Sub-Bailment

A sub-bailment occurs when a bailee of goods entrusts them to a third party, who becomes a sub-bailee owing duties to the original owner. In carriage chains a forwarder or NVOCC bails the cargo, then sub-bails it to the actual sea carrier. The cargo owner can sue the sub-bailee directly in bailment, but is bound by the terms on which it expressly or impliedly consented to the sub-bailment, as held in The Pioneer Container [1994] 2 AC 324, where a Himalaya and jurisdiction clause in the sub-carrier’s bill bound the goods owner. Sub-bailment on terms is how exclusion and jurisdiction clauses reach a claimant who has no direct contract with the performing carrier.