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Disponent owner regarded as principal

The facts

This was a voyage charterparty entered into by an exchange of telefaxes in December 1978. Both owner and charterer employed intermediaries.

The registered owner of the vessel, the Astyanax, was the first plaintiff, Asty Maritime Co Ltd (“Asty). The second plaintiff, Panagiotis Stravelakis (“Panagiotis”) was both an employee of Asty and the cousin of its director. The contemplated voyage was from Argentina to Italy and the cargo was wheat.

The negotiations were initiated by Asty, as principal. During the course of negotiations the issue was raised that Argentina, as the exporting country, imposed a tax on freight in respect of outbound cargo. Certain countries, including Greece, with whom Argentina had entered into taxation treaties were exempt from this tax. Asty was a Cypriot company and, as such, liable for the tax. Because of this fact, Panagiotis who was a Greek citizen was interposed as the principal.

In the telexes, Panagiotis was described as the “disponent owner”. Evidence was lead that a time charter would have been entered into between him and Asty for production to the Argentine authorities in order to obtain the tax exemption. The circumstances in which the fixture was concluded pointed fairly conclusively to a sham to avoid the Argentine tax. Nevertheless, both plaintiffs, Asty and Panagiotis denied expressly that this was so.

Almost immediately after the conclusion of the fixture, the charterer repudiated the charter.

Asty applied for a declaration that it was party to the charter. This application was resisted by the charterer.

Findings

The court of first instance (Leggatt J) held that the intention of the parties was that Panagiotis was a mere nominee for Asty.

A unanimous Court of Appeal, however, found that there was no sham and that the intention of the parties as reflected in the telexes was that Panagiotis was to be the principal in the voyage charter and that a regular time charter was to be entered into in due course.

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Charter Party Casebook