22/10/2014

Standard Chartered Bank v. Dorchester LNG

 

In a judgment handed down today, the Court of Appeal considered the requirements for becoming the lawful holder of a bill of lading under COGSA 1992, and the nature of a claim for payment under a letter of credit.  The court held that a bank does not become the holder of a bill of lading delivered to the bank as part of a presentation under a letter of credit, simply upon indorsement and physical delivery, and that the bank must accept the rights under the bill of lading before it becomes the holder.  The court also held that a claim by the beneficiary against the bank for the face value of a letter of credit sounds in debt rather than damages, and that the bank became the holder of the bill of lading upon paying the sum due under the letter of credit upon being sued.   

Michael Tselentis QC and Socrates Papadopoulos represented the successful Respondent (instructed by Norton Rose Fulbright).