Know Your LOI Counterparty: Lessons from the Court of Appeal Letters of Indemnity are common in shipping, often used to address potential liabilities arising from practical issues. While convenient, they carry material legal and financial risks, as highlighted by the recent Court of Appeal decision. Articles Alessia Di Pietro Published: January 19, 2026 Contact author Download article pdf The recent Court of Appeal decision in Berge Bulk Shipping v Taumata Plantations [2025] EWCA Civ 876 serves as a stark reminder that Letters of Indemnity (“LOIs”) are only as reliable as the party issuing them, and they can expose the accepting party to substantial legal and financial risks if the issuer lacks proper authority or sufficient financial standing. Factual Background  Three New Zealand companies (“Exporters”) owned or had rights over forestry plantations. Their logs were marketed and sold by TPT Forests Ltd (“Forests”) under agency agreements. In 2004, the TPT Group created TPT Shipping Ltd (“Shipping”), a wholly-owned subsidiary, to charter vessels for log exports. Shipping acted as charterer assuming the relative risks, while Forests, as agent for the Exporters, paid Shipping for its services. The dispute arose from shipments from New Zealand to India. Berge Bulk, the disponent owner of the vessel m/v “XING ZHI HAI”, agreed to discharge cargo without original bills of lading against LOIs issued by Shipping, following approval from Forests. Forests did not seek the approval of the Exporters or their manager for the issue of the LOIs. When misdelivery claims arose, Berge Bulk claimed against Shipping, Forests and the Exporters under the LOIs. By then, Shipping had become insolvent and therefore Berge Bulk pursued Forests and the Exporters on the basis that they were undisclosed principals under the LOIs and that the LOIs conferred English jurisdiction. Forests and the Exporters challenged the jurisdiction of the English court. The Judge at first instance held that