Jiangsu Shagang Group Co Ltd v Loki Owning Company Ltd [2018] EWHC 330 (Comm) (01 March 2018)

Jiangsu Shagang Group Co Ltd v Loki Owning Company Ltd [2018] EWHC 330 (Comm) (01 March 2018)

On the evidence, there was no express actual authority given by JSG (through SWM) to Shagang to enter into the guarantee for the POUNDA charterparty. The established internal procedure for obtaining JSG's authority was not followed, and the need for authority was likely overlooked by Shagang. There was no...

Source-derived case information.

Citation
[2018] EWHC 330 (Comm)
Parties
Claimant / Respondent in the Arbitration: Jiangsu Shagang Group Co Ltd; Defendant / Claimant in the Arbitration: Loki Owning Company Ltd
Jurisdiction
England and Wales
Judgment Date
01 March 2018
Procedural Posture
Arbitration Act 1996 S.67 Challenge to Arbitral Award (jurisdiction) / High Court (commercial Court) Judgment on S.67 Challenge
Outcome
Claim allowed; arbitral award as to jurisdiction set aside.
Legal Topics
Arbitral Jurisdiction, Authority to Bind Principal, Guarantees in Charterparties, Express Actual Authority, Agency Law
Arbitration Commercial Law Shipping Arbitral Jurisdiction Authority to Bind Principal Guarantees in Charterparties Express Actual Authority Agency Law

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Parties

Jiangsu Shagang Group Co Ltd

Claimant / Respondent in the Arbitration

Loki Owning Company Ltd

Defendant / Claimant in the Arbitration

Procedural Posture

Arbitration Act 1996 S.67 Challenge to Arbitral Award (jurisdiction) / High Court (commercial Court) Judgment on S.67 Challenge

Legal Issues

  1. 1 Whether Jiangsu Shagang Group Co Ltd (JSG) gave express actual authority to Shagang Shipping Co Ltd to enter into a guarantee on JSG's behalf for the charterparty of the vessel POUNDA
  2. 2 Whether there was a valid arbitration agreement between Loki Owning Company Ltd and JSG

Ratio Decidendi

On the evidence, there was no express actual authority given by JSG (through SWM) to Shagang to enter into the guarantee for the POUNDA charterparty. The established internal procedure for obtaining JSG's authority was not followed, and the need for authority was likely overlooked by Shagang. There was no conversation or approval by SWM for the guarantee, and no documentary or reliable oral evidence to the contrary. Therefore, there was no valid arbitration agreement between Loki Owning Company Ltd and JSG.

Court Disposition

Claim allowed; arbitral award as to jurisdiction set aside.

Orders

  • The award of the arbitral tribunal dated 9 December 2016 as to substantive jurisdiction is set aside.
  • There is no valid arbitration agreement between Loki Owning Company Ltd and Jiangsu Shagang Group Co Ltd in respect of the POUNDA charterparty.