Tag: Charterparty

DELIVERY WITHOUT PRESENTATION OF BILL OF LADING – LOI WON’T SAVE YOU: SHIPOWNER LIABLE FOR MISDELIVERY DESPITE INDEMNITY

In United Overseas Bank Ltd v The “Maersk Katalin” [2026] 1 Lloyd’s Rep 18, the Singapore High Court reaffirmed that delivery of cargo without presentation of original bills of lading remains a fundamental breach, even where carried out against letters of indemnity. The Court held that LOIs merely shift commercial risk but do not authorise misdelivery, and rejected arguments of consent, ratification and causation. Significantly, the Court emphasised that the burden lies on the carrier to prove that the loss would have occurred in any event – a burden not easily discharged. The decision underscores the continued strict liability regime in misdelivery cases, particularly where banks as bill holders are involved.

MARITIME LAW – CLAUSES 28 AND 29 BARECON 2001 – OWNERS CAN’T PICK ANY PORT: COURT LIMITS ‘CONVENIENCE’ IN VESSEL REPOSSESSION CLAUSE

In Songa Product and Chemical Tankers III AS v Kairos Shipping II LLC [2026] 1 Lloyd’s Rep 100, the Court of Appeal held that a clause allowing owners to repossess a vessel at a location “convenient to them” does not entitle them to demand redelivery at any distant port of their choosing. The Court emphasised that repossession must occur as soon as reasonably practicable, and where the vessel is already at a safe and accessible port, owners cannot require charterers to incur the cost and risk of sailing it across the world. The decision clarifies that charterers, as gratuitous bailees post-termination, are only obliged to preserve the vessel – not to undertake burdensome repositioning for the owners’ convenience.

ADMIRALTY – LIMITATION OF LIABILITY – REPAIRS VS CARGO REMOVAL: SUPREME COURT DRAWS THE LINE ON LIMITATION1976, ARTICLE 2

In MSC Mediterranean Shipping Co SA v Conti 11 Container Schiffahrts-GmbH & Co KG (The “MSC Flaminia”) [2025] 2 Lloyd’s Rep 150, the UK Supreme Court clarified the scope of the 1976 Limitation Convention. The Court held that charterers may limit liability for claims brought directly by owners, rejecting the Court of Appeal’s restrictive “owner’s original loss” rule. However, it reaffirmed that claims for loss of or damage to the vessel itself and consequential losses remain non-limitable. Importantly, the Court drew a distinction between repair costs (not limitable) and cargo-related costs (potentially limitable): while payments to authorities, removal of fire-fighting water, and waste disposal were treated as repair costs, the discharging and decontamination of cargo fell within Article 2.1(e) as limitable claims. The ruling underscores the need for careful characterisation of claims when invoking limitation rights.