Ferryways v. Associated British Ports
Note: this case is presently going to appeal on the issues 1) whether Ferryways suffered a loss as a result of the accident to the Chief Officer; 2) whether Ferryways was his employer and 3) if not, whether Ferryways was obliged to indemnify Ambra for the payment to the Chief Officer’s dependants. The appeal is scheduled to be heard in October 2008. Editor, 19 May 2008
DMC Category Rating: Confirmed
ABP contested the claim on two main grounds: first, that Mr Prutskoy’s employer was not Ferrryways but its crewing manager, Ambra Shipmanagement Ltd of Cyprus; second, that ABP was protected from liability by the terms of its stevedoring contract with Ferryways.
As regards the first, Ferryways had engaged Ambra under a Crew
Management Agreement on the standard form of the BIMCO crew management agreement
known as ‘Crewman A Cost Plus Fee’. The contract was subject to English law.
In it, Ferryways was described as ‘Owner’ and Ambra as ‘Crew Manager’.
Part II of Clause 3 of the contract provided that:
Further clauses in the Crew Management contract provided that Ambra credit Ferryways with all discounts and commissions that Ambra obtained in the course of its management services and that Ambra would be fully indemnified by Ferryways against any liabilities it incurred in performing the contract.
Ambra engaged Mr Prutskoy on the terms of a ‘Voyage Contract’. In it, Ambra was described as the ‘Employer’ and Mr Prutskoy as the ‘Employee’. The contract was subject to the law of the vessel’s flag state. Prior to the date of his final engagement, Mr Prutskoy had served some fourteen months on board the "Humber Way".
The contract provided that ‘the Company’ was to liable for the payment of all wages and compensation in the event of the Employee’s death. There then followed elaborate provisions setting out a Grievance Procedure, involving ultimate escalation to ‘the Company’, a Code of Conduct and Company Policy, in particular, its Safety and Environmental Protection Policy.
Oral evidence from an employee of Ambra established that Ferryways got involved with the selection of junior officers and was responsible for the selection of the Master, Chief Officer, Chief and Second Engineer.
The stevedoring agreement between Ferryways and ABP incorporated
the latter’s Standard Terminal Operator’s and Stevedore’s Conditions.
These provided that ABP should perform its contracted services with ‘reasonable
care and skill’. Clause 9 provided that ABP should have no liability for any
loss suffered by Ferryways of an ‘indirect or consequential nature including
Clause 10 provided that all claims of whatsoever nature must be advised to ABP within fourteen days of the event giving rise to the claim.
He also referred to a passage from the judgment of Lord Lloyd of Berwick in the case of Siu v. Eastern Insurance Co. Ltd.  2 AC 199, at p206/207, where he said:
Nowhere in the contract of employment, however, was it stated that Ferryways was to be the Employer, nor that Ferryways was the principal of Ambra. If Ferryways was to take the benefit of the employment contract it must therefore be as an undisclosed principal, that is, a principal whose existence is not disclosed in the contract of employment. The judge then went on to hold that Ferryways was indeed, an undisclosed principal to the employment contract and therefore exposed to the compensation obligations contained in the contract. Factors on which he relied were the following:
a) there was no express provision in the contract that Ambra was the only person to have the rights and obligations of an employer under the contract;
b) the applicable law of the contract was the law of the vessel’s flag; this was more suggestive of the shipowner/operator being entitled to the rights and obligations of the employer, rather than Ambra.
c) the Grievance Procedure, the Code of Conduct and Company Policy clauses in the contract all suggested that it was envisaged that an entity other than Ambra would have the rights and obligations of the employer under the contract; "the obvious contender is the owner or operator of the ship on which the employee agrees to serve";
d) by the time of the accident, Mr Prutskoy knew that the vessel on which he was serving was owned or operated by Ferryways and he was willing to serve on ships in their fleet.
On this basis, Ferryways, in meeting the claim of Mr Prutskoy’s
next of kin, had simply discharged a liability falling directly upon them under
the employment contract. Had it been Ambra that was liable to the next of kin,
then, the judge held, Ambra would have had a right to indemnity from Ferryways
under the Crew Management Agreement.
applied to this case, since Ferryways were in effect claiming from ABP the amounts paid in settlement of the claim brought against them by Mr Prutskoy. But these words, the judge held, were not effective to exclude the claim, since it was the ‘direct and natural result’ of ABP’s (subcontractor’s) breach of contract. He said, at para.84:
The judge rejected an alternative argument advanced by Ferryways to the effect that they could rely on a further provision in the Stevedoring contract which provided:
"(e) Nothing in this Clause  or in Clause 10 shall exclude or limit the liability of the Company for death or personal injury resulting from the Company’s negligence."
Here the judge preferred the position adopted by ABP, namely that these words applied only to its liability to pay damages to the estate of a deceased person who has died as a result of ABP’s negligence. They did not apply to a claim for indemnity from a Customer in respect of the compensation that the Customer had paid to a third party who had, as in this case, been killed by the negligence of (attributed to) ABP.
As for the notice provisions, the judge held that the notice given on the day following the accident was sufficient compliance with Clause 10. He also held that these provisions, being part of ABP’s standard terms and conditions, were subject to the Unfair Contract Terms Act 1977 but were valid in that they were ‘reasonable’. He said, at para.93
The key preliminary issues were, therefore, determined in Ferryways’ favour.
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