In The Aliakmon 1 the House of Lords has held that a consignee named in a bill of lading, who had not acquired contractual rights against the carrier under the Bills of Lading Act 1855 or otherwise, had no cause of action against the carrier in tort for negligently damaging the goods in transit after the risk, but before the property, in the goods had passed to the consignee under a contract of sale with the shipper.

Not the least of the difficulties arising from the case is to discover exactly what happened, the statements of the facts in the various reports2 being somewhat vague at crucial points and not wholly consistent with each other. Steel coils were sold by South Korean sellers to English buyers c. & f. Immingham. The contract provided for payment to be made 180 days after bill of lading date by bill of exchange against bill of lading; the bill of exchange was to be endorsed by the buyers’ bank, the purpose of the endorsement being to make the bank liable on the bill of exchange, and so to provide security for payment of the price. The goods were shipped on board the Aliakmon and at this stage the risk passed to the buyers, in accordance with the rule that risk under a c. & f. contract normally passes to the buyer on shipment. A bill of lading was issued naming the sellers’ suppliers as shippers, but these suppliers had, in shipping the goods and in taking out the bill of lading, acted as agents for the sellers, so that the sellers may be considered to be the shippers. The bill of lading therefore contained or evidenced a contract of carriage between the sellers and the carrier; it named the buyers as consignees and it expressly incorporated the Hague Rules.

After the sellers had obtained the bill of lading from their suppliers and were ready to present it against the bill of exchange, the buyers were unable to procure their bank’s endorsement to the bill of exchange; and to deal with this situation the contract of sale was varied by agreement between the buyers and the sellers. Under this agreement the bill of lading was sent to the buyers with a covering letter stating that the goods were to be at the disposal of the sellers until further notice and that sales of the goods should be notified to the sellers:3 these terms were held in the Court of Appeal and in the House of Lords to amount to a reservation by the sellers of their right of disposal of the goods. It was further agreed that the buyers were to take delivery of the goods, but that they were to do so as agents of the sellers; and that, after the goods had been discharged from the ship, the buyers were to warehouse them to the sole order of the sellers. The buyers presented the bill of lading to the ship and took delivery of the goods; to obtain delivery, they did not have