Legal Updates

Creation of a partnership does not require a written contract but in its absence it is required to show agreement and behavior as partners

October 22, 2020

A Greek shipping company leased a ship to a Turkish company with a crew to operate a regular shipping line between the ports of İskenderun (Turkey), Haifa (Israel) and Port Saíd (Egypt). Among other things, the Turkish company transported trucks loaded with goods to the port of Haifa, from which they crossed by land to Jordan (via the Sheikh Hussein Bridge) to Arab countries. To this end, the Turkish company contracted a shipping agent and customs broker at the port of Haifa, who also paid fees and other payments in its place. It later contended not to owe them funds because a partnership had been formed between them.
The Court held that there was no partnership between the parties and the Turkish company owes funds to the port agents. A partnership is a contract between two or more parties to jointly manage a business. A partnership does not require a written contract, however in the absence of a partnership contract, it is required to show the existence of a partnership in other ways, as a presentation of the parties' intent, whether the parties introduced themselves to others as partners, whether the parties shared business profits and the duration of the relationship. None of these signs existed here. A ship's agent is a person whom the shipowner authorized to be an agent on its behalf at a port in Israel and handles for a cargo owner, in connection with the unloading, loading or delivery of cargo, the collection of transportation fees and arrangements made on the ship or in port area. A customs broker deals with the customs authorities in connection with the import, export or transit of goods. Here, the ship's agent and customs broker sent terms of contract to the Turkish company, which did not oppose to such and began to cooperate with them. Non-opposition constitutes agreement to the terms and conditions and creates an agreement and the said agreement, in accordance with its terms, is a cooperation and not a partnership agreement. The Turkish company is therefore obligated to pay the ship's agent and customs broker.