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It is settled law that a carrier who delivers goods without production of the bill of lading is typically liable for any consequential losses suffered by the bill of lading holder. In the course of prosecuting its claim against the carrier, the bill of lading holder may seek to obtain summary judgment without trial on the basis that there is plainly no defence to its claim.

In the recent case of The “STI Orchard” [2022] SGHCR 6 where the plaintiff bank (“Plaintiff”) sought summary judgment against the defendant shipowner (“Defendant”), the General Division of the High Court of Singapore granted the Defendant unconditional leave to defend the Plaintiff’s claim for misdelivery. A key issue identified by the Court was whether the bills of lading were intended to be relied on as security for the Plaintiff’s financing in the underlying transaction.…

Continue Reading Claims for misdelivery of cargo without presentation of B/Ls: “good faith” and “consent”

In Dera Commercial Estate v. Derya Inc [2018] EWHC 1673, the Commercial Court considered several issues of interest arising out of Article III Rule 6 of the Hague Rules ( “Article III Rule 6”), in the context of a bill of lading for the carriage of maize destined for Jordan which, on arrival, was not allowed into the country by the Jordanian customs authorities, due to damage and “apparent fungus”.  Although, after various efforts to reverse the decision of the customs authorities, the local court gave permission to fumigate the cargo on board the vessel in the hope of preserving its condition, the vessel nevertheless sailed to Turkey, where the cargo was ultimately discharged and sold pursuant to a judicial sale order.
Continue Reading Dera Commercial Estate v. Derya Inc [2018] EWHC 1673

A recent decision provides authority for the broadly accepted understanding that a “unit”, for the purposes of limitation under Article IV Rule 5 of the Hague Rules, cannot apply to a bulk cargo – it can only mean a physical unit for shipment and not a unit of measurement or a customary freight unit (the unit of measurement used to calculate freight).

The cargo in question was 2,000 tonnes of fish oil, loaded into the ship’s tanks. The (disponent) owner contended that each tonne was a “unit” for these purposes and thus it had a right to limit its liability for damage to the cargo. The Commercial Court disagreed.

Had the Court found otherwise, presumably more bulk cargoes would be nominated by lesser units in future (e.g. kilogrammes).

This was one of those peculiarly academic arguments that amuse shipping lawyers, at least.

Although there was no Clause Paramount (or variant), the charterparty permitted the owner to rely upon the package or unit limitation in the same circumstances as it would have been entitled to do so, had the Hague Rules been incorporated in full. Therefore the decision has broad application. Albeit, not if the Hague-Visby Rules apply, as Rule 5(a) therein provides for an alternative weight-based limitation that is apt to include a bulk cargo, in any event.…

Continue Reading English Court confirms that package limitation under the Hague Rules excludes a bulk cargo

Sang Stone Hamoon Jonoub Co Ltd v Baoyue Shipping Co Ltd (“The Bao Yue”) [2015] EWHC 2288 (Comm)

The dispute related to a cargo of iron ore carried from Iran to China by the Defendant Shipper. The bill of lading had been issued “to order”, with no consignee named. The Shipper was requested to discharge…

The decision of Mr. Justice Flaux in (1) Societe de Distribution de Toutes Merchandises en Cote D’Ivoire trading as “SDTM-CI” (2) Kouma Assitan (3) Amlin Corporate Insurance N.V. (4) Axa Corporate Solutions Assurance and (1) Continental Lines N.V. (2) Genshipping Corporation [2015] EWHC 1747, considers the effect of clause 5 of the Synacomex 90 form,…

Reed Smith (Lianjun Li and Min Li of the Hong Kong office, Nick Shaw and Halani Lloyd of the London office) recently represented the successful Charterers in Shagang South-Asia (Hong Kong) Trading Co. Ltd v Daewoo Logistics [2015] EWHC 194 (Comm).

The Respondent Owners chartered their vessel to the Claimant Charterers by a fixture note, clause 23 of which stated, “ARBITRATION: ARBITRATION TO BE HELD IN HONGKONG. ENGLISH LAW TO BE APPLIED”. Clause 24 stated “OTHER TERMS/CONDITIONS AND CHARTER PARTY DETAILS BASE ON GENCON 1994 CHARTER PARTY”. No boxes of Part I of the Gencon 1994 form were completed, including Box 25, which was otherwise to be filled in according to the following instructions: “Law and Arbitration (state 19(a), 19(b) or 19(c) of Cl. 19… (if not filled in 19(a) shall apply (Cl 19)).” Clause 19(a) provided for English law and London arbitration in accordance with the English Arbitration Act, before a Tribunal of three arbitrators if a sole arbitrator was not agreed. It also provided for the appointment of a party’s appointed arbitrator as sole arbitrator if the other party failed to appoint its arbitrator within 14 days.

Owners commenced arbitration in a dispute relating to shortlanded cargo, and purported to appoint their arbitrator as sole arbitrator pursuant to Gencon clause 19(a). Charterers queried the appointment and jurisdiction of the arbitrator, arguing that the seat of the arbitration was Hong Kong, and that the law governing the arbitration (i.e., the curial law) was Hong Kong law, not English law. The sole arbitrator ruled on his jurisdiction, concluding that the arbitration was subject to the Arbitration Act 1996 and that Gencon clause 19(a) was applicable. In the circumstances, he had been properly appointed.…

Continue Reading High Court rules on inconsistency in charterparty arbitration clauses and applicable curial law

In Proton Energy Group SA v Orlen Lietuva [2013] EWHC 2872 (Comm), the court was required to decide whether a binding contract had been agreed between the parties. If a contract had been agreed, the court was required to decide whether it contained an implied condition precedent that it would only be binding if the…