Disputes between the receivers of goods carried by sea under a bill of lading and the shipowner should in principle be governed by the contract of carriage, and hence normally by the bill of lading. Situations can however arise under English law in which the statutory provisions for transfer of that contract (s. 1 of the Bills of Lading Act 1855) do not permit the transferee to take the benefit of nor the liabilities under it. This can occur where the indorsement to the holder was for the purposes of security only; perhaps where the property does not pass between transferor and transferee at the appropriate time to trigger off the section1; or where the receiver has no bill of lading but a delivery order, or even no relevant document at all. In such circumstances the Brandt v. Liverpool 2 contract can be most useful: an implied contract can be held to have arisen where the receiver requests or takes delivery of the goods. This has two sides to it. The shipowner, in return (normally) for payment or the promise of payment of freight and/or other outstanding charges, delivers or promises to deliver, and promises to answer as on bill of lading terms in respect of the goods delivered: and the receiver, in return for delivery or the promise of delivery, undertakes to pay or pays outstanding charges.

The Elli 23 concerned a receiver of cargo in Saudi Arabia who had taken delivery from the shipowner. It was not clear whether or not he had done this against surrender of a bill of lading, for he was a party to a course of dealing with the shipowner whereby he sometimes took delivery before bills of lading had arrived, promising to tender the bills on their arrival. The shipowner sought to sue him for demurrage, for which the bill of lading would make him liable. It was not clear however that the shipowner was able to take advantage of the wording of the Bills of Lading Act, and hence it was argued that delivery had been taken under a Brandt v. Liverpool contract. This, it was argued, was governed by English law, being the law governing the bill of lading; and leave to serve out of the jurisdiction was sought under RSC Order 11, rule 1(1)(f)(iii).

Since the Brandt v. Liverpool contract is notionally a separate transaction, it is obviously in principle possible for it to be governed by a proper law different from that governing the bill of lading. Thus in The St. Joseph 4 it was held that receivers in Guatemala took the goods under a separate contract not governed by the law governing the bill of lading and hence unaffected by the package or unit limitation of the Hague Rules. These were alleged to govern the bill of lading by virtue of Belgian law, the law of the port of shipment. The bill of lading however contained no clause paramount nor choice of law clause, and, the shippers being French and the shipowners Norwegian, it was not clear what the proper law of the bill of lading was, nor whether the Belgian legislation applied to it. The contract under which the receivers took delivery of the goods from the shipowners was held to be in any case a separate one based on the express terms of the bill of lading only, and these did not