The article examines the robustness of bills of lading as security in the hands of a bank and the circumstances that may preclude the bank from recovering its losses or claiming against the carrier. It also considers the implications of using electronic bills of lading.
In a recent judgment of the English Commercial Court, The M/V Smart , which will be welcomed by owners, Mr Justice Butcher held that a shipowner could demand direct payment of freight under a bill of lading even though the bill of lading stated that the freight was payable “as per charterparty” and the vessel’s time charterer was not in default.
Disputes can arise over whether a cargo claimant’s arbitration notice was issued validly – and how (and if) the LOU arbitration provision should be read with the bill of lading’s arbitration clause. Recent guidance stresses caution in such circumstances.