Far East Chartering Ltd & Anor v Great Eastern Shipping Company Ltd

Far East Chartering Ltd & Anor v Great Eastern Shipping Company Ltd

The letter of indemnity was addressed to both the owners and the charterers and was capable of acceptance by the charterers. The shipowners, as agents for the charterers, complied with the request to deliver the cargo, divesting themselves of possession and enabling Binani to obtain the cargo without production of the original bills of lading. There was no public policy bar to enforcement as the LOI was issued in the context of a bona fide contractual dispute, not to facilitate manifestly unlawful conduct.

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
Civil Appeal (commercial) / Appeal From High Court Judgment
Outcome
Appeal dismissed
Legal Topics
Letters of Indemnity, Bills of Lading, Third Party Rights, Delivery of Cargo, Indemnity Enforcement, Public Policy
Commercial Law Shipping Law Contract Law Letters of Indemnity Bills of Lading Third Party Rights Delivery of Cargo 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

Civil Appeal (commercial) / Appeal From High Court Judgment

Legal Issues

  1. 1 Whether the shipowners can enforce a letter of indemnity issued by receivers to charterers under the Contracts (Rights of Third Parties) Act 1999
  2. 2 Whether the letter of indemnity was addressed to the charterers and/or shipowners
  3. 3 Whether delivery of cargo to receivers was effected by shipowners

Ratio Decidendi

The letter of indemnity was addressed to both the owners and the charterers and was capable of acceptance by the charterers. The shipowners, as agents for the charterers, complied with the request to deliver the cargo, divesting themselves of possession and enabling Binani to obtain the cargo without production of the original bills of lading. There was no public policy bar to enforcement as the LOI was issued in the context of a bona fide contractual dispute, not to facilitate manifestly unlawful conduct.

Court Disposition

Appeal dismissed

Orders

  • Declaration that Binani Cement Limited is bound to indemnify the owners (Great Eastern Shipping Company Limited) pursuant to the letter of indemnity dated 6 October 2008.