Arnold Van Steenderen, Van Steenderen Mainport Lawyers, Rotterdam
The Rotterdam District Court has handed down a judgment in Overseas Shippers Association Ltd/MOL (Europe) B.V.[1] in connection with disputes that have arisen under a Frame Agreement enabling members of the Overseas Shippers Association (“OSA”) to benefit from a Volume Incentive Discount of EUR 50 for each container booked for shipment with MOL Europe (“MOLE”). An issue that had to be decided was whether the Frame Agreement was between OSA and the carrier Mitsui OSK Lines (“MOL”) or between OSA and its agent MOLE.
Established facts
Mitsui OSK Lines, Ltd., is an ocean shipping group based in Japan operating a fleet of specialized dry bulkers for iron ore, coal and woodchips to tankers that transport crude oil and LNG and car carriers and containerships. MOL controls MOLE and MOL Liner Ltd.
The relevant services in the case decided by the Rotterdam District Court are deep-sea container liner shipping services. They involve the provision of regular, scheduled services for the carriage of containerized cargo by sea. OSA provides the commercial services to its members, a group of approximately 180 international household goods removal and relocation companies. OSA’s services include worldwide ocean freight contract negotiation and the ability to resolve most related problems for its members. MOLE is the official agent of MOL in the Netherlands.
On 4 November 2014 OSA’s commercial operational manager sent an email to MOLE’s manager inside sales as follows:
“Dear Jane, Do trust you are doing fine. We are pleased in sending you herewith the pre-tender document for the OSA 2015 tender.Last contract year we have shipped more then 60,000 teu of OSA commodities, removals and related articles, all around the world. The OSA commodities are light-weight cargo, approx. 3 tons per 20 ft and 7 tons per 40 ft. Our high seasons are your low seasons. Our tender contains worldwide oceanfreight rates as well as UK inland haulages. The contract year starts March 1st 2015 and ends February 28th 2016. Our main trades with last years volume (and mentioning potential volume), are: ( specification of TEU’s per trade route).
After we reached an agreement on the 2015 Terms and Conditions we need the attached document, with a signature on all pages and last document, to be returned by scanned mailcopy to our Rotterdam office […]
Only after receipt of this signed document we can release the access to the tender via ORIS [OSA’s Rate Information System] to you. […] Logins and a manual will be provided by us. ORIS is our tender and rating system via which the contracts will be handled. You will see that handling our tender via ORIS will be much easier compared with our previous provider GT Nexus. ORIS has been designed in close cooperation with carriers, who have experience with many different tender systems. This cooperation resulted in an easy to handle tender system. If there are any problems in signing this document please be in contact with our operational people. […]
The further planning is as follows: Please return the signed 2015 Terms and Conditions soonest. December 19th final date returning tender bid’s (Note that no extention can be give to this date. Rates which are not published in time will not taken into account).
Week 2 2015 — we will return any questions as well as our benchmarks to the lines
Week 4 2015 (January 19th–23th) — tender meetings at the OSA office in Rotterdam[…]”
MOLE’s reply of 5 November 2014 is as follows:
“Thank you for the opportunity to be invited to the pre-tender process for the OSA 2015 traffic. We will be discussing the pre-tender conditions with our Trade Management teams and will then respond accordingly.”
OSA’s reaction of 7 November 2014:
“Good afternoon Jane,
Just to be sure: for the Intra-Asia trade, same as this year, no volume incentive (VID) will be payable to OSA. All quoted rates for Intra-Asia should be showing nett in ORIS. Note: Intra-Asia is not Asia to/from Subcontinent nor Asia to/from Oceania.”
In a further email of 20 November 2014 OSA requests MOLE to give an update in respect of the internal discussion about the 2015 pre-tender document. This leads to a reaction of MOLE’s regional sales manager on 3 December 2014:
“From our colleagues in the UK we have received a copy of the correspondence exchanged in regard to the OSA tender. We would love to participate in the 2015 tender and we will do the coordination from our Rotterdam office.”
OSA’s response of 3 December 2014:
“Thank you for your reaction. We have indeed invited MOL in the beginning of November to participate. We have sent our pre-tender terms both to the UK and Rotterdam. As is described in the invitation you are requested to accept the tender terms. Upon receipt by email of a signed copy we will release the financial tender through our rating system […] Attention: the deadline to put the tariffs in the system is 19 December 2014 […]”
MOLE’s regional sales manager responds on 3 December 2014:
“Thank you for this. I have requested my colleague in the UK to give a reaction in respect of your terms. The tender itself nor the explanation about the upload in the available tool is known to us. Hence, we will need further explanation and assistance to meet the deadline of 19 December 2014.”
OSA’s response of 3 December 2014:
“The tender documentation has been sent to the UK and to the Netherlands. As soon as this has been signed you will get a further explanation about the upload etc. Most important is that the terms will be accepted.”
OSA sends the invitation to tender to MOLE’s regional sales manager on 8 December 2014 reiterating that this invitation had already been sent to the UK and the Netherlands on 4 November 2014. As MOLE does not immediately respond OSA sends the following email on 19 December 2014:
“What are your plans? Are you willing to participate or not? What are the bottle-necks at this moment? Officially the deadline to feed the system with all tariffs is today. I believe that you may initially make an offer for the trades in which you are interested (excel format) on the basis of our Terms & Conditions. If you could do this before the 31st December we can still include this in the tender. Then the tariffs could be put in our system later.”
MOLE’s reply of 19 December 2014 is as follows:
“My apologies. Unfortunately I had to wait long for the feedback from the UK in regard to the Terms & Conditions of the tender. We will not make it to the official deadline but we would be happy to accept the opportunity to participate in individual trades. Our special focus is for Africa, Oceania and the Middle East. I would like to to hear how we can take this further by filling in the spreadsheets etc. My colleague [MD] will coordinate the tender internally and it is therefore important that he will be copied in for what follows.”
OSA responds on 19 December 2014:
“Okay. Clear. I suggest to fill in the attached excel sheet. This is the download of the UK tender. Please keep this sheet intact in order that we can smoothly upload this in our system. Attached you will find the procurement requirements. Similar to preceding years the base rate inclusive VID must be quoted. As also discussed the official deadline is today 19 December at 23.59. As this is not feasible we request you to ultimately send the tariffs to us on 31 December 2014. I trust that this is all clear. If not, please let me know.”
On 31 December 2014 MOLE sends the following email to OSA:
“As an attachment you will find our offer for the OSA 2015 Global tender. You will further find our offer for UK Haulage. We look forward to your feedback in respect of our offer.”
In week 3 of January 2015 a meeting takes place between OSA and MOLE in OSA’s Rotterdam office. At this meeting or shortly thereafter OSA submits its list of members to MOLE. On 6 March 2015 OSA sends an email to MOLE with the allocations on the main trades:
“We promised you to come back with the allocations on the main trades. Please find attached the allocations we need to have on the most important trades. The overview shows the fluctuating volume per week, based on the seasonality of the last two years. Please arrange that these volumes are allocated in your system for our members. Trust that the attached is clear and to your understanding. Please let me know when you might have questions.”
A specification of volumes/teu’s per trade route is also attached to this email.
On 28 May 2015 MOLE and OSA enter into an Agreement which is titled “OSA Tender for year 1st March 2015 to 29th February 2016 Tender Conditions”. The other party to the contract is referred to in the Agreement as “Carrier”.
At the line destined for the signature of the “Carrier”, the signature of a MOLE employee is placed. Right below, the word “(Carrier)” is followed by “MOL Europe BV”. Right below, the word “Name” is followed by the name of the MOLE employee. Right below, the word “Title” is followed by “Regional Sales Manager”. Below, the words “Carrier Address” are followed by an address. Next to the written text, MOLE’s stamp was placed saying “MOL (Europe) B.V.” and its address.
Clause 11 of the Agreement reads as follows:
“OSA VID: For ALL containers to/from ALL areas listed for ALL commodities quoted USD 50/teu volume incentive is payable to OSA monthly based on Carrier own records submitted to OSA, latest 3 weeks after month ending. Annually there will be a reconciliation against our members own records and a final adjustment. 1 x 20’ is 1 teu, 1 x 40’ (8’6’’ or 9’6’’ high) is 2 teu, and 1 x 45’ is 2.25 teu.”
On 18 June 2015, OSA sends the following e-mail to MOLE:
“The past couple of weeks, various account owners have approached us pro-actively and have offered discounts on the Asia-Europe/Med trades, also to get the maximum out of our busy season. Our high-season usually starts half/mid May and lasts until mid/end September. The reason for this is obvious: the FAK market dropped tremendously and they wanted to bring our figures ‘in line’. To give you an insight in the tariffs the carriers offered us.
OOCL, valid through the end of August, 350/700
NYK, valid through the end of August 400/800
Maersk, valid through the end of September, 350/700
Hapag, valid through the end of August 400/800
MOL is fairly new to us. The oral agreement we have with our ‘regular’ carriers, is that if the market really spikes, they may approach us for a raise, but if the market drops, we may approach them for a possible discount. We would like to hear from you as soon as possible whether you can/want give a discount.”
Shortly after, MOLE responds to this e-mail by making a call to OSA. MOLE informs OSA that they cannot agree to the proposed discount and that MOL/MOLE relies on OSA and their members to honour the price agreements and the promised quantities. OSA responds that they cannot promise the latter and that it is conceivable that the members will choose the cheaper carriers.
On 23 October 2015, OSA sends the following e-mail to MOLE:
“The accounts department informed me that you still have not paid these invoices? Would you please check and take care that these are paid ultimately by the end of next week?”
On 23 November 2015, OSA sends the following e-mail to MOLE:
“Our accounts department informed me that our invoices of July (!) are still not paid? Find the copies attached. VID invoices for the second/third quarter were sent last week. Find the copies attached. Currently you are due USD 24.950, of which USD 8.750 for over 120 days.
[…]
We kindly but urgently request you to take care for the very old invoices to be paid by the end of the month, before we have to take other measures.”
On 30 November 2015 MOLE sends an e-mail to OSA.
“We have recently discussed the proceedings surrounding the current OSA Tender with validity 1st March 2015 to 29th February 2016. After initial negotiations, we were informed on 06 March 2015 about the MOL allocations (refer attachment I). On June 18th, [person 1] approached us to inform us that several carriers had opened up the contracted rates on the Asia to Europe corridor and had adjusted these to lower levels (refer attachment II). Since our rates where contracted in mutual consent for a validity of 1 year, we maintained our position and respected the contracted conditions. Ever since this decision we have seen the bookings with MOL decline steadily. […] Based on our overall findings, we contacted your colleague [person 1] last October to inform you that MOL wished to terminate the contract based on non-performance. Initially the effective date of the termination would be Nov 1st, later-on delayed to Dec 1st to allow for sufficient notice. Although the amount of lost revenue for MOL for not receiving the contracted volumes exceeds the volume incentive payable towards OSA will by far, we confirmed to terminate not seeking additional compensation provided that OSA will not pursue pay out of any volume incentive YTD. You are therefore kindly requested to credit the invoices send sofar.”
Upon this, OSA sends the following e-mail to MOLE on 1 December 2015:
““With regards to the below we cancel the contracts as from today, as agreed in our pretender terms. In the attachment one we ask for following allocations, in no way there has been given any guarantee for volume. As it is clearly discussed during the meetings that we have multiple carriers on these trades and that the best will carry the most. Also we have warned u by telling u that other carriers reduced their rates but u ignored that fact. Also agreed in the tender terms and signed by you is the fact that notwithstanding the volume shipped or agreed VID will be paid from the first till last teu. We therefore request u to pay these invoices at once as there can not be any good reason to credit for us. Failure of such payment within 14 days will leave us with no alternative than to seek legal action to collect our money agreed as per contract.”
The dispute
On the claim
OSA claims payment from MOLE in the amount of:
- USD 49.255,– plus statutory commercial interest
- Costs of extrajudicial collection in the amount of USD 1.125,–
- The legal costs and the subsequent costs
On the counterclaim
MOLE claims payment from OSA in the amount of USD 1.578.154,– plus statutory commercial interest and legal costs.
Assessment of the dispute
Both on the claim and on the counterclaim
Parties have made a choice for Dutch law. The Court accepts the parties choice and will assess the dispute according to Dutch law.
On the claim
OSA’s claim is based on the ground that MOLE is to be considered as the other party to the Agreement. MOLE has rebutted that argument. The Court holds that the reliance doctrine from the Dutch Civil Code (Articles 3:33 and 3:35) and three landmark Supreme Court decisions[1][2] are applicable.
The e-mail of 4 November 2014 from OSA was sent to an employee of MOL’s agent in the UK and regarded an invitation to participate in the “OSA 2015 Global Tender”. Participants in this tender are to agree with the “2015 Terms and Conditions” of OSA first and can subsequently enter their freight rates in ORIS, the booking system of OSA. Participants gain access to this booking system in return for agreeing with the mentioned conditions. MOLE responds on 5 November 2014 that the “Trade Management teams” will be consulted about the conditions and that OSA will be informed about the outcome. Then MOLE’s regional sales manager is informed about the tender by MOLE’s manager inside sales. The e-mail of 3 December 2014 shows that OSA’s conditions have been sent both to MOL’s agent in the UK and MOLE. In MOLE’s e-mail to OSA on 19 December 2014, MOLE’s regional sales manager uses the plural ‘we’ without explaining who exactly ‘we’ refers to. He writes that the OSA conditions have not been approved yet, but that ‘we’ nevertheless gladly participate in the tender. OSA responds that they likewise hope that ‘we’ will participate. In an e-mail of 31 December 2014 MOLE’s inside sales executive as well uses the plural ‘we’ without explaining who exactly ‘we’ refers to. In this e-mail ‘we’s’ bids for the “OSA 2015 Global Tender” and “UK Haulage” are submitted. A meeting between OSA and MOLE takes place in Rotterdam in the third week of January 2015. It was not discussed during this meeting whether MOLE acted on its own behalf or as an agent of MOL. The Agreement was signed on 28 May 2015 and MOLE have entered their freight rates in ORIS with MOLE’s booking reference “NL000255”.
Although MOLE used the plural ‘we’ on several occasions in their e-mails to OSA, this does not mean that OSA had to assume that MOLE wrote (also) on behalf of MOL. In these e-mails MOL is never mentioned and moreover these e-mails do not show that the plural ‘we’ refers to MOLE together with MOL’s agent in the UK. This can neither be assumed from the fact that the url www.molpower.com (belonging to the MOL concern) is mentioned in the contact information under the e-mails from MOLE to OSA. MOLE’s employees never refer to this website and it was neither argued that the url www.molpower.com is mentioned exclusively in e-mails when employee’s of MOL’s agents act on behalf of MOL. Possibly the statement “Indeed we have invited MOL in early November to participate” in the e-mail from OSA to MOLE on 3 December 2014 must be understood as OSA’s intention to invite MOL for the tender. However, following this e-mail, MOLE has never mentioned MOL and, moreover, the Agreement was signed without any reference to MOL and MOLE have entered their freight rates in ORIS with MOLE’s booking reference “NL000255”.
Therefore the Court holds that MOLE is OSA’s co-contracting party to the Agreement. Contrary to MOLE’s belief, it is not relevant that OSA knew that MOLE is MOL’s permanent agent since an agent can act on its own behalf as well. This also applies to MOLE’s argument that the tender was based on carriage by sea since a party can enter into an agreement as a carrier while the carriage is subsequently performed by another party.
Therefore MOLE is bound by the Agreement and has not contested the amount of the claim, which is based on the Agreement. The Court awards OSA an amount of USD 35.050,–. There is no right of set-off, as was argued by MOLE. The decision on the remainder of the claim in the amount of USD 14.175,–, which is based on Clause 22 of the Agreement, is deferred. OSA must prove that this amount is payable by MOLE .
On the counterclaim
The counterclaim is lodged on the condition that the Court holds that there is no right of set-off. As follows from the decision on the claim, this condition is met.
The Court has not established that MOLE’s actions have bound MOL to OSA. MOLE failed to prove that they acted at the expense of or on behalf of MOL. Therefore the Court cannot establish that OSA acted wrongfully towards MOL.
MOLE claims that OSA guaranteed a load volume of 2.425 TEU and argues the following. Carriers are willing to participate in tenders for this provides business in the form of guaranteed volumes/TEU’s. Therefore MOL submitted their bid in the OSA tender on 31 December 2014. MOL has requested OSA to inform them about which volumes per trade route will be assigned to MOL. In an e-mail on 6 March 2015, OSA assigns a volume of 2.425 TEU to MOL.
“Please find attached the allocations we need to have on the most important trades. The overview shows the fluctuating volume per week, based on the seasonality of the last two years. Please arrange that these volumes are allocated in your system for our members.”
OSA denies that they guaranteed a load volume to MOLE. The forementioned text of the e-mail contains a guarantee, according to MOLE. Therefore the Court establishes that MOLE agreed with the text. The question is whether the text implies an obligation for OSA and if so, what kind of obligation. The reliance doctrine applies and it is not a matter of contract interpretation, since this guarantee is no part of the Agreement.
Parties disagree on whether the e-mail of 6 March 2015 contains an obligation and on MOLE’s request to what this e-mail was the response. OSA believes that MOLE’s question was what the expected seasonal turnover of shipments by the OSA members would be.
Strictly considered, the mentioned e-mail is no more than a request of OSA to MOLE. This follows from the used phrases such as “we need to have” and “please arrange”. The phrases “allocations” and “allocated” do not refer to MOLE. Therefore there is no allocation to MOLE and it is not likely that such was MOLE’s request to OSA.
With the sentence “Please arrange that these volumes are allocated in your system for our members.”, OSA (urgently) requests MOLE to maintain plenty capacity to carry a total of 2.425 TEU of OSA member’s shipments. Moreover, OSA members book the shipments themselves rather than OSA. Therefore there is no guaranteed load volume. However, the following applies. By participating in the tender, MOLE committed to charging fixed and favourable freight rates to OSA members. Pursuant to the Agreement, a VID of €50,– was payable by MOLE to OSA for every container OSA members booked. MOLE was required to maintain a capacity of (at least) 2.424 TEU for OSA members. The Court holds that MOLE could rely on OSA to, in return, stimulate their members to book shipments with MOLE in ORIS.
It is established that the total volume booked with MOLE was much lower than 2.425 TEU (namely 329 TEU). This gives reason to believe that OSA did not perform their obligation of stimulating members to book shipments with MOLE. The Court wishes to hear parties arguments on this matter and defers the decision.
[1] Rechtbank Rotterdam 10 May 2017, ECLI:NL:RBROT:2017:3549, NTHR 2017, Iss. 4, p. 198.
[2] HR 11 March 1977, ECLI:NL:HR:1977:AC1877, NJ 1977/521 (Kribbebijter); HR 26 June 2009 ECLI:NL:HR:2009:BH9284, NJ 2010/664 (Wiggers/Makelaardij Sneek); HR 5 September 2014, ECLI:NL:HR:2014:2628, NJ 2015/21 (Tulip).