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Master requested by charterers to discharge without production of bill of lading – charterers liable to indemnify owners for loss suffered

The facts

Gasoil was shipped from Sicily to Nordenham on the River Weser under bills of lading.

The time charterers ordered the master to discharge the cargo without the production of the bills of lading.

The cargo was discharged without the production of bills of lading to receivers not entitled to the cargo.

The shippers arrested the vessel which caused the shipowners a loss of earnings and various other expenses.

The shipowners sought to hold the charterers liable, either on the express terms of the employment and agency clause contained in the charterparty or an implied obligation to indemnify existing alongside the terms of the charterparty.


The Commercial Court (Staughton J) held the charterers liable on the basis of an implied indemnity.


Although the court found as a fact that the charterers ordered the discharge in the absence of a bill
of lading, the evidence was that this requirement was overlooked by both the ship’s agent and the master. This gave rise to the enquiry as to whose agent the “ship’s agent” really was, a question skirted by the court in the solution applied.

If there had been a direct order to discharge with conscious disregard of the absence of a bill of lading, the result of this case would be correct. On the evidence it looks rather more like a culpable omission on the part of the master.

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Charter Party Casebook