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Know your counterparty – the pitfalls of undisclosed principals16 September 2025

It is not always easy to navigate the complex ownership and management structures of commercial vessels, given the numerous parties often involved.

"The Commercial Court recently delivered an interesting ruling as to the identity of charterparty owners in a jurisdictional challenge."

The Commercial Court recently delivered an interesting ruling as to the identity of charterparty owners in a jurisdictional challenge. The court’s judgment in White Rock Corporation Ltd (“White Rock”) v Middle Volga Shipping Company (“Middle Volga”) and North Global Denizcilik Ithalat Ve Ihracat Ticaret Limited Sirketi (“North Global”) [2025] EWHC 2089 (Comm) serves as a salient reminder of the importance of clearly identifying contractual counterparties.

Background

A charterparty for four vessels was fixed on 25 March 2022. The recap identified White Rock as charterers and referred to the registered owners “as per attached Q88”. The Q88 forms noted that Hai Ocean was the registered owner of one of the vessels and Global Logistics & Heavy Industries Inc (“GLHI”) was the registered owner of the other three vessels. North Global was referred to in the Q88 forms as the “disponent owner”, as well as the technical and commercial operator. Middle Volga was not mentioned in the Q88 forms.

Only three of the four vessels were delivered to White Rock under the charterparty and following a collision involving one of the remaining vessels, they were – between March 2023 and February 2024 – withdrawn from charter service.

On 25 March 2024, almost a month after the withdrawal of the last of the delivered vessels, White Rock issued a claim form against Middle Volga and North Global, seeking US$12.6m for wrongful withdrawal of three of the vessels and non-delivery of the fourth.

Having been served with the claim form, Middle Volga issued an application under CPR Rule 11(1) challenging jurisdiction on the basis that, as they were not party to the charterparty, they were not bound by its English jurisdiction agreement.

The question at hand for the Commercial Court was “whether the Charterers have established a good arguable case that they had contracted with Middle Volga by the terms of the Charterparty, by which Middle Volga was bound by the English jurisdiction agreement.”

The Parties’ Submissions

Middle Volga submitted that they were not the contracting party with White Rock, and that White Rock had no arguable case that North Global intended to contract as agent for Middle Volga. Their arguments included the following:

  1. the charterparty signed by White Rock makes clear that the contracting parties are White Rock and North Global;
  2. nothing in the invoices suggested North Global was acting as an agent only (for Middle Volga);
  3. there is a strong presumption that a party described as “owner” is the contracting party responsible for chartering the vessel – relying on the decision in Humble v Hunter (1848) 12 QB 310;
  4. the Q88 forms expressly describe North Global as “disponent owner”, which would be “squarely inconsistent” with Middle Volga being a contracting party; and
  5. there were head charterparties agreed between Middle Volga as owner and North Global as charterer, which is inconsistent with White Rock’s position that Middle Volga chartered the vessels directly to White Rock.

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"White Rock submitted that they believed that they were chartering from Middle Volga, with North Global as only the commercial and technical managers for the vessels."

White Rock submitted that they believed that they were chartering from Middle Volga, with North Global as only the commercial and technical managers for the vessels. They put forward arguments that:

  1. Middle Volga was the registered owner of three of the vessels and disponent owner of the fourth;
  2. the head charterparty between North Global and Middle Volga was either not a genuine document or a sham to give the appearance that Middle Volga was not the direct charterer to White Rock. As a result, North Global was acting as agent on behalf of Middle Volga, with the latter being an undisclosed principal;
  3. the timing of the charterparty, being very shortly after the Russian invasion of Ukraine on 24 February 2022, meant that there was every incentive for documentation not to reflect reality given that Middle Volga was a Russian company; and
  4. the issued Protocols of Delivery each stated Middle Volga as the owner.

Decision/Analysis

The Commercial Court held that Middle Volga had the better of the argument in support of its case that it was not a contracting party to the charterparty with White Rock and therefore the Court did not have jurisdiction. The decision highlighted:

  1. the designation of North Global as “disponent owner” of the vessels on the Q88 forms, such that the vessels had been chartered from Middle Volga and onwards to White Rock;
  2. the recap stating that “owners confirm that the vessel has no connection with Russia including but not limited to commercial ties”, which was indicative of an intention that Middle Volga was not a contracting party; and
  3. the Protocols of Delivery – the only documents supportive of White Rock’s position – would not be outweighed by the other contractual documents which supported Middle Volga’s position.

"The Commercial Court held that Middle Volga had the better of the argument in support of its case."

On the position as to undisclosed principal, the Commercial Court referred to the comments made in The Magellan Spirit [2016] about the presumption that a person named in a contract is the principal and convincing proof being needed in order to displace that presumption and establish that the named person was contracting on behalf of an undisclosed principal. The court here clarified that the first step was for it to consider the terms of the contract in question and if required, to then examine the surrounding circumstances. Its conclusion was that the contract indicated that the contracting party was North Global, not Middle Volga and the surrounding circumstances made the position even clearer.

Key Takeaways

  • The case provides a useful reminder of the position as to undisclosed principals and the Commercial Court’s strict approach on this point.
  • Equally, the Commercial Court is willing to maintain a commercial approach when considering the identity of contractual parties and is prepared to look beyond the contract if necessary.
  • This decision provides a salient lesson for parties to maritime contracts to ensure maximum clarity in their contractual provisions with respect to party identification and the need for consistency in identifying the contractual relationship in other documentation, such as invoices and protocols of delivery.

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