Case Summary: Dolphin Maritime Aviation v Sveriges [2009] E.W.H.C. 716

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Legal Principles and Key Points

• In the case of Dolphin Maritime Aviation v Sveriges [2009] E.W.H.C. 716, it was held that tortious claims for procuring or inducing breach of contract and conspiracy to use unlawful means could be brought in England where such breach meant that money that should have been transferred to an English agent under contract never entered the country.

Facts of the Case

• D was a Swedish P & I Club providing insurance cover for shipping matters.
• A cargo vessel covered by D collided with another vessel and was wrecked.
• The insurers of the cargo instructed C, a recovery agent, to seek compensation in respect for themselves and the owners.
• C negotiated agreements between the vessel owners and the insurers. One agreement provided for any recovery to be paid into C’s client account to stand as security for any settlement.
• In February 2008, a meeting took place between the parties without C’s knowledge. D agreed to pay $8.5 million directly to the insurers.
• C was notified on 18th February about the direct negotiations. On 19th March, C sent an invoice for their commission. On 25th March, the insurers declined to pay and offered a substantially lesser commission.  
• On 14th May 2008, the vessel owners concluded their settlement agreement with the insurers, subject to English law. The transfer of money was to be made directly between the parties without C’s involvement.
• C wrote to D instructing them not to make the payment as this would constitute a breach of contract and tort of conspiracy.
• Around 21st May, D made their payment to the insurers.

Issues

• Did the English court have jurisdiction if, by the contract terms, the money should have been received by C in London?
• Did the wording of the contract confer a benefit on C that should be enforced?

Held by the Queen’s Bench Division (Commercial Court)

• Finding for D, that the damage-C being bypassed-occurred in England, meaning that the English Court had jurisdiction to assess and enforce C’s action if successful.
• It did not appear that the provision for payment to C was intended to be enforceable by C. Therefore, D was entitled to a summary judgment on the claim in contract.

Christopher Clarke J

• D is domiciled in Sweden. Mines de Potasse d’Alsace SA (Case 21/76) [1978] 1 QB 708 enables claimants to commence proceedings ‘at the place where the damage occurred or the place of the event giving rise to it.’
• C submits that D was in breach of the agreement when they entered into an agreement bypassing payment to C’s client account. While C would not benefit from this money, it acted as security in case payments were not made. This analysis must be made under English law since this governed the contract between C and D.
• C submits that, under their terms of agreement with D, ‘recovery’ includes both a claim and any money obtained through the claim being agreed or settled. There is a strong case that the insurers were bound to procure that the sums recovered directly from D were paid in the first instance to C.
• It seems unreasonable that the parties drafting the agreement intended the provision for payment to C to preclude payment to the underwriters directly.
• “If such a right was intended to exist it is unclear what the position would be if solicitor /solicitors were appointed by the underwriters. It would be surprising if C, assuming it had a right beforehand, would now have no right at all. If, in those circumstances, it had any right it would, presumably, be a right held jointly with the solicitor(s) to have the settlement monies paid either to C or an appointed solicitor. Whether or not that right would be of any value would presumably depend on whether it could be established that, if C had not paid the underwriters direct, it would be more likely to have paid C. It is unrealistic to suppose that the parties contemplated this issue ever arising” [81].
• I do not consider it arguable that the parties to the argument intended that the provision for payment to C or the solicitors should be enforceable by C. On the contrary, that provision appears in its commercial context to be a standard provision as to the mode of discharge of an obligation undertaken for the benefit of the insurers.