The court was asked two questions: ‘ An FOB buyer of goods, who has sold on CIF terms and chartered a vessel, loses its on sale during the course of the voyage, and finds a new buyer at a different discharge port. It therefore needs the existing bills of lading to be replaced with new ‘switch’ bills providing for the new discharge port. Its bank holds the original bills as security for the money advanced to its customer for the purchase of the cargo. The owner of the goods agrees with the shipowners to issue new bills of lading and the bank facilitates the transaction by allowing the bills to be switched at its counters, so that the bank retains possession of effective bills at all times to protect its security interest. The new switch bills of lading are consigned to the order of the bank. Does the bank thereby become an original party to the bill of lading so as to come under liability to the shipowners on the terms of the contract of carriage contained in or evidenced by the bill of lading, including, for example, liability for shipment of dangerous cargo or demurrage?
And ‘whether the lawful holder of a bill of lading who has rights of suit under section 2 of the Carriage of Goods by Sea Act 1992 (‘COGSA’) in respect of the contract of carriage contained in or evidenced by a bill of lading which contains an arbitration clause is bound by that arbitration clause and so bound to submit to arbitration the issue whether it has assumed liabilities under the contract.’
Judges:
Popplewelll J
Citations:
[2018] EWHC 1902 (Comm), [2018] Bus LR 1798, [2018] WLR(D) 493
Links:
Jurisdiction:
England and Wales
Contract, Transport, Arbitration
Updated: 30 May 2022; Ref: scu.625920