Skip links


Unicredit Bank AG v Euronav NV (Sienna) [2002] EWHC 957 (Comm).

A bill of lading serves three main functions: it is evidence of the terms of the contract of carriage, proof of receipt for the cargo loaded and a document of title. One exception is where a shipper is also the charterer, then a bill of lading is only a receipt in the hands of the charterer, unless the bill of lading is endorsed to a third party thereby gaining contractual status. This case tested the parameters of the above exception, as the bank asserted (unsuccessfully) that the bill of lading would become a contract of carriage following a novation, when buyers became the new charterers of the vessel.

Factual Background

BP Oil International (“BP”) were the sellers of the cargo, shippers under the bill of lading and the original charterers of the Sienna (“the Vessel”). Euronav N.V (“the Owners”) had chartered the Vessel to BP. Gulf Petrochem FZC (“Gulf”) were the buyers of the cargo from BP.

The bill of lading was issued on 19th February 2020, with Owners acknowledging shipment of the cargo carried on board from Rotterdam, Netherlands to Fujairah, UAE. BP had retained possession of the bills of lading throughout the voyage.

The purchase of the cargo by Gulf was financed by a Letter of Credit issued by Unicredit Bank AG (“the Bank”) on 1st April 2020. It was intended by the Bank and Gulf that the cargo would be re-sold to sub-buyers, approved by the Bank with the sub-buyers paying the Bank directly.

After Gulf had secured the purchase price, BP, the Owners and Gulf entered into a novation agreement in terms of which Gulf became the new charterers of the Vessel on 6th April 2020.

As part of that agreement, Owners were able to discharge cargo without the production of the bill of lading and the cargo was subsequently discharged during April/May 2020 on that basis.

When payment under the financing arrangement fell due, the Bank was not repaid by Gulf or their sub-buyers. The Bank became aware that Gulf was in liquidity distress, and they suspected fraudulent behaviour.

The Bank sought to recover its losses in the sum of ~US$ 24.7M and brought a mis-delivery claim against Owners alleging that Owners had breached the contract of carriage said to be contained in the bill of lading.

BP had retained the bill of lading following the sale of its cargo and until completion of discharge. BP subsequently endorsed the original bill of lading to the Bank after discharge had taken place.

Legal Issues

The Bank argued that Owners were in breach of the bill of lading which they alleged evidenced a contract of carriage.

Owners defended the case on the following grounds:

  1. They were not in breach of the bill of lading considering that the bill of lading was a mere receipt for the goods loaded.
  2. Even if Owners were in breach, the Bank was responsible for causing its own loss, as the cargo was delivered to Gulf without production of the original bill of lading which the Bank itself had authorised and/or permitted.

There was no endorsement of the bill of lading to a third party and the bill of lading therefore did not attain contractual status as a contract of carriage.

The Bank argued that the bill of lading obtained contractual status upon novation in the same way as if it was an endorsement. Therefore it was argued a new contract between BP and Owners was established based on the bill of lading when BP ceased to be the charterers.

The Court found in favour of Owners as the Bank failed to establish that the bill of lading evidenced a contract of carriage after the novation of the charterparty.

It was also found that the discharge of the cargo without production of the bill of lading did not cause the loss or alternatively, the Bank would have suffered the same loss in any event.


This is an exceptional set of facts which took place against the background of the Covid-19 pandemic and in a situation where cargo was released without the production of the bill of lading because endorsing the original bill of lading before discharge commenced was not possible.

The established principle that where a shipper is also the charterer, the bill of lading is not the contract of carriage of goods, but a receipt is reaffirmed.

The novation of the charterparty did not give the bill of lading contractual status and did not trigger the bill of lading obtaining contractual status like an endorsement would have done.

The timing of endorsement is important, and the Court may perhaps have come to a different conclusion if BP had endorsed the bill of lading to the Bank at the time BP was paid under the financing arrangement.

The Bank’s claim was dismissed, and it did not have title to sue under the bill of lading as it failed to evidence a contact of carriage.

The MECO Group