A bill of lading is a contract between ship owner and shipper
The owners entered into a time charter with time charterers who sub-chartered to the shipper.
The charterparty provided for the usual employment and agency and that the owners would have a lien over cargoes and freight.
Sugar was shipped from Mauritius to Bombay under bills of lading which were held by the shipper himself.
One month’s hire was unpaid and the owners attached the sugar to secure their claim.
The shipper had notice of the existence of the charterparty but the terms were not incorporated into the bills of lading.
The High Court in Bombay (Russell J) held that a lien existed over the cargo. The order of the High Court was reversed by the Court of Appeal.
The Privy Council (Lords MacNaghten and Lindley and Sir Arthur Wilson – judgement given by Lord Lindley) held that the bill of lading constituted a contract between the shipper and the ship owner and that there was no lien over the cargo which was provided for in a different contract with different parties i.e. the charterparty.
Counsel on each side were Carver and Hamilton (Lord Sumner).
The case holds that a bill of lading is a contract between the ship owner and the shipper and not merely evidence of its terms.
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