Far East Chartering Ltd & Anor v Great Eastern Shipping Company Ltd [2012] EWCA Civ 180 (09 March 2012)

Far East Chartering Ltd & Anor v Great Eastern Shipping Company Ltd [2012] EWCA Civ 180 (09 March 2012)

The LOI was addressed to both owners and charterers, and the shipowners, as agents for the charterers, delivered the cargo to Binani by surrendering possession and issuing a delivery order, thus fulfilling the LOI's conditions. There was no evidence of bad faith or manifest illegality, so public policy did not preclude enforcement. The shipowners were entitled to enforce the LOI against Binani under the Contracts (Rights of Third Parties) Act 1999.

Citation
[2012] EWCA Civ 180
Parties
First Defendant: Far East Chartering Limited (formerly known as Visa Comtrade Asia Limited); Second Defendant / Appellant: Binani Cement Limited; Claimant / Respondent: Great Eastern Shipping Company Limited
Jurisdiction
England and Wales
Judgment Date
09 March 2012
Procedural Posture
Appeal / Court of Appeal Judgment on Appeal From High Court (commercial Court)
Outcome
Appeal dismissed
Legal Topics
Letters of Indemnity, Bills of Lading, Third Party Rights, Delivery of Goods, Indemnity Enforcement, Public Policy in Contracts
Commercial Law Shipping Law Contract Law Letters of Indemnity Bills of Lading Third Party Rights Delivery of Goods Indemnity Enforcement +1 more

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Parties

Far East Chartering Limited (formerly known as Visa Comtrade Asia Limited)

First Defendant

Binani Cement Limited

Second Defendant / Appellant

Great Eastern Shipping Company Limited

Claimant / Respondent

Procedural Posture

Appeal / Court of Appeal Judgment on Appeal From High Court (commercial Court)

Legal Issues

  1. 1 Whether the letter of indemnity (LOI) issued by Binani was addressed to the charterers and enforceable by shipowners under the Contracts (Rights of Third Parties) Act 1999
  2. 2 Whether the shipowners delivered the cargo to Binani within the meaning of the LOI
  3. 3 Whether public policy precludes enforcement of the LOI in the circumstances

Ratio Decidendi

The LOI was addressed to both owners and charterers, and the shipowners, as agents for the charterers, delivered the cargo to Binani by surrendering possession and issuing a delivery order, thus fulfilling the LOI's conditions. There was no evidence of bad faith or manifest illegality, so public policy did not preclude enforcement. The shipowners were entitled to enforce the LOI against Binani under the Contracts (Rights of Third Parties) Act 1999.

Court Disposition

Appeal dismissed

Orders

  • Declaration that Binani is bound to indemnify the shipowners pursuant to the LOI dated 6 October 2008
  • Costs to be determined as per standard practice