Paul Bugden, Bugden + Co., London
|Ref: MVV Environment Devonport Ltd v NTO Shipping GmbH & Co KG  EWHC 1371 (Comm) HHJ Pelling QC.|
The ultimate issue that arose in this case is whether the claimant was party to the contract of carriage evidenced by the Bill of Lading. If it was not then it was not a party to an arbitration agreement with the defendant carrier and the arbitral tribunal had no jurisdiction. That issue depended on whether the parties making the bookings had either express or implied actual or ostensible authority to enter into a contract of carriage as agent for the claimant.
The defendant carrier characterised the issue between the parties as being whether the claimant was “a party to the Bill of Lading”. The judge held that such an approach was mistaken. A contract of carriage is only evidenced by a bill of lading; see Pyrene Co Ltd v Scindia Navigation Co Ltd  2 QB 402 at 419, where Devlin J held that:
“the contract of carriage is always concluded before the bill of lading, which evidences its terms, is actually issued. When parties enter into a contract of carriage in the expectation that a bill of lading will be issued to cover it, they enter into it upon those terms which they know or expect the bill of lading to contain.”
The defendant carrier placed reliance on the fact that the claimant was named as shipper in the bill of lading. But as the judge observed that distracted attention from; (a) the fact that the contract of carriage was entered into by the parties to it before the bill of lading on which the defendant relied was issued; (b) the naming of a party as shipper in a bill of lading is not decisive and; (c) the issue of whether the parties making the booking on behalf of the claimant had express, implied or ostensible authority, to enter into a contract with the defendant, it being common ground that the claimant did not itself enter into any contract with the defendant.
The starting point is that the parties to a contract of carriage evidenced by a bill of lading are the persons named in the bill of lading as respectively shipper and carrier. However, it can be no more than that as for the reasons already noted the contract of carriage is always concluded before the bill of lading, which evidences its terms, is actually issued. It is open to one who is ostensibly a party to a contract of carriage evidenced by a bill of lading to show that it has been wrongly identified as a party to the contract of carriage.
As such the bill does not always evidence a contract between the carrier and the named shipper. Where an issue arises on this point, the facts, including particularly the evidence of any antecedent contract, must be considered to ascertain the true intentions of the parties as apparent from the bill itself and the surrounding circumstances. It may be the case for any number of reasons that the bill of lading evidences a contract with someone other than the named shipper; for example, the consignee.
Actual authority may be demonstrated by reference to the doctrine of implied actual authority. This differs from express actual authority because it is authority that can be inferred from the conduct of the parties and the circumstances of the case.
The focus in the case of implied actual authority is on the actual circumstances of the relationship between principal and agent. This means, inevitably, that the outcome of particular cases are very much fact sensitive and will at best only be of very limited assistance in arriving at a conclusion in any other case.
However, that being said, implied actual authority can arise only in relation to someone who has been given some express authority to which the implied authority is appurtenant. It as such necessarily includes so-called ‘medium powers’ which whilst not expressed are necessarily to be used in order to obtain the accomplishment of the object of the principal power but as it is ordinarily an adjunct to an existing express authority it inevitably cannot be inconsistent with the express authority
In the result the judge held on the facts that the parties making the bookings on behalf of the claimant had no express, implied or ostensible authority, to enter into a contract with the defendant.