British
Maritime Law Association
Response
to Questionnaire
Prepared
by CMI
Working Group
on
Issues of Transport Law
Acknowledgement
I wish to acknowledge the valuable contribution made to this response by
the following members of Essex Court Chambers:
Miss Claire Blanchard
Mr Ricky Diwan
Mr Nigel Eaton
Mr David Foxton
Miss Philippa Hopkins
Mr Paul Key
Mr John Lockey
Mr Nathan Pillow
Mr John Snider
I am also grateful to those who read a draft of this response and made
comments on it. These included Mr Peter
Morgan, Professor Francis Reynolds QC and Mr Andrew Taylor.
Anthony Diamond QC
Chairman
BMLA Standing Committee on Carriage of Goods
30 September 1999
[COMMENT1] 1. Obligations of the Carrier
1.1 Receipt of the Goods
Question 1.1.1
Does
the period of the Carrier's responsibility for the goods under your national
law commence at the same moment as delivery by the seller under a contract of
sale on "shipment terms"?
In English law the period of the Carrier’s
responsibility for the goods does not necessarily commence at the same moment
as delivery by the seller to the buyer under the contract of sale. The contract of carriage and the contract of
sale are two distinct and separate contracts; normally the parties to the two
contracts are not the same. The terms
of one contract will therefore have little if any relevance to the proper
construction of the other contract. The
moment when the transfer of risk takes place as between seller and buyer will
be governed by the contract of sale.
The commencement of the carrier’s responsibility for the goods will
depend on the terms of the contract of carriage and will also depend in large
measure on the question at what precise time the goods were in fact delivered
into the possession of the carrier or the carrier’s servants or agents at the
place where the transit began.
A contract on “shipment terms” is understood to
mean a contract of sale under whose terms the transfer of risk (though not
necessarily of property) takes place when the goods are placed on board ship at
the port of shipment. Under English
law, the fact that the transfer of risk under the relevant contract takes place
on shipment does not involve that “delivery” of the goods takes place at that
stage. There is no rule in English law
that risk passes on delivery and the meaning of “delivery” in CIF and FOB contracts cannot easily be stated.
Under English law,
assuming INCOTERMS
are not incorporated into the sale contract, FOB, CIF and C&F contracts are all examples of contracts “on
shipment terms”. In all three cases the
risk of loss or damage passes to the buyer on shipment though under many FOB contracts and most CIF and C&F contracts the property will not pass until
later. Where INCOTERMS are incorporated into the contract those terms
expressly provide for each type of contract (namely for FOB, CIF and CFR contracts) that the transfer of risk is to
take place when the goods “pass the ship’s rail” at the port of shipment.
Traditionally loading was the joint
responsibility of shipper and shipowner and it was the duty of the former at
his risk and expense to bring the cargo alongside and to lift it to the ship’s
rail and of the shipowner thereafter to receive and stow the cargo. Nowadays, however, there are a wide variety
of different practices in different trades and ports under which goods may be
delivered into the possession of the sea carrier at an earlier or later stage
and under which one or other party may undertake the obligation to receive load
and stow the cargo. Thus it is not
uncommon in many liner trades for goods to be delivered by the seller to the
sea carrier or his agents before the goods are taken on board ship or even
before the ship has arrived at the loading port. In other circumstances a shipper or charterer may undertake to
load and stow the goods so that his obligations include that part of the
loading and stowing operation that takes place after the goods have passed the
ship’s rail.
As an overall generalisation one can say (as
noted in para 16 of the introduction to INCOTERMS, 1990) that there is a lack of
“synchronisation” between the commencement of the Carrier’s responsibility
under the contract of carriage and the passing of risk from seller to buyer
under a contract of sale. It was the
perceived lack of synchronisation that led to the introduction of sale
contracts on FCA, CPT and CIP terms.
Question 1.1.2
Is it
desirable that the moment of delivery both under the contract of sale and the
contract of carriage should coincide?
In an ideal world the answer to this question
might perhaps be “Yes”. But any
considered answer to this question should take commercial realities into
account. One of the factors bearing on
this question is the desire of many buyers and banks to obtain clean on-board
bills of lading for the goods they have purchased or on which they are to make
an advance. To satisfy this requirement
the seller must tender clean bills of lading with the result that if the goods
have been lost or damaged while in the custody of the carrier or the carrier’s
agents before shipment the seller may have to replace the damaged goods with
sound goods so as to be in a position to require the carrier to issue a clean
on-board bill of lading.
It thus can make good
commercial sense for the parties to enter into a sale contract on “shipment
terms” even if the goods are to be delivered to the sea carrier or his agents
before the goods are taken on board ship.
The lack of “synchronisation” noted in the
introduction to INCOTERMS
has not in English law, caused any difficulty in practice. While it would be neater if the moment of
delivery both under the contract of sale and the contract of carriage could be
made to coincide it is thought that commercial parties must be left to determine
for themselves the moment of time at which the transfer of risk is to take
place. Many different considerations
can play a part and for this reason it is considered impracticable to lay down
any general rule to ensure that the moment at which risk passes under the two
contracts is made to coincide.
Question 1.1.3
Does the expression “liner terms” or a FIO(S) (free in and out (stowed)) clause define the
scope of the contract of carriage and the moment of delivery to the Carrier?
The expression “liner terms” is commonly found
in shipping documents and is usually understood to mean that the shipowner
undertakes to arrange and bear the cost of loading (at least from the ship’s
rail) and of discharge (at least to the ship’s rail). In a recent case dealing with the cost of discharge, the Court
said:
“Whilst this (“liner terms”) is not
a term of art, and its precise meaning may vary from case to case, its general
meaning is clear. The shipowner
undertakes both to load and to discharge the goods and to bear the cost of
doing so. He may undertake responsibility
also, and the question will arise in particular cases whether his undertaking,
as regards either risk or expense, or both, in the case of discharge, extends
beyond the ship’s rail until the goods are loaded and delivered ashore. Thus, a current dictionary definition:
Liner Terms Qualification to a freight rate which
signifies that it consists of the ocean carriage and the cost of cargo handling
at the loading and discharging ports according to the custom of those
ports. This varies widely from country
to country and, within countries, from port to port: in some ports, the freight
excludes all cargo handling costs while in others the cost of handling between
the hold and the ship’s rail or quay is included. [The Marine Encyclopedic
Dictionary by Eric Sullivan, FICS
(1992)]
‘Liner terms’ therefore means
always that the shipowner undertakes to arrange and to bear the costs of
discharge, at least to the ship’s rail”.
The meaning FIO(S) (free in and out (stowed)) is in a sense, the
converse of “liner terms”. It means
that the cargo owner, shipper or charterer is to bear the cost to the shipowner
of loading, stowing and discharging the cargo, including that part of those
operations which take place on board ship.
There are however a wide variety of clauses which can be called FIO(S) clauses.
The expression “FIO(S)” is commonly found in shipping documents and where it stands alone
without further definition its effect is probably confined to dealing with the
cost of loading, stowing and discharging the cargo, as opposed to dealing with
which party is to arrange for those operations or to assume the risks involved
in them.
There have been many reported cases
dealing with the question whether, under the words of particular contracts, the
parties have effectively transferred from owners to shippers or charterers the
duty to load, stow and discharge the cargo (so that, for example, the
charterers are made liable for the consequences of bad stowage) or whether the
contract deals only with the question which party is to bear the relevant
costs.
A “Liner Terms” or FIO(S) clause may be relevant to the question at what
moment the carrier’s responsibility for the goods commences but this is very
much dependent on the wording of the particular clause. Such terms standing alone normally deal only
with which party is to bear the relevant costs and in such a case they do not
define the scope of the contract of carriage or the moment of delivery to the
carrier. If the FIO(S) clause goes further and places the whole
responsibility and risk of the loading and stowage operation on the shipper it
is possible that the stevedores who perform those operations may be treated as
the shipper’s agents; if so, delivery to the carrier would be held to occur
when the stevedores place the cargo in the ship’s holds. Conversely if, under a particular clause the
carrier undertakes the whole responsibility and risk of loading the cargo (both
before and after ship’s rail) it will be clear that delivery to the shipowner
takes place no later than the stage when the goods are taken up by the
stevedores at the commencement of loading.
1.2 Inspection of the Goods and Statements in the Bill of
Lading
Before dealing with Questions 1.2.1 to 1.2.6 it
should be mentioned that there have so far been comparatively few reported
English decisions on the effect of Art III Rule 3 of the Hague Rules and the
Hague Visby Rules. This may be due, in
part, to the fact that, until the introduction of the Hague Visby Rules the
particulars inserted in a bill of lading pursuant to the article were only
“prima facie evidence of the receipt by the carrier of the goods as therein
described”
and there was no conclusive evidence clause.
Partly it may be due to the construction placed on Art. III Rule 3 in a
number of cases that
the obligation to issue a bill of lading containing the particulars required by
the article arises only “on demand of the shipper” and that simply requesting a
bill of lading does not carry with it an implied request that the bill shall
contain all the information set out in the article. It has been held that Art. III Rule 3(c) imposes an unqualified
or “absolute” duty on the carrier to make an accurate statement of fact as to
the apparent order and condition of the goods.
The duty is not merely one which the shipowner or master must take
reasonable care to perform.
Question 1.2.1
Under your national law in what circumstances would it be held that the
Carrier had reasonable grounds for suspicion that the information given by the
shipper was inaccurate?
There is no English authority on the point and
it is thought that it would be a question of fact in each case whether the
carrier can rely on the proviso. In
considering whether a master had “reasonable grounds” for suspecting the particulars
not accurately to represent the goods, a Court would probably apply the
standard of a reasonably competent master.
In one case, where a master refused to sign bills of lading containing
figures at variance with the ship’s figures the Court held that he had behaved
reasonably in so doing.
Question 1.2.2
In what circumstances would it be held that the carrier had no
reasonable means of checking the particulars furnished by the shipper?
There is again no reported case where a shipper
has requested that a bill of lading be issued containing certain particulars
specified in Art. III Rule 3 and where the carrier has refused on the ground that he had “no reasonable means of
checking” those particulars. It is
thought that it would be a question of fact in each case whether the carrier
can rely on the proviso. Where packages
are stuffed in a sealed container the carrier would normally have no means of
checking the numbers or characteristics of those packages.
Question 1.2.3
What is the meaning of “apparent”?
A representation that cargo was shipped in
apparent good order and condition constitutes an admission as against the
shipowner that the goods were shipped externally to all appearances in good
condition. The words constitute no
admission as to the internal condition of the goods, or as to their quality.
In the case of perishable goods, apparent good
order and condition includes apparent ability to withstand ordinary methods of
transport.
The Court applies the test whether a Master or
Chief Officer having a reasonable degree of skill and expertise, would regard
the goods as being externally to all appearances in good condition. Since only external condition is in question
a Master has no obligation or right to open packages to inspect their internal
condition or quality.
Question 1.2.4
What is the legal effect of clauses such as: “shipper’s load and count”,
“said (by shipper) to contain”, “particulars provided by shipper” and “weight
(etc) unknown”?
Clauses such as these give rise to considerable
difficulty in view of the terms of Art. III Rule 3 which oblige the carrier “on
demand of the shipper” to issue a bill of lading containing certain particulars
of the goods, as furnished in writing by the shipper, unless the proviso
applies.
At common law, where the statement of the
amount or quantity of the goods in the bill of lading is qualified by such
words as “weight or quantity unknown” the bill of lading is not even prima facie evidence against the
shipowner of the amount or quantity shipped provided that such amount or
quantity is not drastically at odds with the quantity actually loaded
and the onus is on the cargo-owner of proving what in fact was shipped.
Where the shipper has demanded a bill of lading
showing the number of packages or pieces, or the quantity or the weight as
provided by him in writing the carrier is bound under Art. III Rule 3 to issue
a bill of lading showing one of these matters.
The obligation is alternative.
Therefore if the carrier issues a bill of lading showing both the number
of pieces and the weight, he may qualify the statement as to weight, e.g. by
the words “weight unknown”. Such a bill
of lading will then be prima facie
evidence of the number of pieces but not of the weight.
There remain difficulties in English law as
regards the effect of including a qualification such as “weight unknown” in a
bill of lading in circumstances where a bill of lading stating “weight unknown”
would not comply with the requirements of Art. III Rule 3. It is possible that if there were evidence
before the Court that the shipper had requested an unqualified statement as to
the number of packages or pieces or the quantity or weight of the goods in
circumstances where he was entitled to such a statement under Art. III Rule 3,
a qualification such as “weight (etc) unknown” might be held to be
ineffective. There has been no such
evidence in any of the cases which have so far come before the Courts and, as
noted above, it
has been held that simply requesting a bill of lading does not carry with it an
implied request that the bill shall contain all the information set out in the
article.
A distinction must be drawn between “weight
(etc) unknown” and the other qualifications mentioned in the question such as
“shipper’s load and count”, “said by shipper to contain” and “particulars
provided by shipper”. The effect of the
latter clauses is far less certain since it may be held in an appropriate case
that by signing the bill of lading the Master has impliedly accepted the
shipper’s particulars or figures. A
container packed by the shipper is usually acknowledged as “one container in
apparent good order and condition said to contain (the contents) as declared by
the shipper”. An acknowledgement in
this form does not it is thought, constitute conclusive evidence as to the
condition or description of the contents in favour of an indorse of the bill of
lading.
The questionnaire
requests that, in dealing with the qualifications, the position both as between
the Carrier and the shipper and the Carrier and subsequent holders of the bill
of lading should be considered. Where a
bill of lading contains the qualification “weight unknown” and there is no
evidence before the Court that the shipper had requested an unqualified
statement as to the weight of the goods or the proviso to Art. III Rule 3
applies, then (a) the bill will not be prima
facie evidence of the weight of the goods shipped (provided, at any rate
that the weight is not drastically at odds with the weight actually shipped)
and both the shipper and any subsequent holder of the bill of lading will have
the onus of proving the weight which in fact was shipped and (b) where the bill
of lading has been transferred to a third party acting in good faith no
estoppel can arise by reason of Art. III Rule 4 of the Hague Visby Rules. It is not logically possible to envisage a
case where an estoppel can arise in respect of any particulars set out in a
bill which are qualified by an effective reservation such as “weight (etc)
unknown”. It is thought that the same
would apply under Art. 16.3 (b) of the Hamburg Rules.
Question 1.2.5
Do
you consider that the conclusive evidence rules (Hague-Visby Rules Art. III
Rule 4; Hamburg Rules Art. 16 Rule 3; CMI Uniform Rules for Sea Waybills Rule
5(ii)(b)) should be maintained/introduced as regards marks, the number,
quantity or weight as furnished by the shipper, and the apparent order and
condition of the goods?”
It is considered that there are defects both in
Art. III Rule 3 of the Hague Rules and Art. 15 of the Hamburg Rules. The former does not deal sufficiently with
the effect of reservations such as “weight etc unknown” and the circumstances
in which they are to be effective; the latter extends the required particulars
to be included in the bill to an unnecessary extent; for example, the carrier
is required to specify both the number of packages or pieces and “the weight of
the goods or their quantity otherwise expressed”. It is considered that the conclusive evidence rules should be
limited to particulars of the goods which would be apparent on a reasonable
external examination of the goods. To
go further and to require particulars of weight to be stated in the
circumstances where it is not customary to weigh the goods at the time of
shipment is to invite unnecessary litigation as to the effect of reservations
inserted by the shipowner and to risk making a shipowner liable for matters
over which he has no control.
More generally, it is considered that the
provisions of both the Hague Visby Rules and the Hamburg Rules fulfil a useful
commercial function in supporting the function of a bill of lading as a receipt
for the goods and in excluding or limiting the right of shipowners to resile
from clear statements in the bill of lading where a third party has relied on
the accuracy of the bill of lading, usually by paying for the goods shipped.
It is considered that
Art. 16 Rule 3 of the Hamburg Rules constitutes an improvement over Art. III
Rule 4 of the Hague Visby Rules in one respect; namely in requiring reliance on
the description of the goods set out in the bill of lading as a condition for
the carrier being deprived of the right to prove that the statement was
inaccurate. Art. III Rule 4 of the
Hague Visby Rules requires that the third party must have been acting in good
faith but does not prescribe that the transferee must have relied on the
statements in the bill when accepting the transfer.
It is considered that these or similar
provisions (suitably amended) should be maintained for situations where
negotiable bills of lading are issued and that they should be extended to cases
where the contract of carriage is covered by a sea waybill so that the
conclusive evidence clause would be available to a third party consignee who
could show that in good faith he had acted in reliance on the description of
the goods set out in the waybill. The
position where no transport document is issued requires further study. There could be a case for introducing
conclusive evidence rules where no transport document as such has been issued
but where the contract of carriage is evidenced by electronic means, provided
however that the clause should not operate unless a third party has acted in
good faith in reliance on the description of the goods given by the carrier.
Question 1.2.6
Under your national law do the conclusive evidence rules benefit a fob
buyer?
The answer to this question depends on whether
the fob buyer was the original party to the contract of carriage or the bill
has been transferred to him as “a third party acting in good faith” (Art. III
Rule 4 of the Hague Visby Rules).
If the fob buyer is named in the transport
document as the shipper this will usually be because he was the original party
to the contract with the carrier so that the conclusive evidence clause will
not benefit him.
If however the fob seller is named as the
shipper, it is possible that the bill may have been transferred to the fob
buyer on payment of the price of the goods.
Under English law an unpaid vendor may take a bill of lading making the
goods deliverable to his order and if he takes a bill in this form and not as
agent for, or on behalf of, the purchaser, he thereby reserves to himself the
power of disposing of the goods
(the ius dispondendi); in these
circumstances the property in the goods will not pass to the fob buyer on
shipment but only when he pays or tenders the price against delivery of an
indorsed bill of lading. If therefore
the bill is taken to the order of the fob seller and is subsequently indorsed
to the fob buyer the latter will probably be able to rely on the conclusive
evidence clause in Art. III Rule 4.
If the fob buyer is shown in the bill of lading
as the named consignee it may still be possible that the power of disposing of
the goods was, on the facts, reserved by the seller so that in these
circumstances, too, the fob buyer may be able to show that the bill of lading
was transferred to him as a third party acting in good faith. But where the buyer is shown as the named
consignee it might be held that the shipper took the bill on behalf of the
buyer (the purchaser) or as his agent.
This is far less likely if the bill was made out to the order of the
seller.
1.3 Delivery of the
Goods at Destination
Question 1.3.1
Does the period of the Carrier's responsibility for the goods under your
national law end at the same moment as delivery to the buyer under a contract
of sale on “delivered” terms?
In English law, the time at which the goods are
deemed to have been delivered under the contract of sale and the time at which
the carrier is released from responsibility for the goods under the contract of
carriage do not necessarily coincide.
The contract of sale and the contract of carriage are two quite distinct contracts (which are
likely to have been made between different parties), and it is the contract of
carriage which determines when the carrier’s responsibility ends.
The Hague-Visby Rules,
as they have been interpreted by the English courts, do not provide an answer
to the question, “when does the carrier’s
responsibility for the goods end?”
A literal reading of Art. III Rule 2
might suggest that the carrier is under an obligation to discharge the goods
from the vessel, such that the carrier’s responsibility for the goods cannot
end before discharge is completed.
However, the English courts have rejected the literal construction in
favour of the view that the Rules do not define the scope of the carrier’s obligations, they only determine the manner in which the obligations must be
performed: the scope of the carrier’s obligations (including when they begin
and end) is a matter which the parties are free to determine by their own
contract. Accordingly, the terms of the sea waybill or
bill of lading represent the starting point for determining when the carrier’s
responsibility ends.
Many bills of lading contain clauses which make
express provision for when the carrier’s responsibility for the goods shall
end. Consistent with the principle that the
parties themselves are free to determine the scope of the carrier’s
obligations, the Court will generally give effect to such a clause
according to its terms. Plainly the effect of such a clause
(depending upon its terms) may be that the carrier is released from
responsibility for the goods before there is any delivery to the buyer or other
consignee. But if the clause purports to relieve the
carrier from liability for loss of or
damage to the goods arising from a negligent act occurring in the course of
discharge (as opposed to defining the scope of the carrier’s obligation to
discharge the ship) the clause may be held to be invalidated by Act III Rule 8
of the Hague-Visby Rules.
Absent any express clause, the point at which
the carrier’s responsibility for the goods ends falls to be determined by
reference to common law principles governing the bill of lading. At common law, the carrier’s obligations
under the bill of lading are discharged by performance (and thus the carrier’s
responsibility for the goods ends) when the goods are delivered to the
consignee entitled to receive them under the bill of lading contract. “Delivery” in this context involves placing
the goods completely under the control of the consignee.
The precise moment at which the goods will be
taken to have been placed under the control of the consignee will depend on the
facts of each case, and, in particular, on how the goods are discharged. Delivery to the consignee’s agent is
equivalent to the consignee itself. Accordingly, in the typical case where the
goods are discharged by stevedores, the carrier will be released as the goods
are discharged if the stevedores are (as between carrier and consignee) to be
treated as the consignee’s agents. On
the other hand, if the goods are discharged by the carrier’s agents, then there
will be no delivery until the goods are released to the consignee.
In determining whether or not the stevedores
are the consignee’s agents, the terms of the sea waybill or bill of lading
again represent the starting point. The
bill may state expressly that the stevedores are the consignee’s agents. Alternatively, the stevedores will be
treated as the consignee’s agents if the terms of the bill make the consignee
responsible for discharge.
If the bill is silent as to the position of the
stevedores or as to responsibility for discharge, it may be necessary to ask
whether, on the facts, the stevedores who handled the cargo were the servants
or agents of the carrier or of the consignee.
Relevant factors would include who appointed and paid the stevedores and
whether they acted under a contract made by the carrier or the consignee. In one case, where it was customary for
discharge to be effected by the dock company’s servants at the quay it was
held, in the context of a claim for demurrage, that the stevedores were the
carrier’s agents for the purposes of
bringing the cargo out of the hold, but thereafter became the consignee’s agents for the completion of
discharge.
Accordingly, the moment at which delivery takes
place under a bill of lading varies depending upon the terms of the bill of
lading and the facts of the case. Thus,
in any individual case, the moment of delivery will not necessarily coincide
with the moment of delivery under a contract of sale on “delivered terms”.
Question 1.3.2
Does
a FIO
clause define the scope of the contract in this respect?
An FIO clause may be relevant to the question
at what moment the carrier’s responsibility ends but this is very much
dependent on the wording of the particular clause. As explained earlier (see the answer to Question 1.1.3) the
expression FIO, standing alone, has the limited effect of providing that the
shipper or consignee shall pay the cost to the shipowner of loading and
discharging the cargo. A clause in that
limited form cannot affect the question where the carrier’s responsibility
ends. If the clause goes further and
provides that the consignee undertakes the obligation to discharge the cargo,
it is possible that the stevedores who perform the discharge may be treated as
the consignee’s agents; if so, delivery may be held to occur when the
stevedores take up the cargo in the ship’s holds.
Question 1.3.3
Is
the co-operation of the consignee/bill of lading holder necessary to complete
delivery?
There is scant authority on this point in
English law.
It may be argued that, conceptually, delivery
is a bilateral process: the carrier must release the goods to the consignee,
but equally the consignee must receive them, and there can be no delivery (and
thus no end to the carrier’s responsibility) unless and until the consignee
does receive them.
Further, it is settled that the carrier does
not fulfil the obligation to deliver simply by discharging the goods on arrival
at the discharge port and leaving them in a place from which the consignee may
collect them. The consignee must be
given a reasonable opportunity to collect the goods. If the goods are lost or damaged after arrival but before the
consignee has had reasonable opportunity to collect them, then the carrier
remains liable.
What happens however if the carrier does afford
the consignee a reasonable period to collect the goods, but the consignee
refuses or fails to do so? Does the
carrier cease to be responsible for the goods at the end of the reasonable
period: in other words, is a tender
of delivery sufficient to discharge the carrier’s obligations, whether or not
the consignee accepts the tender?
There does not appear to
be any English authority directly on point in the context of carriage of goods
by sea. However, in a recent decision
in a different context,
there was held to be an implied term of a contract of bailment that the
bailee’s responsibility for the goods would cease after the expiry of a
reasonable time for their collection. A
bill of lading contract is a contract of bailment, and application of this
decision to bills of lading would suggest that the carrier who tenders goods
for collection ceases, by virtue of an implied term, to be responsible for the
goods if the consignee fails to collect them within a reasonable time. If so, then the carrier is able, by
tendering the goods for delivery, to obtain a release from responsibility
without the consignee’s co-operation.
Question 1.3.4
What
are the carrier’s rights if the consignee (bill of lading holder) does not co-operate
or refuses to receive the goods?
Under English law a consignee who is a bill of
lading holder only incurs liability under the contract of carriage if he takes
or demands delivery of the goods or makes a claim under the contract of
carriage; see the answer to Question 2.2.1 (post). Assuming, however, that the consignee
eventually takes or demands delivery and thus becomes liable under the
contract, his failure to collect the goods within a reasonable period will
constitute a breach of contract and render him liable to the carrier for
damages. Accordingly, if the carrier
keeps the goods aboard the vessel, and as a result the vessel is detained
waiting for the consignee to come to collect them, the carrier may be entitled
to recover demurrage, if the contract so provides or damages for detention in
the absence of any provision for demurrage. But the carrier would be under a duty to
mitigate his damages and in practice the cost and inconvenience involved in
detaining the vessel may be such that the carrier’s reasonable course is to
discharge the goods and store them ashore.
In principle, (subject to the proviso mentioned above) the carrier’s
storage costs should be recoverable from the consignee as damages for breach of
contract.
1.4 Delivery of the Goods Without Surrender of the Bill of
Lading
Question 1.4.1
Under
your national law what are the rights of the holder as regards the goods after
delivery to the person entitled to the goods under the contract of sale?
Under English law a bill of lading is a
document of title to goods in a rather special sense. It acts as a kind of transferable “key to the warehouse”
and is thus a symbol of constructive possession of the goods. A bill of lading may also be used as part of
the mechanism whereby the property in goods is transferred from a seller to a
buyer or whereby a pledge of the goods is conferred on a lender but in such
cases the transfer of the bill passes only such property or title to the goods
as was intended to pass under the underlying contract of sale or pledge.
Once the shipowner has
delivered the goods to a person entitled to have them delivered to him a bill
of lading in respect of those goods is extinguished as a document of title.
In the example given in the Questionnaire,
where the Carrier has delivered the goods against a letter of indemnity, the
holder of the bill of lading might have a right of suit against the carrier
(see the answer to question 1.4.2) but his right to claim the goods from the
person to whom they had been delivered, or to recover damages in lieu, would
depend on whether he or that person had title to those goods. The mere fact that the holder retained
possession of the bill would not constitute proof of title since the holder
might have consented to the release of the cargo against the letter of
indemnity; indeed he might have ordered it.
Since the bill of lading is only a document of title in the limited
sense explained above, the rights of the holder as regards the goods after they had been released by
the carrier would be dependent on the terms of the relevant contract or
contracts of sale and in particular on any terms governing the passing of
property and the right to possession.
Question 1.4.2
What
are the rights of suit of the holder against the Carrier under the contract of
carriage after such delivery?
Delivery of the cargo without presentation of
the bill of lading constitutes a breach of the bill of lading contract,
even if the shipowner delivers the goods to the person entitled to the goods
under the contract of sale.
Consequently the holder of the bill of lading
would have rights of suit against the carrier if the latter delivered the goods
against a letter of indemnity. Such
rights of suit would be transferred to any named consignee identified in the
bill and to any indorsee of the bill provided that he became the holder by
virtue of a transaction made before the time when the bill of lading was
extinguished as a document of title.
There appears to be no reported case where a
lawful holder of a bill of lading has requested a carrier to deliver the goods
against a letter of indemnity and where the lawful holder has subsequently
commenced proceedings against the carrier for damages for breach of
contract. It is thought that it would,
in those circumstances, constitute a defence to the carrier that the holder
consented to the release of the cargo against the letter of indemnity. In any event the holder’s remedy would be
defeated by circuity of action.
In cases where the lawful holder has not consented
to delivery of goods against a letter of indemnity he will be entitled to
recover damages from the carrier for breach of contract, for breach of the
relationship of bailment and/or for conversion of the goods.
Question 1.4.3
Are
such rights affected by endorsement of the bill of lading after such delivery
and if so how?
This is a question of some complexity in
English law. It has been held that if
the shipowner delivers goods against an indemnity to a person entitled at that
time to have the goods delivered to him then the bill of lading is at that
moment exhausted by delivery to the right person and having obtained the goods
the consignee cannot thereafter by endorsement of the bill of lading convey any
title to the goods to a third party. Section 2(2) of the Carriage of Goods by Sea
Act 1992 provides that a person shall not have any rights of suit transferred
to him unless he becomes the holder of the bill of lading by virtue of a
transaction effected in pursuance of any contractual or other arrangements made
before the time when a right to possession of the goods ceased to attach to
possession of the bill.
It would seem to follow
that if the goods have been delivered at the request of the lawful holder of
the bill of lading against an indemnity to the person entitled to those goods
under the contract of sale, then at that moment the bill of lading is exhausted
as a document of title and any person to whom the bill may subsequently be
endorsed by virtue of a contractual or other arrangement made after such
delivery will acquire no rights of suit against the carrier. Consequently the rights of suit, if any,
will remain with the person who was the lawful holder of the bill at the time
of delivery.
Question 1.4.4
What
are the rights of suit against the Carrier under the contract of carriage of
the person to whom such delivery has been made?
The person to whom delivery has been made will
have a right of suit against the Carrier (e.g. for damages for delivery of the
goods in a damaged condition) in the following circumstances:
(1)
if he subsequently becomes the lawful
holder of the bill of lading (provided he does so by virtue of an agreement
made before the time when a right to possession ceased to attach to possession
of the bill) he will acquire rights of suit against the carrier under the bill
of lading contract;
(2)
if delivery was made by the carrier
under a ship’s delivery order which contained an undertaking to deliver the
goods to the person to whom in fact the goods were delivered, he will acquire
rights of suit against the carrier under the delivery order;
(3)
if a new contract can be inferred
between the parties by virtue of delivery having been given against
presentation of a document such as a ship’s delivery order;
Moreover, even if the party to whom delivery has been
made has no rights of suit under the bill of lading contract, he may be able to
bring proceedings against the carrier in tort if he had property in and/or the
right to possession of the cargo at the time when the loss or damage occurred.
1.5 Dating and Signature of
the Transport Document
Question 1.5.1
Under your national law is
it a requirement that the transport document be dated
·
with the date of receipt by the Carrier of the goods specified
therein in the case of a “received for shipment” document
·
with the date of shipment on board in the case of an “on board”
document
·
with the date of signature
·
with a date agreed by the shipper and the Carrier?
Under English law it is not essential to the validity of a transport
document such as a bill of lading that it must be dated. Thus it has been held that a forged and
false date does not render a bill of lading a nullity because dating is not
part of the essence of a bill of lading.
On the other hand the practice of dating a transport document is
widespread and universal. Since a CIF seller is under a duty to tender a bill of lading on terms and in a
form customary in the trade it is thought that an undated bill of lading would
not normally be good tender under a CIF contract. Nor would an undated bill of lading be good
tender under a letter of credit unless shipment on a named vessel had been
indicated by a pre-printed wording on the bill that the goods had been shipped
on a named vessel.
Under English law an “on board” transport document such as a bill of
lading should only be issued and dated when all of the cargo covered by the
document has been loaded. Similarly a “received for shipment” document
should only be issued and dated when all the cargo covered by the document has
been received by the Carrier.
If a Master or ship’s agent issues an “on board” bill of lading
bearing a date which he knows to be false (since it is earlier than the date of
completion of loading), it is reasonably clear that the person so signing together
with the carrier would normally be liable in fraud to anyone who suffers loss
by relying on the accuracy of the date e.g. by taking up and paying for the
bill of lading which he would have rejected if he had known the true date of
completion of loading. It would constitute no defence that the
shipper colluded with the carrier in issuing a bill of lading bearing a date
known to be false.
Question
1.5.2
Is it a requirement that the transport document indicates on the
face of the document the name and address of the Carrier/the identity of the
Carrier (e.g. “the registered owner of the carrying vessel”)?
There is no such requirement in English
law. Some bills of lading contain
express clauses identifying the carrier; for example most modern bills issued
by the more reputable combined transport operators contain clauses identifying
the carrier by name. Other bills of
lading contain no such clause or are printed on paper headed with the names of
vague entities such as “ABC Lines” or entities which are clearly no more than
agents. Some bills of lading contain
“demise” or “identity of carrier” clauses but these do not always resolve the
difficulty of identifying the carrier.
Normally, where the charter is not a demise, a bill of lading signed by
the master or by the charterer as authorised agent of the master is construed
as a contract with the shipowner.
Question 1.5.3
Is it a requirement that
the transport document be signed and, if so, by whom and how?
It is an undecided point in English law whether it is essential to
the validity of a transport document such as a bill of lading that it must be
signed. In practice however bills of
lading are always signed (or otherwise authenticated) on behalf of the carrier,
though the signature may be indecipherable.
What is essential to the validity of a bill of lading is proof that it
was issued by or on behalf of a carrier in respect of the goods covered by
it. Since bills of lading are always in
practice signed there would be difficulties in proving that a particular
document had been issued on behalf of the carrier, or that it was more than a
draft or provisional document, if it had not been signed. In addition an unsigned bill of lading would
not be good tender under most forms of sale contract or under a letter of
credit.
2. Rights of the Carrier
2.1 Freight
Question 2.1.1
Under your national law
what are the respective liabilities for payment of freight of the original
shipper, the consignee and intermediate holders of the bill of lading? Are such liabilities affected by delivery of
the goods to the consignee? Are they
subject to any relevant contractual provisions?
In English law, the bill of lading is not itself the contract
between the original parties; it is simply evidence of its terms. Therefore the bill of lading may not in all
cases establish the identity of the person liable to pay freight to the
carrier. It is necessary in each case
to establish with whom the carrier contracted; this is because the carriage is
for reward and the personal liability to pay the reward is a contractual
liability. The terms upon which the
goods have been shipped may not be in all respects the same as those set out in
the bill of lading. It therefore does
not necessarily follow that in any given case, the named shipper is to be under
a personal liability for the payment of the freight.
The personal liability is that of the person with whom the
performing carrier has contracted to carry the goods. This person will normally be the shipper. But the shipper may be shipping as the agent
of the consignee, in which case the contract will be with the consignee. If for example the consignee is the owner of
the goods, he is prima facie liable
to pay freight for them, as being the person with whom the contract of carriage
is presumed to have been made. Where goods have been shipped by a
forwarding or shipping agent in the United Kingdom who has booked cargo space
on a vessel and is known to be acting for a shipper whose name has not been
disclosed, the forwarding or shipping agent incurs personal liability for the
freight by reason of a long-established usage in the forwarding industry.
A contract to pay the freight will not always be implied from the
fact of shipment and the issue of a bill of lading. It is possible for there to be more complex
contractual schemes; the performing carrier may be in contractual relations
with others as well, as for example where there is a voyage or time charter.
By s. 2(1) of the Carriage of Goods by Sea Act 1992, a person who
becomes the lawful holder of a bill of lading has transferred to and vested in
him all rights of suit under the contract of carriage as if he had been a party
to the contract. By s. 3(1) of the Act,
where a person in whom rights of suit are vested by virtue of s. 2(1) takes or
demands delivery of any of the goods to which the bill of lading relates, or
makes a claim under the contract of carriage against the carrier in respect of
any of those goods, or is a person who, at a time before those rights were
vested in him, took or demanded delivery from the carrier of any of those
goods, that person shall become subject to the same liabilities under that
contract (including any liability to pay freight) as if he had been a party to
that contract. The liability of that
person to the carrier is additional to, and not in substitution for, the
liability of the original party to the contract of carriage: s. 3(3) of the
Act. Whether the person who falls
within s. 3(1) of the Act is liable to the carrier for the freight depends on
whether the freight is due and unpaid, which will be determined by construing
the terms of the contract of carriage.
Quite apart from the liability imposed by s. 3(1) of the Act, a
person may become bound to a contract of carriage and liable to pay freight if
a new contract with the carrier may be found as a fact.
Question 2.1.2
When is the freight
earned?
Traditionally, freight has been described as “the reward payable to
the carrier for the safe carriage and delivery of the goods. At common law, no freight is payable unless
the shipowner has substantially performed his obligation under the contract of
carriage by tending delivery of the goods at the discharge port, and no freight
is payable if the goods are lost on the voyage or if for any reason (other than
the fault of the shipper) the goods are not tendered for delivery at the port
of destination. If the carrier is able to deliver the goods,
albeit in a damaged condition, at the port of destination, he is entitled to
his freight in full without deduction for the damage,
although he may be liable in damages to those interested in the goods.
The traditional position as to when freight is
earned is often varied in practice by the inclusion of special terms in the
bill of lading to the effect that freight is deemed earned on loading or on
signing the bill of lading. In such
circumstances, the carrier will be entitled to his freight even if the goods
are lost on the voyage
and will be able to recover unpaid freight despite the loss of the goods.
Question 2.1.3
When is the freight
payable?
At common law, freight is payable once it has been earned, i.e. on
tender of delivery of the cargo.
Payment and delivery are concurrent acts. The carrier is entitled to refuse to
discharge the cargo unless freight is paid for each portion as delivered.
Again, special provisions in the bill of lading may determine the
time of payment. Stipulations as to the
time of payment vary considerably in practice, but a common form is one which
provides that freight is payable within a specified number of days after
completion of discharge. In The Samos Glory,
the final part of the freight was payable “after completion of discharge and
settlement of demurrage”. It was held
that the obligation to pay the final part of freight only accrued when the
demurrage liability had been determined by agreement or award.
Where the bill of lading provides that freight is deemed earned on
signing the bill of lading, and then provides for when the freight shall be payable,
the provision as to payment will generally be construed as providing only a
mechanism for the determination of the date for payment; in the absence of
clear language, the provision will not be construed as a condition precedent to
the right to freight. Accordingly, if
goods are lost after signature of the bill of lading but before the due date
for payment, the carrier will be able to recover freight in full.
Question
2.1.4
To what extent are the Carrier’s rights affected by frustration of
the contract of carriage before the freight is earned/paid, or by the contract
being discharged by breach?
Under the doctrine of frustration,
circumstances which substantially delay the performance of the contract of
carriage or render its performance impossible may discharge the parties to the
contract. Frustration occurs whenever
the law recognises that supervening and unforeseen circumstances, arising
without default on the part of either party, have rendered a contractual
obligation incapable of being performed because in such circumstances
performance would be something radically different from that which was
undertaken by the contract.
The Law Reform (Frustrated Contracts) Act 1943 does not apply to
contracts of carriage. Accordingly, the common law determines the
consequences of frustration. At common
law, the effect of the frustration of a contract is that the parties are
discharged from performance of obligations for the future, but because the
contract is not dissolved ab initio,
obligations which have accrued prior to the date of frustration remain to be
performed.
Accordingly, if the vessel sinks with her cargo, then in the absence
of special provision in the contract of carriage, the carrier will not be
entitled to any freight. If, however,
the contract of carriage provides that freight is deemed earned on signing of
bills of lading, then the carrier will be able to recover the unpaid freight
from the shipper despite the frustration of the contract; this is because the
obligation to pay freight accrued before the frustration of the contract. This will be the case, even if the contract
of carriage provided that some or all of the freight deemed to be earned on
signing of the bill of lading is not to be paid until a date after the
frustrating event (e.g. within a certain number of days after completion of
discharge), unless such provision is construed to be a condition precedent to
the right to freight.
Under English law, the discharge of a contract of carriage for
breach operates prospectively; obligations which accrued prior to the date of
discharge are unaffected. Accordingly,
if freight is deemed earned on signing of the bill of lading, the carrier is
entitled to recover freight in full, even if after signature of the bill of
lading the carrier commits a repudiatory breach of contract which is accepted
as bringing the contract to an end. Again, this will be the case despite a
provision as to the date when the freight is to be paid, unless such provision
is to be construed as a condition precedent to the right to freight.
Question 2.1.5
What is the effect of an
endorsement on the bill of lading reading “freight (pre) paid” or “freight
collect”?
Freight is prima facie
payable according to the terms of the contract of carriage. A bill of lading marked with the words
“freight paid” or “freight prepaid” will serve as a receipt for the
freight. The question has been
discussed
whether the words “freight paid” or “freight prepaid” can operate as an
estoppel so as to prevent the carrier claiming freight from a third party who
took up the bill without knowledge that in fact the freight had not been
paid. Despite some authority to the
contrary, the point remains an open one.
“Freight collect” bills of lading may be used under CIF or C&F sale contracts. Under these forms of sale contract, payment
of the freight element in the price may be effected in one of two ways. The first way is for the seller to prepay
the freight and invoice the buyer for the full CIF
price, which is payable by the buyer against the shipping documents. The second way is for the seller to leave
the buyer to pay the freight on the delivery of the goods, invoicing him only
for the CIF price less freight. When the first method is used, the seller
provides freight prepaid bills of lading.
When the second method is used he provides so-called freight collect
bills of lading, that is to say, bills of lading under which freight is payable
by the receiver (who may be the buyer himself or a sub-buyer from the buyer) to
the ship at the port of discharge. The
shipowner is not obliged to deliver the cargo against the “freight collect”
bill of lading before receiving payment of the freight.
Question
2.1.6
What is the effect of a “cesser” clause in the bill of lading
purporting to relieve the shipper of all liability on shipment of the goods?
A cesser clause in a bill of lading in a
language apparently wide enough to relieve the shipper of all liability upon
shipment of the goods will generally not be construed so as to relieve the shipper
of all liability unless an alternative remedy is available to owners, e.g. by
means of a lien under the terms of the bill of lading.
Question 2.1.7
If the freight is unpaid
what are the Carrier’s rights to lien the goods or to withhold delivery?
There are two sources of a Carrier’s right to lien the goods or
withhold delivery: express agreement, and the common law which applies in the
absence of express agreement.
At common law, a Carrier has a possessory lien for unpaid freight. Such a right depends on possession of the
goods. Furthermore, such a right only
exists at common law if the agreed time for payment of freight is
contemporaneous with the time of delivery of the goods. So in the absence of express agreement,
there is no lien for unpaid freight which was payable before the delivery of
the goods or for freight which is not due when delivery of the goods is sought.
The common law lien for freight applies to all goods coming to the
same consignee on the same voyage for the freight due on all or any part of the
goods.
The Carrier may do what is reasonable to maintain his lien. He will not lose his lien by warehousing the
goods ashore.
The possessory lien at common law does not of itself confer any
right to sell goods the subject of the lien to realise the freight due, unless
the goods have been abandoned by all persons entitled to them and have thereby
become the Carrier’s property.
Express agreements for a lien for unpaid freight are now common and
generally effect will be given to the terms of the express agreement.
2.2 Deadfreight and other charges
Question
2.2.1 (part (i))
Under your national law what are the respective liabilities of the
original shipper, the consignee and intermediate holders of the bill of lading
for payment of such items as deadfreight demurrage and general average
contributions?
The shipper’s liability for these charges arises as a matter of
contract. The liabilities of the
original party to the contract of carriage remain unaffected by the transfer of
the bill.
By s. 2(1) of the Carriage of Goods by Sea Act 1992, a person who
becomes a lawful holder of a bill of lading has transferred to and vested in
him all rights of suit under the contract of carriage as if he had been party
to that contract. However, as a statutory
quid pro quo for this transfer of
rights, a person in whom rights of suit are vested and:
(1)
who takes or demands delivery from the
carrier of any goods to which the bill of lading relates;
(2)
who makes a claim under the contract
of carriage against the carrier in respect of any of those goods; or
(3)
who, at a time before the rights of
suit were vested in him, took or demanded delivery from the carrier of any of
those goods;
will become subject to the same liabilities under the contract as if
he had been a party to that contract (s. 3(1)).
The “lawful holder” includes:
(1)
a person in possession of the bill of
lading who is the named consignee;
(2)
a person in possession of the bill of
lading as a result of the completion by delivery of the bill of lading, or any
indorsement of the bill of lading or, in the case of a bearer bill, transfer of
the bill of lading;
(3)
a person with possession of the bill
as a result of transactions by virtue of which he would have become a holder
within paragraph (a) and (b) above, had not the transaction been effected at a
time when the bill no longer gave a right (as against the carrier) to
possession of the goods to which the bill of lading related (s. 5(2)). In this last case, a person will only become
a lawful holder if he does so by virtue of a transaction effected pursuant to a
contractual and other arrangement entered into before the time when the right
to possession to the goods ceased to attach to the bill of lading, or as a
result of the rejection of the goods or documents delivered to another person
in pursuance of any such arrangement.
The words “the same liabilities” are extremely wide. It would appear to have been the intention
of the Law Commission, who were responsible for the drafting of the Act, that
these should be interpreted widely.
Accordingly, contractual obligations undertaken by the shipper in
respect of deadfreight, demurrage and other charges will be assumed by the
consignee and intermediate holders in the following circumstances:
(1)
where such persons become “lawful
holders” of the bill of lading as defined in the paragraph above; and
(2)
he either:
(1)
takes or demands delivery from the
carrier of any goods covered by the bill of lading after becoming a lawful
holder; or
(2)
he had taken or demanded delivery of
the goods from the carrier before becoming the lawful holder; or
(3)
he makes a claim under the contract of
carriage against the carrier in respect of any of the goods covered by the bill
of lading.
If liabilities under the bill of lading are vested in the consignee
or an intermediate holder, this does not relieve the shipper of his original
liabilities (s. 3(3)). The Act does not
state whether an intermediate holder who has taken one of the steps specified
above in relation to any goods and afterwards endorses the bill of lading and
transfers the goods to a third party is thereby discharged from the liabilities
imposed on him by the Act. It has
however now been decided that there is a distinction between (a) a claim or
demand for delivery of the goods, which may be withdrawn or abandoned and (b)
actual delivery of the goods which, once taken, is irreversible. In the case of (a), the intermediate party
may withdraw the claim or demand and endorse the bill to a third party
purchaser instead. In such circumstances
the intermediate party remains liable only until he endorses the bill to a
party who fulfills the conditions of liability set out in the Act.
A liability to contribute in general average attaches, apart from
contract, to those parties who were the owners of goods at the time the general
average act occurred.
Question 2.1.1 (part (ii))
Are such liabilities
affected by delivery of the goods to the consignee?
As noted above, the liabilities of the shipper are not affected by
delivery to the consignee. An
intermediate holder will only become subject to such liabilities if (a) he
himself has sought or seeks delivery of the goods, or (b) to exercise the
rights of suit vested in him. In case
(a), as explained above, it has recently been decided that, if the intermediate
holder’s attempt to obtain delivery of the goods does not succeed, he will
remain subject to those liabilities only until such time as he endorses the
bill of lading to a party who does obtain delivery of the goods. In case (b), the fact that the consignee has
obtained possession of the goods before or after such rights of suit are
exercised will not affect the intermediate holder’s liabilities.
Question 2.1.1 (part (iii))
Are they subject to any
relevant contractual provisions?
The effect of the statutory vesting of liability is to make the
intermediate holder or consignee in the relevant circumstances subject to
liabilities “as if he had been a party to the contract”. Accordingly the terms of the relevant
liability will be subject to any relevant contractual provisions.
Question
2.2.2
If the items are unpaid, what are the Carrier’s rights to lien the
goods or to withhold delivery?
At common law (that is to say in the absence
of a relevant contractual possession), a Carrier will have a lien for general
average contributions,
freight and for expenses incurred in protecting and preserving the goods. However, in the absence of contract he will
have no lien for deadfreight,
demurrage or
other charges.
The bill of lading may give contractual rights to lien in respect of
deadfreight,
demurrage and
for any other charge which may be due to the Carrier under the bill of lading. The precise charges covered by any lien
clause in the bill of lading will be a matter of construction of the bill. Such clauses will be strictly construed.
In addition to any lien clause appearing on the bill of lading
itself, it is possible that such a clause may be incorporated by reference into
the bill of lading from a charterparty to which the Carrier is party. Whether or not such a clause is incorporated
by reference into the bill of lading depends upon the words of incorporation
used. A clause providing “freight and
all other conditions as per charter” will incorporate any lien stipulated for
in the charterparty for loading and discharge port demurrage
and deadfreight. The English courts are generally more ready
to hold that lien clauses in a charterparty become terms of a bill of lading by
words of incorporation
than other terms such as arbitration clauses.
Question
2.2.3
Do any such rights of lien extend to a general lien for any sums due
from “the merchant” in respect of other goods?
No such lien is granted by common law, and
accordingly if a Carrier wishes to obtain such a lien it is necessary for him
to secure its inclusion in the bill of lading.
However a Carrier may create a lien by contract to cover sums due in
respect of other goods.
Clear words would be required for a lien to cover sums due in respect of other
goods, because of the restrictive approach to the construction of liens
referred to above.
Question 2.2.4
May any such rights of
lien be exercised after delivery of the goods to the consignee or after the
goods have passed out of his hands?
A lien arising at common law is a possessory lien, and the
continuation of such a lien depends upon the Carrier or his agent maintaining
possession of the goods. A Carrier will
not lose his lien by consenting to hold as agent of the consignee
by warehousing the goods ashore provided they are held to his order.
A contractual lien will also generally require the continuation of
the Carrier’s possession in one of the manners just described to be
effective. However, some contractual
lien clauses do seek to provide for a lien which continues after the Carrier
has parted with possession of the goods.
Such a clause may operate so as to qualify any delivery to the
charterer or bill of lading holder so that the goods are still held on behalf
of the Carrier and to his order.
After the goods have passed from the possession of the consignee, it
is difficult to see on what basis such a clause could continue to operate,
unless the consignee passed possession on terms which expressly sought to
preserve the Carrier’s lien. Moreover
it is difficult to envisage that the clause can operate once a bulk cargo has
been mixed in a shore tank with other cargo.
3. Obligations to the
Carrier of the Shipper, intermediate bill of lading holder and consignee
3.1
Question 3.1.1
How is “the shipper”
defined in your national law? Is there
a distinction between “the shipper” and a supplier of goods to be shipped who
is not a party to the contract of carriage?
The term “shipper” is not defined in the Carriage of Goods by Sea
Act 1992 (“the Act”), which is the statute which governs the transfer of rights
and liabilities under shipping documents in English law. The term “shipper” would however generally
(but not invariably) be understood to mean the party by whom a contract for the
carriage of goods by sea has been concluded with a carrier
as opposed to the supplier of goods to be shipped who is not a party to the
contract of carriage. See further
below.
Question 3.1.2
Is there any presumption
that the person named in the bill of lading as the shipper is liable as the
contractual counterpart of the Carrier?
It is not clear whether there is any such presumption. It is probably a rebuttable inference of
fact that the shipper named in the bill of lading is the contractual
counterpart of the carrier
because, albeit the bill of lading is not a contract (for that is made before
the bill of lading is signed and delivered), it is excellent evidence of the
contract i.e.
it is evidence that there is a contract between the shipper named in the bill
of lading and the carrier on the terms set out in the bill of lading (but there
may be no such contract, for example where the shipper is acting as an agent
for a disclosed principal).
In cases where the charterer is himself the shipper, the bill of
lading is to be taken only as acknowledgement of receipt of the goods,
but there will of course be a contract of affreightment between the shipper and
the carrier on the terms of the charterparty.
Question 3.1.3
What rights and
liabilities are rights and liabilities exclusively of the consignee?
The consignee has no rights and liabilities merely by being the
consignee named in the bill of lading.
The carrier is not entitled to deliver the goods to the consignee named
in the bill of lading, without the production of the bill of lading, and does
so at his risk if the consignee is not in fact entitled to the goods.
Question 3.1.4
To what extent do rights
and liabilities pass from the shipper to intermediate holders of the bill of
lading and thence to the consignee, and to what extent are such rights and
liabilities ultimately the exclusive
rights and liabilities of the consignee?
It is proposed to deal separately with (a) the transfer of rights of
suit under the contract of carriage and (b) the question of liabilities.
(a) The transfer of rights of suit
By virtue of s. 2(1) of the Carriage of Goods by Sea Act 1992 a
person who becomes the lawful holder of a bill of lading shall have transferred
to and vested in him all rights of suit under the contract of carriage as if he
had been a party to that contract (this is subject to the provisos stated
below).
As stated in the answer to question 2.2.1 the “lawful holder”
includes a person who is in possession of the bill of lading and who by virtue
of being identified in the bill is the consignee of the goods to which the bill
relates. It also includes a person with
possession of the bill as a result of the completion, by delivery of the bill,
of any indorsement of the bill or, in the case of a bearer bill, of any other
transfer of the bill.
The effect of the transfer of rights to the lawful holder of a bill
is to extinguish any entitlement to those rights of the original party to the
contract of carriage and of any previous holder from whom those rights have
been transferred. Thus the shipper ceases to have contractual
rights once someone else becomes the lawful holder of the bill of lading and
the intermediate holder ceases to have contractual rights once someone else
becomes the lawful holder.
There are three provisos.
First the Act does not apply to what is commonly called a “straight”
bill, i.e. one which is “incapable of transfer either by indorsement of, as a
bearer bill, by delivery without indorsement”.
But such a bill may nevertheless be a sea waybill within the meaning of
the Act.
Second, the transfer of rights of suit effected by the Act is of
rights under the contract of carriage “contained in or evidenced by” the bill
of lading. These words probably exclude terms or
incidents of the contract which are not evidenced by the document itself and of
which the transferee consignee has no notice.
Third, there is no transfer of rights of suit where a bill of lading
is transferred after the goods have been completely delivered to the person
having a right under the bill of lading to claim them (i.e. after the time when
the bill is extinguished as a document of title conferring constructive
possession of the goods), unless the transferee becomes the holder by virtue of
a transaction effected pursuant to any contractual or other arrangements made
before the time at which the right to possession of the goods ceased to attach
to possession of the bill, or as a result of the rejection of goods or
documents delivered to another person in pursuance of any such arrangements. (This exception has been referred to in the
answer to Question 1.4.3).
(b) Liabilities
The provisions of the 1992 Act have been set out and discussed in
the answer to Question 2.2.1.
Liabilities do not pass under the Act from the shipper to
intermediate holders of the bill of lading and thence to the consignee. The liabilities of the original party to the
contract of carriage remain unaffected by the transfer of the bill. However the transferee of a bill of lading
may become subject to the same liabilities as if he had been a party to the
contract. This will occur only if he
becomes the “lawful holder” and if he enforces his rights under the Act by
taking or demanding delivery from the Carrier of any of the goods to which the
bill relates (whether before or after the rights of suit are vested in him) or
makes a claim under the contract of carriage against the carrier in respect of
any of those goods. Accordingly
liabilities under the bill are not exclusive to the consignee.
It should be added that it seems probable that there is a category
of liabilities which fall only on the shipper and which are not assumed by a
transferee of the bill of lading even if he enforces his rights under the
Act. It is doubtful whether a
transferee who becomes a “lawful holder” and exercises his rights under the Act
will become subject to the liability of the shipper under Art. III rule 5 of
the Hague Visby Rules (guarantee of accuracy of particulars); under Art. IV
rule 3 (responsibility for loss sustained by the carrier); or under Art. IV
rule 6 (liability for shipping dangerous goods).
Question
3.1.5
To what
extent are rights and liabilities retained by the shipper after he has ceased
to hold the bill of lading, and to what extent are such rights and liabilities
exclusively the rights and liabilities of the shipper?
This question has been answered in the course of dealing with the
previous question.
3.2 Receipt of the Goods
Question 3.2.1
Is it an obligation of the
consignee to receive the goods timeously and to co-operate with the Carrier to
enable the Carrier to fulfil his obligations as to delivery?
In short, the answer to this question is “yes”:
The general duties of the consignee (as always, subject to specific
contractual or customary provisions) commence with his obligation to use due
and reasonable diligence to discover when the ship carrying his cargo arrives
at the discharge port. The master is under no general duty to give
notice of his arrival or readiness to unload, although the consignee’s duty to
receive the cargo from the vessel commences only when she is actually ready to
discharge the particular consignee’s cargo (regardless of the consignee’s
ignorance of her arrival).
The discharge of the consignee’s cargo is a joint act of both the
shipowner and the consignee: the shipowner must get the cargo out of the holds
and “deliver” it to the consignee, and it is the consignee’s duty to take
delivery of it. When the consignment is put at the
consignee’s disposal by the shipowner, the consignee must actually take
delivery within the time (if any) stipulated by the contract. This duty is strict and unconditional, such
that a consignee who fails to ensure that the cargo is discharged within that
time is liable to pay demurrage or damages for detention in respect of the
period during which the ship is thereby delayed,
except where the delay is caused by the negligence or default of the shipowner,
or where the delay is covered by an exception in the contract.
Where a bill of lading requires a consignee to take delivery of the
cargo “immediately” or “directly” the vessel is ready to discharge, he must do
so promptly, without further delay than is reasonably required.
Where no time for discharge is fixed by the contract, the
consignee’s duty is to take delivery of the cargo within a reasonable time,
taking into account all of the prevailing circumstances. In this regard, the consignee must use
reasonable diligence in receiving the cargo and must do everything which he
could reasonably be expected to do in the circumstances.
Whilst the master of the vessel must give the consignee a reasonable
time to appear or give orders as to the discharge,
if the consignee fails to come forward to take delivery as required, the master
may land and warehouse the cargo at the consignee’s risk and expense (whether
by virtue of contractual or customary power, or as part of the master’s duty to
deal with the cargo in a reasonable manner).
Question 3.2.2
Is such an obligation
affected by the goods being tendered for delivery in a damaged condition, or
damaged to such an extent that they have lost their commercial identity?
On principle, it would seem that the duty of the consignee to take
delivery of the goods should be unaffected by the fact that they are merely
damaged to some extent. At the time of
delivery by the carrier, it may be impossible to determine the cause and extent
of the damage, and it will not therefore be clear whether the consignee has any
right of action in relation to the damage at all (and if so, whether rights
would lie against the carrier itself, i.e. the person to whom the consignee
generally owes the duty to take delivery).
The effect on the consignee’s obligation where the goods have lost
their commercial identity naturally depends upon the meaning of “commercial
identity”. Again on principle it would
seem that where goods are destroyed on the voyage (for example, where cotton
bales have been turned to ashes by fire), it can readily be said that there are
in fact no “goods” of which the consignee can take delivery, and therefore that
there can be no duty upon him to do so.
The difficulty arises where the goods are damaged such that they cease
to be useful for their intended purpose (or to comply with their description),
but are not destroyed nor lose their general character as goods of a particular
type. Thus, where oil is contaminated
with seawater to such an extent that it cannot be used for its intended purpose
as fuel, but nonetheless is still “oil”, it is a matter of conjecture whether
it has “lost its commercial identity”.
Insofar as it is simply not worth as much by virtue of the damage, the position would seem to be
no different from that above, where the goods could nonetheless still be called
“the goods” (and hence delivery should be taken), but where the consignee may
have a cause of action to recover the difference in value between the cargo as
it should have been delivered, and the cargo as it was actually delivered.
Support for the foregoing analysis (and assistance for the test of
“commercial identity”) can be derived from the authorities which govern the
question of when liability to pay freight is extinguished by virtue of damage
to or loss of the goods. In many ways
this is a logical corollary to the consignee’s obligation to take the
goods. The general rule in that context
is that freight remains payable in full for the carriage of the goods
notwithstanding that the goods are delivered in a damaged or deteriorated
condition, even if the damage arises
owing to the fault of the master and crew, or is so great that the goods are no
longer even worth the freight payable. Thus, although the consignee may have a
claim for the damage, the freight is nonetheless due in full to the shipowner
unless the goods have in fact lost their merchantable character (or “commercial
identity”).
The test of the stage of damage or deterioration at which this
identity is lost was stated by Lord Esher
to be whether “the nature of the thing has been altered, and it becomes for
business purposes something else, so that it is not dealt with by business
people as the thing it originally was.”
It is thus a test of degree, which will inevitably vary from case to
case. Nonetheless, it would appear that whenever
this “commercial identity” is lost,
the duty to pay freight would also cease. It is thought that similar principles
would be held to apply to the consignee’s duty to take delivery.
4. Rights to give
instructions to the Carrier
Questions 4.1.1 and 4.1.2
Who is the person entitled
to give instructions to the Carrier, and is the right to give such instructions
transferable under a negotiable bill of lading, under a sea waybill and if no
contractual document is issued?
Is the Carrier obliged to
accept such instructions as to matters affecting the goods themselves and as to
other matters arising under the contract of carriage?
These questions are considered shortly and together since it is
difficult to generalise on a matter which depends entirely on the particular
terms of the particular contract of carriage and the circumstances in which the
instructions are given.
It is proposed to discuss in turn (a) instructions as to the
delivery of the goods and (b) other instructions.
(a) Instructions as to delivery
Where a transferable bill of lading is issued, the Carrier is
obliged to deliver the goods to the holder of the bill of lading upon
presentation of an original bill. It is
for this reason that the bill of lading has been described in the classic 19th
century authorities as the “key of the warehouse” which confers constructive
possession of the goods upon the holder.
It follows that only the holder of the bill (whether he be the original
shipper or a transferee) is entitled to demand delivery and he may do so only
upon presentation of an original bill.
The right to demand the goods, or a delivery order, from the carrier is
thus transferable by transfer of the bill.
Even where the bill is made out to the order of a named consignee,
the shipper may, nevertheless be entitled to redirect the carrier to deliver
the goods to another person. The shipper may if he has retained the right
of disposal of the goods, delete the name of the consignee and either leave the
bill deliverable to a name left blank or insert the name of another consignee. This right is however lost once the bill of
lading has been delivered to the consignee so that the consignee has become the
lawful holder of the bill of lading.
The shipper’s right to redirect the goods to someone other than the
originally named consignee may be compared with the “right of disposition” or
the “right to modify the contract of carriage” given to a consignor under
conventions for the international carriage of goods by air, road and rail.
Where the goods are shipped on terms that a
sea waybill will be issued, the waybill may name the consignee or it may
entitle the shipper to nominate the consignee after shipment and in either of
these cases it may make provision for his identify to be varied. Under such a shipment the shipper retains
the right to direct the carrier to deliver the goods to someone other than the
named consignee. Accordingly such a
contract would normally be construed as one to deliver the to the named
consignee or to such other person as the shipper might direct. The shipper cannot exercise the right to
redirect (as in the case of an order bill) merely be endorsing the document and
delivering it to the newly designated consignee; he must notify the carrier
that delivery is to be made to that consignee.
Some waybills contain provisions for the right to redirect the goods
to be transferred to the named consignee at a particular stage of the transit
or in defined circumstances. So far,
such provisions have not required to be considered by the Courts.
Where the shipper has exercised his power to redirect the goods by
substituting C for B as consignee, C becomes “the person to whom delivery.....
is to be made by the carrier” under Section 2(1) of the Carriage of Goods by
Sea Act 1992 so that rights under the contract of carriage are vested in C and
any rights which were previously vested in B become extinct under Section
2(5). The effect would appear to be
that if the Carrier does not deliver the goods to C, then C will be entitled to
bring an action against the carrier for non-delivery.
Where no contractual document is issued at the time of shipment the
Carrier’s obligation will normally be to deliver the goods at the contractual
destination either to the shipper or to someone nominated by him. There will be no transfer of the right to
give instructions and no transfer of rights of suit save that, where electronic
commerce is used to effect the transaction, the Secretary of State has power to
make Regulations modifying the provisions of the 1992 Act so as to make it
apply to such shipments.
No Regulations have to date been made.
(b) Other instructions
It is common for charterparties to contain provisions entitling the
charterer to give instructions to the shipowner in the course of performance of
the contract. It is not usual for such provisions to be
included in other types of contract for carriage by sea.
Where a shipper wishes to give instructions to the carrier as to
such matters as the time of delivery or the conditions under which the goods
are to be carried, it is normal for the shipper and the carrier to negotiate
and reach agreement upon the terms of the carriage and for those terms to be
recorded in the carriage document. If
the terms are so recorded then, in the event of breach, the right of suit will
be transferred to the holder of the bill of lading or consignee under the
relevant sea waybill. If there is an
oral agreement between the shipper and the Carrier but the relevant term is not
evidenced by the bill of lading or sea waybill, it is unlikely that the 1992
will effect a transfer of the right to sue for breach of that term to the
holder of the bill of lading or consignee under the sea waybill.
Finally, English maritime law recognises that unforeseen and
extraordinary circumstances (such as a casualty) may arise in the course of a
marine adventure and that if they do, the master, before dealing with the cargo
in a manner not contemplated in the contract must, if possible, communicate
with the owners of the cargo as to what should be done and obtain their
instructions. If it is not possible to communicate with
cargo and obtain instructions in time, the master has authority to act as agent
of necessity. If the master
communicates with cargo and obtains instructions he is bound to follow them
unless the instructions are inconsistent with his duty to the shipowner. These rights and obligations are incidents
of a contract of affreightment and may perhaps be regarded as implied terms of
such a contract. The question whether,
in the event of any breach, a right of suit is transferred to the bill of
lading holder or consignee under a sea waybill could well be a matter for
academic debate. In practice,
proprietary rights are likely to be affected and the owners of cargo will have
rights of suit if, through any conduct of the master, their proprietary rights
are infringed.
Harris
v Best (1892) 68 LT 76;
Scrutton, on Charterparties 20th ed (1996) p.170.
Ceval
International Ltd v Cefetra BV [1996] 1 Lloyd’s Rep 464, 467.
See the authorities discussed in Scrutton (op. cit.) pp.173 to 176 and in Carver’s
Carriage of Goods, 13th ed. (1982), paras 1104 to 1106.
Art. III Rule 4 of the Hague Rules.
Canada
& Dominion & Sugar Co v Canadian National (WI) SS [1947] AC 46; Noble Resources Ltd v Cavalier Shipping Corporation (The Atlas)
[1996] 1 Lloyd’s Rep 642; The Mata K
[1998] 2 Lloyd’s Rep 614; The River
Gurara [1998] 1 Lloyd’s Rep 224.
Arctic
Trader [1996] 2 Lloyd’s
Rep 449 at p.458
The
Bookadoura [1989] 1
Lloyd’s Rep 393.
Scrutton, op. cit., p.120.
Dent
Line v Glen Line (1940) 45
Com. Cas. 244.
Conoco
(UK) Ltd v Limai Maritime Co Ltd (The “Sirina”) [1988] 2 Lloyd’s Rep 613.
This paragraph is taken from Scrutton, op. cit., p.119. See also New
Chinese Co v Ocean SS Co [1917] 2 KB 664 and Attorney-General of Ceylon v Scindia [1962] AC 60 and the cases
cited in Scrutton, p.119 note 86.
This paragraph is taken from Scrutton, op. cit. p.432.
In The
River Gurara [1998] 1 Lloyd’s Rep 224 where it was conceded that “said to
contain” was equivalent to a “weight (etc) unknown” provision, it was doubted
by Philips LJ whether this concession had been rightly made on the ground that
it was arguable that the carrier had impliedly accepted the shipper’s
description. In The Mata K [1998] 2 Lloyd’s Rep 614 it was assumed that the
expression “said to be” was equivalent to “weight unknown”. In The
Esmeralda I [1988] 1 Lloyds Rep 206 (decided by an Australian Court) a bill
of lading which qualified the number of packages in a container by the words
“said to contain — packed by shippers” and “particulars furnished by shipper of
goods” was held to give rise to no estoppel and not to constitute even prima facie evidence of the number of
packages shipped.
Sale of Goods Act 1979 Section 19.
The Hague-Visby Rules are given force of
law in England by the Carriage of Goods by Sea Act 1971.
“the
carrier shall properly and carefully load, handle, stow, carry, keep, care for
and discharge the goods”.
Pyrene
v Scindia [1954] 2 QB 402
(Devlin J); Renton v Palmyra [1957]
AC 149 (HL).
The gist of such clauses is generally that
the carrier’s responsibility shall cease once the goods have physically crossed
the rail: for examples, see Scrutton, op.
cit. p.296.
Knight
v Fleming (1898) 5 Rettie
1070 (Court of Session). [NB: although this is a Scottish authority, it is
cited by leading texts as reflecting the position under English law: see
Scrutton, op. cit. p.290; Cooke
“Voyage Charters” p.142]; Chartered Bank
of India v British Indian Steam Navigation [1909] AC 369 (PC).
The Court is likely to hold, as a matter of
construction, that such a clause does not release the carrier from liability
for deliberate misconduct (e.g. misdelivery) at or after discharge: Sze Hai Tong Bank v Rambler [1959] AC
576 (PC); The “Ines” [1995] 2 Lloyd’s
Rep 144 (Clarke J).
This was the case in Chartered Bank of India v British Indian Steam Navigation [1909] AC
369 (PC). The bill provided that the
liability of the carrier would “absolutely
cease” once the goods were free of the ship’s tackle. The carrier discharged the goods into the
custody of its own agents. The goods
were subsequently lost. The Privy
Council held that the carrier had been released from responsibility, although
the loss occurred before delivery to the consignee.
Chartered
Bank of India v British Indian Steam Navigation [1909] AC 369 at 375 (PC); Barclays Bank v Commissioners of Customs & Excise [1963] 1
Lloyd’s Rep 81 at 88 (Diplock J).
British
Shipowners’ Co Ltd v Grimond
(1876) 3 Rettie 968 (Court of Session) [NB: again, a Scottish authority which
is taken as reflecting the position in English law]; Chartered Bank of India v British Indian Steam Navigation [1909] AC
369 at 375 (PC). Accordingly, there is
no delivery (and no discharge of the carrier’s obligations) while the goods are
subject to a carrier’s lien: Barber v
Meyerstein (1870) 4 HL 317.
For example, British Shipowners’ Co Ltd v Grimond (1876) 3 Rettie 968; Knight v Fleming (1898) 25 Rettie 1070.
Chartered
Bank of India v British Indian Steam Navigation [1909] AC 369 (PC), where the vessel discharged the
goods into the hands of the carrier’s agents, and the goods were later lost
while still in the agent’s custody: it was held that there had been no
delivery, although discharge had been completed (but the carrier was released
from responsibility by virtue of the express terms of the bill of lading).
Scrutton op.cit p.288. The position in relation to discharge is the
converse of the common law rule in relation to loading, where it is the
shipper’s obligation to lift the cargo to the ship’s rail, whereupon
responsibility shifts to the carrier to receive and stow the cargo: Scrutton,
op.cit.p.170.
The
“Jaederen” [1892] p.351
(Gorrell Barnes J).
Gatliffe
v Bourne (1838) 4 Bing NC
314, where the carrier discharged the goods onto the wharf immediately upon
arrival and they were destroyed by fire before the consignee had had the
opportunity to collect them.
JJD
v Avon Tyres unrep. 19th
January 1999 (Evans-Lombe J). The
plaintiff had bailed moulds to the defendant under a contract for the
manufacture of tyres. The contract was
subsequently terminated. The defendant
asked the plaintiff for instructions as to what to do with the moulds, but the
plaintiff made no effort to collect them for several years, by which time they
had become lost.
See also Palmer “Bailment” 2nd
edn p.705ff.
Hick
v Rodoconachi [1891] 2 QB
626 (CA); The “Arne” [1904] p.154
(DC).
Meyerstein
v Barber (1866) LR 2 CP 38
and (1870) LR 4 HL 317; Sanders v Maclean
(1883) 11 QBD 127.
Sewell
v Burdick (1884) 10 App
Cas 74; The “Delfini” [1990] 1
Lloyd’s Rep 252 at p.268.
Barber
v Meyerstein (1870) LR 4
HL 317; London Joint Stock Bank v British
Amsterdam (1910) 16 Com Cas 102, 105; The
Future Express [1992] 2 Lloyd’s Rep 79.
The
“Houda” [1994] 2 Lloyd’s
Rep 541.
Ss. 2(1) and 2(2) of the Carriage of Goods
by Sea Act 1992.
See London
Joint Stock Bank v British Amsterdam Maritime Agency (supra) at p.105, where these words appear. However the title to goods passes at such
time as the parties intend and intention can be evidenced by the transfer of a
stale document; see Benjamin’s Sale of Goods, 5th edition (1997),
paras 19-084 and 19-085 and the cases there cited.
By virtue of s. 2(1)(c) of the Carriage of
Goods by Sea Act 1992.
Peter
Cremer Westfälische GmbH v General Carriers SA [1973] 2 Lloyd’s Rep 366.
The
“Aliakmon” [1986] AC 785.
Kwei
Tek Chao v British Traders and Shippers Ltd [1954] 2 QB 459, 476 per Devlin J.
Mendala
III Transport v Total Transport Corpn. (The Wilomi Tanana) [1993] 2 Lloyd’s Rep 41; Scrutton, op. cit., p.66.
Scrutton, op. cit., p.115.
Scrutton, op. cit., p.80 and the authorities listed at note 81.
The
Ardennes (1950) 84 Ll L
Rep 340; [1951] 1 KB 55.
[1997] 2 Lloyd’s Rep 641, Court of Appeal.
Domett
v Beckford (1883) 5
B&Ad 521.
See e.g. Fragano v Long (1825) 4 B&C 219, Dickenson v Lano (1860) 2 F&F 188.
Coleman
v Lambert (1839) 5 M&W
502.
Anglo
Overseas Transport v Titan Industrial Corporation [1959] 2 Lloyd’s Rep 152; Perishables Transport Co Ltd v N Spyropoulos (London) Ltd [1964] 2
Lloyd’s Rep 379; Cory Brothers v Baldan
Ltd [1997] 2 Lloyd’s Rep 58.
Schmidt
v Tiden (1874) LR 9 QB
446.
Kirchner
v Venus (1859) 12 Moore PC
361 at 390.
Scrutton, op. cit. p.321.
Scrutton, op. cit., p.331.
The
Aries [1977] 1 WLR 185; The Dominique [1989] 1 Lloyd’s Rep 431.
The
Karin Vatis [1988] 2
Lloyd’s Rep 330; The Dominique (op. cit.).
Scrutton, op. cit., p.340.
Scrutton, op. cit., p.341.
[1986] 2 Lloyd’s Rep 603.
See The
Karin Vatis, footnote 58 above.
Scrutton, op. cit., p.23.
See s. 2(5)(a). The Act does apply to time charterparties and charterparties by
way of demise.
See The
Karin Vatis, op. cit., footnote 58.
The
Dominique [1989] 1 Lloyd’s
Rep 431.
See The
Indian Reliance [1997] 1 Lloyd’s Rep 52 at 55; The Nanfri [1979] AC 757 at 784.
See e.g. The Aegis Britannic [1987] 1 Lloyd’s Rep 119, CA (a charterparty
case).
See generally Scrutton, op. cit., pp.379-382.
Paragraphs 2.24 to 2.29 of the Report of
the Law Commission and the Scottish Law Commission on Rights of Suit in Respect
of Carriage of Goods by Sea, Law Com No 196, Scot. Law Com No 130.
Borealis
AB v Stargas Ltd (The “Berge Sisar”) [1998] 2 Lloyd’s Rep
475. It is however understood that an
appeal is pending to the House of Lords.
Huth
v Lamport (1886) 16 QBD
735; Scrutton, op. cit., Articles
1543 and 144).
The
Cebu No 2 [1993] 1 QB 1.
Gullischen
v Stewart (1882) 11 QBD
186.
Kish
v Taylor [1912] AC 604.
The
Miramar [1983] 2 Lloyd’s
Rep 319 at p.324.
See for example the lien for “all
previously unsatisfied freight and charges on other goods due in respect of any
shipment by any steamer or steamers of the line from either shipper of
consignee” cited in Scrutton, Article 191 or the wider clause in Whinney v Moss SS Co. (1910) 15 Com Cas
114.
Allan
v Gripper (1832) 2 C&J
218.
For example Clause 21 of the Asbatankvoy
charter provides:
“LIEN:
The Owner shall have an absolute lien on the cargo for all freight, deadfreight,
demurrage and costs, including the attorney’s fees, of recovering the same,
which lien shall continue after delivery of the goods into the possession of
the Charterer, or of the holders of any such Bills of Lading covering the same
or of any storagemen.”
See the suggestion at Cooke, “Voyage
Charters” p.686. The difficulty of this
clause, and of reconciling it with the possessory nature of the lien, was
commented upon by Evans J in Rashtriya
Chemicals and Fertilizers v Huddart Parker Industries [1988] 1 Lloyd’s Rep
342 at 350.
See the definition of “carrier” in Article
1(a) of the Hague Visby Rules: “‘Carrier’ includes the owner or charterer who
enters into a contract of carriage with a shipper”.
In Goode
(2nd ed.) 1995 the shipper is defined as follows: “The shipper is the person to whom the
carrier undertakes the duty of transporting the goods. He may be the seller or buyer under a
contract of sale, a freight forwarder or any other consignor. His identity is prima facie established by the bill of lading, but it
does not necessarily follow that the person named in the ‘shipper’ box is the
true contracting party.” In Cho Yang v Coral Hobhouse LJ at p.643
col 1 cited authority for the proposition that the shipper may be shipping as
agent for the consignee in which case the contract will be with the
consignee. The view expressed by the
editors of Contracts for the Carriage of
Goods (LLP 1993 ed. Yates) is as follows (§1.6.5.1.49): “as a general rule ... a person named as a
shipper in a bill of lading will normally be considered as a party to the
contract of carriage ...”.
See Scrutton, (op. cit.) p.67.
See Scrutton, op. cit. p.71 and the cases there cited.
See Scrutton, op. cit. p.292 and Yates, §§1.6.15.2.8-9 and the cases there cited.
S. 2(5) of the 1992 Act. The position of sea waybills however is
somewhat different in that the Act does not extinguish any rights deriving from
a person having been an original party to a contract contained in or evidenced
by a sea waybill.
S. 1(2)(a) of the 1992 Act. The transfer of rights under a sea waybill
is without prejudice to the rights of the original party to the contract.
See Scrutton, op. cit., p.40.
S. 2(2) of the 1992 Act; Scrutton, op. cit., p.38.
Scrutton, op. cit., pp. 40, 433-4, 447 and 453: The “The Aegean Sea” [1998] 2 Lloyd’s Rep 39 at 69-70. The question whether a transferee of the
bill can become subject to the liability of the shipper for shipping dangerous
cargo is a matter of considerable difficulty; see Benjamin, op cit., para 18-098.
Harmony
v Clarke (1815) 4 Camp 159
(in relation to goods shipped in general ships); and Nelson v Dahl (1879) 12 Ch D 583 (in relation to shipments under a
charterparty). See also Cockburn J in Houlder v General SN Co (1862) 3 F&F
170 at 174: “It is the duty of the
consignee, apart from special custom or contract, to use due and reasonable
diligence to discover when the ship arrives with his goods on board.”
See Petersen
v Freebody & Co [1895] 2 QB 294 (CA).
See Postlethwaite
v Freeland (1880) 5 App Cas 599 (HL).
Straker
v Kidd (1878) 3 QBD 223.
See Alexiadi
v Robinson (1861) 2 F&F 679.
See Hick
v Raymond & Reid [1893] AC 22 (HL).
See Alexiadi
v Robinson, supra; Hulthen v Stewart & Co [1903] AC 389
(HL).
Proctor
Garrett v Oakwin SS Co. [1926] 1 KB 244.
This latter duty to deal reasonably may, of
course, equally entitle the master to retain the cargo on demurrage, provided
he does not thereby detain the vessel beyond a reasonable time, or even (where
discharge is otherwise impossible) return the cargo to the port of loading.
Dakin
v Oxley (1864) 15 CB (NS)
646.
In Asfar
v Blundell [1896] 1 QB 123.
In the more recent case of “The Caspian Sea” [1980] 1 Lloyd’s Rep
91, Donaldson J adopted a test of whether the goods delivered could
commercially be sensibly and accurately described as what they were supposed to
be.
Benjamin op cit paras 18-011 to 18-013.
Scrutton op. cit. 184.
This is recognised by S.5(3) of the 1992
Act.
Benjamin, op. cit. Para 18-015.
Benjamin, op. cit0., para 18-118.
See S.1(5) of the 1992 Act.
The typical employment and indemnity clause
in time charters is an example of this.
See the answer to Question 3.1.4.
Scrutton, op. cit.pp.254 to 255.
