WOLLONGONG COAL LTD V PCL (SHIPPING) PTE LTD (THE “ILLAWARRA FORTUNE”)

[2020] NSWSC 184, Supreme Court, New South Wales, Mr Justice Stevenson, 5 March 2020

Carriage of goods by sea – Bills of lading – Switch bills – Bills of lading providing “freight payable per charter party” – Time charterer taking assignment from vessel owner of rights under bills of lading – Whether assignee from vessel owner entitled to recover freight from shipper – Lien on sub-freights

PCL was the time charterer of the MV Illawarra Fortune and WCL was the shipper under the owner’s bills of lading in respect of a cargo of coal on board. There was also a voyage charter for the vessel between PCL and WCL’s parent company, where freight and shipping costs of US$3.2 million remained unpaid. PCL had taken assignment of the shipowner’s rights under the bills of lading and sought to recover US$3.2 million from WCL in respect of the unpaid freight under the voyage charterparty. Bills of lading had first been issued in August 2013 and identical switch bills had been issued in September 2013, identifying a third party as shipper in place of WCL. The question for the judge was whether the shipowner could have recovered from WCL the freight and shipping costs under the August bills and whether PCL could therefore do the same as assignee from the owner.