Laemthong International Lines Company Ltd v Abdullah Mohammed Fahem & Co

Laemthong International Lines Company Ltd v Abdullah Mohammed Fahem & Co

The owners were entitled to enforce the terms of the receivers’ LOI under section 1(1)(b) of the Contracts (Rights of Third Parties) Act 1999 because the LOI purports to confer a benefit on them, and there is no indication that the parties intended to exclude such enforceability. The owners, as agents of the charterers for the purpose of delivery, are within the class of persons intended to benefit from the LOI’s indemnity provisions.

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
Civil Appeal / Appeal From High Court Preliminary Issues Determination
Outcome
Appeal dismissed
Legal Topics
Third Party Rights, Letters of Indemnity, Agency, Enforcement of Contractual Terms
Contract Law Shipping Law Third Party Rights Letters of Indemnity Agency Enforcement of Contractual Terms

Case Brief

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Parties

Laemthong International Lines Company Limited

Claimant/respondent

Abdullah Mohammed Fahem & Co

Second Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From High Court Preliminary Issues Determination

Legal Issues

  1. 1 Whether the owners are entitled to enforce the terms of the receivers’ letter of indemnity (LOI) 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 the Act
  3. 3 Whether the parties intended the LOI to be enforceable by the owners

Ratio Decidendi

The owners were entitled to enforce the terms of the receivers’ LOI under section 1(1)(b) of the Contracts (Rights of Third Parties) Act 1999 because the LOI purports to confer a benefit on them, and there is no indication that the parties intended to exclude such enforceability. The owners, as agents of the charterers for the purpose of delivery, are within the class of persons intended to benefit from the LOI’s indemnity provisions.

Court Disposition

Appeal dismissed

Orders

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