Delivery of cargo without bills of lading

Liner agents took delivery of two discharged containers of frozen beef.  The agents arranged for the two containers to be transferred to cold storage where they were stripped and the beef placed in storage awaiting delivery instructions.

A short time later the storage company delivered the beef to third parties on the instructions of the notify party without the bills of lading being surrendered.  It was not until two weeks later that the agents became aware that the original bills of lading had not been surrendered, and their enquiries revealed that the beef had already been delivered.  At about the same time the agents learned that the notify party had filed for bankruptcy.

Lawyers advised that the agents' principals would be liable to the holders of the bills of lading for the value of the cargo, and that they in turn would have a good claim for indemnity against the agents for allowing the release of the cargo without ensuring that the bills of lading were first surrendered.

The value of the cargo was US$ 73,400 which was settled in full with the Line and the shippers,  in return for an assignment of their rights against the storage company and the notify party. Unfortunately, after a full investigation lawyers advised that a claim against the storage company was unlikely to succeed and there was little prospect of any recovery from the notify party's bankruptcy.