In a recent U.S. Fifth Circuit Court of Appeals decision claims brought by the cargo claimant against the vessel owner failed because there was no privity of contract between the vessel owner and cargo claimant. The bill of lading had been issued on behalf of a sub charter “as carrier” and the charterer had been dismissed from the proceedings when it filed for bankruptcy protection. Even if the bill of lading had evidenced a contract between the vessel owner and cargo claimant, the claim still failed in the U.S. because the charterers’ agent had exceeded the charterers’ authority when issuing a bill of lading that did not conform with the mate's receipt. The Court of Appeals decision is discussed in a paper by Michael Chalos and Ryan Gilsenan of Chalos, O’Connor & Duffy, LLP, New York which is available to view below.
Had the claim had been brought in England and been subject to English law it is likely that the claim against the owner would also have failed on grounds of privity. However, while it is not clear from the judgment whether questions of apparent or ostensible authority were considered, it is likely that the decision would have been different if the claim had been decided on English law principles applying to the charterers’ authority to issue bills of lading. The English law perspective is discussed by Eduardo Prim of MFB Solicitors which is also available to view below.
