ENEL SpA (ENEL) bought crude oil from Coastal International Trading Ltd under a CIF contract. The oil was loaded in Syria in October 1983 and unloaded in Venice, Italy. ENEL presented a bill of lading to receive the oil. The oil was carried on the Katina, a Greek-flagged vessel, owned by a Liberian shipowner, Mayfair Co (Mayfair).

In 1984, Mayfair sued ENEL in the Tribunal of Venice, as the freight remained unpaid, and claimed compensation of USD 242,140.15. Mayfair also concluded a substitute contract of carriage for the crude oil with Brooks Ranger from Panama.

In 1992, the Tribunal of Venice upheld Mayfair's claim. In 1996, the Court of Appeal of Venice upheld ENEL's appeal. Mayfair appealed this decision in cassation.

Mayfair argued that under Italian law, the governing law of the contract of carriage was the law of the ship's flag, ie the Greek Maritime Code, and the contract of carriage provided in cl 7 that freight was to be paid immediately upon completion of unloading. Furthermore, under Italian law, the Greek Maritime Code, and English law, namely the Bills of Lading Act 1855, because the bill of lading did not include the destination of the voyage and the place and date of discharge it was not a document of title, which meant that ownership of the oil had not passed to ENEL.

Held: The appeal is dismissed.

The Court pointed out that the absence of indications of the destination of the voyage, or the place and the date of discharge did not affect the validity of the bill of lading. The Court also noted that this principle is generally recognised in international Conventions, such as the Hamburg Rules, even if the Convention did not apply in this case. Notably, the Court recalled arts 7.1 and 15.8 [sic: 15.1.k] of the Hamburg Rules. It highlighted that art 16.4 of the Hamburg Rules establishes that a bill of lading which does not set forth the freight or otherwise indicate that freight is payable by the consignee or does not set forth demurrage incurred at the port of loading payable by the consignee, is prima facie evidence that no freight or such demurrage is payable by the consignee. However, proof to the contrary by the carrier is not admissible when the bill of lading has been transferred to a third party, including a consignee, who in good faith has acted in reliance on the absence in the bill of lading of any such indication. Therefore, the Court held that cl 7 of the contract of carriage could not be enforced against ENEL.

Furthermore, the Court noted that the right to delivery of the goods does not originate from the contract of carriage but from the bill of lading. In conclusion, the Court highlighted that issuing the bill of lading is a unilateral act and that the right to delivery of the goods is linked to possession of the bill of lading and not to the contract of carriage.