In London Arbitration 13/08 – LMLN 4 cargo receivers brought claims against owners under the bills of lading. The pre-load survey at the load port revealed rust staining and that some of the bundles were wet. Owners commenced arbitration against charterers seeking a declaration for a clause 8 indemnity on the grounds that the bills of lading should have been claused. Charterers argued that it was not appropriate to do so before the claims had been settled in accordance with the interclub agreement.

The tribunal held that the issuing of clean bills by charterers was a breach of the charter and contrary to the express written authority given to the charterers’ agents by the master. The bills should have been claused in accordance with the pre-load survey and the mate’s receipt. As the bills were issued clean, receivers were able to advance their claim. It was therefore clear that owners were entitled to declaratory relief even though the cargo claims had not yet been settled.

It also held that the interclub agreement would not apply in this case as the relevant contracts of carriage were not authorised by the charter and were issued in clear breach of it. Accordingly owners were entitled to the declaration sought.