NAVIG8 CHEMICALS POOL INC V AETURNUM ENERGY INTERNATIONAL PTE LTD (THE “NAVIG8 AMETRINE”)

[2021] EWHC 3132 (Comm), Queen's Bench Division, Commercial Court, Christopher Hancock QC, sitting as a High Court Judge, 23 November 2021

Contracts (letter of indemnity) – Discharge of cargo without production of bill of lading – Defendant’s liability under letter of indemnity – Obligations under letter of indemnity – Interpretation – Breach – Quantum

The claimant disponent owner of the vessel Navig8 Ametrine sought an indemnity from the defendant voyage charterer under a letter of indemnity (LOI) issued in respect of the discharge of a cargo of light naphtha without production of the bill of lading. The charterparty provided for the possibility of such discharge upon voyage charterers’ request and against an LOI. Following discharge, a bank asserting that it was the lawful holder of the bill of lading had sought possession of the cargo and arrested the vessel. It was alleged that the defendant’s buyer had been selling goods held in its tanks without the knowledge of its banks. As the defendant did not assist in providing security for the release of the vessel from arrest, the claimant paid US$9.5m to the bank for the owners’ P&I Club to procure the release of the vessel. The issues now before the court essentially concerned the defendant’s liability under the LOI. The defendant was by this stage unrepresented.