Dolphin Maritime & Aviation Services Ltd v Sveriges Angartygs Assurans Forening, Court of Appeal - Commercial Court, April 02, 2009, [2009] EWHC 716 (Comm)

Resolution Date:April 02, 2009
Issuing Organization:Commercial Court
Actores:Dolphin Maritime & Aviation Services Ltd v Sveriges Angartygs Assurans Forening

Neutral Citation Number: [2009] EWHC 716 (Comm)

Case No: 2008 FOLIO 865




Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 02/04/2009



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Robert Bright QC (instructed by Reed Smith LLP) for the Claimant

Robert Thomas (instructed by Hill Dickinson LLP) for the Defendant

Hearing date: 18th February 2009

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1 This is an application by the defendants (i) to strike out the claim against them for procuring a breach of contract and unlawful means conspiracy on the ground that the Court has no jurisdiction to hear it; and (ii) for summary judgment in a claim in contract on the grounds that it has no realistic prospect of success.

2 The claimant, Dolphin Maritime and Aviation Services Limited (``Dolphin''), is an English company based in Stanmore, Middlesex. It carries on business as a cargo recovery agent and claims correspondent. The defendant, Sveriges Angfartygs Assurance Forening (``the Club''), is a Swedish corporation and a well established P & I Club.

3 In order to understand the nature of the dispute it is necessary to set out some of the history.


4 At some time after 31st July 2006 the Panamanian flagged vessel ``New Flame'', which was entered with the Club, left New York carrying a cargo of scrap steel of about 42,000 mts bound for Iskenderun, Turkey. The purchasers of the cargo- Nursan Metalurji Edustri AS - had insured it with two Turkish insurers: - Anadolu Sigorta (``Anadolu'') and Garanti Sigorta (``Garanti''). Garanti now operates under the name Eureko Sigorta (``Eureko''). I refer to them hereafter as ``the underwriters''.

5 On 12th August 2007 the ``New Flame'' collided with the m.v. ``Torm Gertrud'' off Gibraltar. The ``New Flame'' became semi-submerged and grounded on a reef in Gibraltar waters. There was an unsuccessful attempt to salve her under a Lloyd's Open Form. Eventually the Government of Gibraltar issued a wreck removal order requiring the removal of ``New Flame'' and her cargo. At some stage the underwriters paid the cargo owners and became subrogated to their rights. An action was instituted in New York by the owners of the cargo against the owners of both vessels. The underwriters instructed Dolphin to seek to recover compensation in respect of the cargo on their behalf and that of the owners of the cargo.

6 Recovery agents such as Dolphin are often paid by way of commission on the recoveries which they take by way of deduction from the monies recovered. They then pass on the balance to the principal on whose behalf they have acted. Dolphin's case is that it accepted instructions from cargo underwriters subject to its standard terms and conditions which make provision for their commission to be paid in that way.

Dolphin's terms

7 Dolphins standard terms provide, inter alia, as follows:


(c) ``The Services'' means the provision of or doing or taking of one some or all of (1) representation of the Client by the Company, including claims handling and settling;(2) actions by the Company on behalf of the Client to achieve a Recovery for the Client; (3) the giving of advice and opinions and consulting services to the Client; (4) the conduct of investigations for the benefit of and on behalf of the Client, whether in pursuit of a Recovery or not; (5) negotiation with and reaching agreement with others on behalf of the Client; (6) the appointment of others on behalf of the Client; and (7) preparation (as agents) for litigation or Alternative Dispute Resolution process involving the Client.

(d) `Recovery' means any type of claim concerning another person either pursued or resisted, and or subsequently agreed or settled, by the Company on behalf of the Client, in order to obtain payment of monies due to the Client from such other person or reduce the amount of any payment of monies to be made by the Client to such other person and includes where appropriate the amounts of money so obtained or reduced.


6.1. The Client shall notify the Company forthwith in writing of any payments, offers of payments or any other correspondence arising in relation to any appointment of the Company, which are received directly by the client.


6.5. The Client undertakes not to discuss or negotiate any matter in relation to which the Company has been appointed with any other person whether directly or indirectly.


6.7. The Client undertakes promptly to pay the Company's fees, expenses and disbursements in accordance with the terms and conditions contained herein.

6.8. The Client undertakes and agrees that any Recovery on its behalf by the Company will be received direct by the Company into the Company's bank account and not be directed to be paid or withheld by any other person.


7.1. In the event that the Company considers it appropriate to instruct, engage or retain any Service Support Provider, whether as an agent or as an independent contractor, for any purpose connected with the Services the Company has agreed to provide to the Client herein, the Client fully authorises the Company to do the same and agrees that all such persons shall be engaged instructed or retained by the Company acting only in its capacity as agent for the Client and that the Client remains directly liable to all such persons in relation to any services provided by them.


9.7. In those cases where the Company's fee is commission based the Company's usual practice is to deduct its fees from any Recovery received by it and thereafter to present a statement to the Client of the net Recovery payable to the Client, taking account of such deduction. Following presentation of the statement the net sum will be paid to the Client and no invoice will usually be issued.


11.1. This agreement and any appointment of the Company by

the Client in accordance with this agreement will continue until all the Services under this agreement or the subject of such appointment have been provided, unless this agreement is terminated earlier in accordance with the following terms.

11.2. Save in Recovery Cases as appears below, either party may terminate this agreement or any instruction pursuant to it at any time by giving 14 days written notice (by letter or fax, specifically excluding e-mail) of termination, which in the case of termination by the Client must be received at the Company's registered address. Upon any such termination the Client's liability for the Company's fees (based on the scale(s) applicable) will be as set out below. In addition, following any termination, the Client must settle any Service Support Provider's or any third parties claims for payment, fees and expenses within 7 days of receipt of any relevant invoice from that person.

Non-Recovery Cases

11.3. The Client shall pay the fees incurred up to termination as per the fee scale of the Company current and applicable at the time of termination.

Recovery Cases

11.4. In all cases in which this agreement relates in whole or in part to a Recovery, the appointment of the Company by the Client in accordance with this agreement to provide the Services in relation to that Recovery and as its agent is irrevocable by the Client but may be terminated by the Company in accordance with Clause 11.2 above.

11.5. If this agreement and or the Company's appointment or instruction is, for whatever cause, terminated before the Company has concluded or received a Recovery, the Client will, save as provided herein, be obliged to pay the Company's fees immediately, based on the amount the Company reasonably expected to recover alternatively on a quantum meruit basis, whichever results in the higher figure.

11.6. If, prior to termination, the Company or any Service Support Provider instructed by it on behalf of the Client, has negotiated a settlement proposal of the Client's claims or liabilities at a level the Company has recommended that the Client accepts, but the Client does not, the Client will be at liberty to pursue the Recovery independently but will be obliged to pay the Company's fees based on the recommended figure alternatively on a quantum meruit basis, whichever results in the higher figure.

11.7. In the event that the reason for termination is the Client's impecuniosity or insolvency a right exercisable against all persons to pursue the Recovery which is the subject of this agreement shall automatically vest in the Company and any monies recovered as a result will, subject to any applicable provisions of insolvency law which may prevent the same, be the property of the Company once recovered but in such cases any of the Client's liabilities, actual or potential, associated with the Recovery shall, to the fullest extent permitted by any applicable law, remain those of the Client.

11.8. In any of the above cases, any sums recovered directly by the Client from any persons which would otherwise comprise a Recovery, and whether before or after termination, must be paid in the first instance into the Company's bank account. After deduction of the Company's fees and any other expenses in accordance with the provisions of this agreement, the balance will then be remitted to the Client.''

8 After they were instructed Dolphin began to act on the underwriters' behalf. Mr Sharma of Dolphin negotiated two important agreements on behalf of the underwriters with the owners of the ``New Flame''. Owners' interests were represented by the Club, on whose behalf Hill Dickinson's Piraeus office was instructed. One of those agreements was an Escrow Agreement entered into on 30th November 2007 which provided for any recovery from the owners of the ``Torm Gertrud'' to be paid into a Hill Dickinson client account, of which Hill Dickinson was to be the escrow agent to stand as security for any settlement in favour...

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