In The Ever Given [2024] EWCA Civ 260, the Court of Appeal has upheld the decision of Andrew Bake J that no salvage contract came into being between the shipowners and the salvors, SMIT, in connection with the assistance rendered to the vessel when it became stuck in the Suez Canal in March 2021. Andrew Baker J found, on a preliminary issue, that no salvage contract had come into existence between the parties. Instead, Smit’s claim for salvage, in respect of its services in successfully refloating the vessel and bringing it to a place of safety, fell under the 1989 Salvage Convention, with the quantum of the claim to be determined by the Admiralty Court. The parties had reached agreement on remuneration on 26 March 2021 but that was not enough to show that they had concluded a contract. In that email exchange the parties made it clear to each other that they were still negotiating, and showed the detailed work of negotiating the contract terms by which they would be bound. They did not communicate to each other an intention to be bound in the absence of completing that work of negotiating and agreeing a detailed set of contract terms. That further work was not completed, as a counter-proposal on detailed terms later sent by Capt Sen put the parties some considerable distance apart, and that gap was never closed.
The Court of Appeal, for whom King LJ gave the leading judgment, agreed. Owners bore the burden of proving that the parties’ exchanges unequivocally showed an intention to be down, and they fell considerably short of doing so. At the very least the exchanges with SMIT were consistent with there being no intention to be legally bound until all outstanding matters were agreed, which was not good enough for owners’ purposes.
The series of ultimatums did not undermine this analysis. At no stage did SMIT suggest, either unequivocally or at all, that it would be content with a binding contract dealing only with remuneration terms. The urgency to conclude a contract did not continue with the same intensity when the parties reached agreement on the terms of remuneration. However, once the refloating attempt on 26th March had failed, SMIT was in a strong commercial position as the vessel still needed to be refloated without further delay and it was becoming increasingly apparent that SMIT was, in effect, the only realistic means by which this could be done. If the owners would not agree to SMIT’s terms, it was increasingly likely that SMIT would at least be entitled to some form of salvage award. This defused the urgency of the situation for SMIT whose engagement of the tugs ‘ALP GUARD’ and ‘CARLO MAGNO’ became less and less and less of a speculation.