09 Apr 2013

Successful jurisdiction challenge for Hyundai Merchant Marine


International law firm, Stephenson Harwood LLP, has advised on the successful challenge by Hyundai Merchant Marine Company Limited (HMM) to an arbitral tribunal's jurisdiction, in its dispute against Americas Bulk Transport Limited (ABT). The dispute arose out of discussions between HMM's representative and ABT's broker in New Jersey for the possible charter of the Pacific Champ for the carriage of a cargo of hot moulded briquettes (HBI) from Houston via the Orinoco River.

During the discussions, HMM provided ABT with a proforma charterparty to be used as the basis of the proposed charter, which excluded the carriage of HBI. When this was discovered, HMM’s representative agreed to consult with HMM’s head office in Seoul about whether HBI could be carried under HMM’s head charterparty, a bareboat charterparty.

ABT sent HMM an email which purported to set out the terms of the alleged fixture, including a provision “Sub Review Ownrs Head CP BTB”. HMM responded proposing amendments to the proforma charterparty form, which included a provision permitting the carriage of HBI, but not permitting the vessel to sail to the Orinoco River (because on consulting with its head office, HMM found that the bareboat charterparty permitted HBI but did not permit sailing via the Orinoco River). ABT purported to lift the subjects, but HMM maintained that there was no valid and binding charterparty.

ABT claimed damages for breach of the alleged charterparty and commenced arbitration. HMM challenged the Tribunal’s jurisdiction on the ground that no binding charterparty and no arbitration agreement had been made. The Tribunal held that it had jurisdiction. HMM appealed and the objection was upheld.

Sean Gibbons, a marine & international trade partner, who led the team at Stephenson Harwood LLP said: "HMM's objection was successfully upheld because there was no consensus between the parties as to the terms of the charterparty. ABT's email was sent before my client was able to check with its head office whether HBI could be carried and in turn inform ABT. As a result no binding charterparty had been entered into."

HMM is an integrated logistics company operating around 160 state-of-the-art vessels. HMM uses its worldwide global service networks, diverse logistics facilities, leading IT shipping related systems and professional highly trained staff to serve the global shipping community.

HMM were advised by Sean Gibbons and Joanne Lewis, respectively partner and associate in the Marine and International Trade Team at Stephenson Harwood LLP.



Andrew Rieley
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