Laemthong International Lines Company Ltd v Abdullah Mohammed Fahem & Co [2005] EWCA Civ 519 (05 May 2005)

Laemthong International Lines Company Ltd v Abdullah Mohammed Fahem & Co [2005] EWCA Civ 519 (05 May 2005)

The terms of the receivers' LOI purport to confer a benefit on the owners as agents of the charterers in delivering the cargo, and the owners are entitled to enforce the LOI directly against the receivers under section 1(1)(b) of the Contracts (Rights of Third Parties) Act 1999. The parties did not intend to exclude the owners from enforceability, and the commercial context supports this interpretation.

Citation
[2005] EWCA Civ 519
Parties
Claimant/respondent: Laemthong International Lines Company Limited; Second Defendant/appellant: Abdullah Mohammed Fahem & Co
Jurisdiction
England and Wales
Judgment Date
05 May 2005
Procedural Posture
Appeal From High Court (commercial Court) / Court of Appeal Judgment
Outcome
Appeal dismissed
Legal Topics
Third Party Rights, Letters of Indemnity, Agency, Enforcement of Indemnities, Contracts (rights of Third Parties) Act 1999
Commercial Law Shipping Law Contract Law Third Party Rights Letters of Indemnity Agency Enforcement of Indemnities Contracts (rights of Third Parties) Act 1999

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Parties

Laemthong International Lines Company Limited

Claimant/respondent

Abdullah Mohammed Fahem & Co

Second Defendant/appellant

Procedural Posture

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

Legal Issues

  1. 1 Whether shipowners (owners) are entitled to enforce the terms of the receivers' letter of indemnity (LOI) directly against the receivers under the Contracts (Rights of Third Parties) Act 1999
  2. 2 Whether the LOI purports to confer a benefit on the owners within the meaning of section 1(1)(b) of the 1999 Act
  3. 3 Whether the parties intended the LOI to be enforceable by the owners as third parties

Ratio Decidendi

The terms of the receivers' LOI purport to confer a benefit on the owners as agents of the charterers in delivering the cargo, and the owners are entitled to enforce the LOI directly against the receivers under section 1(1)(b) of the Contracts (Rights of Third Parties) Act 1999. The parties did not intend to exclude the owners from enforceability, and the commercial context supports this interpretation.

Court Disposition

Appeal dismissed

Orders

  • Declaration that owners are entitled to enforce the terms of the receivers' LOI against the receivers
  • Order that both charterers and receivers provide bail or other security to secure the release of the vessel from arrest