At discharge port no bl produced? How to carry out discharge?

LOI (Letter of Idemnity)

The practice of discharging the cargo against a LOI (Letter of indemnity) is so common specially in tanker trade that this can trick masters. Masters must ensure that direct request from charterers/shipper to discharge the cargo against such LOI should not be considered. Master must receive such instructions from the ship owners. If vessel is on time charter, charterer would receive the LOI from shipper or sub charterer and instruct master to discharge the cargo.

In these cases, sometimes owners need LOI in their own format. Also, such LOI from shipper or sub-charterer is indemnifying the charterers but not the owners. Owners are not under any contractual obligations with sub-charterers and such LOI might not be enough to protect owner’s interest. So, in this case owners might need a separate LOI in their format from the charterers (time) of the vessel

The problems which usually arise are where

1. no bill of lading is available at the discharge port
2. delivery of cargo is requested at a port which is not the named discharge port.

In the absence of clear guidance from the shipowners or the local P&I correspondent, the master should take note of the following points.

1. The unavailability of a bill of lading at the discharge port is a problem for the buyers and sellers of the cargo to resolve.
2. The master should not agree to discharge the cargo against a letter of indemnity (unless the shipowner has expressly agreed to this).
3. Delay to the vessel while waiting for the bill of lading will usually be paid for under the charterparty in the form of hire or demurrage (or as part of the laytime which has been paid for in the freight payment). Even if the vessel is threatened with the cost of the delay, that threat should not justify delivery of the cargo without production of the bill of lading or at the wrong port.
4. Delivery without production of the bill of lading, or at the wrong port, will be a breach of the terms of the shipowner’s P&I insurance and there will be no insurance if in consequence a claim is subsequently brought by the ‘true’ cargo owner.
5. In some places the cargo can be discharged (at the named discharge port) into the custody of the port or a private warehouse where it will remain under the legal control of the master until the bill of lading has been produced. The master should investigate this, if possible, through the P&I correspondent.