled that on 11 April 2012 Mr. Pal called him and told him of the brokers' concerns. On 11 April Mr. Chan, having consulted an in-house lawyer, provided the following response to Mr. Pal:

"As we have already advised you through email on March 30 2012 6.54 PM that all the agents of the lenders of our shiploans are located in Hong Kong and aware of our financial strength. Therefore, our vessels will not be arrested by the lenders."

49. Mr. Baker relied upon the fact that this message did not object to the suggestion that SMMC were Nan Fung's commercial managers. This is true. But it may also be observed that, although requested to state that SMMC were Nan Fung's commercial managers, Mr. Chan did not comply with the request. I therefore do not consider that this exchange materially assists Mr. Baker's case. The fact that Mr. Chan did not object to the suggestion cannot be of any assistance to Navig8's case when Mr. Chan did not adopt the suggestion. However, the "editing" of Mr. Chan's initial email when it was sent on to Navig8's broker raises questions about Mr. Pal's conduct to which it will be necessary to return.

The events leading up to the fixing of the vessels on 13 April 2012

50. In the early morning (GMT) of Friday 13 April 2012 (early afternoon Hong Kong and Singapore time) Mr. Brocklesby was discussing with Mr. Rexer an offer by SMMC for the time charter of the four Aframax vessels. At 0837 GMT (1637 HK time) Mr. Rexer informed Mr. Brocklesby that SMMC required the deal to be subject to "Owners BOD approval" (BOD being Board of Directors) and that they were going to see Nan Fung the next week

"obviously to tell them what has been done. But, he thought better to just clear the air with them (and he believes this will be better in the long-term) to give you the assurance that they have given it their okay in person. He said they keep them advised daily – so there shouldn't be any surprises."

51. At this stage the proposed deal was for 3 years made up of 1 + 1 + 1 Charterers' option.
52. Shortly thereafter Mr. Brocklesby expressed his wish for a clean deal. At 1001 GMT (1801 HK time) Mr. Rexer replied with SMMC's latest offer. He said:

"After long discussions, this is what they can offer. Rajiv [Mr. Pal] said a deal cannot be done without Star Maritime in it."

53. The attached offer from SMMC included, for the first time, the following:

"Disponent Owners Signatory in Contract:

Star Maritime Management Company, Pte Ltd."

54. It is unclear precisely what discussions gave rise to SMMC's insistence that it be "in" the deal or why the reference to disponent owners was introduced. In his statement Mr. Brocklesby said that he could not recall why this was done. When cross-examined it was suggested to him that he had been concerned that Nan Fung's name did not appear in any of the documents and that he wanted it to be mentioned to strengthen his position against them. Mr. Brocklesby was unable to assist with this suggestion. Mr. Rexer also had no recollection of this exchange and could not really assist with Mr. Bright's suggestion.
55. At this stage the proposed deal was still for 3 years (1 + 1 + 1 at charterers' option) but Mr. Rexer reported that whilst Mr. Pal appreciated Navig8's preference for such a deal Mr. Pal wanted to see "Nan Fung in person". The terms proposed included an alternative of a 1 year deal which was expressed to be "firm (no subjects)".
56. A few minutes later at 1016 GMT (1816 Hong Kong time) Mr. Rexer reported to Mr. Brocklesby that the "owners can offer …with no subjects today" a two year deal (1 + 1 charterers' option).
57. Negotiations continued as to the terms of the proposed fixtures. They were not completed until 1511 GMT (or 2311 HK time). In the result the four Aframax vessels were time chartered to Navig8 for a period of two years (1 + 1 charterers' option) with owners having an option to amend the deal to a three year period (1 + 1 + 1 charterers' option). The owners were to exercise their option by Friday 20 April. Although the charters were never signed it is agreed that the fixtures were on the terms of an amended ShellTime 4 form and that Navig8 had contracted with "SMMC (hereinafter referred to as disponent owners) being owners of the vessel…."
58. It is a remarkable fact, notwithstanding that Mr. Pal had informed Mr. Rexer that he kept the owners informed daily, that there was no email traffic between Nan Fung and SMMC concerning these fixtures. Given the detailed discussion as to terms one would have expected that there would have been some email traffic.
59. Mr. Baker submitted that on 13 April 2012 there was a telephone call between Mr. Pal and Mr. Chan in which Mr. Chan gave Mr. Pal express specific authority to conclude the fixtures. This submission was based upon what Mr. Pal had said on 16 July 2012 when questioned by representatives of Navig8 and on his email dated 22 November 2012, though on neither occasion was mention made of a specific authority being given on 13 April 2012.
60. In addition Mr. Baker relied upon Mr. Muralee's recollection in his statement dated 24 January 2014 that on 13 April 2012 Mr. Pal spoke to Mr. Chan and afterwards told him, Mr. Muralee, that he had been given authority to conclude the deal with owners' subjects.
61. Mr. Brocklesby also said in his statement dated 24 January 2014 that he recollected Mr. Rexer telling him on 13 April 2012 that Mr. Pal had spoken to Mr. Chan and had obtained authority to confirm a period of 12 months plus 12 months but that Nan Fung wished to discuss the following week whether to confirm an option for further period of 12 months.
62. Mr. Chan gave evidence that he had no calls with Mr. Pal on 13 April 2012 concerning the fixtures. However, Mr. Chan was aware in general terms that negotiations for fixing the vessels were underway. He was informed of this by Mr. Bach of Origoo. Thus at 0706 GMT (or 1506 HK time) Mr. Bach informed him that the vessels were being offered for "1 + 1 + 1 year" at "incredibly cheap" rates. At 1612 GMT (or 0012 HK time) Mr. Bach informed him that the four vessels had "gone on subject for 1 + 1 + 1 year". Mr. Chan gave evidence that the next week he received calls from three other brokers to the same effect. He said that those calls caused him to telephone Mr. Pal on 16 or 17 April to find out whether what he had been told about the low rates was true. Mr. Chan said that he expressed the view to Mr. Pal that the deal was too long and too cheap. Mr. Pal told him that he thought the deal was fair and that the deal had been done. Mr. Chan said that he replied that it was his (Mr. Pal's) deal and it was up to him. On 20 April SMMC confirmed to Mr. Rexer that the deal was for 1 + 1 year charterers' option.
63. I will return later in this judgment to the question whether there was a telephone call on 13 April 2012 as submitted by Mr. Baker.

The meetings of 18 April 2012 and 24 May 2012

64. Just five days after the fixing of the vessels between SMMC, allegedly on behalf of Nan Fung, and Poten, on behalf of Navig8, a meeting took place between Nan Fung and SMMC. As with the meeting on 21 September 2011 Mr. Pal prepared a presentation. On 17 April 2012 he sent the presentation which he described as "discussion points". One document was entitled "Star Maritime Management Company Structure" and indicated that there was a commercial management agreement between SMMC and Sparkle and Shining, the disponent owners of the four Galaxy vessels. Another document was entitled "Business Structure and Risks". This also indicated that there was a commercial management agreement between SMMC and Sparkle and Shining as disponent owners. Under the heading of "Risks" and "disponent owners" the following was stated:

"Due to huge outstanding maritime claims on other ships, face ship arrest by other creditors. Unable to extend working capital facilities for aframax operations. "

65. A third document was entitled "Proposed Solutions to Risk of Arrest." Two "immediate" solutions were proposed, the second of which was:

"Change over of commercial management of 4 aframax either by:

Direct commercial management operation between owner/SMMCPL with necessary indemnity from disponent owner,

OR

Nan Fung takes stakes/control (say 60%) in the Star Maritime Management Company Pte Ltd. (Costs $7,500)."

66. These documents suggest that no commercial management agreement between Nan Fung and SMMC had been made in September 2011. For such an agreement was still being suggested in April 2012. Mr. Baker did not accept this. He submitted that the court should find on the evidence that the purpose of this meeting was to document the arrangement that had been informally put in place following the 21 September 2011 meeting. (This submission was based upon an explanation given by SMMC in December 2012 long after the dispute between the parties had arisen.) I have found this submission very difficult to accept, for several reasons. First, the document headed Business Structure and Risks expressly acknowledges that there is a commercial management agreement between SMMC and the disponent owners. Second, the document headed Proposed Solutions to Risk of Arrest refers to a "change over" of commercial management of the four vessels. Third, that "change over" is to be achieved in one of two ways. All three of these points strongly suggest that as at April 2012 there was a commercial management agreement between SMMC and the disponent owners but that SMMC was proposing a change to that arrangement. None of that makes sense if there was already in existence, even informally, a commercial management agreement between SMMC and Nan Fung.
67. There is a manuscript note on one copy of these documents ("no change in current BBC arrangement") but there was no evidence as to who made it or when. I have therefore placed no reliance on that note.
68. A further meeting took place on 24 May between SMMC and Nan Fung. Once again Mr. Pal prepared certain documents. The email dated 21 May which enclosed them was headed "Re: Change-over of Technical Management of Aframax Tankers." The opening document was entitled "Follow-up Meeting on Operational Issues" and referred to discussing and finalising items requiring immediate action. Page 1 of 3 pages on the Follow-up Meeting referred to immediate action. In a column headed "Proposed Action (18/4/2012)" the third item is described as follows:

"Change-over of commercial management of 4 Aframax either by:

(i) Direct commercial management operation between owner/SMMCPL with necessary indemnity from disponent owner

(ii) Nan Fung takes stakes/control (say 60%) in Star Maritime Management Company Pte Ltd."

69. That is obviously a reference to the proposal made at the meeting on 18 April 2012. A third column is headed "Action by Owner" and with reference to the third item there is to be found "Reply Awaited". That suggests that Nan Fung had not yet replied to the proposal made at the meeting on 18 April 2012. These matters all support Nan Fung's case that the commercial management agreement between SMMC and the disponent owners remained in place and that there was no such agreement in place between SMMC and Nan Fung. A further column is headed "Remark". Against the third item is to be found the following:

The Issue : The Counter party for Charterer, (who pays hire and loads 600,000 barrels of crude worth $60mil) is a $5,000 commercial manager who are unable to provide a copy of commercial management agreement/authority to fix.

Alternative Proposal : Until Nan Fung can review/revert on our proposal of 18^th April 2012 ->

Can Nan Fung/owner issue a letter to SMMC confirming/acknowledging that as per owner's records Star Maritime Management Company Pte Ltd with its registered office at 24 Raffles Place #18-00, Clifford Centre, Singapore 048621 is the manager of Baltic Galaxy, Caspian Galaxy, Pacific Galaxy and Caribbean Galaxy with effect from 1^st August 2011 ?

70. The passage entitled "The Issue" contemplates a charterer such as Navig8 dealing with a counterparty who is unable to provide the charterer with authority to fix. That counterparty must be SMMC and the inability to provide authority to fix suggests that SMMC is fixing on behalf of Nan Fung (because if SMMC were fixing on behalf of the disponent owners they could prove their authority to fix by reference to their commercial management agreement). The passage entitled "Alternative Proposal" recognises that Nan Fung were yet to respond to the proposal made on 18 April 2012 and suggested that in the meantime Nan Fung issue a letter confirming that SMMC had been the manager of the four vessels since 1 August 2011.
71. Mr. Baker submitted that this was a further attempt by Mr. Pal to get the arrangement which had been in place since 21 September 2011 documented. It was, it appears to me, a further attempt by Mr. Pal to overcome the operational difficulties which he was having in fixing the vessels. However, I have found it difficult to accept Mr. Baker's submission that Mr. Pal was simply trying to obtain written evidence of a commercial management agreement that had been in place since 21 September 2011. The document does not state that that was its purpose. No reference is made to the meeting on 21 September 2011. The date which is mentioned is 1 August which predates the meeting by some 7 weeks. There is no suggestion that Mr. Chan agreed to give the confirmation which had been requested.

Later events

72. Mr. Baker relied upon a number of matters following the fixing of the vessels on 13 April 2012.
73. On 27 April 2012 Mr. Chan was sent by Mr. Ng of Simpson Spence and Young the text of an article in Tradewinds which claimed that Nan Fung had asked Mr. Pal to take over the management of the Aframax vessels. It was put to him that that was indeed the truth and that was why Mr. Chan had not telephoned Mr. Pal to correct him. Mr. Chan said that he had contacted Mr. Ng to say that he had not appointed Mr. Pal as manager of the vessels. He said he did not know that Tradewinds was a popular journal in the shipping industry and he regarded the article as "talk, talk, talk." Given Mr. Chan's lack of knowledge of the shipping market I see no reason to doubt his evidence in this respect, notwithstanding that in his earlier statement he had said he had no recollection of the Tradewinds article. It is possible, indeed likely, that his later recollection was prompted by seeing the email.
74. On 4 May 2012 Mr. Pal forwarded to Mr. Chan an email which had been sent by Maersk to "our current charterers" which suggested that Nan Fung was considering taking back the four vessels from ETA. Navig8 were concerned at this email and asked for some reassurance that the information in the email was false. Mr. Chan replied that they had complained to Maersk about the false information which had been circulated. This was, I accept, a curious reply because the information circulated by Maersk was essentially correct. The explanation may possibly be that, whilst the matter was under consideration, no decision had not yet been taken. On the same day Mr. Chan told Mr. Bach that "the process with the banks is progressing" and Mr. Bach concluded, as he told Mr. Brocklesby, that it was very likely that the vessels would be withdrawn from the demise charters. However, I have difficulty in accepting that the exchange reveals an acceptance by Mr. Chan that the recent charters had been fixed by Mr. Pal on behalf of Nan Fung.
75. Later that day Mr. Rexer, Navig8's broker, emailed Mr. Chan requesting confirmation that Nan Fung acknowledged the four charters and provided a form of wording which stated in terms that SMMC was Nan Fung's agent. He sent a chasing email on 8 May. It seems that there followed a telephone conversation between Mr. Chan and Mr. Rexer. Mr. Chan gave evidence that this was a heated conversation, that Mr. Rexer pushed him to send the letter which had been requested and that Mr. Chan refused to do so. Mr. Chan gave evidence that he told Mr. Rexer that Nan Fung had not entered into any charters and that SMMC was not their agent. He said that Mr. Rexer told him that he needed the comfort letter to which Mr. Chan replied that he would not send anything which was untrue.
76. Mr. Chan's evidence on this telephone call was criticised by Mr. Baker in that in his first witness statement Mr. Chan had said that he only learnt that Navig8 were claiming that they had chartered the vessels from Nan Fung "several months after the time charters were fixed". This evidence sits unhappily with his later recollection of the telephone call of 8 May. Mr. Chan suggested, when cross-examined, that in his first statement he was saying that he did not learn from Navig8 themselves that they were claiming to have chartered the vessels until several months later. This is possible (because the previous paragraph deals with Poten and Mr. Rexer) but his first statement is nevertheless mistaken because the chasing email of 8 May from Mr. Rexer refers to the "PIC at Navig8" (person in charge at Navig8) saying they had fixed with the owners. However, Mr. Baker accepts that there was a telephone conversation on 8 May between Mr. Chan and Mr. Rexer. In an email dated 8 May from Mr. Rexer to Mr. Pal Mr. Rexer appears to give a report on the call:

"FYG, Nan Fung have told us directly that they will not provide this letter. What is worrying is that that they do not give a specific reason at all. Is this an unrealistic request."

77. Mr. Bright submitted that in the absence of evidence from Mr. Rexer about this call and bearing in mind the brevity with which Mr. Chan was observed to express himself when cross-examined it was difficult to draw any conclusions from this email of 8 May. But, in my judgment, there is no reason to doubt this contemporaneous account of the conversation. Had Mr. Chan stated that SMMC had no authority from Nan Fung Mr. Rexer would have written in very different terms. I must therefore conclude that Mr. Chan's recollection that he told Mr. Rexer that SMMC had no authority to act on behalf of Nan Fung is mistaken. What is clear, however, and is undisputed is that Mr. Chan refused to make the statement requested by Mr. Rexer. That refusal is consistent with Nan Fung's case and is what he told Mr. Rexer.
78. Also in May 2012 SMMC discussed with Nan Fung a proposal that Navig8 become the vessels' technical managers. It was suggested that Nan Fung must have been dealing with SMMC as their agents. I accept that these events are open to that interpretation but I was not persuaded that this was how Mr. Chan viewed the matter at the time.
79. On 28 May 2012 Mr. Chan informed Clarksons that he would forward certain documentation which had been requested "as soon as we receive from our Agents and Charterers". Mr. Chan accepted that the reference to "our agents" was a reference to SMMC but suggested that that was his mistake.
80. Mr. Baker suggested that there was no mistake at all. Mr. Bright suggested, contrary to the evidence of Mr. Chan but based upon some documents added to the bundles during the trial, that the reference to "our agents" was to Itochu, a broker involved in fixing the demise charter of Baltic Galaxy and Caspian Galaxy. On this basis "the charterers" had to be SMMC, which is possible on the basis that they were agents of the demise charterers.
81. On balance I prefer Mr. Bright's submission. Having regard to the rest of Mr. Chan's evidence it is unlikely that he would refer to SMMC as Nan Fung's agents, notwithstanding his acceptance, when cross-examined, that he did.
82. On 30 May 2012 Ms. Lo, when sent unsigned copies of the charters fixed with Navig8, said, in an email to Mr. Chan, "if not yet signed by us, can we withhold it ?". I accept that this supports Navig8's case because it suggests that Ms Lo thought that the charters were being fixed on behalf of Nan Fung. She had no satisfactory explanation for this.
83. On 26 June 2012 Mr. Ng sent Mr. Chan an email asking for his feed back on information in the market to the effect that the charters with Navig8 had been fixed by SMMC acting for Nan Fung. Mr. Chan replied on 29 June stating:

"1. Star Maritime Pte Ltd acts as Commercial Manager for the Bareboat Charterers, Sparkle Marine Inc and Shining Marine Inc., of our four Aframaxes to conclude the time charter deal with Navig8.

2. We have not signed any documents to appoint Star Maritime Pte Ltd as our Commercial Manager.

3. After we knew from the market, we have verbally communicated with Mr. Rajiv Pal, G.M. of Star Maritime Pte Ltd with regard to the length and lower than market rate of the T/C deal made between Star Maritime Pte Ltd and Navig8 for our four Aframaxes.

4. We have reported the above to our legal advisor, WFW and submitted the related documents including the Bareboat Charterparties and T/C contracts for their review.

5. WFW confirmed to us that we can withdraw our four tankers and will not be responsible for the T/C contracts signed between Star Maritime Pte Ltd and Navig8."

84. Mr. Baker described this response in this way. "He [Mr. Chan] hid behind the lack of any written agreement, but also revealed his true concern, namely, dissatisfaction with the period and rate SMMC had fixed, something that was irrelevant to him if this was a fixture not binding Nan Fung/Owners with Bareboat Charterers who were about to lose the Vessels." I was not persuaded that this was a fair description of Mr. Chan's response. In my judgment Mr. Chan said clearly that any commercial management agreement was between SMMC and the disponent owners and that Nan Fung were not bound by charters fixed by SMMC.
85. There then followed a meeting between Nan Fung and Navig8 on 12 July 2012 when it is common ground that Mr. Chan denied that there were any time charters between Nan Fung and Navig8.
86. On 16 July 2012 representatives of Navig8 and Poten met with Mr. Pal. An email from Navig8 records that "they tried to strip him of as much info as possible but got a lot of contradictory in the process." The meeting notes do not record any reference by Mr. Pal to the meeting of 21 September 2011. He is reported as saying that there was "no official CM [presumably commercial management] contract in place between Nanfung/SMMC – only verbal discussions and email exchanges." He is also reported as saying that the new charterparty details had been "discussed" between him and Mr. Chan "verbally" but that "no authority required from Nan Fung to fix the deals."
87. Finally, Mr. Baker relied upon the fact that there was no attempt by Nan Fung until November 2012 to collect any money from SMMC by the exercise of a lien. Mr. Baker said that this was only consistent with Nan Fung treating SMMC as their own agents. Whilst there is some force in this point it may also reflect Nan Fung's lack of familiarity with the concept of a lien (and in any event Mr. Baker submitted that Nan Fung did not have the benefit of a lien which extended to time charter hire). Mr. Baker said that Mr. Chan's evidence that he had asked for payments from Mr. Pal was an invention but it may be that Mr. Chan was confused with his request for a report on the balances, which Mr. Baker accepts was made.
88. It was after the termination of the bareboat charters in respect of Baltic Galaxy and Caspian Galaxy on 22 October 2012 that Mr. Pal stated his position by email to Mr. Chan. On 24 October 2012, in response to the notice of termination, he said:

We refer to the forwarded copy of your notice of termination of Bareboat Charter in relation to "Baltic Galaxy" and "Caspian Galaxy" to Sparkle Marine Inc. and your e-mail dated today (24^th October 2012) to Sparkle Marine Inc. and Shining Marine Inc. which was copied to us.

As you are aware that Star Maritime Management Company has been acting as your manager for the 4 Aframax Tankers and has been protecting your interest since after the meeting on 21^st/22^nd Sept 2011. You are also aware of the fact that these two Vessels are chartered to Navig8 under a time charter party by us on your behalf and that both Sparkle Marine Inc. and Shining Marine Inc. were inactive as bareboat charterers for your vessels since September 2011.

In this regard, we do not understand why you are asking Sparkle to redeliver the ships at the port of Singapore on 26^th October 2012 at 10.00am.

89. On 30 October 2012 Mr. Pal tendered SMMC's resignation as managers of the four Aframax vessels to Mr. Chan. On 7 November Mr. Pal, in a further email, said that on 21 September SMMC had proposed "to act as the commercial manager for Owners/Nan Fung for the 4 Aframax vessels. Owners/Nan Fung accepted our proposals." This statement was repeated on 22 November 2012. On 3 December Captain Rajesh of SMMC said, when asked to explain the documentation prepared for the meetings on 18 April and 24 May 2012, that SMMC had requested Nan Fung "to document the Commercial Management in writing. This discussion material was produced to Owners/Nan Fung to clarify the position prior to September 2011 for the purpose of documenting the existing Commercial management Agreement between SMMC and Owners/NanFung at that time (18 April 2012 and 24 May 2012)."
90. On 14 December 2012 Nan Fung terminated the bareboat charterparties in respect of Pacific Galaxy and Caribbean Galaxy.

The first issue; who was party to the charters ?

91. There was a dispute between the parties as to the proper approach to this question. Mr. Baker submitted that the question is one of fact, dependent upon the evidence including the subjective intentions of the parties. Mr. Bright submitted that the question is one of construction. Whilst evidence of the background known or reasonably available to both parties is admissible in construing the charterparties evidence of subjective intentions is not.
92. In support of his submission Mr. Baker relied upon The Starsin [2004] 1 AC 715. At paragraphs 175-6 Lord Millett said as follows:

175. The identity of the parties to a contract is fundamental. It is not simply a term or condition of the contract. It goes to the very existence of the contract itself. If it is uncertain, there is no contract. Like the nature and amount of the consideration and the intention to create legal relations it is a question of fact and may be established by evidence. Such evidence is admissible even where the contract is in writing, at least so long as it does not contradict its express terms, and possibly even where it does: see Young v Schuler (1883) 11 QBD 651 Chitty on Contracts 28th ed. p 633. But bills of lading are transferable documents of title, and the claimants are holders of the bills by endorsement. Consequently the evidence must be found within the four corners of the bills themselves.

    176. Where a contract is contained in a signed and written document, the process of ascertaining the identity of the parties and the capacity in which they entered into the contract must begin with the signatures and any accompanying statement which describes the capacity in which the persons who appended their signatures did so. This may require interpretation, and to this extent the process may without inaccuracy be described as a process of construction. But it is not of the same order as the process of construing the detailed terms and conditions of the contract. These describe the incidents of the contract and the nature and extent of the parties' obligations to each other. But the identity of the parties themselves is not an incident of the contract. Where a signature is accompanied by a description of the capacity in which the signatory has appended his signature the description is not a term or condition of the contract. It is part of the signature and so part of the factual evidence of the identity of the party which is undertaking contractual liabilities under the contract.

93. Reference was also made to Lewison, The Interpretation of Contracts at paragraph 10.07 and to McMeel, The Construction of Contracts at paragraph 16.02.
94. In the light of the above I accept that identification of the parties to a contract is a question of fact. The terms in which a party is described in a contract are part of the factual evidence of the identity of the parties. Since the question is one of fact other evidence can be admitted to identify the party in question. But the exercise must remain an objective exercise. I do not consider that the subjective intentions of one party can be relevant save to the extent that such intentions are communicated to the other.
95. In the present case those who brought about the four charters on 13 April 2012 were Mr. Pal of SMMC, Mr. Rexer of Poten and Mr. Brocklesby of Navig8. I leave Mr. Chan of Nan Fung out of account for this purpose because of the dispute as to whether Nan Fung authorised SMMC to enter into charters on its behalf. Mr. Pal made it apparent that he was acting on behalf of Nan Fung. In December 2011 he had provided Mr. Rexer with a corporate structure diagram which showed that SMMC acted as commercial managers on behalf of Nan Fung. Mr. Rexer passed that diagram onto Mr. Brocklesby. In the course of the negotiations on 13 April 2012 Mr. Pal (or Mr. Muralee) told Mr. Rexer that Nan Fung was being kept informed and that information was passed on to Mr. Brocklesby by Mr Rexer. In the light of the market perception of ETA it is improbable that Mr. Brocklesby would have been willing to charter the vessels from them (or their principals Shining and Sparkle). He was obviously concerned to trade with Nan Fung rather than with ETA. It is likely that this concern was apparent to Mr. Pal, through Mr. Rexer. Thus I accept Mr. Baker's submission that the communicated understanding of each of the parties was that SMMC was acting on behalf of Nan Fung.
96. Mr. Bright did not accept that submission. He submitted that on 13 April 2012 Mr. Brocklesby did in fact want Nan Fung's name on the charters but was told that he could not have that and that the name of SMMC must be on the charters. I accept that the exchange of emails between 0837 GMT (or 1637 HK time) and 1016 GMT (or 1816 HK time) is open to that interpretation but I am unable to make a finding to that effect. There were "long discussions" about this between Mr. Pal and Mr. Rexer but the evidence of Mr. Rexer did not reveal what the discussions were about. If Mr. Brocklesby had wanted Nan Fung's name on the charters it is odd that he would have been satisfied by the words required by SMMC - "Disponent Owners Signatory in Contract – SMMC" – which hardly make clear Nan Fung's liability as owner. I strongly suspect that the reason why those words were required and the meaning the parties attributed to them would have become clear had Mr. Rexer or Mr. Brocklesby been able to recall the subject matter of the "long discussions" but they could not. Mr. Bright submitted, on the basis of his cross-examination of Mr. Rexer, that Mr. Rexer had accepted that events had unfolded in the way Mr. Bright had suggested. But the passages in the transcript on which Mr. Bright relied do not persuade me of that.
97. So one is left with having to decide on the evidence who Mr. Pal, Mr. Rexer and Mr. Brocklesby intended to be liable as owner by agreeing to the words "Disponent Owners Signatory in Contract: SMMC." All of them envisaged, to the knowledge of each other, that Nan Fung was to be liable as owner. Yet it is hard to imagine words less likely to refer to Nan Fung. For, usually, the phrase "disponent owner" refers to a person who is himself a charterer of the vessel from the registered owner; see The Astyanax [1985] 2 Lloyd's Rep. 109 at p. 113 per Kerr LJ. On that basis the disponent owners were the demise charterers, Sparkle and Shining, and Nan Fung were the registered owners. Nan Fung could not be the disponent owners. However, there is one recorded instance of the phrase "disponent owner" being used to refer to a person who is the agent of the registered owner; see O/Y Wasa Steamship Co.Ltd. v and NV Stoomschip Hannah v Newspaper Pulp & Wood Export Ltd. (1949) 82 Lloyd's List Rep. 936 at p.954 per Morris J. who held in the particular circumstances of that case that the phrase "though somewhat vague, is, in my judgment, not inapt to cover someone who is a manager, particularly if he is a manager having very wide powers." The evidence of Mr. Brocklesby and Mr. Rexer was to the effect that this is not a current use of the term.
98. I have come to the conclusion that the present case is another example of the phrase disponent owner being used in that, admittedly rare and unusual, sense of a manager of a vessel. The parties cannot have intended it to be used in its usual sense of a person who had chartered the vessel from the owner because that would mean that they intended Sparkle and Shining to be liable as owner which none of them did. I consider that the charterparty must be regarded as having been signed by SMMC as disponent owner in the sense of being the manager of the vessel. I do not consider that any of the parties envisaged that SMMC was incurring personal liability on the charters. They must have considered that SMMC was acting on behalf of Nan Fung.

The second issue; did SMMC have authority to act on behalf of Nan Fung ?

99. There is a powerful case that Nan Fung did not agree with SMMC on 21 September 2011 that SMMC could manage the four Galaxy vessels on its behalf. I will list some of the cogent pieces of evidence which support Nan Fung's case.
100. First, there is Mr. Chan's contemporaneous manuscript note on a copy of the last page of Mr. Pal's presentation for that meeting recording "Conclusion from Nan Fung after the meeting." That note indicates that a conclusion or response from Nan Fung on the proposal on that last page, namely, that there be a commercial management agreement between SMMC and the registered owners, had not been given at the meeting but was sought or expected after the meeting. It was not suggested that any positive response was forthcoming from the registered owners after the meeting.
101. Second, there is the absence of any written confirmation of the suggested agreement after the meeting. One would have expected Mr. Pal to send such an email had he secured the agreement he claims. Equally, one would have expected an email dealing with the terms of the agreement.
102. Third, there is Nan Fung's internal memorandum of the meeting which does not record the suggested agreement.
103. Fourth, there are the documents prepared by Mr. Pal for the meetings with Nan Fung on 18 April and 24 May 2012 which suggest, for the reasons I have endeavoured to express, that no commercial management agreement had been agreed between SMMC and Nan Fung.
104. Against those matters must be weighed Mr. Muralee's evidence that on Mr. Pal's return from the meeting on 21 September 2011 Mr. Pal informed Mr. Muralee that SMMC was now acting for Nan Fung. I have already accepted that evidence. But the question is whether Mr. Pal was telling the truth to Mr. Muralee. The four matters which I have already summarised in favour of Nan Fung's case suggest that Mr. Pal was not telling the truth. I accept that the behaviour alleged against Mr. Pal is odd, namely, telling an untruth to his own office staff, but I do not regard such conduct as so improbable that it cannot have occurred. Mr. Pal was having difficulty marketing the vessels on behalf of ETA/Sparkle and Shining. He considered that his chances of fixing the vessels would be improved if SMMC were marketing them on behalf of Nan Fung. Personnel in his office such as Mr. Muralee had to deal with the market and so it is possible that Mr. Pal considered that he must let them believe that a commercial management agreement had been struck with Nan Fung. Moreover, there are two proved instances in which Mr. Pal acted in a manner which suggests that he has less regard for the truth than a responsible businessman ought to have.
105. On 15 December 2011 he forwarded to Mr. Rexer a diagram showing the "corporate structure" of SMMC. The diagram suggested that there was a commercial management agreement between SMMC and the registered owners of the four Galaxy vessels. No mention was made of the demise charterers. Yet, when Mr. Pal prepared the documents for the meeting with Nan Fung on 18 April 2012 he prepared another diagram showing the "company structure" of SMMC which mentioned the demise charterers and suggested that the commercial management was between SMMC and the demise charterers. Both documents cannot be true; one must be untrue.
106. On 30 March 2012 Mr. Pal passed on to Mr. Rexer what purported to be an email from Mr. Chan. But, whilst Mr. Chan had indeed sent an email to Mr. Pal, Mr. Pal had significantly altered it in the manner which I have already described. This again suggests that Mr. Pal is prepared to act dishonestly in his dealings with others.
107. Mr. Baker submitted that the events after the meeting on 21 September 2011 could "best be explained" by there having been an agreement reached on 21 September 2011 that SMMC would act as the agents of Nan Fung. I have reviewed the events between September 2011 and April 2012 on which reliance has been placed by Mr. Baker at paragraphs 32-48 of this judgment and the events after April 2012 on which reliance is placed at paragraphs 64-90. Whilst some events are consistent with Navig8's case very few positively support Navig8's case (an example of one which does is Ms. Lo's comment on 30 May 2012). In the result I am unable to agree that the events subsequent to the meeting of 21 September 2011 can "best be explained" by there having been an agreement reached at that meeting.
108. Mr. Pal has said by email that an agreement was reached at the meeting but little weight can be accorded to his emails in circumstances where he did not attend court so that his evidence could be tested by cross-examination. Mr. Muralee said that Mr. Pal was still in Singapore but no longer worked for SMMC. It seems to me likely that Navig8 must have asked Mr. Pal to give evidence but that he declined the invitation. Mr. Baker did not suggest that that inference was wrong. But Mr. Baker submitted that Mr. Pal's statement by email could be tested by comparing it with the conduct of the parties after the meeting in September 2011. It is true that some of those events show Mr. Pal saying that SMMC acts for Nan Fung and seeking to get Nan Fung to say that. In that sense they are consistent with what Mr. Pal said by email. But they are also consistent with Mr. Pal saying that which he wished to be true and trying to get Nan Fung to say that which he wished Nan Fung to say. In any event I do not know how he would have explained (a) the absence of any email from him after the meeting on 21 September confirming the agreement he says he had reached, (b) the absence of any emails between SMMC and Nan Fung concerning the fixtures in April 2012 or (c) the documents he had prepared for the meetings in April and May 2012 which suggest that no agreement had been reached in September 2011.
109. In the result the evidence before the court has persuaded me that no agreement was reached at the meeting on 21 September 2011. Mr. Pal is prepared to lie to others if he conceives that it is in his interests to do so; he did so with the two conflicting organograms (one of which had to be untrue) and with the altered email. He also did so, I find, when he told Mr. Muralee that an agreement had been reached at the meeting on 21 September 2011 and he did so in his emails to Nan Fung in the latter half of 2012.
110. I am conscious that Mr. Pal has not given evidence and therefore has not been able to respond to the allegation that he has lied. However, I must reach a decision on the evidence before the court. If that evidence compels me to reach conclusions about Mr. Pal which reflect adversely upon him I cannot avoid doing so simply because he has not given evidence. I can only record that he did not give evidence.
111. Mr. Baker reminded me of Mr. Muralee's evidence that he recalled hearing and seeing Mr. Pal speaking to Nan Fung on the telephone and receiving instructions. He could not recall the particular subject matter of such calls save that they were about the negotiations concerning the Aframax vessels. I consider, on the balance of probabilities, that Mr. Muralee was mistaken and had allowed his undoubted belief that SMMC were acting on behalf of Nan Fung to persuade himself that there was indeed such frequent contact by telephone concerning the fixtures of the Aframax vessels. Mr. Chan accepts that there was some telephonic contact (he mentioned in particular a call on 11 April) and it may be that recollection of such calls by Mr. Muralee has contributed to his misrecollection. In any event his evidence does not persuade me that Mr. Pal was in fact receiving instructions from Mr. Chan with regard to the operation or management of the Galaxy vessels. The evidence to which I have referred and which supports Nan Fung's case is too cogent to be displaced by this part of Mr. Muralee's evidence.
112. Mr. Baker submitted, in the alternative to his primary case, that there was an agreement by conduct that SMMC was to act as agent on behalf of Nan Fung. The matters relied upon by Mr. Baker in this regard (printed in blue in his closing submissions) were Mr. Chan's failure to state that the Q88s were wrong in October 2011, Mr. Chan's request for information as to the current state of employment of the vessels in October 2011, Mr. Chan's failure to protest as to Mr. Pal's email of 4 November 2011, Mr. Chan's failure to object in February 2012 that the demise charterers were no longer members insured by the P&I Club, the suggestion that in February 2012 Mr. Chan treated SMMC as acting for Nan Fung with regard to the Baltic Galaxy collision, Mr. Chan's request in March 2012 that SMMC pay the fees of Holman Fenwick Willan and Mr. Chan's failure to object in March/April 2012 to the suggestion that SMMC were Nan Fung's agents. I have considered these events earlier in this judgment and do not consider that they evidence the suggested agreement by conduct. None of them could amount to an unequivocal acceptance by Nan Fung of SMMC's offer on 21 September 2011 to act as Nan Fung's agent.
113. Finally, I must consider the further submission that on 13 April 2012 Mr. Chan gave express authority to SMMC to fix the charters on behalf of Nan Fung, quite independently of any commercial management agreement reached on 21 September 2011 or by conduct. The question is whether Navig8 can prove on the balance of probabilities that there was a call on that day during which Mr. Chan expressly authorised Mr. Pal to fix the charters on behalf of Nan Fung.
114. The best evidence for the suggested express authority is Mr. Muralee's recollection. However, if there had been such a conversation in which express authority was given one would expect to see some mention of it in the email traffic on 13 April. Mr. Pal would have been delighted to have received such authority and yet does not appear to have communicated the grant of such authority to Mr. Rexer. On the contrary Mr. Rexer's emails to Mr. Brocklesby on 13 April 2012 merely said that "they [SMMC] keep them [Nan Fung] advised daily" and that Mr. Pal would meet Nan Fung the next week "obviously to tell them what has been done". A later email, in which Mr. Rexer reports that the offer was "firm (no subjects)", again refers to Mr. Pal wanting to see Nan Fung in person. Indeed, Mr. Rexer's recollection in his statement dated 31 January 2014 was that Mr. Pal did go to see Nan Fung the week after the fixture. He makes no specific mention of being told that Mr. Chan had expressly authorised the charters on 13 April 2012.
115. Nor, it seems, was any such express authority mentioned in terms by Mr. Pal to representatives of Navig8 and Poten on 16 July 2012 or in his emails dated 7 and 22 November 2012. On 16 July 2012 Mr. Pal is reported as having said that Mr. Chan was kept informed and that he had instructed Mr. Pal to fix for 1 + 1 year as 1 + 1 + 1 was too long. On 7 November 2012 he said merely that Nan Fung were kept informed and on 22 November 2012 he again made reference to a call in which Nan Fung gave instructions concerning the length of the fixture. The date of 13 April was not mentioned. It is to be noted that Mr. Pal's statements on 16 July and 22 November are consistent with Mr. Chan's evidence that he telephoned Mr. Pal on 16 or 17 April and expressed his view that the charter was too long.
116. Mr. Baker suggested that Mr. Chan, when recalling the call on 16 or 17 April, "carefully" made no mention of the call on 13 April. I do not accept that Mr. Chan was lying but I agree that one has to be cautious in accepting Mr. Chan's evidence that there was no call on 13 April because in his earlier statements he had made no mention of his concern over the low rates, the proposed length of the deal or his call on 16 or 17 April. However, he maintained his denial of any call on 13 April. Indeed he was sure that there had been no call on 13 April because he recalled receiving calls from brokers as to the low rates and length of the fixture and as a result he had telephoned Mr. Pal the next week. That recollection enabled him, he said, to "clearly remember" that he did not have any call with Mr. Pal on 13 April.
117. Mr. Brocklesby insisted when cross-examined that he had been told by Mr. Rexer that Mr. Pal had spoken to Nan Fung and had obtained "authority" to confirm a period of 12 months plus 12 months. I do not doubt that he believes that he was told that but I consider that his evidence owes much more to a reconstruction, based upon the email traffic, of what happened rather than to a genuine recollection of what happened.
118. My conclusion is, on the balance of probabilities, that there was no call on 13 April 2012 in which Mr. Chan expressly authorised SMMC to conclude charters of the Aframax vessels on behalf of Nan Fung. First, in the absence of any email traffic between Mr. Pal and Mr. Chan on 13 April it is unlikely that Mr. Pal sought or obtained any instructions from Mr. Chan by telephone. The detailed matters being negotiated would surely have been put on email to Mr. Chan before Mr. Pal sought verbal authority by telephone. Second, if there had been such a call in which express authority had been given to SMMC to fix the vessels on behalf of Nan Fung it is more likely than not that Mr. Pal would have mentioned it specifically to Mr. Rexer and that Mr. Rexer would have referred to it in his emails on 13 April 2012 to Mr. Brocklesby. Mr. Pal had sought such authority in September 2011 and had failed to get to it. He was preparing to meet Nan Fung the next week on 18 April 2012 in a further attempt to persuade Nan Fung to grant such authority. But instead of reporting that he had received express authority from Nan Fung he said that Nan Fung was being "advised daily" and that he was preparing to meet Nan Fung in person. He did say that he could offer a deal for 12 months "firm (no subjects)" but if he had received express authority to fix the vessels on behalf Nan Fung in circumstances where otherwise he had had no authority to fix the vessels on Nan Fung's behalf it is likely that he would have made a clear reference to such grant of authority. Third, Mr. Pal would surely have mentioned the call specifically when interviewed on 16 July. He did not. Fourth, he in fact referred to a discussion with Mr. Chan about the length of the charters and also did so in his email dated 22 November 2012. It is more likely than not that this was a reference to the call the next week on 16 or 17 April 2012 to which Mr. Chan referred in his evidence. Fifth, it is also more likely than not that Mr. Muralee's recollection in fact related to that later call. Sixth, I am not persuaded that Mr. Brocklesby had any real recollection of being told by Mr. Rexer that Mr. Pal had "obtained authority" from Nan Fung. Seventh, I accept Mr. Chan's evidence that he made his call on 16 or 17 April because of his concerns over the low rate of hire and the length of the charters. I also accept his evidence that having expressed his view that it was a bad deal it was up to Mr. Pal what to do because it was his deal. I do not consider that in that call Mr. Chan purported to exercise the option which Mr. Pal had purported to negotiate for the "owners". In accepting Mr. Chan's evidence in this regard I have considered the criticisms of that evidence made by Mr. Baker when cross-examining him based upon the fact that in his first and second statements Mr. Chan had made no reference to the call on 16 or 17 April. But it is not disputed that there was a later call on 16 or 17 April and Mr. Chan's reasons for recollecting the genesis of that call (his concern at what three brokers were reporting to him) appeared to me to be credible, notwithstanding, as pointed out by Mr. Baker, that Mr. Chan had been told the same by Mr. Bach by email on 13 April. (Mr. Chan's explanation was that to receive the information from one source did not mean a great deal. He telephoned Mr. Pal when he received the same information from three other brokers.) It seems likely that it was reading the emails from Mr. Bach which prompted Mr. Chan's recollection in his third statement which he maintained in his oral evidence notwithstanding sustained cross-examination on this topic. I was not persuaded that I should reject that evidence because it had not been mentioned in his first and second statements.
119. For these reasons I have concluded that Navig8 has failed to establish that SMMC was authorised by Nan Fung to fix the Aframax vessels on its behalf. On the contrary I am satisfied that Nan Fung did not so authorise SMMC. It follows that Navig8's claim against Nan Fung must be dismissed.

Damages

120. In the light of my decision on liability it is unnecessary for me to assess the damages recoverable by Navig8 had they succeeded on liability. However, the damages need to be assessed for the purpose of the claim against SMMC and so I shall express my views on the principal matters in dispute. If necessary the appropriate arithmetic can be done by the parties.
121. There was a dispute as to whether damages are recoverable from the date when the registered owners withdrew the vessels from service under the charterparties or from the later date when Navig8 accepted the alleged repudiatory breach of the registered owners as terminating the charterparties. I accept Mr. Baker's submission that damages should be assessed from the date of breach, that is, the date on which the registered owners withdrew the vessels from service. Whether damage was immediately caused on withdrawal of the vessel is a separate question. If damage was immediately caused (by reason of Navig8 being unable to trade the vessel) such damage is recoverable notwithstanding that Navig8 formally terminated the charterparty by accepting the registered owners' repudiatory breach at a later date.
122. Whilst there was agreement that the measure of Navig8's loss was the difference between the charterparty rate and the market rate there was a dispute as to what the market rate was. It is not uncommon for there to be a difference of opinion as to the assessment of a market rate, especially where the charters are for an unusual period (in this case, 3-6 months with a charterer's option of an extra 12 months). Finding a comparable and reliable fixture or fixtures is difficult. Navig8 relied upon the evidence of Mr. Pearce who has extensive experience of actually fixing vessels. The registered owners relied on the evidence of Mr. Lawrie who has studied the tanker market for many years but who had no experience of actually fixing vessels. The experts agreed that there was a dearth of charter fixtures around April 2012 and limited evidence on which to base rates for a one year time charter plus a one year charterers' option.
123. The assessment of a market rate is not a science. Whilst market data is susceptible to theoretical analysis, with which Mr. Lawrie is familiar, the assessment of a market rate for a particular vessel at a particular time for a particular voyage on particular terms also involves a question of judgment based upon market experience, something which Mr. Pearce has. I was not persuaded by the cross-examination of either witness (the time for which was very limited) that one approach should be preferred to the exclusion of the other. Both approaches can inform an assessment of the relevant market rate. In those circumstances my finding ought to reflect both approaches. That can appropriately and fairly be done by finding a market rate mid-way between the rates assessed by both experts. I set out below my understanding of the mid-way rates. If I have misunderstood the figures I will permit the parties to agree upon the appropriate corrections.
124. Thus in relation to the Baltic Galaxy damages would run from 13 November 2012. The measure of the charterers' damages would be the difference between the charter rate and the market rate, namely US$14,000 for the first period and US$14,937.50 for the second period save that for the period from 13 November until 28 December account should be taken of rate achieved by the charterers on a mitigation fixture.
125. In relation to the Caspian Galaxy damages would run from 10 November 2012. The measure of the charterers' damages would be the difference between the charter rate and the market rate, namely US$14,000 for the first period and US$14,937.50 for the second period.
126. In relation to the Pacific Galaxy damages would run from 20 December 2012. The measure of the charterers' damages would be the difference between the charter rate and the market rate, namely US$13,375 for the first period and US$15,062.50 for the second period.
127. In relation to the Caribbean Galaxy damages would run from 27 January 2013. The measure of the charterers' damages would be the difference between the charter rate and the market rate, namely US$13,375 for the first period and US$14,250 for the second period.
128. I leave the arithmetical assessment of the damages, based upon my findings, to the parties.

The claim for US$127,965.63 as the balance of account in respect of Caspian Galaxy

129. This claim must fail in circumstances where there is no binding contract between Navig8 and the registered owner of Caspian Galaxy.

The alternative claim in restitution

130. In the alternative Navig8 claims that the registered owner of Caspian Galaxy was unjustly enriched at its expense in the sum of US$127,965.63.
131. The circumstances which have given rise to this claim are these. Navig8 paid hire to SMMC believing that it had a contract with the registered owner. On 24 October 2012 Nan Fung asked ETA (copied to SMMC) to remit the hire outstanding under the bareboat charters. SMMC replied that it would resign as the registered owners' commercial manager and would remit hire less expenses. SMMC made a payment of US$766,019.44 in relation to all four vessels. Navig8 says that US$328,214.30 related to Caspian Galaxy and accepts that it must give credit for its use of the vessel. There is a dispute as to how to calculate that benefit. Navig8 does so by using the charterparty rate which results in a net benefit to the registered owner of Caspian Galaxy in the sum of US$127,965.63. (Nan Fung says that the market rate should be used to calculate the credit.)
132. Navig8 says that it made the payment in question in the mistaken belief that there was a valid contract between it and the registered owner and that as a result the registered owner was unjustly enriched.
133. It is to be noted that any enrichment of Nan Fung occurred, not when Navig8 made payment to SMMC, but when SMMC paid Nan Fung. The circumstances in which a claim for unjust enrichment can succeed in a three party case are unsettled; see Goff and Jones, The Law of Unjust Enrichment 8^th.ed. at paragraphs 6-12 – 6-15, The Law of Restitution by Andrew Burrows 3^rd.ed. at p.69ff. and The Principles of the Law of Restitution by Graham Virgo 2^nd.ed. at p.105ff. I do not propose to enter this debate for, in my judgment, the registered owner of Caspian Galaxy has a good defence to the claim even if a claim of unjust enrichment can succeed in a three party case. Nan Fung had requested the bareboat charterers to remit the hire outstanding under the bareboat charters. The monies received by Nan Fung on 1 November 2012 from SMMC were, I was told by Mr. Bright in his closing submissions, applied by Nan Fung in discharge pro tanto of the bareboat charterers' debt to the registered owners. In those circumstances Nan Fung can rely upon the change of position defence (explained by Goff and Jones at paragraph 29-19), alternatively on the defence of bona fide purchase (explained by Goff and Jones at paragraph 29-21) or on the defence that the enrichment was justified by a contract with a third party (explained by Goff and Jones at paragraph 29-22). In such circumstances any enrichment of Nan Fung was not unjust.
134. Mr. Baker disputed this conclusion on the ground that there is no evidence that Nan Fung has applied the sum in question in reduction of its claim against the bareboat charterers and on the ground that SMMC did not pay the sum in question as agent for the bareboat charterers. As to the first it is difficult to identify what else Nan Fung could do with the money other than to apply it in reduction of the sums owed by the bareboat charterers in circumstances where the money had been paid in response to Nan Fung's demand for payment by ETA and the bareboat charterers. I infer that that is what they did. As to the second, even if SMMC did not pay the sum in question as agent for the bareboat charterers, any enrichment of Nan Fung was not unjust in circumstances where the sum was applied in reduction of the debt indisputably owed by the bareboat charterers to Nan Fung.
135. The claim in restitution must therefore fail.

The claim against SMMC

136. Having regard to my findings SMMC must be liable in damages to Navig8 for breach of an implied warranty of authority. SMMC did not appear at the trial to resist this claim. The measure of damages is the sum which otherwise would have been payable by Nan Fung as damages plus the balance of account.

Conclusion

137. Navig8's claims against Nan Fung are dismissed. Navig8's alternative claim against SMMC succeeds.