Article

Note: To pay for the sale of 11,500 mt of maize, Ghee Huat Co Pte Ltd. (Buyer) arranged for issue of an LC in favor of Shivnath Rai Harnarain Ltd. (Seller/Beneficiary) that required presentation of a clean Bill of Lading. Seller entered a charterparty agreement with Able Shipping Line (Charterer) to ship the cargo from Haldia, India to Melaka, Malaysia.

Charterer, Able Shipping Line, contracted with the owners of the vessel MV Win Moony (Shipowners) to load and ship the cargo. Only part of the cargo was loaded on the Win Moony, which sailed after a mate's receipt was issued to Seller. Unable to present a Bill of Lading, Seller/Beneficiary was unable to obtain payment under the LC.

Claiming that Shipowners failed to issue a Bill of Lading for the partial shipment notwithstanding payment of full freight, and refusing to accept a conditional or claused Bill of Lading, Seller sued Shipowners and arrested the Win Moony, requesting an order that a Bill of Lading be issued reflecting the cargo shipped on board. Shipowners brought the instant case, seeking an order striking the arrest on the ground that admiralty jurisdiction was improperly invoked. Shipowners contend there was no agreement relating to the carriage of goods between Seller and Shipowners.

The High Court of Malaysia (Melaka), Low, J., granted the motion to strike the warrant for arrest.

The court ruled that since there was no agreement of carriage between Seller and Shipowners, admiralty jurisdiction was wrongly invoked. The court noted that the only contractual relationship between Shipowners and Seller/Beneficiary was the mate's receipt, which was not a contract of carriage, but rather a simple receipt, presented to parties who may not necessarily be parties to the contract of affreightment, and that embodied no obligation to issue a Bill of Lading.

[JEB/ees]

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