Shell International Petroleum Co. Ltd. v. Gibbs (The Salem) - Court of Appeal (Lord Denning M.R., Kerr and May L.JJ.) - 12 February 1982

“Salem” cargo not “taken at sea”

In December 1979 the Salem loaded 195,000 tons of crude oil in the Gulf for carriage from Kuwait to Italy. As she went down the east coast of Africa she changed her name to Lema , turned off to Durban and moored to a buoy one and a half miles offshore. Most of the oil was pumped ashore but 15,000 tons were left in the ship. The vessel was subsequently scuttled. The whole operation was the result of a fraud planned at least as early as October 1979. The oil had been loaded into the Salem by the Kuwait Oil Company in complete innocence. The master of the Salem , who was involved in the conspiracy, issued bills of lading for the oil to be delivered in Italy. The cargo was sold to Shell who quite innocently became the owners of the oil and therefore the losers.