Case Summary - Allied Marine Transport Ltd v Vale do Rio Doce Navegacao SA
Allied Marine Transport Ltd v Vale do Rio Doce Navegacao SA: The Leonidas D (1985) CA: Except in rare circumstances, the offeree's silence does not constitute acceptance. Facts In April 1975, the plaintiff owners chartered The Leonidas D to the defendant charterers. Disputes developed in December 1975 and March 1976, prompting the charterers to demand $110,000 from the owners. Arbitrators would determine the dispute under the terms of the time charter (the contract between the parties). In April 1976, the parties each nominated an arbitration, but the arbitrators failed to name a third arbitrator. The time charter was renewed and continued to operate until May 1977. There are no complaints or mentions of the charterers' original dispute. Indeed, until August 1981, when they gave notice of their intention to proceed with the arbitration, the charterers did nothing further to pursue their claim. The owners have now requested an injunction to prevent the charterers from proceeding with the arbitration, citing the lengthy delay as a reason. Decision The charterers could not be prohibited from pursuing their claim, according to the Court of Appeal. (I) In the absence of an offer and acceptance, there was no agreement to terminate the arbitration. Per Robert Goff LJ, giving the judgment of the court: ‘We have all been brought up to believe it axiomatic that acceptance of an offer cannot be inferred from silence, save in the most exceptional circumstances. In the absence of such circumstances, there were too many possible explanations of the silence of both parties to allow the court, adopting an objective test of their behaviour, to infer either an offer or an acceptance of an agreement to abandon the arbitration.’ (II) The owners could not rely on promissory estoppel in the same way. His Lordship said: ‘It is well settled that that principle requires that one party should have made an unequivocal representation that he does not intend to enforce his strict legal rights against another; yet it is difficult to imagine how silence and inaction can be anything but equivocal.’
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