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BILLS OF LADING : KEY LEGAL & COMMERCIAL FEATURES

BILLS OF LADING : KEY LEGAL & COMMERCIAL FEATURES. Chris Grieveson Ince & Co. The Functions of the Bill of Lading. 1. It is a receipt for the goods; 2. It is a contract of carriage; 3. It is a document of title; (i) it represents the goods; (ii) it transfers constructive possession;

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BILLS OF LADING : KEY LEGAL & COMMERCIAL FEATURES

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  1. BILLS OF LADING :KEY LEGAL & COMMERCIAL FEATURES Chris Grieveson Ince & Co

  2. The Functions of the Bill of Lading 1. It is a receipt for the goods; 2. It is a contract of carriage; 3. It is a document of title; (i) it represents the goods; (ii) it transfers constructive possession; (iii) it may transfer property in the goods.

  3. Seawaybill It is :- (1) a receipt for the goods and (2) Contract of Carriage of goods but (3) is not a document of title

  4. Problems • Seller does not know financial status of Buyer • Buyer can not inspect cargo at sea • Cargo sold on while at sea • Buyer needs to be sure cargo meets description

  5. Problems • Holder has right to demand delivery of goods on discharge • Seller can withold delivery dox buyer needs til seller is paid • Buyer protected as in most cases seller must obtain clean bill

  6. Solutions • Transfer document of title representing cargo • Negotiable bill can be forwarded ahead of goods to buyer

  7. Solutions • Holder has right to demand delivery of goods on discharge • Seller can withold shipping dox buyer needs for delivery til seller paid • Buyer protected as in most cases seller must obtain clean bill

  8. Clean bill • Clean = shipped in ‘apparent good order and condition’ • NO qualifications eg ‘wet’, ‘rusty’ etc. • Transfer to 3rd party = carrier is bound by description (art iii r4)

  9. Hague-Visby Rules Article III 4. Such bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein described in accordance with paragraph 3(a), (b) and (c). However, proof to the contrary shall not be admissible when the bill of lading has been transferred to a third party acting in good faith.

  10. Clean Bill • Inspection of the bills = best assurance on loading condition • Clean bills are required for most transactions • Received for shipment = no evidence of condition on shipment

  11. Condition vs quality • Rep of carrier goes ONLY to conditon (physical) not quality • No rep on invisible condition • Cf Athelviscount

  12. Quality or weight • Unless ‘weight unknown’/‘said to be’- weight is fixed on transfer • Master may refuse to sign bill with figures he considers incorrect – artIII r3 proviso

  13. Provided that no carrier, master, or agent of the master shall be bound to show…..any marks number, quantity or weight which he has reasonable grounds for suspecting not accurately to represent the goods actually received….

  14. Cif, c&f ,fob – clausing • Cargo owner needs to know when he can demand clean bill • Cif- bill procured on shipment – show shipment within time

  15. Hague-Visby Rules Article III 3. After receiving the goods into his charge the carrier or the master or agents of the carrier shall, on demand of the shipper, issue to the shipper a bill of lading showing among other things :- (b) Either the number of packages or pieces, or the quantity, or weight, as the case may be, as furnished in writing by the shipper. (c) The apparent order and condition of the goods.

  16. Claused bills Generally is timing relevant? • No clause on load condition- BUT • clause can be post shipment • See Galatia

  17. Indemnity? clean bill not clean cargo • Where no doubt = fraud, no indemnity • Doubt= may be valid

  18. On demandWeight/ quantity unknown • Art III r 3 carrier obliged to give details • No demand= no obligation for evidence of weight quantity

  19. Condition unknown • Does not qualify ‘shipped in apparent good order and condition. • Unknown relates only to unapparent condition

  20. Weight unknown /said to be • Generally statements of weight etc NOT evidence of weight at all if claused • BUTSirina

  21. Status of statements in B/L • Estoppel not contractual promise • Or Misrepresntation • Date – rep or warranty

  22. Contract of carriage • Which is the governing contract of carriage? • Vessel chartered and bill issued to Charterer =bill mere receipt • Bill issued to shipper but endorsed to Charterer = receipt

  23. Bill issued to shipper not charterer or endorsed by charterer to others = Bill is governing contract

  24. The Charterparty Shipowner C I F or C & F B/L B/L C/P Charterer Shipper Seller Receiver Buyer Sale Contract

  25. The Charterparty Shipowner F O B C/P B/L Shipper Seller Charterer Buyer Sale Contract

  26. Incorporation of bill terms • 2 problems • Where there is more than one charter – to which does the bill refer • Are the words of incorporation sufficient

  27. Shipowner C/P B/L Time Charter C/P Voyage Charter Receiver/Buyer

  28. Parties to the B/L contract 1. Bill of lading signed by or on behalf of the Master bind the shipowners as Carriers Except : When the vessel is demise chartered, in which case it is the demise charterer who is the Carrier. 2. Bill of lading signed by the charterers or their agents otherwise than “for” or “on behalf of” the Master bind the charterers as Carrier.

  29. Conlinebill 17. Identity of Carrier The contract evidenced by this Bill of lading is between the Merchant and the Owner of the vessel named herein (or substitute) and it is therefore agreed that said shipowner only shall be liable for any damage or loss due to any breach or non-performance of any obligation arising out of the contract of carriage, whether or not relating to the vessel’s seaworthiness. If, despite the foregoing, it is adjudged that any other is the Carrier and/or bailee of the goods shipped hereunder, all limitations of, and exonerations from, liability provided for by law or by this Bill of Lading shall be available to such other.

  30. “INES” 3. Signature : “Signed as agents for the carrier, Maras Linje” 1. Bill on Charterers Form 2. Bill included “identity of carrier” clause Held : Owners’ Bill

  31. “HECTOR” 1. Bill on Conline Form 2. Bill included “identity of carrier” clause 3. Bill signed by charterers’ agents : “For the Master” 4. Bill included stamp on its face : “Carrier : US Express Lines” Held : Charterers’ Bill

  32. “FLECHA” 1. Bill on Charterers’ Form 2. Bill included “identity of carrier” clause 3. Signature : “As agents for the carrier, Conti Pacific Lines” Held : Owners’ Bill

  33. “STARSIN” 1. Bill on Charterers’ Form 2. Bill included “identity of carrier” clause 3. Signature : “As agents for the carrier, Conti Pacific Lines” Held : Charterers’ Bill

  34. Starsin Court of Appeal • Owners bill where:- • On face of bill it appears owner is issuer • underlying facts show owner NOT issuer • BUT issuer had owners authority= Owners Bill

  35. THE TRADITIONAL RULE Only parties to a contract can sue and be sued under that contract.

  36. The Problem A No Contract Contract C B Contract

  37. Basic Relationship C/P or ship’s bill T/T S/O Through B/L Tort Claims Consignee Shipper

  38. Effect of Contracts (Rights of Third Parties) Act on Bills of Lading 1. It will not apply to bills issued before 11th May 2000 2. It enables third parties to rely on exclusion and limitation clauses but not on other clauses (i.e. shield not sword) 3. Third party must be identified by name or as member of class or by description

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