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First and Final Award

PARTIES

1.

The Claimant is Watergate Technical Services Limited, a company incorporated in Nigeria with its registered office at No 4, First Crescent, Off Road 2, Rumuibekwe, Port Harcourt, Nigeria. The Claimant provides marine services, including remotely operated vehicle (ROV) services and hire. The Claimant is represented in this arbitration by

[Person 1]
Emeka Onyeka & Co
1st Floor, 106, Old Aba Road (Opp. Ugorji House)
Rumuobiakani
Port Harcourt
Nigeria

2.

The Respondent is Fathom Offshore Services Limited, a company incorporated in the United Kingdom with its registered office at Cirrus Building, 6 International Avenue, Abz Business Park Dyce, Aberdeen, Scotland AB21 0BH. The Respondent is a shipbroker and provides brokering services for offshore diving, ROV and subsea projects in West Africa and elsewhere. The Respondent is represented in this arbitration by

[Person 2]
Brodies LLP
15 Atholl Crescent
Edinburgh EH3 8HA
United Kingdom.

OVERVIEW OF THE DISPUTE

3.
This arbitration arises under a written agreement dated 11 July 2017,1 which was signed on behalf of the Claimant on 4 October 2017 (incorrectly written as 2016) and on behalf of the Respondent on 5 October 2017. The agreement is called a Commission Agreement, but both parties refer to it as the Brokerage Agreement. I will adopt that term.
4.

The Claimant claims $225,127.872 for ROV services/hire it says it provided under the Brokerage Agreement. The Respondent says that the services were provided by the Claimant under a contract with CNS Marine Nigeria Limited (CNS), and that CNS, not the Respondent, is responsible for paying the Claimant.

ARBITRATION AGREEMENT

5.

Clause 6 of the Brokerage Agreement provides as follows:

This commission agreement shall be governed by and construed according to the laws of England. Any dispute arising out of or in connection with this agreement shall be solved by amicable settlement. In the case of lack of agreement within a period of two (2) months shall be finally settled under the rules of Arbitration of the international chamber of commerce by one or more arbitrators appointed in accordance with the said rules. The arbitration shall be held in the English language and shall take place in London, England.

6.
Therefore, in accordance with the parties' agreement, the seat or juridical place of arbitration is London, England, English law is applicable, and the arbitration is to be conducted in the English language. The Expedited Procedure Provision of the ICC Rules of Arbitration 2017 (Rules) apply.

PROCEDURAL HISTORY

7.
Solicitors for the Claimant wrote to the Respondent on 8 March 2018 seeking payment of invoices for the amounts claimed in this arbitration.3 Solicitors for the Respondent replied on 15 March 2018 denying liability.4 Attempts to arrange meetings to resolve the dispute were unsuccessful.
8.

On 27 May 2019 the Claimant issued its Request for Arbitration, accompanied by the witness statement of [Person 3], [employee] of the Claimant, dated 27 May 2019 ([Person 3] WS), and documentary evidence. The Request for Arbitration was acknowledged by the Secretary General of the ICC Court on 5 June 2019.

9.
On 7 June 2019, the Secretariat of the ICC Court sent notice of the Request for Arbitration to the Respondent at the address given in the Request for Arbitration,5 namely: Unit 2, Lower Square, Aboyne, Aberdeenshire AB34 5HX, United Kingdom. This was returned marked 'address is incomplete.' At the Claimant's request, on 18 June 2019 the Secretariat sent notice of the Request for Arbitration to the Respondent at Riverside House, Riverside Drive, Aberdeen AB11 7LH, United Kingdom and to an email address for [Person 4].
10.
On 11 June 2019, the Claimant invited the ICC Court to appoint a sole arbitrator.
11.

On 22 July 2019, the Secretariat informed the parties that that the 30-day time limit for the Respondent to file an Answer had expired on 18 July 2018. The Secretariat also informed the parties that having regard to the amount in dispute the Expedited Procedure Provisions (Rules, Art 30) shall apply.

12.
On 29 July 2019, the Respondent's counsel sent an email to the Secretariat requesting an extension of time to file an Answer to 28 August 2019. On 30 July 2019 the Respondent's counsel notified the Secretariat that the Respondent was content for a sole arbitrator to be appointed. The Secretariat replied on 30 July 2019 that, as the time limit for filing an Answer had expired, it could not be extended, but any Answer would be transmitted to the arbitral tribunal, once constituted.
13.
On 2 August 2019, the Respondent issued its Answer, received at the Secretariat on 6 August 2019.
14.
On 12 August 2019 the Claimant issued a Reply. The Claimant's counsel sent the Reply to me by email on 27 August 2019.
15.

On 8 August, 2019 the ICC Irish National Committee proposed me, Eamonn Conlon, of North Wall Quay, Dublin 1, Ireland, as sole arbitrator. The ICC Court confirmed my appointment on 18 August 2019. On 20 August 2019 the Secretariat transmitted the file to me. By email to the Secretariat and counsel for the parties dated 20 August 2019, I acknowledged receipt of Secretariat's correspondence.

16.

On 21 August, 2019 I sent counsel for both parties an email proposing that the case management conference required by the Rules be held by telephone on 2 September 2019. I requested the parties to send me, by 28 August 2019, their clients' VAT numbers, and copies of the Request for Arbitration and Answer in MS Word format. I also requested agreed (if possible, otherwise individual) proposals on:

  • What further submissions and evidence are required, and whether submitted consecutively or simultaneously
  • Whether document production is requested
  • Whether a hearing for oral evidence or submissions is requested
  • Timetable for the above procedural steps, consistent with the Expedited Procedure
  • Any other matter relevant to the conduct of this arbitration
17.
Following correspondence between the tribunal and the parties, the time agreed and fixed for the telephone case management conference was 30 August 2019 at 9.00 London time.
18.
On 27 August 2019, counsel for both parties exchanged and submitted to me their respective Notes on Arbitral Procedure, in which both parties requested that the arbitration be decided based on the documents already submitted. I sent counsel for both parties a draft Procedural Order later the same day.
19.

Both counsel and I dialled in to the case management conference at the appointed time on 30 August 2019, but unfortunately counsel for the Claimant could not be heard. Accordingly, I directed that both parties submit updated proposals by email that day, in the following terms:

The case management conference required by article 24 of the ICC Rules (and article 3(3) of the Expedited Procedure Rules) was held by telephone at 9:00 am today, London time. Counsel for the respondent, Mr [Person 2], appeared by telephone. My skype screen indicated that counsel for the claimant, Mr [Person 1], had dialled-in but his microphone was muted. Unfortunately, I was unable to hear him.

I indicated at the case management conference that, as the claimant's counsel was unable to participate, I would direct both parties to submit by email today their proposals on the procedural order. Mr [Person 2] said that his client wished to produce a responsive witness statement the week after next, and I asked him to put this in his email proposal.

Accordingly, I direct both parties to email me their proposals on the content of the procedural order today (copying each other and the secretariat as usual).

As noted in my draft procedural order, I propose to give the parties an opportunity to make submissions on quantum, interest and costs. On costs, I would ask the parties to indicate whether they wish the tribunal to deal with the amount of recoverable costs, or have them dealt with by the court in accordance with section 63(4) of the UK Arbitration Act 1996.

Having considered the parties submissions, I propose to issue Procedural Order No 1 on Monday, 2 September.

20.

On 30 August 2019 counsel for the Respondent sent an email recapitulating the Respondent's defence (discussed below) and stating as follows regarding procedural matters:

Further Procedure

The Respondent intend to lodge a witness statement from [Person 4], [legal representative] of Fathom, addressing the Reply by the Claimant, Quantum, Interest and Costs, and two further productions; a letter from CNS, confirming that the Claimant’s invoices were sent by the Respondent to CNS, and the emails from the Respondent to CNS, attaching the invoices. The Respondent seeks fourteen days to lodge and intimate same.

Advance on Costs

The Respondent is unable to meet the advance on arbitration costs due by 13 September, but, in a spirit of candour, outline that now. It is open to the Claimant to meet the Respondent’s share of the advance to progress the arbitration.

Caution/Consignment for Fathom’s legal expenses

The Respondent seeks an order to oblige the Claimant to consign such sums as the arbitrator considers appropriate in respect of the Respondent’s legal costs, as an Interim Measure under Article 28, within fourteen days. The Respondent suggests £20k, or such other sum as the arbitrator consider appropriate.

The Respondent is prejudiced in defending this misguided arbitration as a result of their lack of funds.

Even if the Respondent is successful, they will require to recover their costs from the Claimant at their domicile in Nigeria. This will require the Respondent to instruct Nigerian lawyers to raise proceedings for recognition and enforcement of any arbitral award in their favour. This is likely to be costly and, it is my understanding, slow.

21.

Later on 30 August 2019, counsel for the Claimant sent an email addressing the Respondent's defence (discussed below) and stating as follows regarding procedural matters:

Further Step (Procedure)

The Claimant also wish to react to any new or factual issue(s) raised in the Respondent's further written document including the alleged letter and emails. The Claimant therefore seeks four (4) days after receipt of service (via email) of the Respondent's further document and productions to file its reaction, Quantum, Interest and Costs.

i. Advance on Cost

ii. Caution/Consignment for Fathom's legal expenses

There is no denying the fact that the Respondent from the outset intends to delay and frustrate this proceeding, reference is made to the Respondent's delay and/or evasive attitude in accepting or acknowledging receipt of the Claimant's Request for Arbitration at its 2 last known addresses including the Secretariat's services via email. The Tribunal is hereby further put on Notice of the Respondent’s dishonourable conducts.

There is also no reasonable ground or justification for the Respondent’s Interim measure application under Article 28 other than a clear strategic plan to delay and frustrate the proceeding.

From the amount claimed, it is apparent that the Claimant is struggling but determined to survive irrespective of action(s) of the likes of the Respondent. The Claimant however, cannot also be exonerated, if successful in this matter from spending more funds, even if it means obtaining loan at exorbitant cost to recover her costs from the Respondent from her domicile in the United Kingdom.

22.

Further to the above, on 2 September 2019, I issued Procedural Order No 1 as follows:

The file in this arbitration was transmitted to the tribunal electronically on 20 August 2019 and subsequently in hard copy. The case management conference was, by agreement of the tribunal and counsel for both parties, scheduled to be held by telephone on 30 August 2019 at 9:00 London time. Prior to the case management conference, counsel for both parties had submitted Notes on Arbitral Procedure.

The tribunal and counsel dialled in to the case management conference at the appointed time but unfortunately, counsel for the claimant could not be heard. Accordingly, I directed that both parties submit updated proposals by email that day (30 August 2019). Both parties, through their counsel, did so.

Further to the above, I direct as follows:

  1. By 13 September 2019, the respondent shall file a witness statement of [Person 4], [legal representative] of the respondent, together with the additional documents set out in Mr [Person 2]'s email of 30 August 2019.

  2. By 20 September 2019, the claimant may file a response to the respondent's submission at 1 above.

  3. Each party may deal in the above submissions with the following:

    (a) The quantum of the claimant's claim

    (b) The claimant's claim for interest at the Nigerian Banks overall lending rate from 7 October 2017, including details of the amount claimed and the legal basis of the claim

    (c) The parties' claims for costs, including whether the parties wish the tribunal to assess the amount of recoverable costs and, if so, details of the costs claimed.

  4. Submissions shall be sent by email to the arbitral tribunal, the court secretariat and the other party's counsel. The covering email for each submission shall show that this has been done. Submissions shall be in searchable PDF or MS Word format. Any accompanying documents shall be also sent by email (which may include sharefile) and, as far as possible, shall also be in searchable format. A hard copy of each submission and any accompanying documents shall be sent to me by courier, to be received no later than 2 days after the due date.

  5. By agreement of both parties: the above will complete the written procedure (subject to any further direction of the tribunal); there will be no oral hearing or examination of witnesses.

  6. I will rule on the respondent's application for security for costs by separate ruling.

  7. I will retain documents submitted by the parties for 2 months after the final award has been rendered. Unless parties ask to recover documents, I may then destroy them.

  8. The parties shall undertake to pay any VAT applicable to the arbitrator's fee to the arbitrator or his firm upon presentation of an invoice. The parties shall also undertake to pay to an account administered by the ICC any retainer on account of VAT directed by the arbitral tribunal.
23.
As noted above, on 30 August 2019 counsel for the Respondent applied for an order directing the Claimant to provide security for costs. I refused this requested order in a ruling dated 2 September 2019 on the ground that the Respondent had not proven, or alleged, that the Claimant would not be able to discharge a costs award.
24.

As the case management conference was held on 30 August 2019, in accordance with the Appendix VI, Article 4(1) of the Rules, the arbitral tribunal must render its final award by 29 February 2020. No extensions to this time limit have been sought or made.

25.

In accordance with Procedural Order No 1, the Respondent served a witness statement of [Person 4], its [legal representative] dated 12 September 2019 ([Person 4] WS), and accompanying documentary evidence on 13 September 2019; and the Claimant served its Response to the Respondent's Submission and Quantum of Claim, Costs and Interests (Response) on 17 September 2019.

26.

By email dated 18 September 2019 I thanked the parties' counsel for their timely submissions and, in accordance with Article 27 of the Rules, noted that this closed the submissions and that I would proceed to award.

JURISDICTION

27.

Section 30 of the UK Arbitration Act 1996 (the Arbitration Act) provides that, unless otherwise agreed by the parties, the tribunal may rule on its own substantive jurisdiction, that is, as to:

  1. whether there is a valid arbitration agreement,
  2. whether the tribunal is properly constituted, and
  3. what matters have been submitted to arbitration in accordance with the arbitration agreement.
28.
No party has objected that there is no valid arbitration agreement.
29.
No party has objected that the tribunal is not properly constituted.
30.
The matters submitted to arbitration are the claim of the Claimant set out in the Request for Arbitration and the defence of the Respondent set out in its Answer (as summarised above at paragraph 4), including the Claimant's claim of interest and the Claimant's and Respondent's claim of costs. No party has objected that these matters are not subject to the arbitration agreement.
31.
Accordingly, I am satisfied that the tribunal has all the aspects of substantive jurisdiction to determine the matters submitted to arbitration.

THE FACTS

32.

The Claimant had been having discussions with the Respondent over a lengthy period, and had sent the Respondent a commercial proposal on 22 September 2016. Initial discussions were between Mr [Person 3], the Claimant's [employee], and Mr [Person 5] of the Respondent. At some point these discussions were taken over on the Respondent's side by Mr [Person 6], who was Mr [Person 5]'s late father and [legal representative] of the Respondent.6

33.
The Respondent had been requested by CNS Marine Nigeria Limited (CNS) to locate an ROV to be installed on the construction vessel Siem Daya 1. CNS is an offshore diving and subsea contractor. It was a subcontractor to Petro Pride Subsea Limited (PPSL), which in turn had a contract with Mobil Producing Nigeria (MPN) to carry out work on pipelines in Nigerian coastal waters. PPSL chartered the construction vessel 'Siem Daya 1'.7 MPN is sometimes referred to by the parties as Exxon Mobil.
34.
On 11 July 2017, the late Mr [Person 6] contacted Mr [Person 3] asking whether the Claimant's Falcon ROV was available for hire, and asked for a commercial proposal. The Respondent asked the Claimant to include 2.5% commission in its commercial terms. The Claimant provided the proposal the same day.8
35.
The Claimant's commercial proposal of 11 July 20179 is entitled: 'PROPOSAL FOR PROVISION OF ROV SERVICES FOR FATHOM'. It includes daily rates for an ECA H100O light work ROV and for a Seaeye falcon inspection ROV, for each, two ROV supervisors and two ROV pilot technician trainees, and rates for mobilisation and demobilisation. It states that these rates include 2.5% commission.
36.
On 23 August 2017 the Respondent asked the Claimant whether the Falcon ROV 'is prompt available; this would be to mobilise aboard the Siem Days 1 which is in Onne.' The Claimant responded the same day that the ROV was available, asking for the programme and schedule. Still the same day the Respondent answered: 'Hope to get you an update in the morning, should be quite prompt. I have asked Cns Marine to let me know first thing tomorrow morning.' The next day the Respondent asked the Claimant for a packing list and identification papers for the Claimant's personnel so that they could be cleared to board. The Respondent asked What Form of Contract do you want to use? An open draft would be good.' The Claimant forwarded the packing list.10
37.
On 6 September 2017 the Respondent sent the Claimant a revised commercial proposal.11 Mr [Person 3] says that the revised proposal used 'standby rate being the lowest rate In the industry and, late [Person 6] was clear about the fact that the amount was for all circumstances in the entire duration of the hire of our vehicle and personnel.12
38.
The Claimant's revised commercial proposal of 6 September 201713 is entitled: PROPOSAL FOR THE PROVISION OF ROV SERVICES FOR FATHOM OFFSHORE/CNS MARINE'. It includes daily rates for the Seaeye Falcon Inspection ROV only, two ROV supervisors and two pilot technician trainees, and rates for mobilisation and demobilisation. Again, it states that these rates include 2.5% commission. Payment terms are stated as follows: payment for the first 15 days before the equipment departs the Claimant's base; invoices for the balance sent at the end of each month or the end of the project whichever comes first; each to be paid within 30 days. The proposal also states that it is 'based on understanding of a 6 months project as the case maybe.'
39.
Also on 6 September 2017, the Respondent replied: 'Well received and I have forwarded to Cns for their review and comment, are you not able to give a standby rate for the vehicle at all?' The Claimant replied: 'Like I mentioned to you earlier the rate we gave you is a standby rate, as such we can't be able to do down further.' The Respondent replied: 'Yours all noted and I will let them know.14
40.

The next day, 7 September 2017, the Respondent emailed the Claimant:

Can you send the vehicle to the Siem Daya 1 at Brawl Jetty tomorrow morning, I understand that [Person 7] from CNS will issue PC tonight, please advise what he needs to put in the PC, he is speaking with your Ugo Owner in parallel.15

41.

On 8 September 2017 the Respondent emailed to the Claimant a CNS Purchase Order of that date.16 The email stated:

As per my earlier, please find attached from Cns Marine for the hire of the Falcon ROV and operators to be delivered to the 'Siem Daya 1’ at the Brawal Jetty this morning. .

The email also gave contact details for the CNS representative onboard, [Person 8].

42.

The Purchase Order17 is in the name of CNS. it is signed on behalf of CNS. It identifies the Claimant as the vendor. It includes the unit prices quoted in the Claimant's commercial proposal, extended out for 60 days, not 6 months. It states:

Equipment & Crew go on-hire at Siem Daya 1 mobilisation by MPN and off-hire at completion of project estimated at 60 days.

And: 'Invoices to be paid not more than 30 days of receipt.'

43.
The Claimant responded the same day pointing out a mistake in the Purchase Order: the unit prices for crew were not multiplied by two, although there were two of each category of crew. The next day, 9 September 2017, the Claimant sent a reminder, and also asked about provision for feeding the Claimant's personnel. The Respondent replied: 'You should have received the revised PO by now, sent about 10 minutes ago.' Subsequently the Respondent informed the Claimant: Either [Person 8] or [Person 9] will inform you when personnel are to join, they will need to comply with Exxon Mobil MOH certification re medical, TB screening etc., can you send me copies of their certification please.18
44.
The corrected Purchase Order19 is identical to the first, save for the corrected multiplication.
45.
There may be a factual issue between the parties as to how the corrected Purchase Order was sent to the Claimant. For the reasons given below, I find that the Respondent sent it to the Claimant.
46.

The Claimant delivered the ROV as instructed on 8 September 2017. The Claimant also delivered a waybill dated 8 September 2019 addressed:

ATTN: Capt. SIEM DAYA 1
CNS INTERNATIONAL /FATHOM SUBSEA
Brawal Jetty, Onne, Rivers State.

It is signed on behalf of the Claimant and also: 'Received by [Person 8] 08/09/17'.20

47.

On 4 and 5 October 2017 the Claimant and Respondent respectively executed the Brokerage Agreement, dated 11 July 2017.21 The Respondent returned a countersigned copy to the Claimant by email on 5 October 2017. The email stated:

Once the mobilisation is completed and invoicing can be generated it would be most useful if you could forward your invoices to ourselves in the first instance for on pass to Cns Marine, that way we can provide any assistance needed.

The email also referred to Exxon Mobil’s requirements concerning operation procedures for the Claimant's staff.22

48.

It came to the Claimant's attention that the Siem Daya 1 had cast off from Onne with the Claimant's equipment on board, but not its personnel.23 The Claimant notified the Respondent on 11 October 2017:

We understand that the vessel Siem Daya 1 has departed for Offshore, would you please update us on the programme.

Also we don't have any person onboard to look after the equipment, just for your information.24

49.

On 17 October 2017 the Claimant sent an invoice for the first 30 days to Mr [Person 6], who acknowledged receipt.25 The invoice, dated 16 October 2017, was addressed to

Customer
Name: CNS MARINE NIGERIA
C/O Mr [Person 6] (sic) (Fathom Subsea Uk)

at an address in Lagos State, Nigeria and the following email address: [Redacted]. The amount of the invoice was $59,815.87 including VAT. It covered the period 8 September 2017 to 7 October 2017.

50.
Mr [Person 6] submitted the invoice to CNS on 18 October 2017. On or about 20 October 2017, Mr [Person 6] was hospitalised. Sadly, he died on 26 October 2017. Around 23 October 2017 Mr [Person 4] took over his duties in relation to the contract with the Claimant. Mr [Person 4] had received a copy of the Claimant's 17 October 2017 email forwarding the invoice. He submitted the Claimant's invoice to CNS on 23 October 2017 and again on 25 October 2017, unaware at the time that Mr [Person 6] had already done so.26
51.

On 9 November 2017 Mr [Person 3] sent Mr [Person 4] an email, apologising for having to bother him at that time, reminding him of the first invoice, and forwarding a second invoice for the second 30 days.27 The second invoice, dated 8 November 2017, was addressed to

Customer
Name: CNS MARINE NIGERIA
C/O Mr [Person 4] (Fathom Subsea Uk)

at the same address as the first. It covered the period 8 October 2017 to 6 November 2017. The Respondent forwarded it to CNS on 14 November 2017.28

52.
On 14 November 2017 CNS informed Mr [Person 4] that it did not intend to pay the Claimant as the vessel had not yet been mobilised by MPN, and, under the Purchase Order, payment only began on such mobilisation.29 Mr [Person 4] informed Mr [Person 3] of this by email the same day. Mr [Person 3] responded that the vessel has been in the field working for MPN for about two months. Mr [Person 4] responded that the vessel was sitting offshore but no operations had commenced. He expressed his view that the Purchase Order clearly provided that no daily charges were payable until the vessel was mobilised by MPN.30
53.

Further correspondence failed to resolve this difference of views.31 On 15 November 2017 the Claimant reissued the two previous invoices, addressed to the Respondent.32 These invoices were addressed to

Customer
Name: Fathom Offshore Services Limited Uk
Attn: Mr [Person 4]

at an address in Scotland. They were also dated 16 October 2017 and 8 November 2017. Mr [Person 4] says that the Respondent immediately notified the Claimant that it had no right to invoice the Respondent, as it was a broker only.33

54.
The Claimant sent the Respondent a third invoice dated 6 December 2017, for $51,660, covering the period 7 November 2017 to 6 December 2017.34
55.
The Claimant received its ROV back on 11 January 2018, and notified the Respondent of this on 12 January, asking for an update on payment. Mr [Person 4] replied the same day that he would 'request CNS to update on their payment plan.' On 15 January 2018 Mr [Person 3] emailed the Claimant's final invoice to Mr [Person 4].35 This invoice,36 for $61,992, covered the period 6 December 2017 to 11 January 2018. Mr [Person 4] replied on 15 January 2018: 'Your invoice customer as per your PC is CNS Marine in Nigeria.’ He wrote that, under the Brokerage Agreement, it is the Respondent who would invoice the Claimant for its commission on the basis of 'pay when paid.' He said that the Claimant had no contractual authority to invoice the Respondent, that he had previously advised Mr [Person 3] of this. He said that while the Claimant continues to be in breach of the agreement the Respondent would provide no further services to the Claimant.37
56.
Mr [Person 10] of the Claimant responded on the same day stating that the Respondent had forwarded CNS's Purchase Order to the Claimant, and was therefore responsible for CNS's decisions on the project.38

FACTUAL ISSUE: HOW WAS THE CORRECTED PURCHASE ORDER SENT TO THE CLAIMANT?

57.
While it is clear that the Respondent emailed the original Purchase Order to the Claimant on 8 September 2017,39 there may be an issue about whether CNS sent the corrected Purchase Order directly to the Claimant, or whether it was sent via the Respondent. As noted above,40 by email on 9 September 2017 the Respondent stated to the Claimant that the corrected Purchase Order had been sent about 10 minutes ago.
58.

Mr [Person 3] says:

the Respondent's client [CNS] through the Respondent issued a Purchasing Order (the 'PO') including the amended PO dated 8 September, 2017 to us for hire of our equipment and personnel for the project estimated to last 60 days.41

59.

In its Answer the Respondent pleads:

The Claimant requested modification to the rates stated in the original PO submitted by CNS on 8 September 2017. A revised PO was submitted by CNS to the claimant on 9 September 2017. The Claimant requested that CNS sign the revised PO. CNS signed the revised PO (WT8).42

60.

In its Reply the Claimant pleads:

The Claimant was neither introduced as a contractor or supplier at any point or given any access by the Respondent to its Client throughout the build up to the project, more importantly, the PO (WT8) for the hire/project was not directly sent to the Claimant but, through the Respondent.43

61.

Mr [Person 4] says:

During the period of July 2017 to August 2017, [Person 6], at the time the [legal representative] of Fathom, negotiated a suitable commercial offer from Watergate to CNS that met the budgetary requirements communicated by CNS to Fathom. This was put forward to CNS in Watergate's Commercial Proposal of 11 July 2017, as revised on 6th September 2017 (F1). On satisfactory conclusion of negotiations between the two parties, CNS issued a Purchase Order ('PO') (WT8) directly to Watergate in September 2017 concluding the contract. This was considered an acceptable contract between the two parties with the Commercial Proposal being the offer and the PO being the acceptance. This is also reflected within the brokerage agreement at Paragraphs 1-4.44

62.
I take Mr [Person 4]'s statement that CNS 'issued' the Purchase Order 'directly' to the Claimant as an assertion of its legal effect (a contract between CNS and the Claimant), rather than as factual evidence of how of it was communicated.
63.

In its Response, the Claimant repeats that the Purchase Order

was neither delivered directly or personally by the Respondent's client (CNS) whose office is evident in Nigeria or emailed by its client (CNS) but by the Respondent.45

64.
From the submissions and evidence quoted above, it is common case that, at least up to the date of the Purchase Order, the Respondent negotiated the contract terms with the Claimant. Mr [Person 4] says that it was the late Mr [Person 6] who negotiated the Claimant's offer to CNS. As I have already noted, the Respondent sent the first (incorrect) Purchase Order to the Claimant. Based on all of the evidence, I find that the Respondent, not CNS, also sent the corrected version of the Purchase Order to the Claimant.

THE BROKERAGE AGREEMENT

65.
The Brokerage Agreement46 refers to the Claimant as 'Owner' and the Respondent as 'Broker'.
66.

The relevant provisions of the Brokerage Agreement (other than clause 6, which I have quoted above) are as follows:

  1. This Commission agreement is made with reference to the Commercial offer received on the 11th of July 2017 for the provision of ROV Services to Cns Marine Nigeria Limited onboard the 'Siem Daya 1

  2. In consideration of the services rendered by the broker, the owner shall pay to the broker 2.5% commission on all of the Services provided and as invoiced to Cns Marine Nigeria Ltd.

  3. It is agreed that for the purposes of calculating the brokerage fees that no commission shall be due on the following amounts

    (i) Reimbursement of costs for personnel travel and hotels

    (ii) Telecommunication, email and internet service charges


  4. The owner shall pay the brokerage fees once corresponding payment has been received from Cns Marine Nigeria Ltd and after the receipt of an invoice for brokerage fees due and payable under this agreement.

THE PARTIES' SUBMISSIONS ON LIABILITY

The Claimant's claim

67.

The Claimant claims that the Respondent breached the Brokerage Agreement as follows:

5.1 To date, the Respondent has failed to process and ensure the payment to the Claimant of the amount due and payable to her under the Brokerage Agreement. The claimant is entitle to the payment of the sum of $225, 127.87 USD from the Respondent for ONLY the equipment hired and delivered on the instructions of the Respondent via a PC dated 8 September, 2017 on its client’s vessel from the 8 September, 2017 till 11 January, 2018.

5.2 In accordance with the parties’ agreements, the Claimant sent invoices dated 16/10/2017, 8/11/2017, 6/12/2017 and 15/01/2018 to the Respondent for processing and payment.

5.3 In total breach of the parties’ agreements, the Respondent has repeatedly till date failed to discharge its obligations under the parties’ agreements on the relevant due dates of the various invoices.

5.4 It has been more than 2 months since the parties have failed to amicably resolve the issues which arose on the 14 November, 2017 relating to payment of the invoices due and payable from 16/10/2017.47

68.

The Claimant seeks an award as follows:

  1. A Declaration that the Responding (sic) violated its obligations and therefore in breach of its agreements with the Claimant.

  2. A Declaration that the Claimant is entitled to the sum of $225,127.87 USD being the cost of the hire of its equipment at the instance of the Respondent from 8 September, 2017 to 11 January, 2018.

  3. An Order from the Arbitral Tribunal directing the Respondent to pay the Claimant $225,127.87 USD being the cost of its equipment hired from 8 September, 2017 to 11 January, 2018 having failed to process the Claimant’s invoices in breach of the parties’ agreements.

  4. An Order directing the Respondent to pay all Arbitration costs, thus; the Claimant Counsel’s travel and accommodation costs and, the cost of this Arbitration.

  5. Interest at the Nigerian Banks overall lending rate on the amount claimed at paragraphs ii & iii above from the 7th October, 2017 when the 1st invoice became due and payable till Award and, 10% interest on the entire sum from the date of the Award to the date of full payment.48

The Respondent's defence

69.
The Respondent says that the Claimant contracted with CNS to provide the ROV services on board the Siem Daya 1 through exchange of the Claimant's commercial proposals and the CNS Purchase Order to the Claimant.49
70.
The Respondent denies that it is breach of its agreement with the Claimant. It says that the Claimant has no contractual or other basis for seeking payment of the amount claimed, and that the invoices ought to have been sent to CNS.50
71.

In paragraph 17 of its Answer, the Respondent pleads as follows:

The Respondent has not breached the Brokerage Agreement by failing to pay the invoices reissued/issued to them by the Claimant. The Brokerage Agreement is clear and unambiguous. Any sums due to the Claimant are payable by CNS, not the Respondent.

Mobilisation

72.
The Respondent pleaded that the contract between the Claimant and CNS provided that the Claimant was only entitled to payment once the Siem Daya 1 was mobilised by MPN. The Respondent said that 'mobilized' is an industry working term that would commonly be defined as the commencement of offshore operation.51
73.
The Claimant disputes this, and says that the Respondent intends to mislead the tribunal in this regard.52
74.

Subsequently, Mr [Person 4] said:

In relation to the quantum, I do not dispute that Watergate has invoiced according to the dates that their equipment was mobilised onto the vessel until the date that the equipment was demobilised. The daily rates invoiced are correct as per the contract between Watergate and CNS. However, I dispute entirely and wholly the right of Watergate to invoice these sums to Fathom.53

75.
Accordingly, there is no longer an issue between the parties about the dates on which the ROV was 'mobilised', or about quantum.

The Claimant's reply to the Respondent's defence

76.
The Claimant says that its only contract for the ROV services or hire was with the Respondent, and the Claimant did not contract with CNS.54 The Claimant cites the following as evidence of this: The Claimant was never introduced to and had no contact with or access to CNS before the services commenced. The terms and conditions were negotiated and agreed between the Claimant and the Respondent.55 More importantly, the Purchase Order was not sent directly to the Claimant, but through the Respondent.56 The Claimant delivered the equipment at the time and to the place instructed by the Respondent.57 The Respondent instructed the Claimant to send invoices to the Respondent.58 Whether the Claimant addressed invoices to the Respondent or CNS is irrelevant.59
77.
The Claimant says it contracted with the Respondent as principal, and not as agent for CNS. The Respondent never disclosed to the Claimant that it was acting as CNS's agent, therefore the Respondent is liable as principal.60
78.

In paragraph 3.5 of its Reply the Claimant pleads

The Respondent having failed to discharge its obligation in total breach of its agreement with the Claimant, the Claimant was left with no choice than to recover its payments from the party (Respondent) it has agreement with and, on whose instruction and directions its hired equipment were delivered onto Siem Daya 1 at Brawl Jetty, Onne Port Harcourt, Nigeria.61

79.
In paragraph 3.7 the Claimant says that when payment was not received 'for lack of privity of contract with the Respondent's client (CNS)', the Claimant forwarded its invoices to the Respondent 'with whom it has contract, having discussed, negotiated and reviewed prices including the receipt of the PC and, who specifically instructed her to deliver the hired equipment onto Siem Daya 1 vessel at Brawl Jetty, Onne, Port Harcourt, Nigeria."62
80.

In paragraph 3.9, the Claimant pleads:

Paragraph 17 in the Respondent’s Answer is both false and misleading, the Respondent is in total breach of her agreement with the Claimant by declining and/or failing to process the Claimant’s invoices notwithstanding its clear and specific direction via email dated 5 October 2017 that the Claimant’s invoices should be first sent to her and, same have been forwarded and acknowledged on 17 October 2017 (WT11). The Claimant has neither done anything in the contrary nor overrides the Respondent's existing clear instruction.

ISSUES ON LIABILITY

81.
The Claimant's claim is for an amount owing under the Brokerage Agreement.
82.
In addition, paragraphs 4.11 and 5.1 of the Request for Arbitration and 3.9 of the Reply state a claim for breach of the Brokerage Agreement.63 The alleged breach is 'declining and/or failing to process the Claimant’s invoices notwithstanding its clear and specific direction via email dated 5 October 2017 that the Claimant’s invoices should be first sent to her and, same have been forwarded and acknowledged on 17 October 2017.
83.
While there is no dispute that the Respondent did not pay the Claimant, the Respondent has, through the witness statement of Mr [Person 4], addressed its performance of the alleged obligation to 'process' invoices.
84.

Therefore, I must decide the following liability issues:

  • Does the Brokerage Agreement require the Respondent to pay the Claimant?

  • Does the Brokerage Agreement require the Respondent to 'process' the Claimant's invoices? If so, what is required of the Respondent? Has the Respondent discharged this obligation?

THE TRIBUNAL'S CONCLUSIONS ON LIABILITY ISSUE ONE

Does the Brokerage Agreement require the Respondent to pay the Claimant?

85.
The Brokerage Agreement contains no express terms requiring the Respondent to pay the Claimant. On the contrary, the express terms of the Brokerage Agreement contemplate that the Claimant will be paid by CNS.
86.
I have quoted above the relevant provisions of the Brokerage Agreement. The only payment for which express provision is made under the Brokerage Agreement itself is the commission paid by the Claimant to the Respondent under clause 2, which sets this commission at '2.5% on all of the Services provided and as invoiced to Cns Nigeria Ltd.’ Clause 4 requires the Claimant to pay this 'once corresponding payment has been received from Cns Nigeria Ltd...'
87.
Thus, the scheme of the Brokerage Agreement is that the Respondent provides brokerage services to the Claimant and the Claimant provides ROV services/hire to CNS. The Claimant invoices CNS, receives payment from CNS, and pays commission to the Respondent. That commission is in consideration of the services rendered by the Respondent to the Claimant.

Contract between the Claimant and CNS

88.
Within this issue, there is an issue between the parties about whether the Claimant contracted with CNS to provide ROV services. My function is to decide, as between the parties to this arbitration, whether the Claimant entered into a contract with CNS.
89.
The Claimant relies on the facts recited at paragraph 76 above.
90.
First, the Claimant says that it had no direct contact with CNS before the Purchase Order was issued and the ROV delivered, the Respondent did all the negotiation, and the terms were agreed between the Respondent and the Claimant. The Respondent does not dispute this. It is confirmed in paragraph 9 of the Answer and paragraph 7 of Mr [Person 4]'s witness statement. In my opinion these facts are not inconsistent with the formation of a contract between the Claimant and CNS. Even before the Purchase Order was issued, the Claimant was aware that the Respondent was negotiating between the Claimant and CNS. While the Claimant's initial commercial proposal64 named only the Respondent, the revised commercial proposal of 6 September 201765 is headed 'Proposal for the Provision of ROV Services for Fathom Offshore/CNS Marine.' The Respondent's response to this proposal was 'I have forwarded to Cns for their review and comment...'66
91.
Second, the Claimant relies on the fact that the Purchase Order was sent to the Claimant by the Respondent. While I have found this as a fact, on their face both Purchase Orders were clearly CNS's.67
92.
Third, the Claimant relies on the Respondent's instruction where and when to deliver the ROV. This instruction (or request) was given in an email of 7 September 2017,68 which also stated that CNS had been asked to issue a Purchase Order. In those circumstances, I do not consider the request or instruction as evidence of a contract between the Claimant and the Respondent for the hire of equipment or the delivery of services.
93.
Fourth, the Claimant relies on the Respondent's instruction to send invoices to the Respondent in the first instance to pass on to CNS. The Respondent gave this instruction (or request) on 5 October 2017, on returning the signed Brokerage Agreement.69 Mr [Person 4] says in paragraph 8 of his witness statement that it is common practice for the Respondent to ask owners to submit their invoices on email first to the Respondent so that their accuracy can be verified, also so that the Respondent can invoice its commission.
94.
I accept the evidence of Mr [Person 4] as to the reason for the Respondent's request that invoices be sent to the Respondent in the first instance. In my opinion, there is nothing in that request suggesting that the Respondent was taking responsibility for payment of the invoices.
95.
Fifth, the Claimant says that it is not relevant that the first two invoices it sent to the Respondent were addressed to CNS, and not the Respondent. I agree. This occurred after the Brokerage Agreement was made, and should not be considered in its interpretation.
96.
Having considered the facts in their entirety, I have no doubt that that they show that, when the Claimant delivered ROV equipment to the Siem Daya 1 at Brawal Jetty on 8 September 2017, it did so in performance of a contract with CNS, not the Respondent.

Agency

97.
As set out above, the Claimant denies that the Respondent entered into the Brokerage Agreement as agent for CNS. This is not in dispute. The Respondent does not claim that it entered into the Brokerage Agreement as agent for CNS. It is common case that the Claimant and Respondent entered into the Brokerage Agreement as principals.

Conclusion on liability issue one

98.
As the Brokerage Agreement does not require the Respondent to pay the Claimant, the claim for an amount due under the Brokerage Agreement must fail.

THE TRIBUNAL'S CONCLUSIONS ON LIABILITY ISSUE TWO

Does the Brokerage Agreement require the Respondent to 'process' the Claimant's payments?

99.
I have summarised the parties' submissions on this issue at paragraphs 82 and 83 above.
100.
Clause 2 of the Brokerage Agreement states that the obligation to pay commission is '[i]n consideration of services rendered by the Respondent. The services are not described, but are clearly brokerage services. The Claimant says that the term uses the past tense, connoting services rendered prior to the date of the agreement.70
101.
I have no hesitation in concluding that it is an implied term of the Brokerage Agreement that the Respondent will takes steps to 'process' invoices that the Claimant sends to the Respondent, particularly when, as here, the Respondent has asked the Claimant to send the invoices to the Respondent in the first instance.71 Such a term is properly implied because it is necessary to achieve a commercial purpose of the Brokerage Agreement as set out in clauses 2 and 4, namely payment of invoices issued by the Claimant to CNS (and, from that payment, a 2% commission to the Respondent). This is part of the brokerage services to be provided by the Respondent to the Claimant. The term 'services rendered' in the Brokerage Agreement does not preclude the possibility that some of the services are to be provided after the date of the agreement.

What is required of the Respondent?

102.
In order to give effect to the commercial purpose referred to above, it is necessary that the invoice be sent to CNS. Therefore, the Respondent's obligation to ’process' invoices means that the Respondent must forward to CNS the Claimant's invoices which are addressed to CNS and sent to the Respondent for the purpose of forwarding to CNS. There may be other implied obligations, such as dealing with queries, but they do not arise because no claims are made in this regard.

Has the Respondent discharged this obligation?

103.
The Claimant sent the Respondent two invoices addressed to CNS, dated 16 October 201972 and 8 November 2017.73 According to its undisputed evidence, the Respondent forwarded the 16 October invoice to CNS three times, on 18, 23 and 25 October 2017, and forwarded the 8 November invoice to CNS on 14 November 2017.74

Conclusion on liability issue two

104.
As the Respondent has discharged its implied obligation to 'process' the Claimant's invoices, the claim for breach of this obligation must fail.

QUANTUM AND INTEREST

105.
As the Claimant's claim for an amount due under the Brokerage Agreement, and its claim for damages for breach of the Brokerage Agreement both fail, the issues of quantum and interest do not arise.

COSTS

106.
The Claimant asks the arbitral tribunal that, if the Claimant is successful, the Respondent be ordered to pay the costs of arbitration, in accordance with the principle that costs follow the event.75 In addition to the advance on costs, the Claimant says that it has incurred legal costs of $45,350 legal fees and $1,670 disbursements.76 The Claimant says that these costs are reasonable and have been exacerbated by the Respondent's: (i) refusal to process and ensure payment of the amount claimed; (ii) evasive tactics in refusing to accept or acknowledge service of Request for Arbitration; (iii) incorrect and misleading pleading allegations; and (iv) interim measure application which the arbitral tribunal rejected.77
107.
The Claimant asks that, if it is partially successful, the Respondent should be ordered to pay an appropriate portion of its costs. The Claimant asks that, if it is not successful, the arbitral tribunal should bear in mind several decisions in which ICC tribunals have declined to order an unsuccessful claimant to pay the respondent's costs, particularly as the Claimant brought the arbitration in good faith and had no other meaningful way of obtaining payment for its hired equipment.78
108.
In his witness statement Mr [Person 4] asks that, if the Respondent prevails, the arbitral tribunal order that the Claimant pay the costs of arbitration.79 He estimates its legal costs as of 12 September 2019 in the region of GBP £20,000, and expresses concern that they will increase weekly if the arbitration continues.80 He repeats that the Respondent could have enforced its contract with CNS in Nigeria.81
109.

Article 34(1) of the Rules provides that the costs of the arbitration includes (as relevant to this arbitration) the fees and expenses of the arbitrator, the ICC administrative expenses fixed by the ICC Court, and the reasonable legal and other costs incurred by the parties.

110.

Article 38(4) of the Rules provides that the final award shall fix the costs of arbitration and decide which of the parties shall bear them or in what proportion they shall be borne by the parties.

111.

Article 38(5) of the Rules provides:

In making decisions as to costs, the arbitral tribunal may take into account such circumstances as it considers relevant, including the extent to which each party has conducted the arbitration In an expeditious and cost-effective manner.

112.

Section 61 (2) of the Arbitration Act provides:

Unless the parties otherwise agree, the tribunal shall award costs on the general principle that costs should follow the event except where it appears to the tribunal that in the circumstances this is not appropriate in relation to the whole or part of the costs.

113.
The 'event' is that the Claimant's claim has failed. Therefore, there being no agreement otherwise, the general rule is that the Respondent is entitled to an award of costs.
114.
The Claimant has cited two reasons for departing from the general principle. First, that the claim was brought in good faith. Second, that the Claimant had no other meaningful way of obtaining payment.
115.
I do not doubt that the claim was brought in good faith. However, in my opinion, this is not a ground for departing from the general principle that costs follow the event.
116.
In regard to the Claimant's assertion that it had no other means of obtaining payment, I have found that the Claimant into a contract with CNS (not the Respondent) for the hire of equipment and provision of services. Accordingly, I do not accept the Claimant's assertion that it had no other means of obtaining payment as a basis for departing from the general principle that costs follow the event.
117.
Accordingly, the Claimant must bear the costs of arbitration.

Amount of costs

118.

At its session on 18 December 2019 the ICC Court fixed the costs of arbitration in respect of the arbitrator's fees and expenses and ICC administrative expenses at $35,000. Accordingly, pursuant to Article 38(4) of the Rules, I include $35,000 in respect of those costs of arbitration as finally determined by the ICC Court.

119.
The Claimant has paid advances on costs in the amount of $35,000.
120.

Section 63(3) of the Arbitration Act 1996 provides that, in the absence of agreement between the parties:

The tribunal may determine by award the recoverable costs of the arbitration on such basis as it thinks fit.

If it does so, it shall specify—

  1. the basis on which it has acted, and

  2. the items of recoverable costs and the amount referable to each.
121.

Section 63(5) provides that, unless the tribunal or the court determines otherwise—

  1. the recoverable costs of the arbitration shall be determined on the basis that there shall be allowed a reasonable amount in respect of all costs reasonably incurred, and
  2. any doubt as to whether costs were reasonably incurred or were reasonable in amount shall be resolved in favour of the paying party.
122.
As I have noted above, Mr [Person 4] estimates the Respondent's costs to 12 September 2019 to be in the region of GBP £20,000, and increasing. The Respondent has not provided a breakdown of this estimate, or details of the costs incurred.
123.

In applying Article 38(5) of the Rules and section 63(5) of the Arbitration Act, I have carefully considered the submissions and evidence presented by both parties in this arbitration, as summarised above. All submissions have been brief. The issues have not been complex. In the absence of a breakdown or details from the Respondent, I consider that £12,000 is a reasonable amount in respect of the Respondent's legal fees and expenses. This allows for 30 hours work at an hourly rate of £400.

124.
Neither party claimed interest on an award of costs.

AWARD

Having carefully considered the evidence and the parties' submissions, and having delivered the above findings and conclusions, as my First and Final Award in this reference covering all matters in dispute between the parties referred to me for determination, I AWARD and DIRECT as follows:

  1. The tribunal has substantive jurisdiction to determine the matters submitted to arbitration. The matters submitted to arbitration are the claim of the Claimant Watergate Technical Services Limited, set out in the Request for Arbitration, and the defence of the Respondent set out in its Answer, including the Claimant's claim of interest and the Claimant's and Respondent's claim of costs.

  2. The claim of the Claimant, Watergate Technical Services Limited, is dismissed in its entirety.

  3. The Claimant, Watergate Technical Services Limited, shall pay the Respondent Fathom Offshore Services Limited £12,000 (Great Britain pounds sterling) in respect of the legal costs incurred by the Respondent in this arbitration.

  4. The Claimant, Watergate Technical Services Limited, shall pay the arbitrator's fees and expenses and ICC administrative expenses at $35,000, being the amount determined by the ICC Court.

  5. All other requests and claims are dismissed.

Place of arbitration: London, England

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