International Harvester Co. v. TFL Jefferson, her engines, boilers, etc. and P & O Strath Services Ltd. - U.S. District Court (S.D.N.Y.) (Sprizzo D.J.) - 22 September 1988

Delivery of cargo into custody of government-controlled port authority - Whether delivery obligation satisfied - Whether in accordance with bill of lading - Government pressure to deliver against guarantee rather than bill of lading - Whether capable of amounting to “restraint of princes”

The plaintiffs were the shippers of a cargo of offset disc harrows, pursuant to an order bill of lading issued by the defendants’ agent, which named the Rahad Corporation, an enterprise of the Sudanese Ministry of Agriculture, as consignee. The cargo was discharged at Port Sudan and, in accordance with the customs and regulations of that port, delivered to the Seaports Corporation, a government department serving as the port authority. Under pressure from the Ministry of Agriculture, the defendants’ agent then provided the consignee with a delivery order enabling them to take possession of the disc harrows, in exchange for a government-backed letter of guarantee. Contrary to the usual practice, the original bill of lading was not produced, but the guarantee purported to indemnify the defendants and to pay all freight charges if it later transpired that the cargo belonged to someone else. Despite this, the plaintiffs were not paid in full and moved for summary judgment against the defendants, on the basis of the admitted fact that they had released the goods to the consignee without requiring the consignee to produce the original bill of lading.