Teare J today handed down judgment in Oldendorff GmbH & Co KG v Sea Powerful II Special Maritime Enterprises and Others  EWHC 3212 (Comm), in which Michael Ashcroft QC and Oliver Caplin acted for the successful defendant shipowner Sea Powerful ("Owners"). The dispute concerned a series of letters of indemnity issued for the discharge of cargo in China without presentation of the original bill of lading. The cargo was alleged to have been mis-delivered,and disputes arose between the various parties to the consolidated proceedings as to whether the various letters of indemnity were engaged on the facts of the case.
The Court was persuaded that the letter of indemnity issued by Oldendorff to Owners was engaged in the circumstances of the case. The case raised interesting questions of contractual construction, agency, and the extent to which the belief of a party delivering cargo pursuant to a letter of indemnity in the standard International Club 1A format had to be merely "honest", "reasonable", or "not arbitrary, capricious or irrational" (although in the end the Judge did not decide that particular issue.)