OLDENDORFF GMBH & CO KG V SEA POWERFUL II SPECIAL MARITIME ENTERPRISES; OLDENDORFF CARRIERS GMBH & CO KG V SCIT SERVICES LTD; SCIT TRADING LTD V XIAMEN C&D MINERALS CO LTD (THE "MV ZAGORA")

[2016] EWHC 3212 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Teare, 15 December 2016

Contracts - Letters of indemnity - Local agent taking delivery without production of bill of lading - Agent representing several of the parties involved - On whose behalf delivery had been taken

Zagora had been arrested at Lanshan in respect of a bill of lading held by the Bank of China. The cargo of iron ore had been delivered without production of the bill of lading. That arrest led to the present litigation where shipowners sought an indemnity from the charterers Oldendorff pursuant to the terms of a letter of indemnity in respect of delivery without production, with claims for indemnities pursuant to similar letters of indemnity made down the chartering chain. The Chinese parties were no longer represented, but summary judgment was not sought for enforcement reasons. The letters of indemnity were on the owners' standard wording and the person named was Xiamen C&D Minerals Co Ltd, a buyer in the sale chain. The master had discharged the cargo to a person purporting to represent Xiamen's local agent, Sea-Road. It appeared that thereafter the cargo had been received by the ultimate buyers and the purchase price paid by Bank of China. When the vessel was subsequently arrested by BoC as bill of lading holder, Oldendorff requested the sub-charterers to put up security for her release but ultimately had to do it themselves. The position of Sea-Road was that it represented buyers in the port and was also nominated under the various charterparties (including by sellers) as agent to disponent owners, the fees being paid by head owners. The question was therefore essentially whether in taking delivery of the cargo, Sea-Road had acted for shipowners or buyers. Before abandoning the proceedings, Xiamen had entered a pleading that it had not nominated Sea-Road as its agent to take delivery.