In brief – No bond for cargo provided by consignee
In the case Metall Market v Vitorio Shipping, it was
held on appeal that the vessel's owner was entitled to refuse
to deliver the cargo and was also entitled to recover all expenses
associated with it.
Only 9% of cargo of steel coils insured on "The Lehmann
Steel coils were carried under four bills of lading but only the
cargo under the fourth bill of lading (comprising some 9% of the
total cargo) was insured.
Consignee liable for 29% of costs of two general average
On route from China to St Petersburg two general average
incidents took place. Firstly the vessel was captured by pirates
and held for 42 days off Somalia until a substantial ransom was
paid. On her release the vessel suffered a main engine breakdown
and had to be towed.
The general average adjusters decided that both the payment of
the ransom and the cost of the tow were allowable general average
disbursements, totalling over US$3.5 million. The consignee was
liable for 29% of that total.
Vessel sails to Finland and cargo discharged into warehouse
subject to lien
When the vessel arrived at St Petersburg, no bond had been
provided by the consignee and only an insurer's guarantee had
been provided for the cargo under the one bill of lading that was
The owners of the vessel, wishing to retain their lien on the
cargo and, being advised that if the vessel berthed they would be
forced to discharge its cargo, sailed to Finland, where they
discharged the cargo into a warehouse subject to their lien.
Arbitrators had found that the amount and form of security which
had been sought by the owner was reasonable and that the
consignee's failure and refusal to provide the missing security
Appeal overturns first instance decision that consignee not
liable to pay shipowner's costs
At first instance it was held that the owner of the vessel was
entitled to exercise a lien on the cargo, but the consignee was not
liable to pay the costs incurred by the shipowner in preserving and
caring for the liened cargo.
On appeal it was held that the owner was entitled to refuse to
deliver the cargo, despite receiving and retaining the
insurer's guarantee covering the general average liability, and
was also entitled to recover all the expenses associated with the
storage and taking care of the cargo.
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