Owners of the Borvigilant v Owners of the Romina G [2003]
Facts
- The claimant’s tug collided with the defendant’s oil tanker
- The claimant claimed the benefit of an indemnity to cover damage to his tug
Issue
- Did the defendant’s agent have the authority to provide the indemnity
Decision
- Yes
Reasoning
- Either implied actual authority, or ratification
- Ratification will be barred (allowed on facts) where it unfairly prejudices a third party
- Lord Clarke adopted Bowstead and Reynolds’ submission that:
“Ratification is not effective where to permit it would unfairly prejudice a third party, and in particular—
(1) where it is essential to the validity of an act that it should be done within a certain time, the act cannot be ratified after the expiration of that time, to the prejudice of any third party;
(2) the ratification of a contract can only be relied on by the principal if effected within a time after the act ratified was done which is reasonable in all the circumstances.”
- Usually, where proprietary rights are at stake, ratification will not be permitted, although this is not an unqualified right
