In The Future Express 1 the Court of Appeal held that a bank, named as consignee in a bill of lading and holding the bill as security, had insufficient interest to sue the carrier who had delivered goods, covered by the bill, to a third party without the production of the bill. The case should therefore be of interest to specialists in international trade law and particularly to banks which seek to enforce security interests in goods represented by documents of title. However, despite the threat to the system of financing international trade by advancing money against documents presented, the future application of the decision is limited by two major factors: its extraordinary factual circumstances and the Carriage of Goods by Sea Act 1992.

The facts of the case were, as Lloyd, L.J., noted, “remarkable”. Simplified, they can be stated as follows. On 11 December 1984, Tradax concluded a c. & f. contract for the sale of 70,000 tons of Australian wheat. The ultimate buyer was the Yemeni Ministry of Supply and Trade, but the contract was concluded through a Mr Dalali. Dalali’s relationship with Tradax was ambiguous,2 but he was effectively the buyer from Tradax in this transaction. He was also responsible for opening a confirmed irrevocable letter of credit in favour of Tradax with a leading Yemen bank (hereinafter “the bank”), payable 180 days after presentation of the documents, which included a full set, clean on board bills of lading made out to the bank’s order and blank endorsed. The credit provided that stale documents were acceptable and the latest date for negotiation of documents was 18 July 1985.