Ferryways NV v Associated British Ports [225] EWHC (Comm)
The court had to determine a number of preliminary issues between Ferryways, a Belgian shipowner/operator and ABP an English port owner/operator. The chief officer on board one of Ferryways’ vessels died as a result of negligence on the part of the stevedores subcontracted by ABP. The vessel’s P&I Club made a payment in respect of the death and of the cost of repatriating the body.
Ferryways sought to recover those sums from ABP because, as they saw it, they were the employer of the chief officer and had suffered a loss. ABP denied this and argued that the employer was the shipmanagement company, Ambra Shipmanagement Ltd (“Ambra”). Whether Ferryways could be described as the employer of the chief officer became the key preliminary issue.
Ferryways and Ambra entered into a standard BIMCO Crewman A Cost Plus Fee contract (the “CMA”) which provided that the crew managers were agents for and on behalf of the Owners. On the basis of the CMA, Ambra engaged crew on employment contracts which described Ambra “as the Employer”.
Consequently, as Ferryways was not stated to be the employer in the contract or to be the principal of Ambra, in order for Ferryways to take the benefit, it had to be as an undisclosed principal. However, under the law of agency, if the intervention by an undisclosed principal is inconsistent with the terms of a contract, he cannot take the benefit of it.
While Teare J accepted that the CMA evidenced an intention on behalf of Ferryways that Ambra would engage crew as agent for and on behalf of Ferryways, he did not consider that it would follow that Ambra would always do so. That would depend on the terms of the particular crew contract.
Therefore, the question was whether the terms of the contract were inconsistent with the intervention of Ferryways as the undisclosed principal? Teare J looked at the whole contract of employment to decide whether the parties intended that only Ambra could take the benefit of the rights and obligations. There was no express provision to this effect. In addition, the applicable law of the contract of employment depended on the flag of the vessel, indicating that the ship owner was entitled to the rights and obligations of the employer.
Further assistance for Ferryways could be found in three clauses in the employment contract which suggested that matters could be dealt with by the ship owner or operator and not by Ambra. These related to the grievance procedure, code of conduct and the safety management systems (SMS). In evidence it was accepted that while Ferryways was content to allow Ambra to select ratings, Ferryways were involved in the selection of the Master, Chief Officer, Chief Engineer and Second Engineer and that if the Master of one of the vessels could not resolve a grievance on board, he would discuss this with Ferryways’ fleet manager whose decision would be final. It was also likely that the vessel’s SMS would have been supplied by Ferryways’ technical managers, not by Ambra.
These were strong indications that an entity other than Ambra would have rights and obligations of the employer under the contract of employment. The obvious contender being the owner or operator of the vessel on which the employee served.
Teare J concluded that the words “as the Employer” did not amount to a term that only Ambra may have rights and obligations as employer and it followed that the contract did not exclude Ferryways from being an undisclosed principal. Therefore, Ferryways was entitled to intervene in the contract of employment as employer of the deceased.