Berge Bulk Shipping Pte Ltd v Taumata Plantations Limited [2025] EWCA Civ 876
On 10 July 2025, the Court of Appeal (Males, Falk and Zacaroli LJJ) unanimously dismissed an appeal against an order holding that the English court had no jurisdiction to hear a claim against three New Zealand companies regarding various letters of indemnity. David Bailey KC and James Goudkamp represented the successful respondents/defendants. The Court’s decision constitutes the leading modern articulation of the law governing undisclosed principals, and is a landmark judgment in the law of agency more generally.
The facts
Three New Zealand companies in the timber industry (“the Exporters”) were sued in the High Court of England and Wales by a disponent ship owner (“Berge Bulk”) for more than US$4.4 million plus certain unquantified indemnities and costs. Berge Bulk alleged that the Exporters were undisclosed principals to letters of indemnity which had been issued to it but which had gone unpaid by the (insolvent) charterer (“TPT Shipping”). The letters of indemnity provided for English jurisdiction. More specifically, Berge Bulk argued that the Exporters had appointed an agent (“TPT Forests”) which in turn had appointed TPT Shipping as a sub-agent, and that TPT Shipping had acted qua agent in issuing the letters of indemnity. There was no dispute that TPT Forests was the Exporters’ agent. The issue was the capacity in which TPT Shipping had acted.
The Exporters’ jurisdictional challenge
The Exporters challenged the Court’s jurisdiction to determine the claims against them. At first instance they contended that there was no good arguable case that they were TPT Shipping’s undisclosed principals (with the result that Berge Bulk was not entitled to the benefit of the jurisdiction clause vis-à-vis them). The Exporters argued that the corporate structure of the TPT group was inconsistent with an agency relationship and there was anyway no meaningful evidence that the Exporters had authorised TPT Shipping to act on their behalf.
The Exporters also submitted that, even if they were undisclosed principals to the letters of indemnity, the doctrine of election had been engaged by steps that Berge Bulk had taken in connection with TPT Shipping’s liquidation, i.e., that Berge Bulk had chosen to treat TPT Shipping as its debtor and were bound by that election.
The judgment at first instance
On 18 September 2024, Mr Christopher Hancock KC, sitting as a Deputy Judge of the High Court, allowed the Exporters’ application and set aside service of the claim form: Yangtze Navigation (Asia) Co Ltd & Anor v TPT Shipping Ltd & Ors [2024] EWHC 2371 (Comm). The Judge accepted that there was no plausible evidential basis for concluding that TPT Shipping was acting other than as principal in both chartering the vessels concerned and in issuing the letters of indemnity. There was, accordingly, no proper foundation for Berge Bulk’s claim that the Exporters were TPT Shipping’s undisclosed principals. On the contrary, the evidence was to the effect that the relevant entities within the TPT corporate group had structured their affairs with a view to ensuring that the risks associated with shipping were borne by TPT Shipping alone. That was inconsistent with the existence of an agency relationship between TPT Shipping and the Exporters.
The appeal
Berge Bulk appealed. Following a two-day hearing in which the Court of Appeal heard submissions on both the doctrine of undisclosed principal and the doctrine of election, the appeal was unanimously dismissed.
Males LJ, delivering the Court’s judgment, upheld the Exporters’ submission that the doctrine of undisclosed principal should not be extended, as Berge Bulk had argued, to cases of fictional actual authority based on an estoppel (i.e., to cases where an alleged sub-agent (here TPT Shipping) was said to have relied on a representation made by the supposed principal (here the Exporters) that an agent (here TPT Forests) had actual authority to bind the principal). He said at [76]:
“The liability of an undisclosed principal arises only when the agent has actual authority to conclude a contract on behalf of the principal. The doctrine of undisclosed principal is already anomalous and should not be extended to the kind of fictional actual authority, arising as a result of an estoppel … [The authority on which Berge Bulk had relied, namely, AJU Remicon Co Ltd v Alida Shipping Co Ltd [2007] EWHC 2246 (Comm)] was not a case of an undisclosed principal, but a case where the agents were purporting to act on behalf of a principal. It is unnecessary to decide whether it is correct in the situation described by Judge Chambers to speak of the agent as acquiring actual authority as a result of an estoppel, but I should not be taken as endorsing that terminology. It is sufficient to say that this principle can have no application to a case of undisclosed principal”.
In circumstances where the Exporters were not TPT Shipping’s undisclosed principals, the issue regarding the doctrine of election fell away. So too did a threshold question as to whether or not CPR 6.33(2B)(b), on which Berge Bulk had relied in an effort to obtain jurisdiction, entailed a merits test. Berge Bulk had argued that CPR 6.33(2B)(b) was indifferent to the merits of the claim with the result that the doctrine of election was irrelevant whereas the Exporters had maintained that the English court has a residual discretion to decline jurisdiction despite the fact that CPR 6.33(2B)(b) dispenses with the need to seek permission to serve the claim form outside the jurisdiction. That threshold question will need to await an answer in a future case.
Significance of the case
The Court of Appeal’s judgment imposes an important limitation on the doctrine of undisclosed principal. It endorses a restrictive approach to what Lord Sumption in Playboy Club London Ltd v Banca Nazionale del Lavoro SpA [2018] UKSC 43, [2018] 1 WLR 4041 at [12] described as “an anomalous legacy of eighteenth and nineteenth century jurisprudence, which survives in the modern law on account of its antiquity rather than its coherence”. Some not inconsiderable re-writing of certain textbooks on the law of agency will be required.
David and James were instructed by Herbert Smith Freehills Kramer LLP (Natasha Johnson, Alec Milne, Ella McDonnell and Rebecca Slimming). Their clients were Taumata Plantations Limited, Tiaki Plantations Co and OPTT New Zealand Forest Investments Limited.
To view a copy of the judgment please click here.