BUG 5 SHIPPING LTD V ALLIA SYSTEMS LTD SA AND ANOTHER

[2015] EWHC 2550 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Popplewell, 27 August 2015

Carriage of goods by sea - Cargo laden on board not discharged at agreed discharge port - Order for sale

The cargo interests had failed to discharge the cargo at the agreed discharge port in Egypt. The judge made an order permitting the sale of the cargo in Israel. The pending agreement for sale to Turkish buyers had not materialised. There remained a risk, should the vessel proceed to Turkey, that the cargo would not be accepted due to its condition; and a further risk that the cargo would, at least in part, be discharged without payment and without security for the current claims. The amount of security offered by cargo interests was for demurrage only, not freight, and was wholly insufficient. The carriage contract required the issue of freight pre-paid bills of lading; but the cargo interests was not in a position to pay freight and there was no guarantee that they would be put in such a position upon arrival in Turkey. A P&I club undertaking should be supplied by shipowners as security, in the event that the price achieved for the cargo in Israel was lower.