The issue in this appeal was whether the parties had concluded a legally binding contract regarding the remuneration that would be paid to the respondent salvors for services to be provided in refloating the MV Ever Given, a container ship which had grounded and was blocking the Suez Canal. The appellant owners of the Ever Given contended that such a salvage contract had been concluded, leaving other contractual terms to be agreed at a later stage (although they never were), and that its effect was to preclude a claim for a salvage reward under the Salvage Convention 1989 or at common law. The salvors claimed that no contract was concluded and that they were therefore able to bring their claim for salvage services rendered, with the quantum of their claim to be determined by the Admiralty Court. The Admiralty Judge, Barker J, held that no contract was concluded: see SMIT Salvage BV v Luster Maritime SA (The 'Ever Given') [2023] EWHC 697 (Admlty) (CMI2140). Barker J found that although what the parties agreed was capable of amounting to a contract regarding the remuneration payable to the salvors for any services which they provided, the parties did not, on an objective view, intend that agreement to be legally binding until the remaining terms (including what services the salvors would provide) were also agreed.

Held: Appeal dismissed.

After reviewing all the communications between the parties, the Court of Appeal concluded that the burden was on the owners to demonstrate that the parties’ exchanges evinced unequivocally an intention to be bound. The Court held, in agreement with Barker J, that they fell considerably short of doing so. At the very least, those exchanges were consistent with the absence of an intention to be legally bound until all outstanding matters were agreed, which was not good enough for the owners' purposes. At no stage did the salvors suggest that they would be content with a binding contract dealing only with remuneration terms. That would have been a complete change of tack on their part. Although neither party used a term such as 'subject to contract' or 'subject details', it was unnecessary to do so. The urgency to conclude a contract on the morning of 26 March 2021 did not continue at the same intensity after the parties reached agreement on the remuneration terms, although the salvors did continue to chase the owners. However, once the refloating attempt on 26 March had failed, the salvors were in a strong commercial position. It was as urgent as ever to refloat the Ever Given without further delay, and it was becoming increasingly apparent that the salvors were the only realistic means by which this could be done. If the owners would not agree to the salvors' terms, it was increasingly likely that the salvors would at least be entitled to some form of salvage reward. From the salvors' point of view, considering the matter objectively, that went a considerable way to defuse the urgency of concluding a contract and rendered the engagement of its tugs less and less of a speculation. The lack of urgency after the morning of 26 March did not reflect any understanding between the parties that a binding contract on remuneration terms had already been concluded.