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Charterers’ indemnity – charterers held liable to indemnify shipowners for liability incurred on bills of lading

The facts

Bales of cotton were shipped from the USA to France under bills of lading which were prepared by charterers and presented to the master for signature. The charterers were responsible for loading the vessel. The master had no opportunity of checking that the cargo described on the bills of lading corresponded with that loaded.

Upon discharge certain markings on the bales of cotton were found to be different to those described on the bills of lading. On this account, a portion of the cargo was rejected by the receivers and the shipowners, under French law, were held liable for short delivery.

The shipowners sued the charterers for recovery.


In a brief judgment, the House of Lords (Loreburn LC, the Earl of Halsbury, Lords Atkinson, Gorrell and Shaw) affirmed the Court of Appeal’s decision fixing the charterers with liability.

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Charter Party Casebook