Laemthong International Lines Co Ltd v Artis (The Laemthong Glory) [2005]

Laemthong International Lines Co Ltd v Artis (The Laemthong Glory) [2005] EWCA Civ 519 revolves around a charterparty contract concerning the vessel Laemthong Glory, engaged in transporting bagged sugar from Brazil to Yemen. The contract allowed unloading at the destination port under a Letter of Indemnity (LOI) if the original bills of lading were not available. The dispute arose when the Yemeni Bank, holding the original bills of lading, arrested the vessel and demanded a claim for its release.

The primary issue was whether shipowners had the right to enforce the terms of the LOI against the cargo receivers under the Contracts (Rights of Third Parties) Act 1999 (the Act). The Court of Appeal dismissed the appeal by Laemthong International, affirming that shipowners were entitled to enforce the LOI's terms against the receivers under the Act.

The Court analysed the wording of the LOI and concluded that it was enforceable by the shipowners, given by the receivers to the charterers under the terms of the Contracts (Rights of Third Parties) Act 1999. This Act allows third parties to enforce contractual terms if the contract explicitly provides for it. The shipowners were considered agents of the charterers, as their purpose was to carry out the delivery of the cargo to the receivers. The LOI, in this context, was seen as benefiting the shipowners, and there was no indication that the parties did not intend for its terms to be enforceable by the shipowners. The court found that the LOI did confer a benefit upon the shipowners under Section 1 of the Contracts (Rights of Third Parties) Act 1999. It was emphasised that the analysis of each LOI should be done on its own terms.

In summary, the court held that the shipowners were entitled to enforce the terms of the LOI against the receivers under the Contracts (Rights of Third Parties) Act 1999. The LOI, in this case, was considered valid and intended to confer a benefit upon the shipowners.