CoMaCo sold a quantity of bananas to Altfadul. On 14 December 2013 CoMaCo voyage chartered the vessel Baltic Strait. The cargo was shipped on the Baltic Strait under bills of lading dated 4 January 2014, with Altfadul as named consignees. The carriers under the bill of lading were also carriers under the charterparty.

On discharge, cargo damage was discovered. Altfadul rejected the cargo under the sale contract, and claimed a refund from CoMaCo. CoMaCo agreed a credit of USD 2,586,105.09 in favour of Altfadul. A near-identical sum (namely, USD 2,586,104.93) was paid by SIAT. (It appears that SIAT were the cargo insurers and that the payment was made to CoMaCo.) Altfadul became lawful holders of the bills of lading with title to sue the carrier.

Altfadul assigned their rights under the bill of lading to CoMaCo, and CoMaCo assigned their rights to SIAT. Accordingly, SIAT had title to sue as assignee of Altfadul's rights. A claim had been brought by Altfadul against the carrier, and SIAT joined the claim as assignee.

The arbitrators awarded Altfadul / SIAT the full value of the cargo damage, namely USD 4,567,351.13. This sum was made up of (a) Altfadul's own loss, which was USD 1,981,246.04 (as it had to give credit for the USD 2,586.105.59 promised by CoMaCo); and (b) the loss suffered by CoMaCo, ie the USD 2,856,105.59 promised to Altfadul. Altfadul claimed this sum on behalf of CoMaCo under Carriage of Goods by Sea Act 1992, s 2(4).

The carrier appealed.

Held (Andrew Baker J):

The carrier's appeal was dismissed and the award upheld (but for different reasons).

  1. Altfadul (and therefore SIAT) was entitled to damages equal to the full value of the cargo damage, irrespective of any recovery or entitlement to recover from the seller CoMaCo. A bill of lading holder suing in contract may recover full damages despite an earlier recovery from an intermediate seller. The bill of lading holder will hold the damages on trust to the extent of the recovery from the seller (R & W Paul v National Steamship (1937) 59 Ll L Rep 28).
  2. In order for a party who has title to sue to claim under s 2(4) on behalf of a party who has suffered loss, it is not necessary that the party suffering loss should previously have held title to sue under the bill of lading. Nothing in the language of s 2(4) suggests such a further requirement.
  3. Where holders of a bill of lading are also charterers (so that the bill of lading is a mere receipt in their hands) the transfer to the charterers of rights of suit under s 2(1) does not entitle them to recover under the bill of lading losses they may have suffered from the carrier.
  4. A claim cannot be made under s 2(4) on behalf of a party who has suffered loss if (as in this case) that party is the charterer of the vessel in respect of the bill of lading voyage so that in the charterer's hands the bill of lading would be a receipt only.

(Evylor Shipping v Altfadul and SIAT (The "Baltic Strait") [2018] EWHC 629 (Comm))

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