Shipowners Songa time chartered the chemical tanker Songa Winds to Navig8, who voyage chartered to Glencore. Bills of lading were issued naming Ruchi as notify party. (Glencore had sold a quantity of sunflower seed oil to Aavanti. Aavanti had contracted to sell to Ruchi.)
At the discharge ports in India, the cargo was delivered to Ruchi without production of bills of lading. Aavanti provided a letter of indemnity ("LOI") to Glencore, requesting that delivery be made to Ruchi (or to such party as Glencore believed to be, to represent, or to be acting on behalf of Ruchi). Glencore provided an LOI to Navig8, requesting that delivery be made to Aavanti (or to such party as Navig8 believed to be, to represent, or to be acting on behalf of Aavanti). Navig8 were deemed (by virtue of a provision in the time charter) to have provided an LOI to Songa, requesting that delivery be made to Aavanti (or to such party as Songa believed to be, to represent, or to be acting on behalf of Aavanti).
SocGen, who claimed to be the lawful bill of lading holder, commenced proceedings against Songa for misdelivery. Songa claimed against Navig8 under their LOI and Navig8 claimed against Glencore under their LOI. The issue was whether the Navig8 and Glencore LOIs were engaged.
Held (Andrew Baker J):
The LOIs were engaged. In taking delivery from the vessel Ruchi represented Aavanti (or was acting on behalf of Aavanti) so that delivery was made to Aavanti as requested by the two LOIs.
This conclusion was based on a number of findings of fact, including:
- There was a standing practice between Aavanti and Ruchi for delivery to be made to Ruchi of cargo sold to it by Aavanti without production of bills of lading, and that practice extended to cases where Ruchi had not paid for the cargo prior to delivery.
- Ruchi was taken by the vessel's agent (appointed by Navig8) to be the receiver nominated by Aavanti.
- Aavanti had no office in India and no right to import cargo into India whereas Ruchi had its own designated tanks at the discharge ports.
- Aavanti had not appointed anyone other than Ruchi to receive the cargo on its behalf.
That conclusion meant that it was unnecessary to reach a conclusion on the belief that Ruchi represented Aavanti. In any event, the Judge held that there was insufficient evidence on that point to deal with it on a summary judgment application.
(Songa Chemicals v Navig8 Chemicals Pool and Navig8 Chemicals Pool v Glencore [2018] EWHC 397 (Comm))
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