Bill of lading – parties to contract
The vessel while on time charter to Watts, Watts & Co moved a shipment of coal from Middelsborough and London under four bills of lading, destination Vladivostock.
Three of the bills were signed by the captain underneath the printed words “for Captain and Owners”. The fourth bill was signed by the charterer underneath the same inscription.
The vessel was unable to enter the harbour of Vladivostock due to ice. The master waited three days and then sailed for Nagasaki were he discharged the cargo. The day after he left Vladivostock for Nagasaki, the wind changed and the ice cleared.
The cargo owners sought to hold the owner of the vessel liable for the losses incurred due to the failure to discharge at the named destination.
The charterparty provided that the captain would be under the orders and direction of the charterers who indemnified the vessel owner from the consequences of the captain signing bills of lading by order of the charterer.
One of the points raised by the owner was that the charterer was party to the bills of lading.
The court of first instance (Channell J) found that the first three bills were, as a matter of construction, contracts between the vessel owner and the consignees. This was because they were signed specifically on behalf of the owner.
With regard to the fourth bill, signed by the charterer, the court’s reasoning was that because charterer had power to order the captain to sign the bills signing above his name and that of the owner, this had the same effect as a signature by the captain on behalf of the owner.
The majority of the Court of Appeal and all four Law Lords in the House agreed with Channell J on all three points.
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