494. Glencore International AG v MSC Mediterranean Shipping Company SA (the “MSC Katrina”) [2015] EWHC 1989 (Comm)

Electronic Release System (ERS) deployed at major port not discharging carrier from obligation to deliver in accordance with bill of lading

The Facts

Glencore shipped three containers of cobalt briquettes from Freemantle to Antwerp.

The bill of lading named Steinweg, Glencore’s agent, as the notify party. The bill was negotiable and contained an English choice of law and an English High Court jurisdiction clause.

On arrival at Antwerp the cargo was handled under an Electronic Release System by which computer generated pin codes were issued to bill of lading holders for them to take delivery.

The ERS was a voluntary system introduced by the port. Upon presentation to it of a bill of lading and payment of freight, the carrier would send a release note with a pin number to the consignee’s designated email address. Each pin was automatically generated by the system and corresponded with a code stored in the port authority’s database.

The port authority approved two model covenants: one between the terminal operator and the shipping company or its agent and one between the shipping company and the freight forwarder.

In this case, neither model covenant was adopted or played a role.

The bill of lading in question provided:

If this is a negotiable bill of lading, then one original bill of lading duly endorsed must be surrendered by the merchant to the carrier in exchange for the goods or a delivery order”.

In the year preceding this transaction Glencore made 69 shipments of cobalt briquettes (on average one per week) carried by MSC to Antwerp and collected by Steinweg.

On each occasion, the ERS was used successfully.

In the ordinary course, bills were presented, freight and charges paid in return for which MSC sent Steinweg a release note containing a pin code valid for a month.

In this case, when Steinweg’s hauliers presented the pin code, two of the three containers had been stolen.

MSC denied liability and argued that the provision of the release note was equivalent to a “delivery order” as stipulated in the bill of lading as a substitute for actual delivery.

Findings

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