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Contract formation – one time charter trip negotiated by email and telephone – no consensus on the facts

The facts

HMM based in Seoul, South Korea, bareboat charterers and disponent owners of the vessel, represented by Ho Jong Baek, General Manager and head of their HandyMax team, entered into negotiations for the carriage of HBI (hot moulded briquettes of reduced iron – used in smelting furnaces) from Houston via the Orinoco River, Venezuela, and back to the US Gulf, with ABT, represented by Charlie Song, chartering broker with Eastmark Shipping.

Song sent two recaps by email to Baek at 20h36 on 11 February 2008 and 15h27 on 12 February 2008.

Both purported to fix the vessel with subjects.

Difficulties in achieving consensus were that the bareboat charter excluded the Orinoco river and the pro-forma time charter provided by HMM excluded HBI as cargo.

After receipt of the second email, Baek informed Song telephonically about the Orinoco restriction and followed up with an email suggesting an amendment to the recap to exclude the Orinoco.

There was a dispute between Song and Baek as to when Baek informed Song that carriage of HBI would be permitted despite the ostensible restriction in the pro-forma.

ABT labelled HMM’s stance as repudiation and claimed damages.


Arbitrators found for ABT. HMM challenged the award under s67 (jurisdiction), s68 (irregularity) and s69 (point of law).

HMM succeeded before Eder J who found that there had been no consensus on the HBI issue. In arriving at his conclusion he found both Song and Baek to have been unsatisfactory witnesses.

Because there was no consensus and therefore no contract, there was no agreement to arbitrate and the arbitrators had no jurisdiction.


Of academic interest because of the main finding was the meaning of point 12 of the recap which read: “Sub review owners head CP BTB”

The arbitrators accepted the argument that the “head CP” was the pro-forma time charter provided by HMM, HMM contending that it was the bareboat charter and that “review” was to be at HMM’s instance.

Eder J agreed with the arbitrators (questionably?)



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