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Liner bill of lading – signed by charterer’s agent on behalf of master – held to be owner’s bill

The facts

A cargo of nutmeg and mace was shipped from St. George’s, Grenada in the West Indies to Rotterdam. During the voyage, 23 containers were lost overboard. The goods were shipped under a liner bill of lading in the name of the time charterer. The shipper alleged that the contract underlying the bill of lading had been made a month before with the agents of the charterer in Granada who signed the bill “for the Master”.

The shipper instituted action against the charterer in England after which it obtained leave from the Admiralty Registrar to join the owner of the vessel, a Liberian corporation.

The owner applied to court to have the Admiralty Registrar’s decision set aside on the basis that it and not the charterer was party to the bills of lading. Finding that the owner was party to the bills of lading would put an end to the proceedings in England on two bases: (1) the bills contained a jurisdiction clause in terms of which action had to be instituted in the jurisdiction at the carrier’s principal place of business, in this case Germany and (2) if the owner was liable on the bills, there could be no viable action against the charterer, to sustain a joinder of the owner.


The court of first instance (Sheen J) found that there was sufficient evidence to indicate that the charterer was liable on the bills of lading.

The court of first instance recognized that the proceedings were interlocutory and that evidence might be presented at trial to show that the bills of lading evidenced contracts between the shipper and the charterer. The Admiralty Registrar’s decision was, accordingly, confirmed.

The Court of Appeal, relying on a number of decisions dating from the early twentieth century espoused the dogma that bills signed by the master are always owner’s bills where a time charter (not by demise) is involved.

The Court of Appeal dismissed the notion that evidence could possibly be led that the contracts were with the charterer and upheld the owner’s contention that the shipper had no case against the charterer. This being so there would be no purpose in joining the owner in proceedings in England because the main case would fall away.

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