The Albazero [1977]

The Albazero [1977] AC 774 involved conjoined appeals in the House of Lords, focusing on the rule regarding the necessity of title in damaged goods for locus standi, particularly when owners are sued by charterers. The central issue revolved around the sister ship of the arrested vessel, the Albacruz, which sank in the North Atlantic, resulting in the loss of its cargo of crude oil.

The charterers, engaged in a 5-year time charter under the Shelltime B (1963) form modified for the Albacruz, were part of a group of companies, including Courtage and Raffinerie Belge de Petroles SA (RBP). The cargo, purchased from Esso, was sold to RBP, and bills of lading were involved in the transaction. Despite the bills of lading being subject to the Hague Rules, RBP failed to claim from the ship owners within the 1-year time limit. Charterers then claimed against the owners on the charterparty, contending that title had not passed to RBP or, if it had, the owners were still liable for cargo losses. Owners argued that title had passed to RBP, and charterers had no standing to sue.

Brandon J, after a comprehensive review, ruled in favour of the charterers, upholding the rule in Dunlop v Lambert [1839]. Roskill LJ, while expressing doubts about the necessity of the rule, followed precedent and confirmed Brandon J's judgment. Lord Diplock, in a brief judgment, recognised the historical development of the law and proposed a compromise: the rule in Dunlop v Lambert should not extend to cases with two contracts covering the same carriage, and the charter party should govern, applying the ordinary principle of compensation.

In essence, Lord Diplock's compromise acknowledged the complexities of multiple contracts and rights of suit, emphasising that the charterers, having suffered no loss, were not entitled to damages. The Albazero case remains a significant milestone in the evolution of maritime law, providing insights into the development of carriage by sea.
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