Lloyd's Maritime and Commercial Law Quarterly


Ahmet Gelgeç*

The Sienna
It is trite law that the bill of lading is considered just a mere receipt in the hands of the charterer notwithstanding whether he is the shipper or the transferee.1 The unusual facts of The Sienna 2 add a new dimension to this “mere receipt rule”. The novelty of the case lies in the question of what would happen to the contractual function of the bill of lading where the charterer has later ceased to be the charterer, as a result of another contract (a novation agreement) in which the parties agreed that the initial charterer will be prospectively replaced by another from the date of the novation agreement.


BP Oil International Ltd (“BP”) voyage-chartered3 the vessel Sienna from Euronav NV, the owners, for the carriage of a cargo of low sulphur fuel which was sold by BP to Gulf Petrochem FZC (“Gulf”) on ex-ship terms destined to Fujairah or Singapore. A bill of lading was issued to BP. Unicredit Bank AG (“the Bank”) financed the purchase and issued a letter of credit in favour of BP, as the financier of Gulf. Once BP was paid under the letter of credit,4 Gulf requested BP to transfer the bill of lading directly to the Bank but BP was unable to do so, as it had yet to be in its possession, due to COVID restrictions at the time. Gulf, BP and Euronav had also entered into a novation agreement which would prospectively replace BP with Gulf as charterer from the date of the agreement.5 Instead of Fujairah, on Gulf’s instructions, the cargo was discharged in Sohar, Oman by ship-to-ship (STS) transfer only against Gulf’s letter of indemnity, without requiring production of the bill of lading, which was subsequently endorsed by BP and received by the Bank well after the discharge.6 As the Bank had not been repaid the value of the cargo, it started proceedings against the owners to recover the amount that it financed, claiming damages for misdelivery based on a breach of the contract, as the latter discharged the cargo without production of the bill.
The trial judge, Moulder J, dismissed the Bank’s claim on two grounds.7 First, the bill of lading was held as a mere receipt in BP’s hands from the date of its issue, as BP was both


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