Nakanishi Kikai Kogyosho Ltd. v Intermare Transport GmbH

The claimants (to whom I refer as “NKK”) have applied under section 72 of the Arbitration Act, 1996 for declarations that they are not party to arbitration agreements in two time charterparties and an injunction restraining the defendants (to whom I refer as “Intermare”) from proceeding against them with two arbitrations. The arbitrations were brought when Intermare gave notice of the appointment of their arbitrator by letters dated 10 March 2008 from their solicitors, Messrs Middleton Potts. The letters were addressed to Namirei Showa Co Limited (to whom I refer as “NS”): they state that copies were sent to NKK and also SN Navigation SA of Panama (“SNN”) and two brokers, Maersk Broker (UK) Ltd of London (“Maersk”) and Fairfield Japan Ltd of Tokyo (“Fairfield”). NKK seek summary judgment.

Intermare’s case is that NKK are parties to two time charterparties in identical New York Produce Exchange form dated 16 April 2007, which were signed at a ceremony in Singapore on 28 May 2007. In each charterparty the Owners of the vessel were described as “Namirei-Showa or Nakanishi Kikai or their guaranteed nominee”, and they were signed under the word “Owners” by a Mr. Shuza Watanabe. The Charterers were described as “Intermare Transport GMBH Hamburg or their guaranteed nominee which to be always guaranteed by Alfred C Toepfer International GMBH”, and the charterparties were signed on behalf of the Charterers by Mr. Johannes Adrichem.

The charterparties were for the hire for seven years with provision for the additional hire periods at the Charterers’ option of two 12,500 deadweight carriers described as “TBN 1” (that is to say, “to be named 1”) and “TBN 2”: the vessels were still to be built and had not been named. Each contained an agreement for London arbitration: in fact they had two arbitration clauses, clauses 17 and 87, but nothing turns on any difference between the clauses.

The charterparties also included (at clause 91) a provision giving the Charterers an option to buy the vessel at any time after the end of the seventh year of hire, the price depending upon when the option was exercised. There were signed in respect of each vessel at the same time as the charterparties a Memorandum of Agreement recording that SNN had agreed to sell and Intermare had agreed to buy the vessel. Against “Purchase Price” they provided, “Reference to Charter Party dated 16^th April 2007”. They bear the same signatures as the charterparties. It is not clear whether these documents were signed as proformas of the agreements to be made if Intermare exercised the options or whether, although clause 91 said that the options might be exercised after the seventh year of the charterparty, Intermare were committing themselves to exercise them on the basis that they were later to determine when they should purchase the vessels. I do not need to express any view about that. What NKK rely upon is that the “seller” under the Memoranda was SNN, and NKK were not mentioned in them.

Mr. Watanabe’s authority to enter into the charterparties and the Memoranda of Agreement was apparently conferred at a meeting on 7 May 2007 of the Board of Directors of SNN, the minutes of which recorded resolutions that SNN should purchase the two vessels and that Mr. Watanabe, and also other officers of SNN, should be SNN’s attorney to execute to sign and execute the time charterparties of the vessels.

The vessels were never delivered to Intermare under the charterparties. By an email sent on or about 13 February 2008, NS informed Intermare that they could not be constructed, and by faxes dated 25 February 2008 Intermare gave notice that they were terminating the charterparties for repudiatory breach. The notices were addressed to NS and copied to SNN, Maersk and Fairfield, but not to NKK.

NKK, who were represented before me by Mr. Chirag Karia, argued that NKK were entitled to summary determination of their claim because:

It seems that any claim that Intermare have against either NS or SNN will be valueless. NS are now insolvent, with a substantial deficit, and on 5 June 2008 they filed for bankruptcy protection in Japan. SNN, a Panamanian company, apparently have no assets, since their purpose was to own the two vessels that in the event were never built. NKK argued that this is the only reason that Intermare claim that they were party to the charterparties. Intermare disputed this and said when in March 2008 they brought the arbitrations that they intended to proceed against NKK as well as NS and SNN. Intermare for their part submitted that Nakanishi were applying for summary judgment in order to delay determination of these proceeding and so the arbitrations. To my mind, these contentions do not cast any useful light upon what I have to decide.

As I have indicated, Mr Karia characterised the first issue as one of construction, and formulated that question as being what meaning the charterparties would convey to a reasonable person having all the background knowledge that would reasonably have been available to the parties at the time that they were concluded. In considering a question of construction such as this, it is proper, of course, to have regard to other documents executed at about the same time and forming part of the same transaction, such as the Memoranda of Agreement, and Mr. Karia acknowledged that, where the identity of parties to a contract is not clear from the written contract itself, extraneous evidence may be adduced. In support of his submission that this question should be determined summarily, he cited the judgment of Moore-Bick LJ in ICI Chemicals & Polymers Ltd v TTE Training Ltd, [2007] EWCA Civ 725, who said (at paras 13 and 14) that upon an application for summary determination of a question of construction the court views with caution an argument that evidence might later be produced that sheds new light upon it:

“Sometimes it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial. In such a case it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction.”

Mr John Russell, who represented Intermare, disputed that a question of the identity of the parties to a contract is one of construction, and argued that evidence about their identity can be adduced when it would not be admissible on a matter of construction. There is some tentative support for this in the speech of Lord Millett in The “Starsin”, [12004] 1 AC 715 at paras 175: “[The identity of the parties] is a question of fact and may be established by evidence. Such evidence is admissible even where the contract is in writing, at least so long as it does not contradict its express terms, and possibly even where it does...” (emphasis added). However, there is no significant issue about what evidence I should consider. I do not determine the jurisprudential nature of a question about who were the parties to a contract, which is a matter of some difficulty and inappropriate for determination on this application for summary judgment.

NKK’s contention is that SNN entered into the charterparties as the Owners being a “guaranteed nominee”, and SNN and Intermare are the only parties to the charterparties and the arbitration agreements in them. NS guaranteed to Intermare “the full performance of SN Navigation SA of Panama for the entire charter party period … of charterparty dated 16^th April 2007 between” the Owners and the Charterers as described in the charterparties. As far as appears from the evidence before me, the formal guarantees were provided to Toepfer by Maersk only under cover of a letter dated 5 December 2007, but there is clear evidence that SNN were identified as NS’s guaranteed nominee through the broker chain before the signing ceremony on 28 May 2007. On 18 May 2007 Fairfield advised Maersk that Mr. Watanabe would sign for SNN on letter paper that gave one of their addresses as “c/o [NS]”. Maersk described the purpose of the letter that SNN were to sign as being “for NS to help persuade Toepfer to attend the signing”, and when it was provided, Fairfield’s covering email described it as being “from SN Navigation (Namirei-Showa)”. In an email of 22 May 2007 Maersk wrote: “View head owners’ nomination of guaranteed nominee, now please find below a draft of guarantee letter which we kindly ask to be issued by owners Namirei-Showa or Nakanishi Kikai on their respective letter head and fully signed to be presented to Charterers during signing of the charterparties”. There is no evidence that NKK were also asked to provide a guarantee. On 23 May 2007 Maersk sent Fairfield the required wording of a guarantee to be given by NS on their headed letter paper, and Intermare issued a Special Power of Attorney authorising Mr Adrichem to “act on our behalf in order to enter into a) long-term charter parties for two 12,500 dwt single screw bulk carriers with Messrs SN Navigation SA; b) a separate agreement with SN Navigation SA for a purchase option in respect of the aforementioned vessels”.

Against this background, NKK submitted that upon the proper construction of the charterparties the only “Owners” were SNN. Mr Karia argued that in the expression “Namirei-Showa or Nakanishi Kikai or their guaranteed nominee” the word “or” is used disjunctively and contemplates that the contracting party will be either NS or NKK or a guaranteed nominee. Mr Russell responded that “or” can be used conjunctively, citing Federal Steam Navigation v Dept of Trade and Industry, [1974] 1 WLR 505 esp. at pp.513, 514 per Lord Morris (dissenting) and pp.523,524 per Lord Salmon, and that the word is so used here. Accordingly he contended that all of NS and NKK and any guaranteed nominee were parties to the charterparties as Owners. I consider that this part of Mr Russell’s submissions faces great difficulties: in some contexts “or” will bear a conjunctive connotation, but it seems commercially improbable that the charterparties should contemplate that NS and NKK should be liable both as primary obligees and as guarantors of a nominee.

Mr. Russell sought support in an email sent by Fairfield to Maersk in 20 November 2007 (to which I refer again later in my judgment). It began “We, [NS] and [NKK] and its guarantees nominee, as owners, would like to response to your request …” (emphasis added). Assuming this to be admissible evidence on this question, I do not consider that it indicates who were intended to be the parties to the charterparties. The word “and” could have been used because Fairfield regarded themselves as making the request for all three companies rather than because of their understanding of the charterparties. In any case, the emails between the brokers often used imprecise language.

I do not finally determine whether “or” is used conjunctively or disjunctively: I shall assume this question of construction in NKK’s favour. This leads to the questions (i) how one of the three candidates (NKK or NS or a nominee) was to be selected, and (ii) what was the position unless and until this is decided.

It was not suggested that the Charterers were to play any part in deciding this. NKK do not contend that, either alone or with NS, they in fact decided that SNN should be the Owners under the charterparties, or that SNN were their nominee, whether guaranteed or otherwise. Their argument was that upon the proper construction of the charterparties a “guaranteed nominee” could be nominated by either NS or NKK. I disagree: while a company is often referred to by the plural pronouns “they”, “them” and “their”, this is not the natural meaning of “their guaranteed nominee” in the charterparties. After all, NS and NKK might have made different nominations, which cannot have been intended.

As for the second question, it was not argued that the charterparties were not intended to be contractually binding until it was decided who should be the Owners, nor was it argued that they were too uncertain to be of contractual effect. I consider that it is at least sufficiently arguable for present purposes that prima facie NKK and NS were to be jointly and severally liable as Owners unless and until they nominated another person or company to be “Owners” and guaranteed the nominee’s liabilities.

NKK’s contention is, in essence, that, before the charterparties were made, NKK and NS had decided that NKK should not participate in the arrangements concerning the vessels, including any nomination of the Owners under the charterparties and that the Owners should be NS or their guaranteed nominee; that NS had so nominated SNN; and that Intermare had at least acquiesced in this arrangement, accepting that NS alone, and not NKK, should guarantee SNN’s liabilities. Have NKK demonstrated this sufficiently for summary judgment purposes? I observe at the outset that this would mean that the references to NKK, and indeed NS, in the charterparties were misleading, or at least anachronistic, in that it had already been decided before they were made that SNN should be the Owners. Nevertheless NKK do not, as Mr Russell pointed out, seek to rectify the charterparties.

I must therefore consider NKK’s evidence about the circumstances in which the charterparties were signed. It is set out in a statement of Mr. Masami Nakanishi, NKK’s President, and also witness statements of two partners in Messrs Jackson Parton, NKK’s solicitors, Mr Edward Clyne and Mr David Hughes. Mr Fred Konynenburg of Middleton Potts made two witness statements for Intermare.

Mr Nakanishi described NKK as a Japanese company engaged in shipbuilding who over the last 15 years have developed their interests through a shareholding in a Chinese shipyard, building first barges and then cargo ships. The shares in NKK are held by Mr. Nakanishi and members of his family’s President. Mr. Nakanishi’s evidence is that NKK are completely separate from NS, a company based in Sakai City which manufactured air conditioning units for ships, that there were no “capital ties, whether direct or indirect” between the two companies, and they had different directors. NKK first had a business relationship with NS in late 2004 or early 2005, and during 2005 or thereabouts NS “started to penetrate the shipbuilding industry” and worked with NKK “as a builder in new shipbuilding projects”.

Mr. Nakanishi said that in 2006, at a time of heavy demand for new engines for vessels, NKK reserved two marine main engines for supply by Aksaaka Tekkojo Co Limited. Mr. Russell observed that in support of this part of his account Mr. Nakanishi put in evidence a document dated 5 September 2005 that apparently confirmed delivery dates for four engines, but I do not consider that any discrepancies between the document and Mr. Nakaniski’s evidence indicate that Mr. Nakanishi’s account is generally unreliable or are of any significance to what I have to decide.

Mr. Nakanishi’s evidence was that the “initial idea” of building two 12,500 dwt vessels was his, and that from about July 2006 he consulted with NS about finding buyers. Mr Clyne suggested that NKK were interested only in the shipbuilding part of the project and never interested in chartering the vessels, but Mr. Nakanishi did not so state and there is no sufficient evidence of this for the purposes of these applications.

In October 2006 there was a meeting in Singapore attended by representatives of Toepfer International and by Mr. Nakanishi, by Mr. Fujiwara, the managing director of NS, and by Mr. Ishii of Fairfield. Mr. Nakanishi said that Fairfield attended as NS’s brokers. He thought that the purpose of the meeting was to seek a shipbuilding order: he spoke about 12.500 dwt vessels, and Mr. Fujiwara and Mr. Ishii spoke about larger 30,000 dwt vessels. According to Mr Nakanishi, he had little understanding of the discussion because it was in English and he speaks almost no English: he relied upon snippets that he heard from Mr. Fujiwara and Mr. Ishii.

Intermare’s account of the meeting, given through Mr. Konynenburg, is different: they say that the meeting followed negotiations about chartering two 29,200 dwt vessels, in which Toepfer were using Maersk as brokers. Mr. Nakanishi, who led the discussions and was actively engaged in them throughout, proposed that NKK and NS could build two further vessels of 12,500 dwt to charter to Toepfer and Intermare. Fairfield translated the discussions, and NKK and NS were, as it is put, “presented effectively as one entity”, engaged in something in the nature of a joint venture. This impression was reinforced, as Intermare perceived it, because they understood that the Nantong Nikka Shipbuilding Company, at whose yard the 29,200 dwt vessels were to be built, was owned as to 50% by Nantong Yahua, and as to the 25% each by NKK and NS. They also understood that Fairfield were the exclusive broker of Nantong Nikka, and that they were representing both NKK and NS.

After this meeting negotiations were conducted through Fairfield and Maersk. On 14 November 2006 Intermare received a proposal in an email headed “Offer – Nakanishi Kikai 12,500 dwt – Toepfer”. It began “As per our discussions we are now pleased to proceed in the newbuilding 12,500 dwt vessels, please find the below firm offer which Charterers are to reply by 09.00hrs Tokyo time on 15^th Nov (Wed) 2006”. The proposal named the proposed Owners and the proposed Charterers in the terms that eventually appeared in the charterparties of 16 April 2007, the Owners being “Namirei-Showa or Nakanishi Kikai or their guaranteed nominee”. Maersk commented that they understood that NKK would be handling the specification, and that, as with the project for the 29,200 dwt vessels, “the Ownership of the vessels will be shared among [NS] and [NKK] to aid financing”. Mr. Nakanishi referred in his evidence to NKK having a “part in the project” in November 2006 but did not state what that part was.

On 16 November 2006, Maersk sent a “recap” email. Mr. Konynenberg said in his witness statement that this evidenced a concluded agreement upon the terms of the charterparties. That argument was not pursued by Mr. Russell: it would not in any case assist Intermare upon this application because the terms of the recap did not include an arbitration agreement. Mr. Russell did, however, point out that in the email the Owners were again described as “Namirei-Showa or Nakanishi Kikai or their guaranteed nominee”, and the terms provided for a commission for Fairfield, as well as for Maersk.

According to Mr. Konynenburg, at about the same time arrangements for chartering two 29,200 dwt vessels were agreed: he exhibited to his witness statement one of the two identical charterparties, which were dated 1 December 2006. Again, the Owners were said to be “Namirei-Showa or Nakanishi Kikai or their guaranteed nominee”, and commission was payable to Fairfield and Maersk. The charterparty in evidence is not signed and there is no evidence who signed these charterparties on the Owners’ behalf.

During the hearing before me, Mr. Karia stated that NKK dispute that they were party to any charterparty of the 29,200 dwt vessels. However, Mr. Konynenburg had referred in his first witness statement to NKK being a “contractual counterparty” to chartering of 29,200 dwt vessels, and this was not challenged in any evidence served by NKK in reply. The only evidence is that NKK were involved in these chartering arrangements, and the provision that Fairfield were to be paid commission suggests that they acted as broker for those who were named as Owners, including NKK.

Mr. Nakanishi said that NKK were unable to find the finance to build the vessels and so informed NS. He heard in “around January or February 2007” that NS had obtained finance and would build them. He “was told” that NKK should “step down from the shipbuilding”, and asked “to transfer our position as buyer of the main engines” to NS. NKK agreed to do so, and thereafter had little information about the vessels. Later, in November or December 2007, Mr Nakanishi received an enquiry from NS about whether the vessels could be built at the Yangzhou Nakanishi shipyard (in which NKK were interested), but terms for this could not be agreed. Although Mr Nakanishi stated that NKK “stepped down” from any involvement with the vessels in early 2007, neither he nor any other witness stated that Intermare, Maersk or even Fairfield were advised of this.

Mr Nakanishi put in evidence what are said to be agreements between NS and Akasaka Tekkojo Co Ltd for the sale of the two engines, but they are in Japanese and only the cover pages are translated. It appears from these pages that NS were the buyer and Akasaka Tekkojo Co Ltd the seller, but no date of the agreements is given.

Mr Nakanishi also put in evidence two agreements dated 24 March 2007 for the construction and sale of the 12,500 dwt vessels between NS as builder and SNN as buyer. Mr Russell commented that they were governed by English law and provided for English arbitrations, although that they had no connection with this jurisdiction. I do not consider this to be remarkable: such provisions are quite usual in contracts of this kind. Perhaps it is rather more curious that the agreement provided for delivery dates of 31 July 2007 and 31 August 2007 which appear unrealistic, but I attach no great significance to this.

NKK rely upon other documents that Mr. Nakanishi said were obtained from NS as showing that NS alone, and not NKK, were interested in the building and chartering of the 12,500 dwt vessels. They are:

NKK’s case is that the charterparties of the 12,500 dwt vessels were concluded without their knowledge and that they first learned of them through an article in Tradewinds on 11 April 2008. Mr Nakanishi said that NKK did not receive the copies of the letters of 10 March 2008, observing that they were apparently sent to an incorrect fax number. This is not a complete explanation for NKK being unaware of the arbitration proceedings because on 19 March 2008 NS sent a letter by fax in which they requested an extension of time to appoint an arbitrator, stating that they did so on behalf of NKK as well as themselves and SNN. They apparently sent a copy of the request to the fax number given by Mr. Nakanishi as NKK’s. Although Mr. Nakanishi stated in his witness statement that this request was made without NKK’s authority or knowledge, he did not properly explain why, if it was sent to NKK’s fax number, it apparently did not come to their attention.

Mr Nakanishi’s evidence must be assessed against exchanges between the brokers relied upon by Intermare as evidencing NKK’s involvement with the 12,500 dwt vessels. On 14 December 2006 Maersk sent an email that apparently reflects their understanding that NKK were, and specifically Mr Nakanishi was, involved in the arrangements for building the two 12,500 dwt vessels, recording that Mr Nakanishi was “pushing very hard” for certain changes to the plans for them, although he did “not want to deliver false promises to Toepfer”. On 12 January 2007 Maersk reported that the “Owners” were hoping to “conclude all outstanding points” by 15 February 2007 and that NKK were pressing the ship designer. On 22 January 2007 Maersk reported to Intermare that Mr Ishii of Fairfield had met with NKK and been given permission to speak directly to the design company. On 26 February 2007 Maersk sent an email to Intermare that read as follows: “Thanks for the Charterers’ acceptance of the delivery of the vessel through the additional charter rate to be discussed which have informed Namirei-Showa and Nakanishi Kikai”. Mr Russell relied upon the last of these communications in particular as evidence (i) that Fairfield were brokers for NKK as well as NS; (ii) that in late February 2007 NKK were still involved with the 12,500 dwt vessels; and (iii) that NKK were not concerned only with the building of the vessels but also the arrangements for chartering them.

On 13 April 2007 Maersk sent to Fairfield what they described as an email “to clean recap as agreed” about the two 12,500 dwt vessels. The Owners and the Charterers were described as in the same terms as in the charterparties dated 16 April 2007. The terms of hire were “As proforma C/P Intermare Namirei-Sohwa or Nakanishi Kikai dated 1^st December 2006 [that is to say, apparently, the charterparties for the 29,200 dwt vessels] logically amended and with the following alterations”, which were then set out. Mr Karia observed that the delivery of the vessels was not to be from a shipyard with which NKK were associated but from another Chinese yard.

No later recap communication between brokers before the signing ceremony on 28 May 2007 is in evidence, and Intermare did not argue that the email of 13 April 2007 recorded a concluded contract: there were outstanding matters to be agreed, and Mr. Konynenburg’s evidence is that they were resolved in discussions between brokers on 16 April 2007. However, charterparties are commonly concluded in “recap” communications of this kind, and it is likely that a contract was concluded before the formal signing ceremony took place, or at least that those involved in the ceremony believed that a contract had been concluded. It is probable that significant communications are not in evidence. (Mr Russell referred in his submissions to Intermare having difficulty in obtaining documents from Maersk, but there is not evidence about this. I do not rely upon this in reaching my decision.)

I should also refer to the evidence about what happened after the charterparties were signed on 28 May 2007. It suggests that Intermare and Maersk understood that NKK were still involved with the vessels. On 15 November 2007 Intermare received an email from Maersk that apparently supposed that the same parties were involved with both the 12,500 dwt vessels and the larger vessels (here referred to as 28,900 dwt). Under the heading relating to the larger vessels, Maersk referred to NKK being “in the process of sourcing a new yard”. As for the 12,500 dwt vessels Maersk wrote “Owners now feel they have to look at an alternative yard”, with no indication that this was not a reference to, among others, NKK: it is of some interest that Maersk also wrote, “Certainly here there is more than meets the eye in terms of the current relationship between [NKK] and [NS], it is understood that the two companies have personal difficulties due to change in [NS’s] top management”.

Further, in November 2007 Fairfield still referred to NKK as an “Owner” of the 12,500 dwt vessels. They wrote this in a email (to which I have already referred) replying to one dated 16 November and forwarded by Maersk to Intermare on 20 November 2007: “We, Namerei-Showa and Nakanishi and its guaranteed nominee, as owners, would like to request…”. Later in December 2007 and January 2008 there were more communications that further evidence Fairfield’s understanding that NKK were involved with the 12,500 dwt vessels. Indeed, an email of 18 January 2008 apparently recorded a conversation between Fairfield and Mr. Nakanishi himself about them.

Before stating my conclusions on the two issues identified by Mr. Karia, I should also consider whether there was a corporate relationship between NKK and SNN since, while it does not affect my decision, it was the subject of a good deal of evidence and some argument. Intermare’s contention is that SNN are a subsidiary of NKK, but NKK deny it. Their understanding, they say, is that SNN are a subsidiary of NS: hence the similar initials, Namirei Showa being more usually and more accurately referred to in Japanese as “Showa Namirei”. Intermare relied upon information published by Lloyd’s Register (i) that SNN are a subsidiary of NKK, and (ii) that from 1 January 2008 until 24 June 2008 SNN were the registered owner of “SNK Lucky”, during which time, they say, NKK were her commercial operator and beneficial owner. NKK relied upon -

Mr. Clyne’s evidence is that the “SNK Lucky” is registered to Phoenix Line Corporation SA, a subsidiary of NKK. She was originally ordered by SNN as buyer from NKK and NS who were jointly engaged in building it, and on 25 March 2008 the “contract was sold by [SNN] to [NKK] at full market value” There is no documentary evidence about this: it seems that there might well have been something in the nature of a joint venture between NKK and NS.

Lloyd’s Register do not claim that their information is invariably accurate, and it might be erroneous in this case. The evidence presented by NKK, I accept, casts real doubt upon it, and I decide these applications on the basis that SNN are not, and have not been, NKK’s subsidiary. However, the evidence also indicates, and I accept for present purposes, that there was a close business relationship between NKK and SN that continued after the charterparties were signed and indeed after the arbitrations were brought.

In view of this evidence, I consider that Intermare have a real prospect of showing that Fairfield were NKK’s brokers and that NKK presented them to Maersk and Intermare as such; that NKK were involved with the chartering as well as the building of the 12,500 dwt vessels, and indeed the 29,200 dwt vessels; that Fairfield negotiated the terms of the charterparties of both the 12,500 dwt vessels and the 29,200 dwt charterparties and were to be paid commission under them on the basis that they acted as Owners’ brokers; and that NKK had not ceased to be involved with the 12,500 dwt vessels when the charterparties for them were concluded, or at least Intermare had not been given notice that they had ceased to be so involved. With regard to Fairfield’s role, I do not overlook Mr. Clyne’s evidence that Mr. Nobuto Yamaguchi of NKK’s Japanese lawyers said that Mr Ishii had said that he had acted for NS and SNN and not NKK. This hearsay evidence stated in general terms cannot, to my mind, be given much weight in view of the exchanges to which I have referred. I consider that there is a real prospect that, if this case goes to trial, Intermare will refute much of NKK’s case about the factual background against which the charterparties were signed.

I acknowledge that nevertheless some of the documentary evidence appears to lend powerful support for NKK’s contention that they were not party to the charterparties and that Intermare knew that when they entered into them, not least the Memoranda of Agreement, the exchanges in which the wording of NS’s guarantee was agreedand the terms of the power of attorney given to Mr Adrichem. In my judgment, however, the circumstances in which the charterparties were concluded are too obscure for the court to give summary judgment on the basis that, notwithstanding the description of the Owners, NKK were not party to them. I reject NKK’s argument that they should have summary judgment because Intermare have no real prospect of successfully defending the claim on the first of the two issues that Mr. Karia identified.

NKK deny that Mr. Watanabe had authority to enter into the charterparties on their behalf, and it is said that under Japanese law Mr. Watanabe could be authorised to act for NKK only if he was given a power of attorney to do so. NKK rely on Mr. Nakanishi’s evidence and also upon a statement made by Mr. Watanabe, as a director of NS, and dated 8 June 2008. In it he stated, according to the translation provided, that “we [NS] hereby confirm” that NS had not obtained NKK’s consent to refer to NKK in the charterparties; that the Owners in the charterparties were NS or NS’s guaranteed nominee and NS had so nominated SNN, their fully-owned subsidiary, and that NKK were not parties to the charterparties.

Intermare do not have evidence directly refuting these assertions: given the nature of the issue, this is perhaps not surprising before disclosure and without the opportunity of cross-examination. They submitted, however, that the issue about Mr Watanabe’s authority is not suitable for summary judgment. I agree with this submission, for broadly the same reason as I have rejected the first argument: that, as I conclude, Intermare have a real prospect of refuting NKK’s factual contentions relevant to this issue, and I am not persuaded that, if the matter goes to trial, Intermare have no real prospect of establishing that Mr Watanabe had at the least ostensible authority to enter into the charterparties for NKK. In any case, I consider that the circumstances surrounding the conclusion of these charterparties and the quality of NKK’s evidence provide a compelling reason that this question should be determined at a trial after disclosure and (if NKK call witnesses to give oral evidence) cross-examination.

In all likelihood the terms of the charterparties were agreed through the brokers and probably contractual arrangements were concluded before the signing ceremony on 28 May 2007. There is at least a real prospect that Intermare were informed through the broking chain that the charterparties would be signed by Mr. Watanabe and the inference was that he would do so on behalf of those companies referred to in the description of Owners. I am unable to accept that Intermare have no real prospect of establishing that Mr. Watanabe had at least ostensible authority to conduct the signing ceremony on behalf of NKK as well as NS and SNN. I consider it realistic to regard the event of 28 May 2007 as essentially ceremonial, whether or not there had been a concluded contract for the hire of the vessels before it took place. Whether or not that is so, while I recognise the force of the arguments that Intermare will face at trial, in my judgment that they have a real prospect of establishing that Fairfield had been given authority to enter into the charterparties on their behalf and that their authority had not been terminated; and that by arranging for Mr. Watanabe to sign the charterparties for the Owners, Fairfield and so NKK held him out as having authority to do so. It might be that this contention will be defeated at a trial by evidence about the terms of Mr. Adrichem’s power of attorney or by evidence that at the ceremony Mr. Watanabe presented the power of attorney granted by SNN and so indicated that he was acting only for SNN or by other evidence. However, to my mind those are matters properly explored at a trial and not to be determined summarily, at least upon the evidence presented on this application.

I have referred to the quality of NKK’s evidence as a reason for refusing the application, and I have already explained why I consider that Intermare have a real prospect of persuading the court that relevant parts of NKK’s account, and in particular Mr. Nakanishi’s evidence, should be rejected. Although it might be said that this did not undermine NKK’s essential argument, I am being asked to determine these issues without being properly appraised of the factual context in which they arose. Apart from the difficulty of reconciling Mr. Nakanishi’s evidence with the documents, parts of his account appear curious: for example, it would be surprising if, after NKK had introduced the proposal for the construction of the two vessels, Mr Nakanishi was content to attend the meeting in October 2006 without understanding what was being said. It is also surprising on the face of it, despite the explanation of difficulty in raising finance, that NKK were apparently content to be excluded so readily in about January or February 2007 from the project that they originated. The position about the two larger vessels remains obscure and is, it seems to me, potentially of some significance.

NKK’s evidence is open to criticism for other reasons. Mr Nakanishi stated that he speaks almost no English, but his witness statement was given in English: it was apparently translated to him orally by NKK’s Japanese lawyer, but it was only after Intermare criticised this procedure that a written statement in Japanese was produced and signed by Mr Nakanishi. The witness statements of Mr Clyne and Mr Hughes were so argumentative that I found it difficult to discern when they were giving evidence of fact and when they making submissions in support of NKK’s case.

I therefore conclude that, despite Mr. Karia’s persuasive arguments, the applications should be refused. I am grateful to both counsel for their clear and focused submissions.