BC Court Of Appeal Upholds The Right Of A Shipowner To Direct Payment Of Freight

The B.C. Court of Appeal has confirmed that a ship owner which is a party to a bill of lading has the right to direct payment of unpaid freight that would otherwise be payable to a third party. In doing so, the Court has adopted, for the first time, the longstanding position in English law in Canada. [Byatt International SA v. Canworld Shipping Company Ltd. et al, (2013) BCCA 427]

Byatt International SA ("Byatt"), the owner of the vessel "LOYALTY",had time chartered it to Korea Line Corporation ("KLC"). KLC in turn had time chartered the ship to MUR Shipping BV ("MUR").

Subsequently Canworld Shipping Company Limited ("Canworld"), who had a service agreement with Prism Sulphur Corporation ("Prism") to transport Prism's sulphur worldwide, voyage chartered the vessel from MUR. In this case, the sulphur was being shipped to Australia pursuant to a bill of lading signed by the "LOYALTY's"...