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The Xing Zhi Hai: English Commercial Court rejects undisclosed principal claim and letters of indemnity liability; agency cannot override separate corporate personality in shipping charterparties

Published on: 24 October 2024

Published by a LexisNexis Commercial expert
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Article summary

Yangtze Navigation (Asia) Co Ltd & another v TPT Shipping Ltd & others (The Xing Zhi Hai) [2024] EWHC 2371 (Comm)

This decision reaffirms the settled position that courts are reluctant to let agency concepts supplant the doctrine of separate corporate personality, a defining feature of standard shipping company structures. It also addresses the practical challenge that can arise when a counterparty deals with an intermediary usually known to act for principals, but the capacity is unclear on this occasion.

Background

  • the dispute related to three consignments of logs carried from New Zealand to India
  • the logs were produced by the third to fifth defendants (the Exporters), who executed Log Marketing and Sales Agency Agreements (LMSAAs) with TPT Forests Ltd (Forests)
  • under those LMSAAs, Forests acted as the Exporters’ agent to market and sell their logs abroad. Consequently, Forests concluded a shipping services agreement (SSA) with TPT Shipping Ltd (TPT Shipping) as agent for and on behalf of the Exporters, and
  • subsequently, TPT Shipping entered into three voyage charterparties (the Charterparties) with the claimant owners in its own name

Contractual provisions

  • SSA: the ‘Services’ supplied by TPT Shipping...

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