Yemen Bank v. Owners of The Future Express - Court of Appeal (Lloyd, Beldam and Rose L.JJ.) - 29 July 1993

C. & f. buyer required to reimburse issuing bank on arrival of shipping documents - Bank not paid because of buyer’s fraud - Whether bank entitled to sue shipowners in conversion as pledgees of goods

The vessel Future Express arrived at Hodeidah, Yemen, on 18 April 1985, carrying a cargo of Australian wheat. The wheat had been shipped in pursuance of a c. & f. contract dated 11 December 1984 between the charterers, as sellers, and the Ministry of Supply and Trade of the Yemen Arab Republic as nominal buyers. The effective buyer was an individual known as Mr. Dalali. The transaction was financed by the plaintiffs, the Yemen Bank for Reconstruction & Development. The letter of credit was opened on Mr. Dalali’s instructions.