## Facts

- A cargo of steel coils carried on the vessel _The Aliakmon_ was damaged during sea transit.
- The sale contract in question contained a retention-of-title clause: ownership remained with the seller until the buyer paid the price in full.
- At the time the coils were damaged, the buyer had not paid and therefore held no legal or equitable title to the goods.
- Relying on contractual rights under the bill of lading and the sale agreement, the buyer sought damages for the physical loss.
- The dispute reached the House of Lords, which examined whether the buyer’s lack of proprietary or possessory interest barred the claim.

## Issues

1. Could a person who neither owned nor possessed the goods at the moment of damage sue for their physical loss?
2. Do contractual rights under a bill of lading or sale contract amount to a proprietary or possessory interest sufficient to support such a claim?

## Decision

- The House of Lords dismissed the buyer’s action.
- It held that a claimant must have a proprietary or possessory interest in the damaged property when the loss occurs; without that interest, no cause of action arises.
- Contractual rights, even those evidenced by a bill of lading, do not by themselves confer the necessary proprietary status.
- Because the retention-of-title clause prevented ownership passing before payment, the buyer lacked standing to recover damages for the coils.

## Legal Principles

- A valid claim for physical damage to property requires the claimant to hold a proprietary or possessory interest at the time of the loss.
- Contractual or expectant interests—however extensive—do not satisfy this requirement unless coupled with ownership or possession.
- The critical moment for establishing standing is the occurrence of the damage, not the commencement of proceedings.
- Limiting recovery to those with a direct property interest avoids overlapping or speculative claims and preserves the coherence of tortious liability.

## Conclusion

The House of Lords affirmed that only parties with a proprietary or possessory stake in goods at the instant they are harmed may sue for their damage. Because title to the steel coils had not passed when they were damaged, the buyer’s contractual rights alone could not support an action. _Re The Aliakmon_ remains a leading authority on the nexus between property rights and tortious recovery in maritime commerce.


Re The Aliakmon [1986] AC 785 (HL)