Shipbrokers’ Warranties of Authority: Lessons Learnt

Shipbrokers’ Warranties of Authority: Lessons from Urania Shipping Nordtrade

The recent Commercial Court decision in Urania Shipping Company Ltd v Nordtrade SIA & another [2025] EWHC 1835 (Comm) shines a light on a perennial issue in the shipping market: when does a shipbroker truly have authority to conclude a fixture — and what happens if that authority is disputed?

The case arose from a voyage charterparty for a cargo of wood pellets from St Petersburg to Turkey. The vessel owner claimed that a Turkish company, BFT, was the charterer, and that two companies in the Nordtrade Group had acted as brokers without proper authority. The allegations included breach of a warranty of authority — the legal promise an intermediary makes that they have a principal’s approval — and deceit.

A default judgment was initially entered against one of the defendants, Nordtrade Tasimacilik TIC. AS (“NT”), after it failed to acknowledge service. NT later applied to set aside that judgment and succeeded, convincing the Court that it had a real prospect of defending the claim.

1. Why the Broker’s Identity Mattered

At the heart of the case was a fixture recap sent on 24 March 2023 from “Nordtrade Ltd” “as broker only”. In reality, “Nordtrade Ltd” was not an incorporated company, but a loose translation of the Latvian name of Nordtrade SIA (“NL”). The claimant argued that “Nordtrade Ltd” referred to both NL and NT, and that both warranted authority to act for BFT.

The Court disagreed that this was obvious. It found it arguable that the recap and related emails referred to a single broker entity, not both companies in the group. The fact that NT’s translated name contained the word “Transport” reinforced the distinction. This ambiguity alone gave NT a realistic prospect of defeating the claim.

2. Authority – Actual, Implied, or None at All?

 The Court also thought NT had an arguable defence that BFT had authorised the charterparty.

• The charterparty and a letter of indemnity bore BFT’s stamp and signature.
• Allegations of forgery were unconvincing.
• There was a plausible commercial explanation for later denials — potentially to avoid demurrage liability.
• Past dealings between the Nordtrade group and BFT could suggest a course of dealing that gave rise to implied authority.

3. Practical Lessons for Brokers

This decision doesn’t settle the ultimate question of liability — that will be decided at trial — but it carries clear warnings for shipbrokers, whether in-house or independent:

i. Be precise about your identity

Always use the full legal name of the entity you represent in emails, fixture recaps and signatures. Avoid informal translations or abbreviations that could cause confusion.

ii. Confirm authority before you fix

Never assume you can bind a principal. Get written confirmation — ideally in a form you can produce in evidence.

iii. Understand when the warranty arises

In shipping, the warranty of authority usually bites at the fixture recap stage, not when the formal charterparty is signed.

iv. Keep a record of past dealings

If you’ve fixed on behalf of a principal before, keep clear records. A course of dealing can be decisive in proving actual authority.

v. Avoid group company ambiguity

In corporate groups, spell out which entity is acting as broker to avoid the risk of a claim landing on the wrong desk.

4. A Broker’s Authority – A Simple Guide

 While every case turns on its facts, the process for determining whether a shipbroker has authority can be mapped in plain terms:

• Step 1: Is the principal clearly identified? If not, you’re already in dangerous waters.
• Step 2: Has the principal expressly authorised the fixture? If yes, you’re safe. If not, keep going.
• Step 3: Is there a history of similar transactions with the same principal? That may create implied authority.
• Step 4: Have you represented to a counterparty that you do have authority? If yes — and it turns out to be wrong — you could face a warranty claim.
• Step 5: Was that representation made in connection with the fixture recap? If so, that’s the point the Court will focus on

 5. Comments

Urania Shipping v Nordtrade is a reminder that in a market built on speed, relationships, and trust, the small details in an email footer or fixture recap can carry heavy legal consequences. Clarity of identity, proof of authority, and careful record-keeping are the shipbroker’s best defences against claims for breach of warranty — and the costly litigation that can follow.