Shell International Petroleum Co. Ltd. v. Gibbs (The Salem) - House of Lords (Lords Diplock, Scarman, Roskill, Brandon and Brightman) - 17 February 1983

“Salem” fraud - Liability of cargo underwriters under SG policy

Shell had been deprived by fraud of a cargo of nearly 200,000 tons of crude oil which they had bought on cif terms. The facts of the case are probably well known by now. Conspirators in South Africa had bought the vessel Salem , manned her and chartered her out to an innocent charterer for the carriage of crude oil to Italy. The master and officers of the Salem were parties to the conspiracy. Instead of proceeding to Italy the vessel diverted to Durban, discharged 180,392 tonnes there, went out to sea again and was scuttled off Dakar with about 15,840 tonnes still on board.