Standard Chartered Bank v Pakistan National Shipping Corporation and Others (The “Lalazar”) - QBD (Admlty Ct) (Clarke J) - 26 May 1995

Plaintiff bank paid out on letter of credit in reliance on genuineness of bill of lading - Bill of lading alleged to contain fraudulent misrepresentations - Whether action should be stayed on basis of exclusive jurisdiction clause in bill of lading - whether plaintiff entitled to summary judgment

Oakprime International Ltd agreed to sell a quantity of bitumen to a purchaser on CIF terms. At the request of the purchaser Incombank HCMS opened a letter of credit in favour of Oakprime. The letter of credit was confirmed by the plaintiff bank. The letter of credit stated that shipment had to be effected not later than 25 October 1993 and was payable against documents which included a clean shipped on board bill of lading and an SGS certificate. Oakprime chartered the vessel Lalazar , owned by the Pakistan National Shipping Corporation, (“PNSC”) to carry the bitumen. In fact, the loading of the bitumen was not completed by 25 October 1993 so that Oakprime could not properly present conforming documents under the letter of credit. That fact was apparent to Oakprime, but there was no evidence or suggestion that PNSC knew the terms of the letter of credit.