Yacht 4YOU Commission Appeal Dismissed
Commission fight over the yacht 4YOU ends with the appeal dismissed and confirms Moran Yacht & Ship Inc gets no sales commission after the private sale to Gildo Finance Corporation.
In late 2009 a company named Galaxias Maritime Ltd, owned by businessman Kirill Pisarev, was about to receive a new luxury motor yacht called 4YOU. The yacht was built in the Netherlands at the Heesen Shipyard and was about 47 meters long. In September 2009, at the Monaco Boat Show, Paul Moran from the yacht brokerage Moran Yacht & Ship Inc met Mr. Pisarev. They met again in October 2009 at the Fort Lauderdale Boat Show and started working together. On 28 October 2009, Galaxias agreed that Moran Yacht & Ship Inc would manage 4YOU. On 5 November 2009, the parties also signed a charter agency agreement. That agreement made Moran the exclusive charter broker for 4YOU and promised a 15% commission on charter bookings. It also said that if another broker booked a charter, the owner would still pay that 15% plus an extra 2% to Moran as the charter manager. The written words in that contract spoke only about charters. It said nothing about selling the yacht and nothing about paying a sales commission if the yacht was sold. In December 2009 the yacht was delivered to Galaxias. On 29 December 2009, Mr. Pisarev agreed to charter the yacht for a week in January 2010, and in 2010 other charters followed, some by him and some by other people.
In March or April 2010, Paul Moran told Mr. Pisarev about a chance to buy a larger 54-meter yacht from Amels in the Netherlands. Because of this possible new purchase, there was talk of selling 4YOU. On 10 May 2010, when 4YOU was in Monaco, many brokers were invited on board to view yachts for their clients. On 11 May 2010, there was a meeting at the Amels yard with Paul Moran and a Moscow-based Moran broker named Lidia Tsareva. Ms. Tsareva and Mr. Robert Moran later said that Galaxias told Moran at that meeting to sell 4YOU for a price between €27,750,000 and €28,000,000. The trial judge, Mr Justice Males, did not accept that account. He accepted Mr. Pisarev’s evidence that he gave no such instruction on 11 May 2010 and that at that time Moran did not have authority to market the yacht for sale.
On 18 May 2010, a businessman named Gennady Miliavsky visited 4YOU in Monaco after Ms. Tsareva invited him. He spent about 15 to 20 minutes looking around and then had tea for about 15 minutes. The judge found that he had no interest in buying the yacht at that time and made that clear. He already owned a yacht called MOSCA and was happy with it. The visit was short and there was no sign of a plan to buy. On 7 July 2010, Galaxias signed a letter of intent related to an Amels vessel that mentioned “marketing after the summer.” By September 2010 there was no dispute that Moran had, by then, been told to market 4YOU for sale, and Moran did so during late 2010 and into 2011. In October 2011, however, Galaxias ended Moran’s services. From that date Moran was no longer the sales broker.
Events moved on at the end of 2011. In December 2011, Mr. Pisarev and Mr. Miliavsky had dinner at a restaurant in Moscow. Mr. Pisarev said that 4YOU was for sale and that the asking price had been reduced. Mr. Miliavsky remembered the yacht’s name and the brief visit he had made in May 2010. By late 2011 his money situation was different. He had sold one yacht and bought another and had sold some businesses, so he had much better liquidity and was more open to buying. In January 2012 they met in Courchevel, a ski resort in France. Mr. Pisarev said he would sell for €22,000,000. Mr. Miliavsky indicated €19,000,000. The judge later said that the €19,000,000 was an indication, not a firm offer. On 27 January 2012 there was an inspection of 4YOU in Italy. On 29 February 2012, Galaxias signed a written contract to sell 4YOU to a company called Gildo Finance Corporation for €19,800,000. Gildo was owned or controlled by Mr. Miliavsky. Although Moran had marketed the yacht earlier, Moran did not arrange this deal. The seller and the buyer reached the agreement after their own talks.
Moran Yacht & Ship Inc then brought a claim in the Commercial Court in London. Moran said it had a right to a sales commission from Galaxias. Moran argued that there was an express contract made on 11 May 2010 to market 4YOU for sale or, if not, that there was an implied contract based on what happened in May 2010 and later. Moran also argued that showing Mr. Miliavsky around the yacht on 18 May 2010 was the effective cause of the sale made on 29 February 2012. Mr. Pisarev and the other defendants denied this. They said there was no instruction in May 2010, there was no implied contract to pay a sales commission, and Moran was not the effective cause of the later purchase. They also relied on the 5 November 2009 charter agency agreement. That agreement promised commission for charters, not sales. The trial judge, Mr Justice Males, looked at the evidence carefully. He was not persuaded by the key parts of Moran’s case and found Mr. Pisarev’s evidence reliable. He held that there was no instruction on 11 May 2010 to market the yacht and, even if instructions were given at a later time, Moran’s short visit with Mr. Miliavsky in May 2010 was not an effective cause of the 2012 sale.
The judge also looked at standard charter party terms used with charters. Some of these forms include clauses numbered 23(D) and (F) or 24(D) and (F). These clauses say that if a charterer decides to buy the yacht within two years from the start of a charter, the broker is entitled to a sales commission. They also say that if another sales broker is used, the owner must pay not less than 15% of the gross sales commission to the original charter broker, and the owner must tell the new broker about this liability. The clauses define “Owner” and “Charterer” widely to cover related companies, trustees, directors, and certain guests. In this case, however, neither Mr. Miliavsky nor Gildo ever chartered 4YOU, so those clauses did not apply. Moran tried to create a new implied term that would treat a person who was shown the yacht as a potential charterer, but who did not actually charter, as if he were a charterer for the purpose of paying a sales commission if a purchase happened within two years and if the broker’s work was an effective cause. The judge rejected that idea. The clause uses clear words to protect brokers when a real charterer later becomes a buyer. It does not give a right when there was only a short pre-charter visit and no charter at all. Adding the new term would go beyond the written words and would not fit with the structure of the contract.
The judge also pointed out that Moran’s account of the key dates changed more than once. The date when Moran said the sales authority was agreed moved from September 2010 to June 2010 and then to May 2010. The date of the alleged introduction of Mr. Miliavsky to the yacht also shifted. These changes made the court less confident about Moran’s version. The judge also considered what commission rate would apply if, despite his main findings, there had been a right to commission. Without expert evidence and using market signs, he thought 4% would be a fair sales commission rate, not 15%. That point mattered only if Moran first proved there was a right to commission at all. Because Moran failed to show a sales contract in May 2010 and failed to show that its actions were the effective cause of the 2012 sale, the judge dismissed the claim.
Moran appealed to the Court of Appeal of England and Wales. The appeal was heard at the Royal Courts of Justice in London by the Chancellor of the High Court, Lord Justice Lewison, and Lord Justice Christopher Clarke. The decision was given on 11 February 2016. Moran’s appeal raised two main questions. First, did Moran have any right to a sales commission in principle? Second, was the May 2010 visit the, or an, effective cause of the sale on 29 February 2012? Moran also said that because it had been involved with 4YOU from the start, the court should be more ready to find a right to commission. Moran argued that the 5 November 2009 charter agency agreement should be read as supporting a right to a sales commission or that such a term should be implied. Moran again relied on the charter party clauses about a charterer buying within two years, or asked for a new implied term that would treat a non-chartering visitor like a charterer if the broker’s work helped cause a later purchase.
The Court of Appeal looked closely at the 5 November 2009 charter agency agreement. Its words are about chartering only. It gave Moran the exclusive right to manage charters and promised a 15% commission on charters. It said nothing about sales or a sales commission. It also had an “entire agreement” clause saying the document contained all the terms and that no other promises were included. Because of this, the Court of Appeal said it was neither obvious nor necessary to add a new implied term about sales commission into a charter contract that spoke only about charters. Reading a hidden sales right into that text did not fit the wording or the business sense shown by the parties’ own words. The court also noted that Moran had not given expert evidence about the usual sales commission rate. In any case, the trial judge had already said that 4% would have been the correct figure if there had been a right to commission. That comment did not change the main point that no right existed in the first place.
The Court of Appeal then turned to clauses 23(D) and (F) or 24(D) and (F) in the charter party forms. Those clauses help a broker who set up a real charter when the charterer later becomes a buyer within two years. They did not help Moran here because there was no charter by Mr. Miliavsky or by Gildo, so the clauses never started to work. Moran asked the court to imply a different term that would treat someone shown the yacht for a possible charter, but who never chartered at all, as if he were a charterer. The Court of Appeal explained that this proposed new term had many problems. It was not pleaded at trial. It would change the contract in an odd way by expanding who could trigger a commission while narrowing the broker’s right to cases where the broker was an effective cause. There was also no proof that Mr. Miliavsky was interested in chartering the yacht when he visited in May 2010. Ms. Tsareva had said she showed him the yacht because she believed it was for sale, not because he was a charter client. Since he never chartered 4YOU, the two-year clause for charterers did not apply. There was no reason to add a new term to cover a non-chartering visitor.
The Court of Appeal also reviewed how the trial judge handled the facts. It saw that the judge had careful reasons to accept Mr. Pisarev’s evidence and to be doubtful about Moran’s changing story. It agreed with the finding that there was no instruction on 11 May 2010 to market 4YOU for sale. On effective cause, the Court of Appeal noted that the sale in early 2012 came from the talks between Mr. Pisarev and Mr. Miliavsky in December 2011 and January 2012, influenced by the change in Mr. Miliavsky’s finances, followed by the inspection on 27 January 2012 and the written contract on 29 February 2012. The short look at the yacht on 18 May 2010, which lasted at most about 35 minutes including tea, did not drive the later deal in a legally important way. In everyday terms, it did not set in motion a natural chain leading to a sale almost 21 months later. The Court of Appeal had no reason to interfere with the trial judge’s view that Moran failed to prove that the May 2010 visit was the effective cause of the sale.
The court also remarked that Moran’s case shifted in ways that were hard to accept. The timeline of the alleged sales authority and the claimed introduction dates changed during the case. Appeals are not a chance to start a new case or add brand new unpleaded claims late in the day. The Court of Appeal would not allow Moran to rely on new implied terms that were not put before the trial judge. In business disputes, clear pleadings and steady facts matter a lot. If a party keeps changing basic dates and theories, it is harder to persuade a court that the story is correct.
After weighing all the points, the Court of Appeal gave a short and firm outcome. On 11 February 2016 it dismissed the appeal. It agreed with Mr Justice Males. There was no contract made on 11 May 2010 giving Moran authority to sell 4YOU. There was no implied contract to pay a sales commission just because Moran was active around that time. The 5 November 2009 charter agency agreement did not cover sales and could not be stretched by implication to include them. The special charter party clauses that protect a broker when a charterer later buys did not apply because neither Mr. Miliavsky nor Gildo ever chartered 4YOU. The suggestion of a new implied term covering a non-chartering visitor was refused. The Court of Appeal also said that, even if it had been necessary to decide, the trial judge was right to find that Moran was not the effective cause of the 2012 sale. The appeal judges described how Moran’s case developed as close to shambolic and noted that Moran had already been given a lot of room to push different theories.
The final result is clear and has a practical meaning. Galaxias did not have to pay Moran any sales commission for the sale of 4YOU to Gildo Finance Corporation for €19,800,000 on 29 February 2012. The dismissal of the appeal on 11 February 2016 confirmed the High Court judgment. The legal lesson is important for yacht brokers and similar agents. If a broker wants a sales commission, there must be a clear contract that authorizes the broker to market the vessel for sale and that sets the sales commission terms. A charter agency agreement that speaks only about charter commission at a rate like 15% does not create a right to a sales commission. The special charter party clauses that reward a broker when a real charterer becomes a buyer within two years do not help when there was no charter at all. Courts will also check whether the broker’s work was an effective cause of the sale when the contract requires it. A short intro visit almost two years before a deal, when the visitor showed no buying interest and did not charter, will not usually count as the effective cause of a later private sale reached through discussions between the owner and the buyer. The decision shows that clarity in agreements and evidence is essential, and that courts will not add implied terms or commission rights that do not match the parties’ words and actions.
