Unicredit Bank A.G. v Euronav N.V. ' Court Of Appeal Judgment In Respect Of Misdelivery Claims Under Bill Of Lading Contracts

• Jurisdiction: European Union
• Law Firm: Quadrant Chambers
• Subject Matter: Litigation, Mediation & Arbitration, Transport, Marine/ Shipping, Arbitration & Dispute Resolution
• Author: Mr Robert Thomas KC and Paul Toms
• Published date: 15 May 2023

On 4 May the Court of Appeal handed down judgment in a case likely to be of interest to shipowners, cargo interests and financing banks, Unicredit Bank A.G. v Euronav N.V. [2023] EWCA Civ 471.

The essential question for the Court was whether a shipowner, Euronav, was liable to the Bill of Lading holder, Unicredit, for delivering a cargo of oil from the vessel Sienna without production of the Bill of Lading.

The Facts

The Sienna had initially been voyage chartered by BP Oil International Limited ("BP") from Euronav. A Bill of Lading was issued by Euronav with BP named as shipper. Following the sale of the cargo by BP to Gulf Petrochem FZC ("Gulf"), Euronav, BP and Gulf entered into a novation agreement by which Gulf became the voyage charterer in place of BP.

Unicredit had financed Gulf's purchase of the cargo from BP. Gulf had, at Unicredit's request, asked BP to indorse the Bill of Lading and send it to Unicredit. However, due to COVID restrictions, that had not happened by the time of discharge. Rather BP remained in possession of the Bill of Lading.

Gulf instructed Euronav to discharge the cargo by STS transfer to two vessels in Oman which Euronav duly did.

Unicredit was not repaid by Gulf the sum which it had financed for the purchase of the cargo.Therefore, when the Bill of Lading was subsequently indorsed to Unicredit, it brought a claim against Euronav alleging a breach of contract contained in or evidenced by the Bill of Lading by reason of the delivery of the cargo without production of the Bill of Lading

Decision of Moulder J

At first instance, Moulder J held that Unicredit's claim failed on the basis that:

1. Since the Bill of Lading was - on issuance - a mere receipt because the shipper and the voyage charterer were the same party i.e. BP, it was not at that time a contract at all. She rejected the argument that when BP ceased to be the voyage charterer by virtue of the novation agreement, a contract came into existence at that stage. Accordingly, at the time of discharge, Euronav's contractual obligations were set out in the Charterparty alone namely to discharge without production of the Bill of Lading if ordered to do so by the voyage charterer. As such, there was no breach of contract.
2. Even had there been a Bill of Lading contract at the time of delivery, breach of the same had caused no loss or the same loss would have been suffered by Unicredit in any event.

The Appeal

Unicredit appealed against each of those findings.

As to the first...