## Facts

- The case involved a shipment of steel coils from South Korea to the United Kingdom.
- The buyers, Leigh and Sillavan Ltd, contracted with the sellers, Aliakmon Shipping Co Ltd, for the goods.
- Under the contract, the buyers assumed the risk of damage during transit but did not acquire legal title to the goods until after the damage occurred.
- The steel coils sustained damage due to improper stowage during transit.
- The buyers sought to recover economic loss in tort, claiming the carriers owed them a duty of care, despite not having legal ownership at the time.

## Issues

1. Whether a party without legal ownership or possessory rights at the time of damage can recover in tort for economic loss arising from negligence.
2. Whether contractual assumption of risk or an equitable interest is sufficient to establish a proprietary interest to support a tort claim.
3. Whether tort law allows recovery for economic loss absent a direct and vested proprietary interest in the damaged property.

## Decision

- The House of Lords unanimously held that a proprietary interest at the time of damage is a prerequisite for recovery in tort.
- The Court found that contractual rights or expectations, even if they include assumption of risk, do not equate to a proprietary interest.
- Equitable interests were also deemed insufficient to establish the standing required for a tortious claim.
- The buyers' claim was rejected due to lack of legal ownership or possessory rights at the time of damage.

## Legal Principles

- In tort law, a claimant must have a proprietary interest (legal or possessory) in property at the time of damage to recover for economic loss.
- Contractual rights or mere expectations do not establish standing for recovery in tort; a direct and vested legal or equitable ownership is required.
- The distinction between contractual remedies (based on agreement) and tortious claims (requiring an independent duty and proprietary interest) is affirmed.
- The requirement of proprietary interest provides clarity in commercial transactions and limits liability to those directly affected.

## Conclusion

The Aliakmon decision established that recovery in tort for damage to goods requires proprietary interest at the time of loss, preventing claims based solely on contractual risk or equitable interest and delineating the boundary between contract and tort remedies in commercial contexts.


Leigh and Sillavan Ltd v Aliakmon Shipping Co Ltd [1986] 2 All ER 145 (HL)