The Bill of Lading – the cornerstone of global shipping and trade. The Bill of Lading entitles the party holding on to the original set of bills of lading to delivery of the cargo. In the usual case, where such cargo is released without production of the original set of bills of lading, the party holding on to the original set of bills of lading would be entitled to arrest the subject vessel and make a claim for misdelivery. Courts have recognised a financing bank’s ability to exercise its security rights when dealing with a defaulting customer, to demand for delivery of the goods to which the bills of lading relate. Given the straightforward nature of these claims (or once so thought), many of these claims have in the past resulted in a summary judgment in favour of the financing bank, where judgment is given without trial.
However, in recent times there have been several judicial decisions that would be of interest to financing banks, which would challenge the present belief in the strength of the bills of lading as security. The challenges that could potentially be raised against the banks may be understood from the recent cases on both local and English shores.
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For further information, please contact:
Liew Kai Zee, Shooklin & Bok
kaizee.liew@shooklin.com
