Dolphin Maritime & Aviation Services Ltd v Sveriges Angfartygs Assurans Forening (The Swedish Club)  EWHC 716 (Comm)
Contract - Jurisdiction - Inducing breach of contract - Rights of third parties - Damages
The Claimant was a cargo recovery agent and the Defendant was a Swedish P&I Club. The Claimant was engaged by an insurer to recover cargo. The Defendant engaged a ship that collided with an insured vessel. The vessel was wrecked. The insurer paid out the cargo vessel and gained its rights through subrogation. The insurer then engaged the Claimant to recover on its behalf. The Claimant issued a letter of undertaking (LOU) to the Defendant to recover loss on behalf of the insurer. The insurer then settled directly with the Defendant which meant the Claimant did not receive a commission on recovery. The insurer refused to pay the commission so the Claimant brought action against the Defendant for a failure to comply with the LOU.
Whether there was a procurement of contract by the Defendant and whether the Claimant had a claim under article 5(3), s 1 of the Contracts (Rights of Third Parties) Act 1999.
The appeal by the Defendant was allowed. The LOU specified that the payment should be made to the Claimant first or the insurer’s solicitors in order for the Defendant’s duty to be discharged. However, there was no inference that the Claimant would benefit from recovering the payment by these means and did not purport to confer a benefit to the Claimant within the meaning of section 1(1)(b) of the Contracts (Rights of Third Parties) Act 1999. Further, on the proper construction of contract, it did not appear that there was an intention for the term to be enforceable by the Claimant.