UniCredit Bank AG v Euronav NV – The Commercial Court dismisses the claim for delivery error

0

PREVIEW

Madam Justice Moulder today delivered her judgment in the case of Unicredit Bank AG v Euronav NV [2022] EWHC 957 (Comm), a claim from a German bank under a bill of lading for error in delivery by the owners of the Sienna, Euronav.

Unicredit financed the purchase by Gulf Petrochem FZC (“Gulf”) of 80,000 tonnes of LSFO (“the Cargo”) from BP Oil International Limited (“BP”). The agreements put in place between Unicredit and Gulf provided that the cargo would be resold to sub-buyers on terms obliging these sub-buyers to pay Unicredit directly and, consequently, to reimburse the sums financed.

BP had originally chartered the vessel from Euronav and was the shipper under the bill of lading. The charter party required Euronav to discharge the cargo without production of the bill of lading if the charterer requested it.

Following Gulf’s payment of the purchase price to BP by means of a letter of credit issued by Unicredit, BP, Euronav and Gulf entered into a novation agreement whereby BP ceased to be the charterer and Gulf became one in his place.

At the time of unloading the cargo, the bill of lading remained in the possession of BP and had not been endorsed.

Euronav unloaded the cargo without producing the bill of lading.

The sums financed by Unicredit have not been reimbursed either by Gulf or by the sub-purchasers. Having become the rightful holder of the bill of lading after the discharge date, Unicredit therefore brought an action for damages for breach of a contract of carriage supposedly contained in the bill of lading by Euronav delivering the cargo without production of the bill of lading

Madam Justice Moulder denied the request.

First, it held that the bill of lading did not contain any contract of carriage at the time of unloading: see paragraphs 27-49 of the judgment. She maintained that the bill of lading, when issued, was merely a receipt since BP was also the voyage charterer at the time. It rejected Unicredit’s argument that the novation had the same effect as if BP had endorsed the bill of lading to a third party. In other words, it rejected the argument that a contract “arose” between BP and Euronav under the terms of the bill of lading when BP ceased to be the charterer due to the novation.

Second, it held that even though the bill of lading contained a contract of carriage at the time of discharge, the discharge of the cargo without production of the bill of lading did not cause the loss claimed or such loss would have been suffered by Unicredit in any event. reason: see points 89-122.

Robert Thomas QC and Paul Toms acted for Euronav, commissioned by Andrew Preston, Dolly Brown and Paul Best of Preston Turnbull LLP.

Share.

Comments are closed.