## Facts

- A bank provided trade-finance facilities to an oil trader and issued a letter of credit (LC) to finance the trader’s purchase of a cargo of light naphtha from the seller.
- The seller chartered a vessel from the demise charterer to carry the cargo and arranged for a set of original bills of lading made out “to order” of the seller’s financing bank.
- The demise charterer delivered the cargo in Singapore to the buyer without production of the original bills of lading, relying on a delivery arrangement with the seller that permitted release without bills; the bank was not a party to that arrangement.
- The seller presented a letter of indemnity in lieu of the bills, and the bank paid under the LC.
- The seller’s financing bank later transferred the bills to the bank, which became holder of the bills after the cargo had already been released.
- The bank mistakenly endorsed the bills to a third-party buyer; that buyer knew the endorsement was erroneous, and the endorsement was cancelled by consent, restoring the bills to the bank’s order.
- The financed buyer became insolvent and the cargo could not be recovered; the bank alleged it suffered loss from the misdelivery.
- The bank commenced an admiralty in rem action, arrested the vessel, and applied for summary judgment for the cargo’s invoice value (USD 8,561,342.03) or, alternatively, interlocutory judgment with damages to be assessed.

## Issues

1. Whether the bank was the lawful holder of the bills of lading with title to sue for misdelivery.
2. Whether the financing structure and facility terms showed the bills of lading functioned as security for the bank, affecting the measure of recoverable loss.
3. Whether the defendant had no real defence such that summary judgment for the full invoice sum should be granted, or whether triable issues required damages to be assessed.

## Decision

- The court denied summary judgment for the invoice sum.
- The court granted interlocutory judgment for the bank on liability for misdelivery, with damages to be assessed.
- The court accepted the bank became holder of the bills and could, in principle, sue for misdelivery notwithstanding the temporary mistaken endorsement that was later cancelled.
- The court held delivery without presentation of the original bills constituted misdelivery and the defendant had no real defence on liability.
- The court found triable issues affecting quantum and causation, including how the bank’s financing arrangements treated the bills as security and whether the bank’s conduct (including the mistaken endorsement episode) affected its loss.

## Legal Principles

- A carrier (or party responsible for delivery under a bill of lading) who releases cargo without production of the original bills is prima facie liable in misdelivery to the lawful holder of the bills.
- Holder status and the right to sue may be established upon endorsement and delivery of the bills, and an erroneous endorsement later cancelled by consent does not necessarily extinguish the holder’s claim for an earlier misdelivery.
- In misdelivery claims by trade-financing banks, the measure of damages is not automatic: courts may examine the facility documentation, transaction mechanics, and the bank’s actual reliance on bills of lading as security to determine the bank’s true loss.
- Summary judgment is inappropriate where there are bona fide triable issues on causation or quantum, even if liability for misdelivery is clear; interlocutory judgment may be entered with damages to be assessed.

## Conclusion

The court held the defendant was liable for misdelivery for releasing cargo without production of the original bills of lading, but refused final summary judgment for the full invoice value because disputed, trial-worthy questions remained about the bank’s actual loss and the role of the bills as security under the financing arrangements.


ING Bank N.V. v. The Demise Charterer of the Ship or Vessel Navig8 Ametrine, [2022] SGHCR 5 (Sing. 2022)