Pyrene Co Ltd v Scindia Navigation Co Ltd
Under an FOB contract, a seller who was not a party to the contract of carriage could still rely on the limitation of liability in the bill of lading.
Facts
Pyrene sold fire tenders to the Indian government on FOB terms, and the government arranged the shipment with Scindia Navigation. While one tender was being loaded, it was dropped by the ship's tackle and damaged, before it had crossed the ship's rail, so property and risk had not yet passed to the buyer. Pyrene sued the shipowner for the damage, and the shipowner relied on the limitation of liability under the Hague Rules in the bill of lading, which had been issued to the buyer.
Legal principle
Devlin J held that the shipowner was entitled to limit its liability. He said that, under an FOB contract, the seller may take part in the contract of carriage, and that, since the seller was a party to the loading operation, which the contract of carriage covered, it was bound by the terms of the contract of carriage, including the limitation of liability. He also described three types of FOB contract: the classic type, where the seller arranges the shipment, the type where the buyer arranges it, and an extended type where the seller arranges it as agent for the buyer.
Related cases on international sales and documentary credits
- Arnhold Karberg & Co v Blythe, Green, Jourdain & Co [1916] 1 KB 495
- Biddell Brothers v E Clemens Horst Co [1912] AC 18
- Bunge Corp v Tradax Export SA [1981] 1 WLR 711
- Comptoir d'Achat et de Vente du Boerenbond Belge SA v Luis de Ridder Limitada (The Julia) [1949] AC 293
- Discount Records Ltd v Barclays Bank Ltd [1975] 1 WLR 315
- Edward Owen Engineering Ltd v Barclays Bank International Ltd [1978] QB 159
- Equitable Trust Co of New York v Dawson Partners Ltd (1927) 27 Ll L Rep 49
- Gill & Duffus SA v Berger & Co Inc [1984] AC 382
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