< Back to insights hub


Commercial Disputes Weekly – Issue 1619 May 2023


"The mere receipt principle…applies in this case to render the Bill of Lading a contract of carriage… when the Charterparty ceased to perform that function…"Unicredit Bank AG v Euronav NV

BP Oil International Ltd (“BP”) sold a cargo of oil to Gulf Petrochem FZC (“Gulf”) and voyage chartered a vessel from Euronav, the defendant owner. The claimant bank, Unicredit, financed the purchase of the oil. Euronav issued a bill of lading to BP on shipment. Unicredit paid for the cargo and the voyage charter was novated to Gulf. The bill of lading should also have been endorsed to Unicredit before delivery of the cargo but there was a delay and so the cargo was delivered without production of the original bill of lading against a letter of indemnity from Gulf. After discharge of the cargo BP endorsed the bill of lading to Unicredit. It then transpired that Gulf had acted fraudulently and did not repay the sums to Unicredit. It brought a claim against Euronav for breach of the contract of carriage evidenced by the bill of lading. The Court of Appeal found in favour of Euronav but confirmed that where a bill of lading initially serves only as a receipt because it was issued to the voyage charterer, upon novation of the charterparty the bill of lading then becomes evidence of the contract of carriage because it is no longer in the hands of the charterer.
Unicredit Bank AG v Euronav NV [2023] EWCA Civ 471, 4 May 2023

Real Estate
A piece of land was subject to a restrictive covenant that was for the benefit of the neighbouring land and provided that ‘no additional buildings whatsoever should at any time be erected on the land’. The owners of the land had obtained planning permission to knock down the existing house on the land and build a replacement, larger building. The court considered and interpreted the wording of the covenant and concluded that it did not prevent the construction of the proposed larger building. The intention of the covenant appears to have been to prevent additional buildings being constructed. If it had been intended to preclude the replacement, extension or alteration of the existing building, that would have been a major interference in the use of the land and it could be expected that clear and explicit words would have been used if that is what the parties intended. Of particular relevance was the fact that the covenant was entered into by the owner of the land in relation to the use of his own land. It is unlikely that he would have agreed such a draconian provision.
McDonagh and another v Reeve [2023] EWHC 933 (Ch), 28 April 2023

Insurance – Interest
In a dispute involving an insurance claim for a personal injury suffered in Spain, liability was admitted and the award of damages calculated in accordance with Spanish law. A dispute arose as to whether Spanish or English law governed the award of interest. The court held that the recovery of interest provided for by Spanish law under Article 20 of the Spanish Insurance Act was, pursuant to Rome II (which applied because the claim commenced in 2019 but has been incorporated into English law post-Brexit) and as a matter of European law, substantive, not procedural. It was a substantive right closely associated with the right to damages and as such, did not arise out of a matter of discretion through the award of interest under English procedure but arose as a right pursuant to the lex causae, applied as result of the application and interpretation of Rome II.
Nicholls and another v Mapfre Espana Compania de Seguros y Reaseguros SA [2023] EWHC 1031 (KB), 4 May 2023

The Supreme Court was due, later this year, to hear the appeal in on the demurrage claim relating to the “ETERNAL BLISS”. However, the matter has now settled between the parties. The issue now rests with the 2021 decision of the Court of Appeal which provided that in the absence of any contrary indication in the charterparty, demurrage liquidates the whole of the damages arising from a charterer’s breach of charter in failing to complete cargo operations within the laytime. If a ship owner wishes to recover damages in addition to demurrage arising from delay, it must establish a breach of a separate obligation by the charterer. The Court of Appeal decision can be found here:
K Line Pte Ltd v Priminds Shipping (HK) Co Ltd [2021] EWCA Civ 1712, 18 November 2021

Should you wish to discuss any of these cases in further detail, please speak with a member of our London dispute resolution team below, or your regular contact at Watson Farley & Williams:

Robert Fidoe
Ryland Ash
Charles BussNikki Chu
Dev DesaiSarah Ellington
Andrew HutcheonAlexis Martinez
Theresa MohammedTim Murray
Mike Phillips
Rebecca Williams

< Back to insights hub

< Back to insights hub