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Oxford Law Citator

Part II Bills of Lading and Other Documents of Carriage, 10 The Carriers’ Delivery Obligation

From: Carriage of Goods by Sea (3rd Edition)

Stephen Girvin

Content type:: Book content

Product:: International Commercial Law [ICML]

Published in print:: 29 March 2022

ISBN:: 9780198811947

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Subject(s):: Bills of lading and carriage of goods — Carrier's obligations — Sea waybills — Shipper's obligations and immunities — Ship’s delivery orders — Letters of indemnity and damages — Delivery

(p. 207) 10 The Carriers’ Delivery Obligation

A. Background

Overview

10.01 Following the recognition of a bill of lading as a document of title at common law,¹ a further principle has evolved. This requires the master only to part with the goods on presentation of the bill of lading by the holder.² This delivery function³ has been described as the ‘principal role’ of the bill of lading⁴ and is reinforced by the statement that the goods are ‘SHIPPED on board in apparent good order and condition … for carriage to the Port of discharge …’⁵

B. Delivery to the Person Entitled

The presentation rule

10.02 A classic statement on the face of the Conlinebill 2016 bill of lading states that ‘one original Bill of Lading must be surrendered duly endorsed in exchange for the cargo or delivery order, whereupon all other Bills of lading to be void’. More detailed wording appears in the standard terms and conditions of major liner companies, it being common for these companies to set out detailed terms for both order and straight bills of lading. Among these, MSC’s bill of lading terms states that

If this is a negotiable (To Order / of) Bill of Lading, one original Bill of Lading, duly endorsed must be surrendered by the Merchant to the Carrier (together with outstanding Freight) (p. 208) in exchange for the Goods or a Delivery Order. If this is a non-negotiable (straight) Bill of Lading, the Carrier shall deliver the Goods or issue a Delivery Order (after payment of outstanding Freight) against the surrender of one original Bill of Lading or in accordance with the national law at the Port of Discharge or Place of Delivery whichever is applicable.⁶

This is usually referred to as ‘the presentation rule’⁷ and is considered as an incident of the bill of lading contract.⁸ It is because of the existence of this principle that ‘a bill of lading can be used as a document of title so that the transfer of the document transfers also the right to demand the cargo from the ship at discharge’.⁹ At common law, the holder of an original order¹⁰ or ‘switch’¹¹ bill of lading which, within a reasonable time, presents¹² it to the master is, in the absence of any custom to the contrary,¹³ entitled to have the goods delivered to it.¹⁴

The master may give up the goods to the first person who presents an original¹⁵ bill of lading,¹⁶ provided that he has no notice of other claimants to the goods and in the absence of circumstances which might raise a reasonable suspicion that the holder claiming delivery is not entitled to the goods.¹⁷ On one view, the master may also give up the goods without the bills of lading if it is proved to his reasonable satisfaction both that the person seeking the goods is entitled to possession of them and that there is some reasonable explanation (p. 209) of what has become of the bills of lading.¹⁸ However, doubts have been expressed as to this view¹⁹ and it has not so far received support by any higher court. On the other hand, if the bills of lading are lost, it seems that the court has an ‘equitable jurisdiction to grant relief in the case of lost bills’.²⁰ Further, where an original bill of lading has been lost, failing agreement, the claimant can apply to the court for an order that, upon tendering a sufficient indemnity, the loss of the bill of lading is not to be set up by the carrier as a defence to its claim to have the cargo delivered.²¹

Delivery and discharge

10.03 The obligation to effect delivery pursuant to the presentation rule embodies an obligation to place the goods under ‘the absolute dominion and control of the consignee’.²² The shipowner’s obligation under the bill of lading contract and in bailment is not discharged until it has actually surrendered possession to the holder and the divesting or relinquishing of the ‘power to compel any dealing in or with the cargo which can prevent the consignee from obtaining possession’.²³ Such delivery should not, however, be confused with ‘discharge’. As explained by Teare J in The Bremen Max:²⁴

… discharge and delivery are different concepts. Discharge is the movement of the cargo from the ship ‘over the ship’s rail’ ashore. Delivery is the transfer of possession of the cargo to a person ashore. Discharge and delivery may occur simultaneously but they need not do so. A cargo may be discharged ashore into a warehouse and only delivered at a later date. Delivery is effected by the shipowner who has the cargo in his possession.

In the context of the application of the Hague and Hague-Visby Rules, which refers to ‘discharge’ in article II, it has been held in Carewins Development (China) Ltd v Bright Fortune Shipping Line²⁵ that

… there is in principle no justification for extending the concept of ‘discharge’ beyond final unloading to embrace every act up to and including delivery of the goods, which would be tantamount to regarding the carrier both as carrier and warehouseman, and which not only would extend the Rules to the entire contract of carriage, including a period of storage ashore, but also possibly may serve to confuse the proper ambit of the Hague-Visby Rules with, for example, particular contractual provisions often found within contracts of (p. 210) carriage by sea entitling the carrier to warehouse the goods, usually at the merchant’s risk and expense, if the consignee does not take delivery.²⁶

Effect of delivery absent notice to the contrary

10.04 In Glyn Mills Currie & Co v East & West India Dock Co,²⁷ a cargo of sugar was delivered to Williams & Co which held delivery orders signed by the buyers, Cottam & Co. Cottam & Co went into liquidation and the bank produced a bill of lading marked ‘First’. However, the House of Lords held unanimously that the dock company was not liable for conversion of the goods.²⁸ Lord Blackburn held that

… when the master has not notice or knowledge of anything but that there are other parts of the bill of lading, one of which it is possible may have been assigned, he is justified or excused in delivering according to his contract to the person appearing to be the assign of the bill of lading which is produced to him.²⁹

Lord Selborne LC stressed that it was ‘for the assignee to give notice of his title to the shipowner, if he desires to make it secure, and not for the shipowner to make any such inquiry’.³⁰ Once the master delivers against a validly presented bill of lading, he is secure in the knowledge that ‘one … being accomplished, the others stand void’.³¹

Interpleading (‘stakeholder applications’)

10.05 Where the master is prresented with more than one bill of lading, he should interplead³² the claims, declining to make delivery until the rival claimants have had their competing claims settled by a court of law.³³ However, the carrier will not be allowed the costs of interpleader proceedings where it has itself caused or contributed to such a conflicting claim or doubt, such as by issuing a second set of original bills of lading³⁴ without first procuring the surrender of the initial set of original bills of lading.³⁵

No obligation to deliver without the bills of lading

10.06 The law is clear where the master is requested to deliver without the original bills of lading. As explained by Butt J in The Stettin:

… A shipowner is not entitled to deliver goods to the consignee without the production of the bill of lading. … The shipowner must take the consequences of having delivered these (p. 211) goods to the consignee without the production of either of the two parts of which the bill of lading consisted.³⁶

If the master delivers without an original bill of lading or has knowledge or notice of other claimants,³⁷ he delivers ‘at his peril’.³⁸ He takes a risk that the consignee is not entitled to the goods and exposes the shipowner to a claim for converting the goods. This might lead to financial catastrophe if the vessel is arrested and, possibly, even sold.³⁹ There is no obligation on the master to deliver the goods to a consignee without an original bill of lading.⁴⁰

Telex release by email

10.07 Although not uncommon, so-called ‘telex’⁴¹ releases have received little direct attention by the courts:

A telex release is routinely used by shipping lines where the original bills of lading are not sent to the port of discharge. The original bills of lading are surrendered on behalf of the consignee at the load port and the shipping lines’ agent at the load port confirms receipt of those original bills of lading and instructs its agent at the discharge port to release the cargo to the consignee.⁴²

Contemporary practice is for such a telex release to take place by email. Unless managed very carefully, however, there are considerable risks associated with the practice and such risks are exacerbated in the digital age by the possibility of email fraud.⁴³ A difficulty also arises where there is an ambiguously worded message or an erroneous belief that such a telex release has been given,⁴⁴ or where a telex release is issued but cancelled because of insolvency.⁴⁵ As is the case where bills of lading are not presented, this will give rise to a claim in conversion.⁴⁶

Circumventing the presentation rule

(p. 212) 10.08 In practice, it is difficult to avoid the exacting scope of the presentation rule. It is not unusual, however, for clauses containing the following wording to be inserted in charterparties: ‘… should bills of lading not arrive at discharging port in time then owners agree to release the entire cargo without presentation of the original bills of lading’.⁴⁷ Such wording is frequently coupled with an indemnity to the shipowner but, where appearing in a bill of lading such a clause should be overruled as being contrary to a core principle. Another way of working with the principle is for the master to carry one of the original bills of lading on board, so that the cargo can be delivered against this bill of lading. While this avoids the possibility of delivery without an original, there is still the risk of misdelivery. Most P&I Clubs do not recommend the practice, although should this be required for commercial reasons, it is usually recommended that the following wording is endorsed on all the original bills of lading: ‘one original bill of lading retained on board against which bill delivery of cargo may properly be made on instructions received from shippers/charterers’.

C. Delivery Against Fraudulent Bills of Lading

Fraud in the carriage of goods by sea

10.09 Bills of lading are of central importance in international trade. It is hardly surprising that the possibilities for fraudulent usage are virtually limitless.⁴⁸ Indeed, there is judicial recognition that ‘skilled fraud may not be uncommon’.⁴⁹ The fraudulent conduct can include: (i) antedating or backdating the bills of lading, such as confirming loading on a date prior to or subsequent to the date on which the cargo was loaded;⁵⁰ (ii) describing cargo as having been received ‘clean on board’ when it is known that the cargo has been damaged in some way;⁵¹ (iii) stating that cargo is ‘shipped on board’⁵² before the cargo is actually loaded; (iv) stating that cargo is ‘shipped under deck’ when it is known to have been loaded on deck; (v) issuing bills of lading which show a different port of shipment or port of origin; (vi) altering the description of the cargo in the bills of lading;⁵³ (p. 213) (vii) issuing bills of lading stating that a certain cargo has been shipped but, on discharge, a different, valueless, cargo is discharged.⁵⁴

Forgeries

10.10 As paper documents, bills of lading can be forged; indeed, modern technology has made it easier to produce bills of lading that appear credible. It is also clear that forgeries can arise from forged signatures,⁵⁵ forged information, such as the date,⁵⁶ and forged indorsements.⁵⁷ The leading case is Motis Exports Ltd v Dampskibsselskabet AF 1912 A/S.⁵⁸ The claimant was the shipper of various goods shipped in containers between Hong Kong and China to West Africa. The vessels were operated by the defendant, Maersk Line. The issue was whether the defendant was liable for the loss of the goods after discharge. The cause of the loss was the use of forged bills of lading to obtain delivery orders and delivery of the goods at the discharge ports. Rix J noted that in general the law did not protect persons who acted on forgeries,⁵⁹ being concerned to protect those whose true title was assailed by the forgery. He concluded that a shipowner was not free to release goods on the basis of a forged bill of lading because the integrity of the bill of lading as the key to the floating warehouse would be lost.⁶⁰ He also reasoned that the shipowner controlled the form, signature, and issue of bills of lading and, if an innocent party had to suffer through the fraud of a third party, it was better that the loss fell on the shipowner, which had the responsibility to look to the integrity of his bills of lading and to care for the cargo in his possession, as well as to deliver it aright.⁶¹ Although the case was taken on appeal,⁶² the appeal concerned the question whether the shipowner was entitled to rely on an exception clause as a defence.⁶³ The decision of the court below on the forgery point was not challenged. However, the court agreed that a forged bill of lading was a nullity: it was simply a piece of paper with writing on it, which had no effect whatsoever.⁶⁴

Forged pin codes

(p. 214) 10.11 As discussed earlier,⁶⁵ order bills of lading in the MSC Eugenia/MSC Katrina,⁶⁶ contained a clause providing that

If this is a negotiable (to order/of) bill of lading, one original bill of lading, duly endorsed must be surrendered by the merchant to the carrier (together with outstanding freight) in exchange for the goods or a delivery order.

The buyers of cobalt briquettes, Glencore, sent two of the bills of lading to its agent, Steinweg, and MSC sent Steinweg an arrival notice for the MSC Katrina. Steinweg lodged one of the bills of lading with MSC, signed and stamped by itself and Glencore. It paid the handling charges, whereupon MSC e-mailed it a release note, pursuant to the electronic release system (ERS) at the port. The email contained three pin codes, one for each container. However, when the haulier arrived to collect the containers, two of the three containers had already been collected.⁶⁷ In response to Glencore’s claim for breach of contract, bailment, and conversion, the court noted that the Electronic Release System (ERS) in place at Antwerp inter alia provided that ‘all terms and conditions contained in the MSC bill of lading concerned are applicable to subject release note’ and that ‘discharge of the cargo will constitute due delivery of the cargo’.⁶⁸ One of the points taken on appeal, but not canvassed at first instance,⁶⁹ was whether delivery of the pin code amounted in law to delivery of the goods. Counsel argued that there was no sense in making a distinction between the presentation of a paper bill of lading and the use of an ERS when ports (including Antwerp) were making use of pin codes. Pin codes were arguably at least as secure, if not more so, than paper bills.⁷⁰ However, Sir Christopher Clarke was unimpressed, noting that delivery of the actual cargo was to the first presenter of the bill of lading⁷¹ and that delivery of the code did not itself constitute delivery.⁷² Further, where a shipowner discharged goods into a storage facility, the goods remained undelivered so long as any order given by the shipowner to the facility remained revocable.⁷³ As the bills of lading did not provide that the provision of the pin codes amounted to delivery, MSC was unable to rely on such provision in answer to the claims brought against it.⁷⁴ Although this may appear to close the door on the use of electronic release systems at ports, Sir Christopher Clarke did hold open the possibility that the parties may agree contractually that symbolic delivery may suffice and that delivery will take place when the symbol is delivered.⁷⁵

Responses to fraud

10.12 The consequences of fraud are regularly addressed by individual carriers, P&I Clubs, and the International Maritime Bureau (IMB).⁷⁶ Most P&I Clubs and other insurers are actively involved in highlighting loss prevention measures against fraud (p. 215) and, following a disproportionate rise in bill of lading frauds, the IMB in 2019 launched an ‘IMB NVOCC Register’ as an initiative to combat such frauds.⁷⁷

D. Delivery and Exclusionary Terms

Express clauses

10.13 An express clause in a bill of lading may be included to absolve the shipowner from the consequences of releasing the goods without the bills of lading. Such exclusion clauses were the subject of an apparently independent doctrine of fundamental breach of contract,⁷⁸ but this has since been rejected⁷⁹ and supplanted by the doctrine that the effectiveness or otherwise of such clauses is a matter of construction, particularly in commercial contracts. In Chartered Bank of India, Australia, and China v British India Steam Navigation Co Ltd,⁸⁰ a cargo of ground nut kernels were shipped from Indian ports to Penang. Delivery was ‘to order or assigns’ under bills of lading that provided that:

In all cases and under all circumstances liability of the Company shall absolutely cease when the goods are free of the ship’s tackle, and thereupon the goods shall be at the risk for all purposes and in every respect of the shipper or consignee.

Employees of the landing agents appointed by the defendants fraudulently delivered the goods aboard the Teesta to persons other than the consignees. The Privy Council⁸¹ held that, although there had been no delivery, there was no ambiguity in the clause providing for cesser of liability. The clause was perfectly clear and afforded complete protection to the shipowners.⁸²

Sze Hai Tong Bank

10.14 However, the above case was distinguished in Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd.⁸³ In that case, the acts of the fraudulent employees in that case could not be imputed to the shipowner.⁸⁴ A cycle company exported cycle parts to Singapore. However, on arrival, the shipowner’s agents caused the goods to be discharged from the ship and placed in the godowns⁸⁵ belonging to the Singapore Harbour Board. The notify party and consignee, the Southern Trading Company, persuaded the Bank to sign an indemnity in favour of the shipowner. The indemnity provided that if the goods were released to the Company it would indemnify the shipowner against any loss thereby occasioned. The cycle parts were in due course released against the presentation of delivery orders. However, the Company never paid for the goods. Rambler brought an action against the shipowner (p. 216) claiming damages for breach of contract or for conversion. Rambler succeeded at the trial and the Bank appealed unsuccessfully to the Court of Appeal of the Colony of Singapore. The issue of law in the Privy Council was whether judgment was properly entered against the shipowner. If it was, the Bank recognized that it was bound to indemnify it. Clause 2(c) of the bills of lading provided that the ‘responsibility of the carrier, whether as carrier or as custodian or bailee of the goods shall be deemed … to cease absolutely after the goods are discharged from the ship’. Lord Denning rejected the appeal and adopted the approach often applied to widely framed exempting clauses:⁸⁶

If such an extreme width were given to the exemption clause, it would run counter to the main object and intent of the contract. For the contract, as it seems to their Lordships, has, as one of its main objects, the proper delivery of the goods by the shipping company, ‘unto order or his or their assigns’, against production of the bill of lading. It would defeat this object entirely if the shipping company was at liberty, at its own will and pleasure, to deliver the goods to somebody else, to someone not entitled at all, without being liable for the consequences. The clause must therefore be limited and modified to the extent necessary to enable effect to be given to the main object and intent of the contract …⁸⁷

Approach confirmed

10.15 This general approach has been confirmed by the courts.⁸⁸ In Motis Exports Ltd v Dampskibsselskabet AF 1912 A/S,⁸⁹ a bill of lading clause, cl 5(3)(b), provided that:

Where the carriage called for commences at the port of loading and/or finishes at the port of discharge, the Carrier shall have no liability whatsoever for any loss or damage to the goods while in its actual or constructive possession before loading or after discharge over ships rail or if applicable, on the ships ramp, however caused.

Rix J held that a natural reading of the language of the clause did not include a misdelivery of the goods by the defendants out of their possession, whether this lay in the absence of any bill of lading or in the absence of an original or genuine bill of lading.⁹⁰ On appeal, the sole issue was whether the bill of lading clause in fact excluded liability for the loss. The Court of Appeal agreed with Rix J. Stuart-Smith LJ stated that the clause was

not apt on its natural meaning to cover delivery by the carrier or his agent, albeit the delivery was obtained by fraud. I also agree with the Judge that even if the language was apt to cover such a case, it is not a construction which should be adopted, involving as it does excuse from performing an obligation of such fundamental importance.⁹¹

(p. 217) Mance LJ agreed with Stuart-Smith LJ, limiting the clause to its ‘natural’ subject-matter, which was ‘loss or damage caused to the goods while in the carrier’s custody, but not deliberate delivery up of the goods, whether without any bill of lading or against a forged and therefore null document believed to be a bill of lading’.⁹² Further:

… the shipowners’ construction of cl 5(3)(b) of this bill of lading would appear to go to the extreme of protecting against any misdelivery, however negligent, and to undervalue the importance which both parties must be taken to have attached to the ship’s obligation to deliver against presentation of original bills of lading.⁹³

The MSC Amsterdam

10.16 The MSC Amsterdam⁹⁴ concerned two material clauses, one of which provided that the carrier’s responsibility was limited to the period from and during loading up to and including discharge but that loss or damage otherwise occurring was excluded ‘howsoever such loss or damage may arise’.⁹⁵ A further clause provided that ‘any loss of, of damage to the goods … shall, after the end of the Hague Rules period, be at the sole risk of the consignee in every respect whatsoever …’.⁹⁶ The case concerned the shipment of a consignment of 18 containers of copper cathodes from Durban to Shanghai. The consignment was released against delivery orders obtained from fraudulently issued bills of lading. When the cargo owner sought delivery the following day, their delivery order was not endorsed by customs. The cargo owner sued the shipowner and obtained an order from Aikens J to the effect that the shipowner deliver the cargo or pay its full value.⁹⁷ The shipowner appealed contending that its liability was limited and this, inter alia, focused attention on the two bill of lading clauses. Counsel accepted that the exclusions did not apply to the misdelivery, whether such was constituted by the wrongful giving of a delivery order to the fraudsters or by the refusal to hand over the goods on production of an original, genuine, bill of lading. Longmore LJ held that

there can be no doubt that [the clauses] would not suffice to excuse the shipowners from their act of conversion and their breach of contract in issuing delivery orders to the fraudsters without the production of the bill of lading. That is all the more the case when one reads the last provision on the front page of the bill of lading which states that three original bills of lading covering the cargo have been issued and then provides that if the bill of lading is negotiable (which it was) …⁹⁸

Counsel then focused attention on a further clause, cl 22, which concerned ‘claims valuation, package limitation time-bar’.⁹⁹ However, Longmore LJ held that it was not apt to limit liability for the essential obligation to deliver against original bills of lading because any exemption or limitation of liability for such a breach had to be clearly expressed.¹⁰⁰ Further:

(p. 218)

… the shipowners’ construction of the clause would [to use the words of Mance LJ in … Motis]¹⁰¹ appear to undervalue the importance which both parties must be taken to have attached to the ship’s obligation to deliver against presentation of original bills of lading.¹⁰²

Exemption by clear wording

10.17 Notwithstanding these cases, it may be possible for the carrier to protect itself by an ‘appropriately drawn exclusion clause’.¹⁰³ However, it is clear from the above cases that an obscurely worded clause,¹⁰⁴ a ‘materially ambiguous’ clause,¹⁰⁵ or a generally worded clause does not apply to a misdelivery.¹⁰⁶

E. Delivery and Custom

Custom proved

10.18 If proved, a custom of a particular port may assist a carrier faced with a misdelivery claim.¹⁰⁷ In The Sormovskiy 3068,¹⁰⁸ Russian consignees of a cargo of sugar entered into a contract with the Commercial Seaport of Vyborg (CSP) for the discharge of the cargo. Sometime after this, it was agreed between all the parties that St Petersburg would be substituted as the port of discharge. However, the vessel commenced discharge at Vyborg without the bills of lading. In response to a claim for loss arising from the delivery of a quantity of sugar without the bills, the shipowner argued that it had complied with its obligations by delivering in accordance with the practice and custom and law of the port of Vyborg.¹⁰⁹ However, after reviewing the evidence given by various Russian witnesses, Clarke J concluded that:

… If there were a custom of the port of Vyborg that cargo was always delivered to the CSP as the agent of the person entitled to possession without the production of an original bill of lading, delivery to the CSP would probably amount to performance of the defendants’ obligations under the contract of carriage. However custom in this context means custom in its strict sense; that is it must be reasonable, certain, consistent with the contract, universally acquiesced in and not contrary to law …¹¹⁰

Approach confirmed

(p. 219) 10.19 The case of East West Corp v DKBS 1912¹¹¹ concerned an action for damages by a seller against a shipowner. Containerized cargoes were shipped from Hong Kong to Chile and discharged without presentation of the bills of lading. The seller sold the goods to a regular client in Chile; in due course, the bills of lading were endorsed to seller’s correspondent banks in Chile for payment. The cargoes were placed by agents in different customs warehouses at San Antonio. Following payment of duty, the cargoes were released without presentation of the original bills of lading. The shipowner raised a number of defences, including that, under the law of Chile, they were obliged to deliver the goods to a licensed customs warehouse. Further, the shipowner argued that it was not negligent in delivering the goods without production of the bills of lading. Thomas J¹¹² concluded that delivery by a shipowner to the customs warehouse was not a delivery to customs and not a delivery of the goods that relinquished the shipowner’s control over them. The shipowner should have ensured that it could discharge its obligation to deliver only on presentation of a bill of lading, by an appropriate contract with the customs warehouse and container operators.

F. Delivery and Straight Bills of Lading

Earlier authorities

10.20 It was for a long period unclear whether the presentation rule applied to straight bills of lading.¹¹³ Certain writers suggest that there is no need for such a rule¹¹⁴ and no distinction appears to have been made in the short judgment in The Stettin.¹¹⁵ However, as is the case with most of the authorities, that case concerned order bills of lading. In Evans & Reid v Cornouaille,¹¹⁶ Hill J suggested, obiter, that it was not open to the carrier to deliver without the bills of lading even if the bills of lading were to a named consignee.¹¹⁷ In Thrige v United Shipping Co Ltd,¹¹⁸ Scrutton LJ indicated that, although it was not necessary to decide the point, if The Stettin¹¹⁹ had decided that there was such a duty, ‘it may require consideration’.¹²⁰ Some 40 years later, in Barclays Bank Ltd v Commissioners of Customs & Excise, Diplock LJ confirmed that the presentation rule was applicable in the case of a person ‘whether named as consignee or not’¹²¹ and in East West Corp v DKBS 1912¹²² (p. 220) Thomas J appeared to suggest, in relation to one set of straight bills of lading,¹²³ that the carrier was bound to deliver to the consignee against presentation of the bills.¹²⁴

Older commonwealth cases

10.21 The Singapore case, Olivine Electronics Pte Ltd v Seabridge Transport Pte Ltd,¹²⁵ concerned the shipment of colour television sets against straight bills of lading. These provided that ‘if required by the carrier one (1) original bill of lading must be surrendered duly endorsed in exchange for the goods or delivery order’. The shipowner delivered the goods to the buyer without the presentation of the bills of lading. The seller was not paid by the buyer and claimed damages in conversion. Goh Joon Seng J held that it was a term of the bill of lading that delivery must be made against the bills of lading. However, even if this gave the shipowner the option of not requiring the surrender of the bill of lading in exchange for the cargo, this was inconsistent with an earlier sentence stating, ‘in witness whereof, where one (1) original bill of lading has been signed if not otherwise stated, the same being accomplished, the others, if any, to be void’.¹²⁶ Beyond this, however, the judge held that the rule on presentation for straight bills of lading was still ‘somewhat open’.¹²⁷ No such similar wording was present in The Brij,¹²⁸ which concerned the shipment of garments from Chinese ports to Hong Kong, from where they were transhipped to Venezuela. The garments were handed over to customs in Venezuela and released to agents for the consignee. As the bills of lading were straight bills, Waung J held that the contractual mandate under the bills of lading was to ‘deliver to named consignee without the production of the original document’.¹²⁹

Voss v APL Co Pte Ltd

10.22 The Singapore case of Voss v APL Co Pte Ltd¹³⁰ arose from the carriage of a Mercedes Benz convertible to Busan. On arrival at Busan, the car was discharged into the custody of APL’s Korean office. The car was later released to an individual who presented a commercial invoice from the seller. On a claim for alleged misdelivery, the shipowner argued that it was entitled to deliver to a named consignee without production of the original straight bills of lading. Judith Prakash J however held that:

Once [the shipowner] issues a bill of lading …, whether it is an order bill or a straight bill, he must not deliver the cargo except against its production. The contrary view had much less support and most of it was recent and cursory.¹³¹

This reasoning was upheld by the Singapore Court of Appeal which held that

… looking at the matter from the perspective of the market place, there is much to commend the rule that even in respect of a straight bill presentation of it is a pre-requisite to obtaining delivery. If nothing else, the advantage of this rule is that it is simple to apply. It is certain. It would prevent confusion and avoid the shipowners and/or their agents having to decide whether a bill is a straight bill or an order bill … and run the risk attendant thereto (p. 221) if the determination they make on that point should turn out to be erroneous. The rule would obviate such wholly unnecessary litigation.¹³²

In reaching this conclusion, both the Singapore High Court¹³³ and Court of Appeal¹³⁴ were strongly influenced by statements of Clarke J in The Sormovskiy 3068,¹³⁵ although that case was plainly concerned with order bills of lading.

Approach followed

10.23 Although obiter, the leading case in English law, The Rafaela S,¹³⁶ has followed this reasoning.¹³⁷ The relevant MSC bills of lading provided that ‘one of the Bills of Lading must be surrendered duly endorsed in exchange for the goods or delivery order’. Langley J agreed with the arbitrators that, although a point of ‘some nicety’, delivery against the bill of lading was not necessary because the printed words appeared in a document which could be used either as a straight bill of lading or as a transferable bill of lading.¹³⁸ In the Court of Appeal, Rix LJ disagreed. He considered that it was

undesirable to have a different rule for different kinds of bills of lading … It is true … that in the case of a negotiable bill the carrier needs to have the bill produced in order to be able to police the question of who is entitled to delivery. Yet an analogous problem arises with a straight bill. A shipper needs the carrier to assist him in policing his security in the retention of the bill. He is entitled to redirect the consignment on notice to the carrier, and, although notice is required, a rule of production of the bill is the only safe way, for the carrier as well as the shipper, to police such new instructions. In any event, if proof of identity is necessary, as in practice it is, what is wrong with the bill itself as a leading form of proof?¹³⁹

Lord Bingham agreed with Rix LJ. He held that he would ‘if necessary’ hold that the production of a straight bill of lading was a necessary precondition of requiring delivery, even where there was no express provision in the bill of lading to that effect.¹⁴⁰ Lord Steyn found the analysis of Rix LJ ‘entirely convincing’¹⁴¹ and agreed with Lord Bingham and Lord Rodger.¹⁴² Similarly, Lord Rodger,¹⁴³ Lord Brown of Eaton-under-Heywood,¹⁴⁴ and Lord Nicholls,¹⁴⁵ all stated that they were in agreement with the opinions of the other law lords.

Views applied

10.24 The obiter views of the House of Lords have been upheld in Australia, Canada,¹⁴⁶ Hong Kong, and India.¹⁴⁷ In Beluga Shipping GmbH v Headway Shipping (p. 222) Ltd¹⁴⁸ bills of lading were stamped ‘freight prepaid’ and ‘copy non-negotiable’ but were not released to the shipper because it was alleged that freight had not been paid. The court noted that the bills of lading contained the standard wording as to the bills of lading being accomplished. It held that this wording required presentation of the original bills of lading and that an officer of the court should not be required to act on any other basis by delivering the goods other than as expressly provided in the bills of lading.¹⁴⁹ In Carewins Development (China) Ltd v Bright Fortune Shipping Ltd,¹⁵⁰ a freight forwarder issued straight bills of lading and delivered without them to the named consignee at Los Angeles. The shipper sued for breach of contract when the consignee failed to pay for the goods. After failing at first instance,¹⁵¹ the shipper succeeded in the Court of Appeal.¹⁵² It appealed to the Court of Final Appeal, which dismissed the appeal, holding that delivery upon presentation of an original bill of lading was ‘a main object (if not the main object) of the contract contained in a bill of lading, whether “order” or “straight” ’.¹⁵³

Evaluation

10.25 As the above cases indicate, there is now considerable uniformity requiring presentation of straight bills of lading. If there is an appropriately drafted clause in the bill of lading—such as ‘one of the bills of lading must be surrendered duly endorsed in exchange for the goods or delivery order’—or if, as is usually the case, there is an attestation clause,¹⁵⁴ a straight bill of lading is treated in the same way as an order bill of lading and must be presented to obtain delivery of the goods. The use of hybrid bills of lading has also advanced the assimilation of the delivery requirement for both order and straight bills of lading.¹⁵⁵ The justification is that ‘the shipper’s ability to withhold the bill of lading—the metaphorical key to the warehouse—pending payment by the consignee is a highly important feature of a recognised mercantile arrangement’.¹⁵⁶ The effect of a clause which specifies that the straight bill of lading should not be presented in order to obtain delivery still awaits clarification.¹⁵⁷ While such a clause is contractually valid, the presence of such a clause might also have the unintended consequence of affecting the status of the straight bill of lading as a document of title, although that question also awaits further consideration.¹⁵⁸

(p. 223) G. Delivery and Sea Waybills

Presentation rule not applicable

10.26 As already noted, a sea waybill performs two of the three functions of a traditional bill of lading: it is a receipt for the goods shipped and it is also evidence of the contract of carriage between the shipper and the carrier.¹⁵⁹ The receiver of the cargo under a sea waybill does not need to present an original in order to obtain delivery because the sea waybill names the receiver in the box marked ‘consignee’ and the carrier may deliver the goods to the receiver once it identifies itself as the named consignee. An example of the usual wording may be found on the face of the MSC Sea Waybill:

Unless instructed otherwise in writing by the Shipper delivery of the Goods will be made only to the Consignee or his authorised representatives. This Sea Waybill is not a document of title to the Goods and delivery will be made, after payment of any outstanding Freight and charges, only on provision of proper proof of identity and of authorisation at the Port of Discharge or Place of Delivery, as appropriate, without the need to produce or surrender a copy of this Sea Waybill.¹⁶⁰

If the parties to the contract of carriage do not require a document which functions as a document of title, a sea waybill will satisfy this need.

H. Delivery Against Letters of Indemnity

The background

10.27 The principles examined so far were settled relatively early in the development of the common law. As we have seen, they have lost none of their legal force. However, such principles also operate in a modern trading environment which during the past 50 years has had to adapt to successive cycles of market turmoil. International trade in bulk commodities, such as crude oil cargoes¹⁶¹ and other hydrocarbons,¹⁶² has led to the practice where a single cargo might be sold more than 150 times,¹⁶³ both before and after loading.¹⁶⁴ Cargoes frequently arrive at the discharge port well before the arrival of the bill of lading.¹⁶⁵ Tomlinson LJ remarked that ‘it is a commonplace in international trade that goods carried by sea arrive at their destination before the documents of title thereto have become available to the ultimate consignee’.¹⁶⁶ This may be because the voyage is (p. 224) short¹⁶⁷ or, more commonly, where the bill of lading is held up in the banking chain owing to banking hours, weekends, and holidays, or because of the financing arrangements between the banks and their customers.¹⁶⁸ The main commercial response to this practical problem has been for the shipowner to deliver against a letter of indemnity (LOI),¹⁶⁹ a ‘common and accepted’ procedure.¹⁷⁰ Such a letter of indemnity is typically be offered by an issuer (indemnitor), such as the consignee, to the carrier (the beneficiary), although is typically proffered to the master. Frequently, however, there are chains of such letters of indemnity. Thus, a consignee might

issue a letter of indemnity to its seller who might also be or be associated with the charterer of the vessel, who may in turn in reliance on the indemnity from the consignee issue his own letter of indemnity to the shipowner.¹⁷¹

However, as pointed out by Leggatt LJ in The Houda:¹⁷²

In default of production of the bill of lading an indemnity is afforded to the shipowner not on account of the lawfulness of the order to deliver but so as to protect him if he does what he is not contractually obliged to do.

In Pacific Carriers Ltd v BNP Paribas,¹⁷³ the High Court of Australia held that, in light of the surrounding circumstances known to the carrier and to the bank, the purpose and object of the transaction, and the market in which the parties were operating, a reasonable reader in the position of the carrier would understand an LOI giving rise to a liability on the part of the bank as an indemnifying party in support of an undertaking by the seller of the cargo. In circumstances where the bank had placed the officer who dealt with requests for LOIs in a position to sign and stamp them, the carrier was entitled to assume that letters of credit had been issued with the bank’s authority.

Legal status

10.28 Letters of indemnity (LOIs) have the status in law of an independent binding contractual agreement¹⁷⁴ and, as with any commercial document, must be construed as a whole to give effect to all the clauses.¹⁷⁵ Whether such a letter of indemnity is a contract of guarantee or a contract of indemnity is a matter of construction.¹⁷⁶ In the case of an (p. 225) indemnity, such as letters of indemnity, the guarantor assumes a primary liability, either alone or jointly,¹⁷⁷ with the principal debtor.¹⁷⁸

Insurance cover

10.29 Shipowners’ Mutual Protection and Indemnity Associations (P&I Clubs)¹⁷⁹ cover risks arising from the carriage of cargoes but expressly exclude cover¹⁸⁰ for the liabilities, costs, and expenses arising out of delivery without production of a bill of lading.¹⁸¹ Notwithstanding the rule against cover, most Clubs give advice as to how to secure against the potential risks associated with the issue of letters of indemnity, recommending one of the International Group of P&I Club¹⁸² forms. These forms were revised on 1 February 2001¹⁸³ and further advice issued on 5 October 2010, such that the forms provide that they are ‘updated’. Two of the main forms are relevant: Int Group A, ‘in return for Delivering Cargo without Production of the Original Bill of Lading’, and Int Group C, ‘in return for Delivering Cargo at a Port other than that stated in the Bill of Lading and without Production of the Original Bill of Lading’. The revisions of the wording took place against the backdrop of negotiations between the International Group and the British Bankers Association and are supplemented by Int Group AA and Int Group CC when a bank joins in the letter of indemnity. In the event of one of the bank indemnities being agreed, these are dependent on the issuer having first failed to respond to a demand from the receiver of the letter and so the bank’s letter may potentially be treated as a guarantee¹⁸⁴ and, if this is so, it must comply with the formal writing requirements for guarantees.¹⁸⁵

Form of indemnity

10.30 Int Group A, or variants of the form, is widely used.¹⁸⁶ The form is addressed to the shipowners and should contain the name of the ship, the voyage (including loading and discharging ports), the cargo, and the relevant details of the bill of lading. The opening statement therefore reads that:

The above cargo was shipped on the above ship by [insert name of shipper] and consigned to [insert name of consignee or party to whose order the bill of lading is made out, as appropriate] for delivery at the port of [insert name of discharge port stated in the bill of lading]¹⁸⁷ but the bill of lading has not arrived and we, [insert name of party requesting delivery], hereby request you to deliver the said cargo to X [name of the specific party] or to such party (p. 226) as you believe to be or to represent X or to be acting on behalf of X¹⁸⁸ at [insert place where delivery is to be made] without production of the original bill of lading.

This is followed by the detailed clauses. Clause 1 sets out the core obligation by the issuer to ‘indemnify you, your servants and agents and to hold all of you harmless in respect of any liability, loss, damage or expense of whatsoever nature’. Clause 2 promises ‘sufficient funds’ in the event of proceedings being commenced and clause 3 is concerned with the provision of bail or security to prevent arrest or detention or threat of such detention or ‘any interference in the use or trading of the vessel’. The issuer promises to indemnify the carrier in respect of any liability, loss, damage or expense caused by such arrest or detention or threatened arrest or detention or such interference …’. Clause 4 provides if the request is to deliver to ‘a bulk liquid or gas terminal or facility, or another ship, lighter or barge’, such delivery is ‘deemed to be delivery to the party to whom we have requested you to make such delivery’.¹⁸⁹ Clause 5 undertakes that once all the original bills of lading come into possession of the issuer, these will be delivered to the carrier whereupon the issuer’s liability ceases. Clause 6 provides that the liability of every person under the indemnity is joint and several and is not conditional upon proceeding first against any person. Finally, clause 7 provides that the agreement is subject to English law and every person liable under the indemnity should submit to the jurisdiction of the English High Court.

Named parties and delivery party

10.31 An issue that arises is whether the letter of indemnity is correctly addressed, showing the beneficiary as addressee as well as the beneficiary’s ‘servants and agents’.¹⁹⁰ In The Bremen Max,¹⁹¹ the court had to determine whether the undertakings provided in a letter of indemnity were conditional upon delivery having been made to the notify party in the bills of lading. The court held that the indemnity contained a clear request to deliver to the notify party. Since the undertakings were given in return for the shipowner complying with the charterer’s request that the cargo be delivered to a named receiver without production of the bills of lading, it followed that if the shipowner delivered to anybody else without production of the bills of lading the charterer’s undertakings were not engaged.¹⁹² The undertakings provided in the letter of indemnity were conditional upon delivery to the notify party.¹⁹³

Amended wording

10.32 Following the above decision, the wording of the indemnity in the Int Form A was amended to extend delivery to ‘… such party as you believe to be or to represent (p. 227) X or to be acting on behalf of X …’ This new wording was considered in The Zagora,¹⁹⁴ which involved a cargo of iron ore sold to a Chinese buyer and sold on by them. The cargo was delivered against letters of indemnity to the end buyer’s shipping agents at Lanshan. However, the Zagora was arrested by the Bank of China, the holder of the original bills of lading, because the cargo was discharged without production of an original bill of lading. Following the arrest, the shipowner sought an indemnity from Oldendorff and claims for indemnities pursuant to all the related letters of indemnity were made down the chartering chain. The seller argued that discharge to the end buyer had not engaged the letter of indemnity because the letter of indemnity from the head buyer had identified the relevant person as itself. On the evidence, Teare J concluded that the cargo was delivered to the head buyer through the agency of the end buyer’s shipping agents.¹⁹⁵ For this reason, the letter of indemnity was engaged and Oldendorff was liable to indemnify the owner of the Zagora in respect of the liability to the Bank.¹⁹⁶

Delivery

10.33 Int Form A is engaged when there has been ‘delivery’ of the cargo without production of an original bill of lading.¹⁹⁷ A leading case in this context is The Jag Ravi,¹⁹⁸ where the court found that by discharging cargo into the custody of a port authority and instructing it to deliver to a buyer, the shipowners had surrendered possession. It had divested itself of the power to compel any physical dealing with the cargo and, as such, had complied with the request to deliver the cargo.¹⁹⁹ Tomlinson LJ indicated, obiter, that the letter of indemnity was engaged in respect of delivery of such quantity as had been effected. If the shipowner was required to effect delivery of the entire cargo before the entitlement to an indemnity arose, this would be ‘productive of disputes as to shortages, unpumpable residues and the like’.²⁰⁰

Provision of security following arrest

10.34 One of the most common reasons why Int Form A is invoked is because of the arrest of the vessel. As noted earlier,²⁰¹ clause 3 contains a promise by the issuer to ‘indemnify the carrier in respect of any liability, loss, damage or expense caused by such arrest or detention or threatened arrest or detention or such interference …’. In The Bremen Max,²⁰² a cargo of ‘Brazilian origin Sinter Feed’²⁰³ was discharged against letters of indemnity without any evidence as to whom the cargo was delivered. Subsequently, the holder of the bills of lading arrested the Bremen Max but the vessel was released following the provision of security. The holder attached the assets of the time charterer and (p. 228) this was passed down the chain of back-to-back charterers, one of whom provided security to the shipowner. The court held that the intention and commercial purpose of the clause was that the shipowner should not have to suffer the arrest of the vessel and that any bail or other security to prevent the arrest of the vessel should not be put up by the shipowner but by the charterers.²⁰⁴ Although the security put up by the shipowner mitigated the loss caused by the charterers’ breach, this did not discharge the obligation on the charterers to put up bail or other security and to hold otherwise would frustrate the commercial purpose and intention of the clause.²⁰⁵

Security

10.35 Letters of indemnity should preferably be countersigned by a bank. As noted above,²⁰⁶ Int Group AA and Int Group CC, are each designed for this possibility where a bank joins in the letter of indemnity. Whether a bank will do so, however, is a matter of negotiation. A letter of indemnity is only as good as the financial standing of the guarantor because delivery without presentation of the bills of lading can lead to extensive liabilities for the shipowner.²⁰⁷

Enforceability

10.36 There is difficulty enforcing a letter of indemnity which is fraudulent. This is irrespective of whether there is any intention to cheat or injure the person to whom the statement is made.²⁰⁸

There are no recently reported cases of indemnities not being honoured because of fraud, at least where the indemnity has been offered in return for delivering cargoes without an original bill of lading²⁰⁹ and it is clear that if the indemnity is taken in good faith and there is no illegality or fraud, the indemnity is enforceable.²¹⁰

No obligation to deliver against an indemnity

10.37 It is clearly established that no shipowner can be placed in the situation where it is under an obligation to accept an indemnity, even where modified by the terms of a charterparty. In The Houda,²¹¹ one of the two main issues on appeal was whether the time charterer could lawfully demand that the shipowner deliver the cargo without the production of the bills of lading. The amended Shelltime 4 wording in that case provided that ‘letter of indemnity to owners’ P & I club wording to be incorporated in this charterparty’ but Neill LJ concluded that while it was open for the shipowner to decide whether it was adequately protected by a letter of indemnity, ‘the rights of a time charterer to give orders do not entitle him to insist that cargo should be discharged without production of the bill of lading’.²¹² In The Nordic Freedom²¹³ a charterparty clause provided that:

(p. 229)

Should the bill of lading not arrive at discharge port and also not available on board vessel prior to scheduled discharge, owners shall discharge entire cargo per charterer, telex instructions against letter of indemnity.

Choo Han Teck JC held that such a clause was the master’s ‘comfort against any claim’ but that this did not relieve him of his obligations under the contract of carriage.²¹⁴ In the event that the master does deliver pursuant to directions from the time charterer, the shipowner is entitled, at least at common law,²¹⁵ to be indemnified by the time charterer against its subsequent liability to the holders of the bills of lading.²¹⁶

I. Consequences of Failure to Take Delivery

Delivery in a reasonable time

10.38 At common law, the master has an obligation to allow the consignee a reasonable time to receive the goods²¹⁷ and cannot discharge his responsibility by simply landing them immediately on the ship’s arrival.²¹⁸ As Roche J explained:

It is an implied term in all contracts such as these that the shipowner must wait for the consignee to appear or give orders, for a reasonable time before taking the matter into his own hands and discharging the goods himself. If he does take matters into his own hands and discharges before that reasonable time has elapsed he is committing a breach of contract.²¹⁹

This obligation may be modified where there is a custom to the effect that delivery may be made in accordance with a particular practice at the port, such as where delivery takes place to a dock authority. In Petrocochino v Bott,²²⁰ evidence was given by witnesses as to the custom of the Victoria Docks in London, this being to the effect that delivery was usually effected to the dock authority and thence to the consignee.²²¹ Brett J held that in such circumstances

the moment the shipowner has cleared the goods from the deck, he ceases to be responsible in any way for them; and that, whatever remedy the plaintiffs may have against the dock company … they cannot under the circumstances charge the shipowner with the loss of the [cargo] in question’.²²²

(p. 230) A more modern exception to the common law rule is typically provided contractually in the bills of lading. Thus, the Conlinebill 2016 form provides that

The Merchant or his Agent shall take delivery of the cargo as fast as the Vessel can discharge including, if required by the Carrier, outside ordinary working hours notwithstanding any custom of the port.²²³

Failure to take delivery

10.39 In the light of the preceding rules, what can the master do if no consignee (or its agent) appears at the port of discharge to take delivery of the cargo? At common law, if the consignee or holder of the bill of lading does not appear to take delivery of the cargo within a reasonable time, the master may land and warehouse the cargo at the expense of the cargo owner.²²⁴ In this way any delay to the ship is prevented. In some jurisdictions, there is statutory provision enabling the shipowner to land and warehouse the goods immediately.²²⁵ In Singapore,²²⁶ for example, section 126 of the Merchant Shipping Act 1995²²⁷ provides that

… in case the owner of the goods is not ready or does not offer to land or take delivery under such arrangement as soon as the ship is ready to unload, a shipowner may land or unship the goods imported in any ship into Singapore at any time after the arrival of the ship.²²⁸

Bill of lading clauses

10.40 It is more common for bill of lading clauses to regulate the rights and liabilities of the parties in relation to the delivery of goods. An illustration is clause 9(e) of Conlinebill 2016,²²⁹ previously referred to,²³⁰

If the Merchant or its Agent fails to take delivery of the cargo the Carrier’s discharging of the cargo shall be deemed fulfilment of the contract of carriage. Should the cargo not be applied for within a reasonable time, the Carrier may sell the same privately or by auction. If the Merchant or its Agent fails to take delivery of the cargo as fast as the Vessel can discharge, the Merchant shall be liable to the Carrier for any overtime charges, losses, costs and expenses incurred by the Carrier.²³¹

(p. 231) There is relatively little authority on the effect of such clauses, but a number of authorities suggest that clauses of this type provide for an agreed method of delivery and that, provided the agreed method is followed, the carriage of goods comes to an end.²³²

J. Consequences of Misdelivery

Generally

10.41 The consequences of a misdelivery are twofold. As explained by Lord Denning in Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd,²³³ the person entitled to delivery may seek damages for breach of contract²³⁴ and in conversion²³⁵ from the shipowner.²³⁶

Claim in contract

10.42 In the case of a misdelivery of the goods there is a ‘contractual right as against the carrier to demand delivery against presentation of the bill of lading and hence the right to possess’.²³⁷ It follows from this that following a misdelivery²³⁸ there is a right to damages for breach of contract following default by the carrier. Where there is a breach of contract, the normal contractual measure of damages is to put the claimant into as good a position as it would have been in if the contract had been duly performed.²³⁹ In the case of a non-delivery,²⁴⁰ this is the market value²⁴¹ of the goods at the time and place at which they should have been delivered, less the amount it would have cost to get them to the place of delivery.²⁴² The check on the damages which may be awarded is provided by the famous test of remoteness expressed in the dictum of Baron Alderson in the case of Hadley v Baxendale:

Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it.²⁴³

Conversion

(p. 232) 10.43 Liability for a misdelivery²⁴⁴ arises also in the tort of conversion, as discussed earlier.²⁴⁵ The measure of damages in conversion was explained in the following terms by Lord Brandon in The Jag Shakti:²⁴⁶

… [W]here one person, A, who has or is entitled to have the possession of goods, is deprived of such possession by the tortious conduct of another person, B, whether such conduct consists in conversion or negligence, the proper measure in law of the damages recoverable by A from B is the full market value of the goods at the time when and the place where possession of them should have been given.

K. Delivery under the Rotterdam Rules

Introduction

10.44 The Rotterdam Rules²⁴⁷ are unique among cargo conventions in making detailed, albeit controversial, provision for the delivery of goods.²⁴⁸ These provisions are in Chapter 9 of the Rules and reflect a determination that such provisions should be included in the Rotterdam Rules.²⁴⁹ There was general affirmation of the attempt to provide legal solutions to a number of thorny questions but, even at a late stage of deliberations, there were concerns that ‘the chapter created more problems than it solved and that adoption of the chapter could negatively affect ratification of the Convention’.²⁵⁰ A number of important changes were made during the final stages in 2008.

Acceptance of delivery by the consignee

10.45 Article 43, the first of the delivery provisions is concerned with enforcing an obligation on the part of a consignee²⁵¹ which demands delivery:

When the goods have arrived at their destination, the consignee that demands delivery of the goods under the contract of carriage shall accept delivery of the goods at the time or within the time period and at the location agreed in the contract of carriage or, failing such agreement, at the time and location at which, having regard to the terms of the contract, the customs, usages or practices of the trade and the circumstances of the carriage, delivery could reasonably be expected.

(p. 233) This provision was included to deal with the specific problem of consignees that were aware that their goods had arrived but wished to avoid delivery of those goods by simply refusing to claim them.²⁵² The critical point appears to be that there is a consignee, as stated in full on the face of most bills of lading.²⁵³ In the case of an indorsed order bill of lading, information about the consignee may be scanty. Nevertheless, once the consignee ‘demands delivery of the goods’, this triggers article 43. On the other hand, if no demand is made, the provision is not activated.²⁵⁴ The provision is only activated when the goods ‘arrive at their destination’ and this means a port or an inland destination, given the possibility under the Rules that carriage may be ‘by other modes of transport in addition to the sea carriage’²⁵⁵ and because the period of responsibility of the carrier ‘begins when the carrier or a performing party receives the goods for carriage and ends when the goods are delivered’.²⁵⁶ The consignee is obligated to take delivery at a certain time, namely, ‘at the time or within the time period and at the location agreed in the contract of carriage’.²⁵⁷ The carrier typically agrees the port or place of discharge with the shipper²⁵⁸ but there is normally not a specified agreed time or time period²⁵⁹ and so this provision seems to be out of line with commercial practice. The default is ‘the time and location at which, having regard to the terms of the contract, the customs, usages or practices of the trade and the circumstances of the carriage, delivery could reasonably be expected’.²⁶⁰

Acknowledgement of receipt

10.46 Article 44 of the Rules provides that

On request of the carrier or the performing party that delivers the goods, the consignee shall acknowledge receipt of the goods from the carrier or the performing party in the manner that is customary at the place of delivery. The carrier may refuse delivery if the consignee refuses to acknowledge such receipt.

This requires that the consignee acknowledges receipt ‘in the manner that is customary at the place of delivery’. However, the difficulty is that it is far from clear that there is a consistent practice. It has, moreover, been suggested²⁶¹ that in these circumstances there would be nothing to stop the carrier requiring that the consignee acknowledge receipt in good order and condition.²⁶²

Delivery against a negotiable transport document

(p. 234) 10.47 The Rules venture further into new territory for a cargo convention in making detailed provision for delivery in respect of different types of transport documents. These provisions are again controversial. Thus, even as late as the middle of 2008 it was noted that

the problems faced by carriers when cargo owners appeared at the place of destination without the requisite documentation, or failed to appear at all, represented real and practical problems for carriers. However, concerns were expressed in the Commission regarding whether the text of draft article 49²⁶³ was the most appropriate way to solve those problems. In particular, the view was expressed that draft article 49 undermined the function of a negotiable transport document as a document of title by allowing carriers to seek alternative delivery instructions from the shipper or the documentary shipper and thus removing the requirement to deliver on the presentation of a bill of lading.²⁶⁴

Article 47.1 concerns negotiable transport documents²⁶⁵ (or their electronic equivalents).²⁶⁶ It provides that

When a negotiable transport document or a negotiable electronic transport record has been issued

(a) The holder of the negotiable transport document or negotiable electronic transport record is entitled to claim delivery of the goods from the carrier after they have arrived at the place of destination, in which event the carrier shall deliver the goods at the time and location referred to in article 43 to the holder:
1. (i) Upon surrender of the negotiable transport document and, if the holder is one of the persons referred to in article 1, subparagraph 10(a)(i),²⁶⁷ upon the holder properly identifying itself; or
2. (ii) Upon demonstration by the holder, in accordance with the procedures referred to in article 9, paragraph 1, that it is the holder of the negotiable electronic transport record.

Article 47 largely mirrors the common law rules previously discussed. The holder, a person in possession identified in it as the shipper or the consignee, or the person to whom it has been endorsed, of a negotiable transport document may claim delivery only upon surrender of the document. However, there is a significant red flag, that the holder must ‘properly identify himself’.²⁶⁸ If these requirements are not fulfilled, article 47.1(b) states that

The carrier shall refuse delivery if the requirements of subparagraph (a)(i) or (a)(ii) of this paragraph are not met.

The Rules further reinforce the common law rule concerning the accomplishment of the remaining originals in article 47.1(c):

(p. 235)

If more than one original of the negotiable transport document has been issued, and the number of originals is stated in that document, the surrender of one original will suffice and the other originals cease to have any effect or validity. When a negotiable electronic transport record has been used, such electronic transport record ceases to have any effect or validity upon delivery to the holder in accordance with the procedures required by article 9, paragraph 1.

Negotiable document not requiring surrender

10.48 The Rules make separate provision where the negotiable transport document expressly provides that the goods may be delivered without the surrender of the transport document. These provisions are, however, ‘opt-in’ provisions because they are not obligatory, but may be invoked by the carrier. Article 47.2²⁶⁹ provides that, in such cases, certain rules may apply. The first of these is concerned with three distinct situations:

(a) If the goods are not deliverable because (i) the holder, after having received a notice of arrival, does not, at the time or within the time period referred to in article 43, claim delivery of the goods from the carrier after their arrival at the place of destination, (ii) the carrier refuses delivery because the person claiming to be a holder does not properly identify itself as one of the persons referred to in article 1, subparagraph 10(a)(i), or (iii) the carrier is, after reasonable effort, unable to locate the holder in order to request delivery instructions, the carrier may so advise the shipper and request instructions in respect of the delivery of the goods. If, after reasonable effort, the carrier is unable to locate the shipper, the carrier may so advise the documentary shipper and request instructions in respect of the delivery of the goods.

The essence is that if delivery is not claimed, or is refused by the carrier, or if the holder cannot be located, the carrier is required to advise the shipper and request his instructions as to delivery. Failing this, after a reasonable effort, it may advise the documentary shipper²⁷⁰ and request instructions for delivery. If delivery is made by the carrier on such instructions, he will be discharged from his obligation to deliver to the holder. This is specified in article 47(2)(b) which, in full, reads as follows:

The carrier that delivers the goods upon instruction of the shipper or the documentary shipper in accordance with subparagraph 2(a) of this article is discharged from its obligation to deliver the goods under the contract of carriage to the holder, irrespective of whether the negotiable transport document has been surrendered to it, or the person claiming delivery under a negotiable electronic transport record has demonstrated, in accordance with the procedures referred to in article 9, paragraph 1, that it is the holder.

Article 47(2)(c) provides an indemnity for the carrier against loss:

The person giving instructions under subparagraph 2(a) of this article shall indemnify the carrier against loss arising from its being held liable to the holder under subparagraph 2(e) of this article. The carrier may refuse to follow those instructions if the person fails to provide adequate security as the carrier may reasonably request.

(p. 236) Article 47(2)(d) provides that the person who has become the holder after delivery under this part of the Rules still acquires contractual rights under the contract of carriage, other than the right to claim delivery of the goods:

A person that becomes a holder of the negotiable transport document or the negotiable electronic transport record after the carrier has delivered the goods pursuant to subparagraph 2(b) of this article, but pursuant to contractual or other arrangements made before such delivery acquires rights against the carrier under the contract of carriage, other than the right to claim delivery of the goods.

The final, complicated provision, reads

(e) Notwithstanding subparagraphs 2(b) and 2(d) of this article, a holder that becomes a holder after such delivery, and that did not have and could not reasonably have had knowledge of such delivery at the time it became a holder, acquires the rights incorporated in the negotiable transport document or negotiable electronic transport record. When the contract particulars state the expected time of arrival of the goods, or indicate how to obtain information as to whether the goods have been delivered, it is presumed that the holder at the time that it became a holder had or could reasonably have had knowledge of the delivery of the goods.

It has been suggested, correctly, that the carrier must prima facie deliver to a person that possesses a bill of lading, even though the bill of lading need not be surrendered; and, if the person is identified in the bill of lading as the shipper or the consignee or is the person to whom the bill of lading is specially endorsed, to that person.²⁷¹

Delivery and non-negotiable transport documents

10.49 The Rules make separate provision for those non-negotiable transport documents which do not require delivery and those that do.²⁷² Article 45 deals with the first case, namely, ‘when neither a negotiable transport document nor a negotiable electronic transport record has been issued …’. Under article 1.15 (and for the electronic equivalent, article 1.19) a negotiable document is one which is ‘to order’ or ‘negotiable’ or contains other appropriate wording having the same effect in law and which is to the order of the shipper, the consignee, or made out to bearer. The designation of a non-negotiable transport document opens up a wide range of documents, including receipts and consignment notes, sea waybills, and their electronic equivalents.²⁷³

Article 45(a) provides that

The carrier shall deliver the goods to the consignee at the time and location referred to in article 43.²⁷⁴ The carrier may refuse delivery if the person claiming to be the consignee does not properly identify itself as the consignee on the request of the carrier.

It is a requirement for such delivery to be made to the ‘consignee’ at the relevant time and location. If there is no name and address in the contract, Article 45(b) provides that this is the responsibility of the controlling party:²⁷⁵

(p. 237)

If the name and address of the consignee are not referred to in the contract particulars, the controlling party shall prior to or upon the arrival of the goods at the place of destination advise the carrier of such name and address

Article 45(c) deals with the case where delivery is not made or where the controlling party or shipper²⁷⁶ cannot be located:

Without prejudice to article 48, paragraph 1, if the goods are not deliverable because (i) the consignee, after having received a notice of arrival, does not, at the time or within the time period referred to in article 43, claim delivery of the goods from the carrier after their arrival at the place of destination, (ii) the carrier refuses delivery because the person claiming to be the consignee does not properly identify itself as the consignee, or (iii) the carrier is, after reasonable effort, unable to locate the consignee in order to request delivery instructions, the carrier may so advise the controlling party and request instructions in respect of the delivery of the goods. If, after reasonable effort, the carrier is unable to locate the controlling party, the carrier may so advise the shipper and request instructions in respect of the delivery of the goods. If, after reasonable effort, the carrier is unable to locate the shipper, the carrier may so advise the documentary shipper and request instructions in respect of the delivery of the goods

A carrier which delivers on the instructions of the controlling party, shipper, or documentary shipper, is discharged from the obligation to deliver the goods under article 45(d):

The carrier that delivers the goods upon instruction of the controlling party, the shipper or the documentary shipper pursuant to subparagraph (c) of this article is discharged from its obligations to deliver the goods under the contract of carriage.

Delivery and non-negotiable documents requiring surrender

10.50 Article 46 of the Rules deals with the situation where a non-negotiable document exists which requires surrender:

When a non-negotiable transport document has been issued that indicates that it shall be surrendered in order to obtain delivery of the goods:

(a) The carrier shall deliver the goods at the time and location referred to in article 43 to the consignee upon the consignee properly identifying itself on the request of the carrier and surrender of the non-negotiable document. The carrier may refuse delivery if the person claiming to be the consignee fails to properly identify itself on the request of the carrier, and shall refuse delivery if the non-negotiable document is not surrendered. If more than one original of the non-negotiable document has been issued, the surrender of one original will suffice and the other originals cease to have any effect or validity.

In such a case, it is mandatory for the carrier to make delivery to the consignee when that person identifies itself and surrenders the non-negotiable document. The carrier can refuse to effect delivery if the person claiming to be the consignee cannot properly identify itself. Article 46(b) is in similar terms to article 45(c):²⁷⁷

(p. 238)

(b) Without prejudice to article 48, paragraph 1, if the goods are not deliverable because (i) the consignee, after having received a notice of arrival, does not, at the time or within the time period referred to in article 43, claim delivery of the goods from the carrier after their arrival at the place of destination, (ii) the carrier refuses delivery because the person claiming to be the consignee does not properly identify itself as the consignee or does not surrender the document, or (iii) the carrier is, after reasonable effort, unable to locate the consignee in order to request delivery instructions, the carrier may so advise the shipper and request instructions in respect of the delivery of the goods. If, after reasonable effort, the carrier is unable to locate the shipper, the carrier may so advise the documentary shipper and request instructions in respect of the delivery of the goods.

Article 46(c) is, likewise, in similar terms to Article 45(d):

(c) The carrier that delivers the goods upon instruction of the shipper or the documentary shipper pursuant to subparagraph (b) of this article is discharged from its obligation to deliver the goods under the contract of carriage, irrespective of whether the non-negotiable transport document has been surrendered to it.

Goods remaining undelivered

10.51 Article 48 of the Rules lays down detailed rules about the rights of the carrier and other parties in the event that the goods remain undelivered. Article 48(1) lays down five situations where the goods will be deemed undelivered on their arrival at the place of destination:

(a) The consignee does not accept delivery of the goods pursuant to this chapter at the time and location referred to in article 43;
(b) The controlling party, the holder, the shipper or the documentary shipper cannot be found or does not give the carrier adequate instructions pursuant to articles 45, 46, and 47;
(c) The carrier is entitled or required to refuse delivery pursuant to articles 44, 45, 46, and 47;
(d) The carrier is not allowed to deliver the goods to the consignee pursuant to the law or regulations of the place at which delivery is requested; or
(e) The goods are otherwise undeliverable by the carrier.

Carriers’ rights where goods undelivered

10.52 Article 48(2) provides that the carrier is entitled to take certain steps at the risk and expense of the person entitled to the goods, where the goods have remained undelivered. In full, this provides that

Without prejudice to any other rights that the carrier may have against the shipper, controlling party or consignee, if the goods have remained undelivered, the carrier may, at the risk and expense of the person entitled to the goods, take such action in respect of the goods as circumstances may reasonably require, including:

(a) To store the goods at any suitable place;
(b) To unpack the goods if they are packed in containers or vehicles, or to act otherwise in respect of the goods, including by moving them; and
(c) To cause the goods to be sold or destroyed in accordance with the practices or pursuant to the law or regulations of the place where the goods are located at the time.

(p. 239) However, article 48(3) provides that

The carrier may exercise the rights under paragraph 2 of this article only after it has given reasonable notice of the intended action under paragraph 2 of this article to the person stated in the contract particulars as the person, if any, to be notified of the arrival of the goods at the place of destination, and to one of the following persons in the order indicated, if known to the carrier: the consignee, the controlling party or the shipper.

If the carrier exercises its right to sell the goods, article 48(4) provides that

If the goods are sold pursuant to subparagraph 2(c) of this article, the carrier shall hold the proceeds of the sale for the benefit of the person entitled to the goods, subject to the deduction of any costs incurred by the carrier and any other amounts that are due to the carrier in connection with the carriage of those goods.

Liability of the carrier

10.53 If the carrier exercises its rights under article 48(2), there may potentially be a difficulty if it thereby becomes subject to liability claims. This is dealt with in article 48(5) which provides that

The carrier shall not be liable for loss of or damage to goods that occurs during the time that they remain undelivered pursuant to this article unless the claimant proves that such loss or damage resulted from the failure by the carrier to take steps that would have been reasonable in the circumstances to preserve the goods and that the carrier knew or ought to have known that the loss or damage to the goods would result from its failure to take such steps.

Footnotes:

¹ See above, para 8.02.

² See the definition of ‘holder’ in the Carriage of Goods by Sea Act 1992, s 5(2); above, para 8.30.

³ UNCITRAL has described this as ‘a key concept’ for the carriage of goods. Among other things, it typically marks the completion of the contract of carriage and the termination of the carrier’s responsibilities’: see Transport Law: Possible Future Work (Report of the Secretary General, UNCITRAL, New York, 25 June–13 July 2001), A/CN.9/497), para 41.

⁴ See Homburg Houtimport BV v Agrosin Private Ltd (The Starsin) [2003] UKHL 12; [2004] 1 AC 715, [132].

⁵ See, eg, Conlinebill 2016. See above, para 3.13.

⁶ Emphasis provided.

⁷ See, eg, Carewins Development (China) Ltd v Bright Fortune Shipping Ltd [2009] 3 HKLRD 409 (HKCFA), [22]. See also John F Wilson, ‘The Presentation Rule Revisited’ [1995] LMCLQ 289.

⁸ Kuwait Petroleum Corp v I & D Oil Carriers Ltd (The Houda) [1994] 2 Lloyd’s Rep 541 (CA), 553. It has also been described as ‘a long practiced understanding in merchant shipping …’: Kamil Export (Aust) Pty Ltd v NPL (Australia) Pty Ltd [1996] 1 VR 538, 545.

⁹ Ibid, 550 (Neill LJ). See also Trafigura Beheer BV v Mediterranean Shipping Co SA (The MSC Amsterdam) [2007] EWCA Civ 794; [2007] 2 Lloyd’s Rep 622, [29]; Motis Exports Ltd v Dampskibsselskabet AF 1912, A/S [1999] 1 Lloyd’s Rep 837, 840.

¹⁰ For straight bills of lading, see below, para 10.20.

¹¹ PT Karya Sumiden Indonesia v Oceanmasters Marine Services Sdn Bhd [2016] 7 MLJ 589, [98].

¹² The actual holder rarely presents the bill of lading in person. In practice, on discharge of the goods from the ship they are normally in the hands of agents or sub-contractors rather than the shipowner or holder. In these circumstances, delivery is made when the goods are placed in the hands of an agent: see, for example, The Jaederen [1892] P 351.

¹³ As to custom, see below, para 10.18.

¹⁴ See Minmetals South-East Asia Corp Pte Ltd v Nakhoda Logistics Sdn Bhd [2018] 6 MLJ 152, [43]–[44]; The Star Quest [2016] SGHC 100; [2017] 1 Lloyd’s Rep Plus 50, [4]; Standard Chartered Bank v Dorchester LNG (2) Ltd (The Erin Schulte) [2013] EWHC 808 (Comm); [2013] 2 Lloyd’s Rep 338, [77]–[78]; The Dolphina [2011] SGHC 273; [2012] 1 Lloyd’s Rep 304, [137]–[142]; Motis Exports Ltd v Dampskibsselskabet AF 1912 A/S [2000] 1 Lloyd’s Rep 211, [19]; Carewins Development (China) Ltd v Bright Fortune Shipping Ltd [2009] 3 HKLRD 409 (HKCFA), [22]; Trafigura Beheer BV v Mediterranean Shipping Co SA (The MSC Amsterdam) [2007] EWCA Civ 794; [2007] 2 Lloyd’s Rep 622, [29]; The Cherry [2002] SGCA 49; [2003] 1 SLR(R) 471, [27]; Primesite Outdoor Advertising (Pty) Ltd v Salviati & Santori (Pty) Ltd 1999 (1) SA 868 (W), 881; The Stone Gemini [1999] 2 Lloyd’s Rep 255 (Fed Ct Aust) (sub nom Westpac Banking Corp v The Ship ‘Stone Gemini’ (The Stone Gemini) [1999] FCA 434), [33]; Kuwait Petroleum Corp v I & D Oil Carriers Ltd (The Houda) [1994] 2 Lloyd’s Rep 541 (CA), 550 (Neill LJ); 553 (Leggatt LJ); 556 (Millett LJ); SA Sucre Export v Northern River Shipping Ltd (The Sormovskiy 3068) [1994] 2 Lloyd’s Rep 266, 270; Glebe Island Terminals Pty Ltd v Continental Seagram Pty Ltd (The Antwerpen) [1994] 1 Lloyd’s Rep 213 (NSW CA), 245; Carlberg v Wemyss 1915 SC 616, 624; Barclays Bank Ltd v Commissioners of Customs and Excise [1963] 1 Lloyd’s Rep 81, 89; Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd [1959] AC 576 (PC), 586; Skibsaktieselskapet Thor Thoresens Linje v H Tyrer & Co (1929) 35 Ll L Rep 163, 170; The Stettin (1889) 14 PD 142, 147; Glyn Mills Currie & Co v East & West India Dock Co (1882) 7 App Cas 591 (HL), 610; London and South African Bank v Donald Currie & Co (1875) 5 Buch 29 (Cape SC), 32; Pirie & Sons v Warden (1871) 9 M 523, 528; Erichsen v Barkworth (1858) 3 H & N 601, 616; 157 ER 608, 615.

¹⁵ A faxed, photocopied, or scanned bill of lading is not an original bill of lading. See, eg, Mitsui OSK Lines (Thailand) Co Ltd v Jack Fair Pty Ltd [2015] FCCA 558; [2015] 1 Lloyd’s Rep Plus 55, [35].

¹⁶ See The Tigress (1863) 1 B & L 38, 44; 167 ER 286, 290.

¹⁷ See Carlberg v Wemyss 1915 SC 616, 624.

¹⁸ See SA Sucre Export v Northern River Shipping Ltd (The Sormovskiy 3068) [1994] 2 Lloyd’s Rep 266, 272; Barclays Bank Ltd v Commissioners of Customs and Excise [1963] 1 Lloyd’s Rep 81, 89.

¹⁹ See Motis Exports Ltd v Dampskibsselskabet AF 1912 A/S [1999] 1 Lloyd’s Rep 837, 841. See also Standard Chartered Bank v Dorchester LNG (2) Ltd (The Erin Schulte) [2013] EWHC 808 (Comm); [2013] 2 Lloyd’s Rep 338, [77]; East West Corp v DKBS AF 1912 A/S [2003] EWCA Civ 83; [2003] QB 1509, [47]. See below, para 10.19.

²⁰ Kuwait Petroleum Corp v I & D Oil Carriers Ltd (The Houda) [1994] 2 Lloyd’s Rep 541 (CA), 558.

²¹ Ibid, 553. See also Carlberg v Wemyss 1915 SC 616, 624.

²² Chartered Bank of India, Australia, and China v British India Steam Navigation Co Ltd [1909] AC 369 (PC), 375 (Lord Macnaghten); British Shipowners’ Co Ltd v Grimond (1876) 3 R 968, 972 (‘so completely in the custody of the consignee that he may do as he pleases with them’, Lord Moncreiff LJC).

²³ Great Eastern Shipping Co Ltd v Far East Chartering Ltd (The Jag Ravi) [2012] EWCA Civ 180; [2012] 1 Lloyd’s Rep 637, [45] (Tomlinson LJ); Barclays Bank Ltd v Commissioners of Customs and Excise [1963] 1 Lloyd’s Rep 81, 88.

²⁴ Oldendorff GmbH & Co KG v Sea Powerful II Special Maritime Enterprises (The Zagora) [2016] EWHC 3212 (Comm); [2017] 1 Lloyd’s Rep 194, [21]; Farenco Shipping Co Ltd v Daebo Shipping Co Ltd (The Bremen Max) [2008] EWHC 2755 (Comm); [2009] 1 Lloyd’s Rep 81, [32]; The Vasiliy Golovnin [2008] SGCA 39; [2008] 4 SLR(R) 994, [68].

²⁵ [2006] 4 HKC 1 (HKCFI). As to Art II of the Hague and Hague-Visby Rules, see below, para 19.05.

²⁶ Ibid, [187] (Stone J). This was not a live issue in the Court of Final Appeal: see [2009] 3 HKLRD 409 (HKCFA), [44]. See further below, para 10.24.

²⁷ (1882) 7 App Cas 591 (HL). See above, para 5.08.

²⁸ Affirming the majority decision of the Court of Appeal (Brett LJ dissenting): see Glyn Mills Currie & Co v East & West India Dock Co (1880) LR 6 QBD 475 (CA).

²⁹ (1882) 7 App Cas 591 (HL), 614.

³⁰ Ibid, 596.

³¹ Ibid, 599 and above, para 5.08.

³² The procedure is now known as a ‘stakeholder application’ in English law. Under it, a person in possession of property claimed by two or more persons is relieved from liability by compelling them to bring their claims to court (at their expense): CPR Part 86 (see Sir Peter Coulson (ed), Civil Procedure: The White Book Service 2021, vol 1 (Sweet & Maxwell 2021) para 86.0.1A). The shipowner (or his agent, the master) will have the protection of a court order when it disposes of the property.

³³ In most Anglo-common law jurisdictions, including Australia (Federal Court Rules 2011 (Cth), r 18.01), Hong Kong (Rules of the High Court, cap 4, O 17), Malaysia (Rules of Court 2012, O 17), New Zealand (High Court Rules 2016, r 4.58), and Singapore (Supreme Court of Judicature Act, cap 322, Rules of Court, R 5, O 17), the procedure is still known as ‘interpleading’.

³⁴ ie, so-called ‘switch bills’: see below, para 11.11.

³⁵ See Elder Dempster Lines v Zaki Ishag (The Lycaon) [1983] 2 Lloyd’s Rep 548.

³⁶ (1889) 14 PD 142, 147. See also The Cherry [2002] SGCA 49; [2003] 1 SLR(R) 471, [27]; The Taveechai Marine [1995] 1 MLJ 413; MB Pyramid Sound NV v Briese Schiffahrts GmbH & Co KG (The Ines) [1995] 2 Lloyd’s Rep 144; SA Sucre Export v Northern River Shipping Ltd (The Sormovskiy 3068) [1994] 2 Lloyd’s Rep 266; London Joint Stock Bank Ltd v British Amsterdam Maritime Agency Ltd (1911) 104 LT 143, 145.

³⁷ See Glyn Mills Currie & Co v East & West India Dock Co (1882) 7 App Cas 591 (HL), 611 and above, para 10.04.

³⁸ Minmetals South-East Asia Corp Pte Ltd v Nakhoda Logistics Sdn Bhd [2018] 6 MLJ 152, [36]; PT Karya Sumiden Indonesia v Oceanmasters Marine Services Sdn Bhd [2016] 7 MLJ 589, [100]; Motis Exports Ltd v Dampskibsselskabet AF 1912 A/S [2000] 1 Lloyd’s Rep 211 (CA), [16]; The Stone Gemini [1999] 2 Lloyd’s Rep 255 (Fed Ct Aus) (sub nom Westpac Banking Corp v The Ship ‘Stone Gemini’ (The Stone Gemini) [1999] FCA 434), [33]; Carewins Development (China) Ltd v Bright Fortune Shipping Ltd [2009] 3 HKLRD 409 (HKCFA), [21]; The Cherry [2002] SGCA 49; [2003] 1 SLR(R) 471, [27]; Primesite Outdoor Advertising (Pty) Ltd v Salviati & Santori (Pty) Ltd 1999 (1) SA 868 (W), 880; Kuwait Petroleum Corp v I & D Oil Carriers Ltd (The Houda) [1994] 2 Lloyd’s Rep 541 (CA), 556; SA Sucre Export v Northern River Shipping Ltd (The Sormovskiy 3068) [1994] 2 Lloyd’s Rep 266, 273; Glebe Island Terminals Pty Ltd v Continental Seagram Pty Ltd (The Antwerpen) [1994] 1 Lloyd’s Rep 213 (NSW CA), 245; United Asian Bank Bhd v M/V Fuji Hoshi Maru (The Fuji Hoshi Maru) [1981] 2 MLJ 333, 335; Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd [1959] AC 576 (PC), 586; Skibsaktieselskapet Thor Thoresens Linje v H Tyrer & Co (1929) 35 Ll L Rep 163, 170.

³⁹ See Andrew M Tettenborn and Francis D Rose, Admiralty Claims (Sweet & Maxwell 2020) para 4-124.

⁴⁰ Gatoil International Inc v Tradax Petroleum Ltd (The Rio Sun) [1985] 1 Lloyd’s Rep 350, 361.

⁴¹ The actual use of telexes went into abeyance during the 1980s with the development of the facsimile (fax). This has, in turn, become virtually obsolete with the pervasive and easy use of email.

⁴² Golden Meats & Seafood Supplies CC v Best Seafood Import CC 2011 (2) SA 491 (KZD), [12]. See also Mitsui OSK Lines (Thailand) Co Ltd v Jack Fair Pty Ltd [2015] FCCA 558; [2015] 1 Lloyd’s Rep Plus 55, [22]; World Asian International Ltd v Brilliant Top in Logistics Ltd [2012] HKCU 1624 (HKCFI), [19].

⁴³ See ‘Telex release by e-mail—precautions and pitfalls’ The Intermediary (ITIC, 2 February 2007) 14.

⁴⁴ See, eg, Ahmad v Mitsui OSK Lines Ltd [2005] FCA 731; (2005) 222 ALR 338 (telex release written on a freight slip).

⁴⁵ Toll Holdings v Stewart [2016] FCA 256; (2016) 338 ALR 602.

⁴⁶ As occurred in Red Chamber Co v Lau Siu Man t/a Professional Cargo Delivery Services Co [2011] HKCU 1833 (HK Dist Ct). See above, para 9.37.

⁴⁷ See, eg, Aegean Sea Traders Corp v Repsol Petroleo SA (The Aegean Sea) [1998] 2 Lloyd’s Rep 39. In this case, the wording was linked to further wording stating that ‘charterers hereby indemnify Owners against all consequences of discharging cargo without presentation of original Bills of Lading …’. Variants of the latter are common in certain time charterparty standard forms, such as Baltime, cl 9 and Shelltime 4, cl 13(a), and in certain voyage charterparty forms (see, eg, Compania Portorafti Commerciale SA v Ultramar Panama Inc (The Captain Gregos) (No 2) [1990] 2 Lloyd’s Rep 395, 398). See HN Bennett (gen ed), Carver on Charterparties (2nd edn, Sweet & Maxwell 2021) para 7-269.

⁴⁸ Generally on fraud in the maritime context, see Paul Todd, Maritime Fraud and Piracy (2nd edn, Informa 2010).

⁴⁹ Motis Exports Ltd v Dampskibsselskabet AF 1912, A/S [2000] 1 Lloyd’s Rep 211 (CA), 217. For an earlier example, see Finlay v Liverpool and Great Western Steamship Co Ltd (1870) 23 LT 251, 255.

⁵⁰ See Trengganu Forest Products Sdn Bhd v Cosco Container Lines Co Ltd [2009] 7 MLJ 781, [50]; Sunrise Maritime Inc v Uvisco Ltd (The Hector) [1998] 2 Lloyd’s Rep 287, 297; The Saudi Crown [1986] 1 Lloyd’s Rep 261 and the discussion below, para 11.03.

⁵¹ See above, para 6.31.

⁵² See the discussion of the Conlinebill 2016 form, above, para 3.13.

⁵³ See, eg, Suez Fortune Investments Ltd v Talbot Underwriting Ltd (The Brillante Virtuoso) [2019] EWHC 2599 (Comm); [2019] 2 Lloyd’s Rep 485, [581]; OMV Petrom SA v Glencore International AG (No 2) [2016] EWCA Civ 778; [2016] 2 Lloyd’s Rep 432, [7]; Hentiq 1320 (Pty) Ltd v Mediterranean Shipping Co SA Geneva [2012] ZASCA 56; 2012 (6) SA 88.

⁵⁴ See, eg, Sumanu Natural Resources Ltd v Mediterranean Shipping Coy SA [2016] EWCA Civ 34 (containerized drums of coltan ore, worth approximately US$2 million, substituted with sand and pebbles). See also ‘MSC launches High Court claim over alleged $2m cargo fraud’ (Lloyd’s List, 9 February 2007).

⁵⁵ Cf McKean v McIvor (1870) LR 6 Exch 36 (forged orders).

⁵⁶ RBRG Trading (UK) Ltd v Sinocore International Co Ltd [2018] EWCA Civ 838; [2018] 2 Lloyd’s Rep 133; Kwei Teck Chao (t/a Zung Fu Co) v British Traders & Shippers Ltd [1954] 2 QB 459.

⁵⁷ See The Dolphina [2011] SGHC 273; [2012] 1 Lloyd’s Rep 304, [178].

⁵⁸ [1999] 1 Lloyd’s Rep 837. See Stephen Girvin, ‘Forged Bills of Lading’ [2000] JBL 81. See also Orexim Trading Ltd v Mahavir Port and Terminal Pte Ltd [2018] EWCA Civ 1660; [2019] 1 Lloyd’s Rep 89, [13]; RBRG Trading (UK) Ltd v Sinocore International Co Ltd [2018] EWCA Civ 838; [2018] 2 Lloyd’s Rep 133, [8]; Trafigura Beheer BV v Mediterranean Shipping Co SA (The MSC Amsterdam) [2007] EWCA Civ 794; [2007] 2 Lloyd’s Rep 622; A/S D/S Svenborg, DS AF 1912 A/S v Far East Trading Cote D’Ivoire [2004] EWHC 2929 (Comm), [9]; The Jian He [1999] SGCA 71; [1999] 3 SLR(R) 432, [62]; Kwei Tek Chao (t/a Zung Fu Co) v British Traders & Shippers Ltd [1954] 2 QB 459, 476; Guaranty Trust Co of New York v Hannay & Co (No 2) [1918] 2 KB 623 (CA), 629; Leather v Simpson (1871) LR 11 Eq 398, 403; Woods v Thiedemann (1862) 1 H & C 478, 490; 158 ER 973, 978.

⁵⁹ By analogy with the law on cheques, whereby a paying bank debiting its customer on a forged cheque had to repay the customer, and on forged share certificates: Ruben v Great Fingall Consolidated [1906] AC 439 (HL), 444; Sheffield Corp v Barclay [1905] AC 392 (HL).

⁶⁰ [1999] 1 Lloyd’s Rep 837, 843.

⁶¹ Ibid.

⁶² [2000] 1 Lloyd’s Rep 211 (CA), criticized by Brian Davenport QC in ‘Misdelivery: A Fundamental Breach?’ [2000] LMCLQ 455.

⁶³ Discussed below, para 10.13.

⁶⁴ [2000] 1 Lloyd’s Rep 211 (CA), 216. See also Trafigura Beheer BV v Mediterranean Shipping Co SA (The MSC Amsterdam) [2007] EWCA Civ 794; [2007] 2 Lloyd’s Rep 622; Paolo Ghirardani, ‘Computer fraud that cost MSC’ Lloyd’s List (13 June 2007).

⁶⁵ Above, para 4.19.

⁶⁶ Glencore International AG v MSC Mediterranean Shipping Co SA (The MSC Eugenia/MSC Katrina) [2017] EWCA Civ 365; [2017] 2 Lloyd’s Rep 186.

⁶⁷ See also Hapag-Lloyd AG v Iamgold Corp 2021 FCA 110 (Fed CA Can), [8], where a similar theft took place at Antwerp.

⁶⁸ Ibid, [6].

⁶⁹ [2015] EWHC 1989 (Comm); [2015] 2 Lloyd’s Rep 508.

⁷⁰ [2017] EWCA Civ 365; [2017] 2 Lloyd’s Rep 186, [26].

⁷¹ Ibid, [28].

⁷² Ibid, [31].

⁷³ Ibid, [40].

⁷⁴ Ibid, [42].

⁷⁵ Ibid, [41].

⁷⁶ <https://www.icc-ccs.org/icc/imb> accessed 16 August 2021.

⁷⁷ Set up ‘to improve anti-fraud standards and provide a mechanism to recognise participating NVOCCs who adhere to a minimum standard of anti-fraud measures in their operations’: see <https://www.icc-ccs.org/nvoccregister> accessed 16 August 2021.

⁷⁸ Originating in the famous deviation case, Tate & Lyle Ltd v Hain Steamship Co Ltd (1936) 55 Ll L Rep 159 (HL), 175, below, para 25.21.

⁷⁹ See Photo Production Ltd v Securicor Transport Ltd [1980] AC 827 (HL). See Michael Bridge (gen ed), Benjamin’s Sale of Goods (11th edn, Sweet & Maxwell 2020) para 13-043.

⁸⁰ [1909] AC 369 (PC).

⁸¹ Upholding an appeal from the Supreme Court of the Straits Settlements.

⁸² Ibid, 375–6.

⁸³ [1959] AC 576 (PC).

⁸⁴ Ibid, 588.

⁸⁵ These were warehouses, most of them located adjacent to the Singapore River. See, eg, Ian YH Tan, ‘The Colonial Port as Contact Zone: Chinese Merchants and the Development of Godowns along Singapore River, 1827–1905’ (2020) 8(1) Architectural Histories 1–15, <https://journal.eahn.org/articles/10.5334/ah.417/> accessed 3 July 2021.

⁸⁶ [1959] AC 576 (PC), 587. On the general contractual approach to exemption clauses, see Benjamin (n 79) para 13-018.

⁸⁷ See also Primesite Outdoor Advertising (Pty) Ltd v Salviati & Santori (Pty) Ltd 1999 (1) SA 868 (W), 881.

⁸⁸ As have the courts in other jurisdictions: see Carewins Development (China) Ltd v Bright Fortune Shipping Ltd [2009] 3 HKLRD 409 (HKCFA), [71]; Center Optical (Hong Kong) Ltd v Jardine Transport Services (China) Ltd [2001] 2 Lloyd’s Rep 678 (HKCFI), [55]; Vastfame Camera Ltd v Birkart Globistics Ltd [2005] 4 HKC 117 (HKCFI), [69]; The Jian He [1999] SGCA 71; [1999] 3 SLR(R) 432, [21]; Primesite Outdoor Advertising (Pty) Ltd v Salviati & Santori (Pty) Ltd 1999 (1) SA 868 (W), 880–1; Kamil Export (Aust) Pty Ltd v NPL (Australia) Pty Ltd [1996] 1 VR 538, 544.

⁸⁹ [2000] 1 Lloyd’s Rep 211 (CA) (above, para 10.10). See also MB Pyramid Sound NV v Briese Schiffarts GmbH & Co KG (The Ines) [1995] 2 Lloyd’s Rep 144, 154.

⁹⁰ [1999] 1 Lloyd’s Rep 837, 847.

⁹¹ [2000] 1 Lloyd’s Rep 211 (CA), 216.

⁹² Ibid, 217. See also East West Corp v DKBS AF 1912 A/S [2003] EWCA Civ 83; [2003] QB 1509.

⁹³ Ibid.

⁹⁴ Trafigura Beheer BV v Mediterranean Shipping Co SA (The MSC Amsterdam) [2007] EWCA Civ 794; [2007] 2 Lloyd’s Rep 622. See Paul Todd, ‘Excluding and Limiting Liability for Misdelivery’ [2010] JBL 243.

⁹⁵ Cl 4(ii).

⁹⁶ Cl 7.

⁹⁷ [2007] EWHC 944 (Comm); [2007] 2 All ER (Comm) 149.

⁹⁸ [2007] EWCA Civ 794; [2007] 2 Lloyd’s Rep 622, [32].

⁹⁹ Cl 22. This clause was described by Longmore LJ as a ‘mélée (or perhaps congeries) of provisions’: ibid, [37].

¹⁰⁰ Ibid.

¹⁰¹ ie Motis Exports Ltd v Dampskibsselskabet AF 1912, A/S [2000] 1 Lloyd’s Rep 211 (CA).

¹⁰² [2007] EWCA Civ 794; [2007] 2 Lloyd’s Rep 622, [37]. See also Carewins Development (China) Ltd v Bright Fortune Shipping Ltd [2009] 3 HKLRD 409 (HKCFA), [71] (Ribeiro PJ); [89] (Litton NPJ), where the Court of Final Appeal in Hong Kong confirmed that the exemption clause in the bills of lading (cl 2(b)) would not exempt the carrier from a misdelivery.

¹⁰³ See Trafigura Beheer BV v Mediterranean Shipping Co SA (The MSC Amsterdam) [2007] EWCA Civ 794; [2007] 2 Lloyd’s Rep 622, [37]; Motis Exports Ltd v Dampskibsselskabet AF 1912, A/S [2000] 1 Lloyd’s Rep 211 (CA), 217; Glebe Island Terminals Pty Ltd v Continental Seagram Pty Ltd (The Antwerpen) [1994] 1 Lloyd’s Rep 213 (NSW CA), 245; Nissho Iwai (Australia) Ltd v Malaysian International Shipping Corp Berhad (1989) 167 CLR 219 (H Ct Aus).

¹⁰⁴ Trafigura Beheer BV v Mediterranean Shipping Co SA (The MSC Amsterdam) [2007] EWCA Civ 794; [2007] 2 Lloyd’s Rep 622, [29]; [37].

¹⁰⁵ Carewins Development (China) Ltd v Bright Fortune Shipping Ltd [2009] 3 HKLRD 409 (HKCFA), [67]–[8].

¹⁰⁶ See also Sang Stone Hamoon Jonoub Co Ltd v Baoyue Shipping Co Ltd (The Bao Yue) [2015] EWHC 2288 (Comm); [2016] 1 Lloyd’s Rep 320, [68].

¹⁰⁷ See, generally, D Rhidian Thomas, ‘ “Custom of the Port” as a Category of Commercial Custom’ [2016] LMCLQ 436, 443.

¹⁰⁸ SA Sucre Export v Northern River Shipping Ltd (The Sormovskiy 3068) [1994] 2 Lloyd’s Rep 266.

¹⁰⁹ An alternative argument that they were not prohibited under English law from delivering without production of the original bills of lading received short shrift from Clarke J: [1994] 2 Lloyd’s Rep 266, 274.

¹¹⁰ [1994] 2 Lloyd’s Rep 266, 275, cited with approval in Olivine Electronics Pte Ltd v Seabridge Transport Pte Ltd [1995] SGHC 145; [1995] 2 SLR(R) 527, [24].

¹¹¹ [2002] EWHC 83 (Comm); [2002] 2 Lloyd’s Rep 182.

¹¹² This aspect of the case did not go to the Court of Appeal: see [2003] EWCA Civ 83; [2003] QB 1509. See the discussion of the Court of Appeal decision above, para 8.32 and para 9.32.

¹¹³ See, eg, Melissa (HK) Ltd v P&O Nedlloyd (HK) Ltd [2000] 1 HKC 483, 496. But cf Cadbury Schweppes Plc v Nigerian National Shipping Line Ltd (The River Ngada) (2001) 570 LMLN 1.

¹¹⁴ See, eg, Nicholas Gaskell, Regina Asariotis, and Yvonne Baatz, Bills of Lading: Law and Contracts (LLP 1990), para 14.24; GH Treitel and FMB Reynolds, Carver on Bills of Lading (4th edn, Sweet & Maxwell 2017), para 6-018. Cf, however, Parsons Corp v CV Scheepvaartonderneming ‘Happy Ranger’ (The Happy Ranger) [2002] EWCA Civ 694; [2002] 2 Lloyd’s Rep 357, [49]: ‘I would merely underline Lord Justice Tuckey’s comment [at 31] that it would be unwise to assume that all of the statements in the text books regarding “straight” bills are correct’ (Rix LJ).

¹¹⁵ (1889) 14 PD 142.

¹¹⁶ (1921) 8 Ll L Rep 76.

¹¹⁷ Ibid, 77.

¹¹⁸ (1924) 18 Ll L Rep 6 (CA).

¹¹⁹ (1889) 14 PD 142.

¹²⁰ Above, n 116, 9.

¹²¹ [1963] 1 Lloyd’s Rep 81, 89. See also SA Sucre Export v Northern River Shipping Ltd (The Sormovskiy 3068) [1994] 2 Lloyd’s Rep 266, 274; Kuwait Petroleum Corp v I & D Oil Carriers Ltd (The Houda) [1994] 2 Lloyd’s Rep 541 (CA); MB Pyramid Sound NV v Briese Schiffarts GmbH & Co KG (The Ines) [1995] 2 Lloyd’s Rep 144.

¹²² [2002] EWHC 83 (Comm); [2002] 2 Lloyd’s Rep 182.

¹²³ ie, the ‘Maersk bill of lading No 4’.

¹²⁴ [2002] EWHC 83 (Comm); [2002] 2 Lloyd’s Rep 182, [24].

¹²⁵ [1995] SGHC 145; [1995] 2 SLR(R) 527. See Toh Kian Sing, ‘Of Straight and Switch Bills of Lading’ [1996] LMCLQ 416.

¹²⁶ Ibid, [23].

¹²⁷ Ibid, [27].

¹²⁸ [2001] 1 Lloyd’s Rep 431 (HKCFI).

¹²⁹ Ibid, 434. This case is expressly overruled by Carewins Development (China) Ltd v Bright Fortune Shipping Ltd [2009] 3 HKLRD 409 (HKCFA), [37], below, para 10.24.

¹³⁰ [2002] 2 Lloyd’s Rep 707 (sub nom Voss Peer v APL Co Pte Ltd [2002] SGHC 81; [2002] 1 SLR(R) 823).

¹³¹ Ibid, [33].

¹³² Ibid, [51] (Chao Hick Tin JA) (sub nom APL Co Pte Ltd v Voss Peer [2002] SGCA 41; [2002] 2 SLR(R) 1119). This view has been upheld in Malaysia: see PT Karya Sumiden Indonesia v Oceanmasters Marine Services Sdn Bhd [2016] 7 MLJ 589 (H Ct, Kuala Lumpur), [103].

¹³³ Ibid, [23].

¹³⁴ Ibid, [51].

¹³⁵ SA Sucre Export v Northern River Shipping Ltd (The Sormovskiy 3068) [1994] 2 Lloyd’s Rep 266, 274.

¹³⁶ JI MacWilliam Co Inc v Mediterranean Shipping Co SA (The Rafaela S) [2005] UKHL 11; [2005] 2 AC 423.

¹³⁷ The principal issue in the case whether straight bills of lading were covered by the Hague Rules: see below, para 19.14.

¹³⁸ [2002] EWHC 593 (Comm); [2002] 2 Lloyd’s Rep 403, 407.

¹³⁹ [2003] EWCA Civ 556; [2004] QB 702, [145]. See also Jacob J, [150].

¹⁴⁰ [2005] UKHL 11; [2005] 2 AC 423, [20].

¹⁴¹ Ibid, [51].

¹⁴² Ibid, [52].

¹⁴³ Ibid, [78].

¹⁴⁴ Ibid, [79].

¹⁴⁵ Ibid, [26].

¹⁴⁶ Cami Automotive Inc v Westwood Shipping Lines Inc 2009 FC 664; (2009) 351 FTR 236, [16]; Timberwest Forest Corp v Pacific Link Ocean Services Corp 2008 FC 801; [2009] 2 FCR 496, [13].

¹⁴⁷ Assobhai Bhanji & Sons v Great Circle Shipping Pvt Ltd MANU/MH/1726/2017 (Bombay HC), [28]; [35].

¹⁴⁸ [2008] FCA 1791.

¹⁴⁹ Ibid, [13]; [18]. See also Mount Isa Mines Ltd v The Ship ‘Thor Commander’ [2018] FCA 1326; [2019] 1 Lloyd’s Rep 167, [114]; Toll Holdings v Stewart [2016] FCA 256; (2016) 338 ALR 602, [86].

¹⁵⁰ [2009] 3 HKLRD 409 (HKCFA).

¹⁵¹ [2006] 4 HKLRD 131 (HKCFI).

¹⁵² [2007] 3 HKLRD 396 (HKCA).

¹⁵³ Above, n 150, [2]. Overruling The Brij [2001] 1 Lloyd’s Rep 431 (HKCFI), see above, para 10.21.

¹⁵⁴ See above, paras 3.16 and 5.07.

¹⁵⁵ See, eg, MSC’s Standard Terms and Conditions which states that: ‘If this is a non-negotiable (straight) Bill of Lading, the Carrier shall deliver the Goods or issue a Delivery Order (after payment of outstanding Freight) against the surrender of one original Bill of Lading or in accordance with the national law at the Port of Discharge or Place of Delivery whichever is applicable.’ See <https://www.msc.com/che/contract-of-carriage> (accessed 28 December 2020).

¹⁵⁶ Carewins Development (China) Ltd v Bright Fortune Shipping Ltd [2009] 3 HKLRD 409 (HKCFA), [27]. See also JI MacWilliam Co Inc v Mediterranean Shipping Co SA (The Rafaela S) [2005] UKHL 11; [2005] 2 AC 423, [6]; London Joint Stock Bank Ltd v British Amsterdam Maritime Agency Ltd (1911) 104 LT 143, 144.

¹⁵⁷ Cf Anonima Petroli Italiana SpA v Marclucidez Armadora SA (The Filiatra Legacy) [1991] 2 Lloyd’s Rep 337 (CA), where the contract of sale, inter alia, provided that ‘Seller to instruct owners/master of performing vessel to deliver the cargo to receivers without presentation of original or copy of B/L if same not yet received by Buyer’.

¹⁵⁸ See above, para 8.09.

¹⁵⁹ See above, para 4.04.

¹⁶⁰ See also Genwaybill 2016: ‘The cargo shipped under this Waybill will be delivered to the Party named as Consignee or its authorised agent, on production of proof of identity without any documentary formalities’.

¹⁶¹ For a readable account, see Martin Stopford, Maritime Economics (3rd edn, Routledge 2009) 434. See also Michael Tamvakis, Commodity Trade and Finance (2nd edn, Informa 2015) ch 2.

¹⁶² See Tenacity Marine Inc v NOC Swiss LLC [2020] EWHC 3689 (Comm), [11].

¹⁶³ See Harvey Williams, Chartering Documents (4th edn, LLP 1999) 112.

¹⁶⁴ See Voest Alpine Intertrading GmbH v Chevron International Oil Co Ltd [1987] 2 Lloyd’s Rep 547, 550; MG Bridge, The International Sale of Goods (4th edn, Oxford University Press 2017) para 1.53.

¹⁶⁵ In A/S Hansen-Tangens Rederi III v Total Transport Corp (The Sagona) [1984] 1 Lloyd’s Rep 194, 201, when asked how often an original bill of lading had been presented to him prior to discharge, a master answered, ‘I have never seen it’. See also below, para 13.12.

¹⁶⁶ Great Eastern Shipping Co Ltd v Far East Chartering Ltd (The Jag Ravi) [2012] EWCA Civ 180; [2012] 1 Lloyd’s Rep 637, [1]. See also Tenacity Marine Inc v NOC Swiss LLC [2020] EWHC 3689 (Comm), [11]; Oldendorff HmBH & Co KG v Sea Powerful II Special Maritime Enterprises (The Zagora) [2016] EWHC 3212 (Comm); [2017] 1 Lloyd’s Rep 194, [1].

¹⁶⁷ Voyages from the North Sea oilfields (eg, from Sullom Voe) to North Western Europe are relatively short. See RM Wiseman, ‘Transaction Chains in North Sea Oil Cargoes’ (1984) 2 JENRL 134, 136. See also Anonima Petroli Italiana SpA v Marclucidez Armadora SA (The Filiatra Legacy) [1991] 2 Lloyd’s Rep 337 (CA), 342–3.

¹⁶⁸ At one time this also created difficulties relating to title to sue because of the requirements of s 1 of the Bills of Lading Act 1855. See, eg, Enichem Anic SpA v Ampelos Shipping Co Ltd (The Delfini) [1990] 1 Lloyd’s Rep 252 (CA), discussed above, para 8.15.

¹⁶⁹ See The Epic [2000] SGCA 28; [2000] 2 SLR(R) 240, [37]. See also the discussion of indemnities above, para 6.32.

¹⁷⁰ Great Eastern Shipping Co Ltd v Far East Chartering Ltd (The Jag Ravi) [2012] EWCA Civ 180; [2012] 1 Lloyd’s Rep 637, [1].

¹⁷¹ Ibid, [2].

¹⁷² Kuwait Petroleum Corp v I & D Oil Carriers Ltd (The Houda) [1994] 2 Lloyd’s Rep 541 (CA), 553.

¹⁷³ [2004] HCA 35; (2004) 218 CLR 451 (H Ct Aus). See also above, para 6.32.

¹⁷⁴ See, eg, Songa Chemicals AS v Navig8 Chemicals Pool Inc (The Songa Winds) [2018] EWHC 397 (Comm); [2018] 2 Lloyd’s Rep 47, [69]; The Stone Gemini [1999] 2 Lloyd’s Rep 255 (NSW CA) (sub nom Westpac Banking Corp v The Ship ‘Stone Gemini’ (The Stone Gemini) [1999] FCA 434), [71].

¹⁷⁵ See, eg, Harmony Innovation Shipping Pte Ltd v Caravel Shipping Inc (The Universal Bremen) [2019] EWHC 1037 (Comm); [2020] 1 Lloyd’s Rep 206, [20]. For broader consideration, see Homburg Houtimport BV v Agrosin Private Ltd (The Starsin) [2003] UKHL 12; [2004] 1 AC 715, [9]–[13].

¹⁷⁶ See Moschi v Lep Air Services Ltd [1973] AC 331 (HL), 349.

¹⁷⁷ See, eg, Int Group A, cl 6 (joint and several liability), below, para 10.30.

¹⁷⁸ In the case of a guarantee, the guarantor assumes a secondary liability to answer for the debtor who remains primarily liable. See, eg, Marubeni Hong Kong & South China Ltd v The Mongolian Government [2005] EWCA Civ 395; [2005] 1 WLR 2497, [20].

¹⁷⁹ See, generally, Steven J Hazelwood and David Semark, P&I Clubs: Law and Practice (4th edn, LLP 2010) para 10.94.

¹⁸⁰ It is contrary to the principles of mutuality to permit one member to follow a practice which is for its sole economic benefit and involve the other members who do not engage in such commercial practices: see Christopher Hill, Steven J Hazelwood, and Bill Robertson, An Introduction to P&I (2nd edn, LLP 1996) 91.

¹⁸¹ See, eg, the Britannia P & I Club, r 19(17)(iii)(c); Gard, r 34.1(i); Standard Club, r 3.13.3(5).

¹⁸² See <http://www.igpandi.org> accessed 16 August 2021.

¹⁸³ These replaced versions issued in 1984 and 1998.

¹⁸⁴ See the distinction between ‘indemnity’ and ‘guarantee’, above, para 10.28.

¹⁸⁵ Pursuant to s 4 of the Statute of Frauds 1677. See HG Beale (gen ed), Chitty on Contracts (33rd edn, Sweet & Maxwell 2018) para 45-042.

¹⁸⁶ The wording may also be incorporated in a charterparty, as in the amended Shellvoy charterparty in Clearlake Chartering USA Inc v Petroleo Brasileiro SA (The Miracle Hope) (No 2) [2020] EWHC 805 (Comm); [2021] 1 Lloyd’s Rep 543.

¹⁸⁷ Cf Jiang Xin Shipping Co Ltd v FGV Trading Sdn Bhd [2018] 8 MLJ 716 (H Ct, Kuala Lumpur), [28], where a single reference to Chennai, rather than New Mangalore, was held to be an obvious bona fine mistake which did not prevent the LOI from being engaged.

¹⁸⁸ The underlined wording was introduced after Farenco Shipping Co Ltd v Daebo Shipping Co Ltd (The Bremen Max) [2008] EWHC 2755 (Comm); [2009] 1 Lloyd’s Rep 81.

¹⁸⁹ This provision is not qualified by cl 1 or cl 2 but ‘is intended to be and must be given effect as an agreement that was binding upon delivery being given without production of bills of lading whether or not that delivery was in fact to a party delivery to whom was requested by the LOI’: Songa Chemicals AS v Navig8 Chemicals Pool Inc (The Songa Winds) [2018] EWHC 397 (Comm); [2018] 2 Lloyd’s Rep 47, [58] (Andrew Baker J).

¹⁹⁰ See Great Eastern Shipping Co Ltd v Far East Chartering Ltd (The Jag Ravi) [2012] EWCA Civ 180; [2012] 1 Lloyd’s Rep 637 (LOI addressed to ‘Owners/Disponent Owners/Charterers of the MV JAG RAVI’ held to be addressed to both the owners and charterers); Laemthong International Lines Co Ltd v Artis (The Laemthong Glory) (No 2) [2005] EWCA Civ 519; [2005] 1 Lloyd’s Rep 688 (shipowners entitled to enforce a letter of indemnity addressed to the charterer, both as a matter of contract and under the Contracts (Rights of Third Parties) Act 1999). See above, paras 9.52; 9.55.

¹⁹¹ Farenco Shipping Co Ltd v Daebo Shipping Co Ltd (The Bremen Max) [2008] EWHC 2755 (Comm); [2009] 1 Lloyd’s Rep 81.

¹⁹² Ibid, [34].

¹⁹³ Ibid, [37].

¹⁹⁴ Oldendorff GmbH & Co KG v Sea Powerful II Special Maritime Enterprises (The Zagora) [2016] EWHC 3212 (Comm); [2017] 1 Lloyd’s Rep 194.

¹⁹⁵ Ibid, [31].

¹⁹⁶ See also Harmony Innovation Shipping Pte Ltd v Caravel Shipping Inc (The Universal Bremen) [2019] EWHC 1037 (Comm); [2020] 1 Lloyd’s Rep 206, [27]–[28] (believed delivery). In Songa Chemicals AS v Navig8 Chemicals Pool Inc (The Songa Winds) [2018] EWHC 397 (Comm); [2018] 2 Lloyd’s Rep 47, [40], the court held that in delivering a cargo of sunflower seed oil to a buyer, who had sold the same cargo on back-to-back terms to a replacement buyer, the buyer was acting both for the replacement buyer and the seller and carrier.

¹⁹⁷ As to ‘delivery’ and ‘discharge’, see above, para 10.03.

¹⁹⁸ Great Eastern Shipping Co Ltd v Far East Chartering Ltd (The Jag Ravi) [2012] EWCA Civ 180; [2012] 1 Lloyd’s Rep 637, discussed above, para 9.56.

¹⁹⁹ Ibid, [45].

²⁰⁰ Ibid, [48].

²⁰¹ Above, para 10.30.

²⁰² Farenco Shipping Co Ltd v Daebo Shipping Co Ltd (The Bremen Max) [2008] EWHC 2755 (Comm); [2009] 1 Lloyd’s Rep 81.

²⁰³ A type of iron concentrate which is too fine-grained for direct use in a blast furnace and has to undergo a process of agglomeration (‘sintering’) into larger particles at destination before smelting. Generally as to iron ore cargoes, see above para 1.06.

²⁰⁴ [2008] EWHC 2755 (Comm); [2009] 1 Lloyd’s Rep 81, [21].

²⁰⁵ Ibid, [22]. See also Oldendorff GmbH & Co KG v Sea Powerful II Special Maritime Enterprises (The Zagora) [2016] EWHC 3212 (Comm); [2017] 1 Lloyd’s Rep 194.

²⁰⁶ See para 10.30.

²⁰⁷ See below, para 10.41.

²⁰⁸ Derry v Peek (1889) 14 App Cas 337, 374.

²⁰⁹ But cf Brown, Jenkinson & Co Ltd v Percy Dalton (London) Ltd [1957] 2 QB 621 (CA) and Hunter Grain Pty Ltd v Hyundai Merchant Marine Co Ltd (1993) 117 ALR 507 (Fed Ct Aus), above, para 6.33.

²¹⁰ See Miskin Manor Shipping Co Ltd v Herbert Clarke & Sons (Erith) Ltd (1927) 29 Ll LR 282, 285.

²¹¹ Kuwait Petroleum Corp v I & D Oil Carriers Ltd (The Houda) [1994] 2 Lloyd’s Rep 541 (CA).

²¹² Ibid, 552. Such also applies in the case of a voyage charterparty: ibid, 558. See also Strathlorne Steamship Co Ltd v Andrew Weir & Co (1934) 49 Ll L Rep 306, 311.

²¹³ [1999] SGHC 256; [1999] 3 SLR(R) 507.

²¹⁴ Ibid, [11]. See also BNP Paribas v Bandung Shipping Pte Ltd [2003] SGHC 111; [2003] 3 SLR(R) 611, [69]; The Cherry [2002] SGCA 49; [2003] 1 SLR(R) 471, [27]. This point was also noted by UNCITRAL, in the discussions which led to the enactment of the Rotterdam Rules: see Transport Law: possible future work (Report of the Secretary General, UNCITRAL, New York, 12 June–7 July 2000), A/CN.9/476), para 45. As to UNCITRAL, see para 16.03 below.

²¹⁵ See A/S Hansen-Tengens Rederi III v Total Transport Corp (The Sagona) [1984] 1 Lloyd’s Rep 194, 206; Strathlorne Steamship Co Ltd v Andrew Weir & Co (1934) 50 Ll LR 185 (CA), 193.

²¹⁶ Although there might be an issue whether such an obligation to indemnify is express or implied. See below, para 34.105 et seq.

²¹⁷ Bourne v Gatliff (1844) 11 Cl & Fin 45, 70; 8 ER 1019, 1029.

²¹⁸ See Turner, Nott & Co v Lord Mayor, Aldermen and Burgesses of the City of Bristol (1928) 31 Ll L Rep 359; Procter, Garrett, Marston v Oakwin Steamship Co Ltd [1926] 1 KB 244 (CA); Bourne v Gatliff (1844) 11 Cl & Fin 45; 8 ER 1019. A charterer or consignee may not refuse to take delivery of the damaged cargo in exchange for security given by the shipowner: see London Arbitration 14/06 (2006) 698 LMLN 4.

²¹⁹ Ibid, 360.

²²⁰ (1874) LR 9 CP 355.

²²¹ Ibid, 361.

²²² Ibid.

²²³ Cl 9(e). See also above, para 3.24 and below, para 10.39.

²²⁴ See Sang Stone Hamoon Jonoub Co Ltd v Baoyue Shipping Co Ltd (The Bao Yue) [2015] EWHC 2288 (Comm); [2016] 1 Lloyd’s Rep 320, [49]–[50]; Metall Market OOO v Vitorio Shipping Co Ltd (The Lehmann Timber) [2013] EWCA Civ 650; [2014] QB 760, [95]; ENE Kos I Ltd v Petroleo Brasileiro SA (The Kos) (No 2) [2012] UKSC 17; [2012] 2 AC 164, [20]–[21]; Smailes & Son v Hans Dessen & Co (1906) 95 LT 809 (CA); Mors-le-Blanch v Wilson (1873) LR 8 CP 227; Cargo ex Argos (1872) LR 5 PC 134.

²²⁵ Cf art 48 of the Rotterdam Rules, discussed below, para 10.44.

²²⁶ This section was based on the UK Merchant Shipping Act 1894, s 493, repealed in the Statute Law (Repeals) Act 1993, Sch I, Pt XV.

²²⁷ cap 179.

²²⁸ Section 126(1). Section 126(2) further states that: ‘(a) if any wharf or warehouse is named in the charter-party, bill of lading or agreement, as the wharf or warehouse where the goods are to be placed and if they can be conveniently there received, on that wharf or in that warehouse; and (b) in any other case, on some wharf or in some warehouse on or in which goods of a like nature are usually placed’.

²²⁹ The older (1978) version provided (at cl 8) that: ‘The Merchant or his Assign shall take delivery of the goods and continue to receive the goods as fast as the vessel can deliver and—but only if required by the Carrier—also outside ordinary working hours notwithstanding any custom of the port. Otherwise the Carrier shall be at liberty to discharge the goods and any discharge to be deemed a true fulfillment of the contract …’.

²³⁰ See above, para 10.45.

²³¹ See, for other examples, Gaskell (n 114), 436–44. See also MSC Mediterranean Shipping Co SA v Cottonex Anstalt [2015] EWHC 283 (Comm); [2015] 1 Lloyd’s Rep 359 where a clause provided that: ‘The Merchant shall take delivery of the Goods within the time provided for in the Carrier’s applicable Tariff or as otherwise agreed. If the Merchant fails to do so, the Carrier may without notice unpack the Goods if packed in Containers and/or store the Goods ashore, afloat, in the open or under cover at the sole risk of the Merchant. …’

²³² See Keane v Australian Steamships Pty Ltd (1929) 41 CLR 484 (H Ct Aus); Australasian United Steam Navigation Co Ltd v Hiskens (1914) 18 CLR 646 (H Ct Aus). Cf, however, Center Optical (Hong Kong) Ltd v Jardine Transport Services (China) Ltd [2001] 2 Lloyd’s Rep 678 (H Ct HK). The correctness of the Australian decisions has been doubted: see, eg, J Cooke et al, Voyage Charters (4th edn, Informa 2014) para 10.24.

²³³ [1959] AC 576 (PC), 586. See also Trafigura Beheer BV v Mediterranean Shipping Co SA (The MSC Amsterdam) [2007] EWCA Civ 794; [2007] 2 Lloyd’s Rep 622 (above, para 10.16).

²³⁴ See below, para 10.42.

²³⁵ See below, para 10.43.

²³⁶ See also APL Co Pte Ltd v Voss Peer [2002] 2 Lloyd’s Rep 707; The Nordic Freedom [1999] SGHC 256; [1999] 3 SLR(R) 507; MB Pyramid Sound NV v Briese Schiffahrts GmbH & Co KG (The Ines) [1995] 2 Lloyd’s Rep 144, 151; Glyn, Mills Currie & Co v East & West India Dock Co (1882) 7 App Cas 591 (HL), 610.

²³⁷ East West Corp v DKBS 1912 [2002] EWHC 83 (Comm); [2002] 2 Lloyd’s Rep 182, [50].

²³⁸ A misdelivery can also occur where the shipowner delivers the goods to their lawful owner.

²³⁹ ie, his ‘expectation’ or ‘performance’ interest: see, eg, Koufos v C Czarnikow Ltd (The Heron II) [1969] 1 AC 350 (HL), 414. In Livingstone v Rawyards Coal Co (1880) 5 App Cas 25 (HL), 39, Lord Blackburn explained that the ‘measure of damages is … that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been if he had not sustained the wrong for which he is now getting his compensation in reparation’. See below, para 36.02.

²⁴⁰ Cf the Sale of Goods Act 1979 s 51.

²⁴¹ See Benjamin (n 79) para 17-004. There can, however, be difficulties in establishing this available market value of the goods: see, eg, Derby Resources AG v Blue Corinth Marine Co Ltd (The Athenian Harmony) [1998] 2 Lloyd’s Rep 410.

²⁴² See Rodocanachi v Milburn (1886) 18 QBD 67 (CA), 78, endorsed in Attorney General of the Republic of Ghana v Texaco Overseas Tankships Ltd (The Texaco Melbourne) [1994] 1 Lloyd’s Rep 473 (HL).

²⁴³ (1854) 9 Ex 341, 354–5; 156 ER 145, 151. See now also Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas) [2008] UKHL 48; [2009] 1 AC 61, below para 36.05.

²⁴⁴ See Voss v APL Co Pte Ltd [2002] 2 Lloyd’s Rep 707(sub nom APL Co Pte Ltd v Voss Peer [2002] SGCA 41; [2002] 2 SLR(R) 1119); Chabbra Corp Pte Ltd v Jag Shakti (The Jag Shakti) [1986] AC 337 (PC); Bristol and West of England Bank v Midland Railway Co [1891] 2 QB 653 (CA); London Joint Stock Bank Ltd v British Amsterdam Maritime Agency Ltd (1911) 104 LT 143. See Paul Todd, ‘The Bill of Lading and Delivery: The Common Law Actions’ [2006] LMCLQ 539, 540–52; Simon Baughen, ‘Bailment or Conversion? Misdelivery Claims Against Non-contractual Carriers’ [2010] LMCLQ 411.

²⁴⁵ Above, para 9.37.

²⁴⁶ Chabbra Corp Pte Ltd v Jag Shakti (The Jag Shakti) [1986] AC 337 (PC), 345.

²⁴⁷ For the background to the Rules, see below, para 17.09.

²⁴⁸ See Michael F Sturley, Tomotaka Fujita, Gertjan van der Ziel, The Rotterdam Rules (2nd edn, Sweet & Maxwell 2020) ch 8. For discussion of the application of the Rules, see below, para 20.03.

²⁴⁹ See, eg, Transport Law: Possible Future Work (Report of the Secretary General, UNCITRAL, New York, 12 June–7 July 2000), A/CN.9/476), para 44.

²⁵⁰ See, eg, Report of the United Nations Commission on International Trade Law (General Assembly, New York, 16 June–3 July 2008, A/63/17), paras 137–8.

²⁵¹ A consignee is defined in the Rules as ‘a person entitled to delivery of the goods under a contract of carriage or a transport document or electronic transport record’: art 1.11.

²⁵² Report of the United Nations Commission on International Trade Law (General Assembly, New York, 16 June–3 July 2008, A/63/17), para 140.

²⁵³ As required by art 36.3(a).

²⁵⁴ It is unlikely that the consignee will trigger art 43 if it merely makes enquiries from the carrier’s agents as to the whereabouts of the goods; or even, it would seem, though this is less clear, if it asks to be supplied with samples from the goods.

²⁵⁵ See the definition of ‘contract of carriage’ in art 1.1. Cf art 12.2 on the period of responsibility of the carrier, which may end when the carrier is obliged to hand over the goods to ‘an authority or other third party’.

²⁵⁶ Art 12.1.

²⁵⁷ Art 43.

²⁵⁸ See, eg, Conlinebill 2016, above, para 3.12.

²⁵⁹ Conlinebill 2016, cl 9(e) provides that: ‘The Merchant or his Agent shall take delivery of the cargo as fast as the Vessel can discharge including, if required by the Carrier, outside ordinary working hours notwithstanding any custom of the port.’ Cf MSC Bill of Lading Standard Terms & Conditions, cl 20.2 (‘… within the time provided for in the Carrier’s applicable Tariff or as otherwise agreed’); Bill of Lading CMA CGM Terms and Conditions, cl 11(2); Maersk Terms for Carriage, cl 22.2.

²⁶⁰ Art 43.

²⁶¹ Charles Debattista, ‘Delivery of the Goods’ in Yvonne Baatz et al, The Rotterdam Rules: A Practical Annotation (Informa 2010), para 44-02.

²⁶² As to the effect of such statements, see above, para 6.16.

²⁶³ ie, art 47 of the Rules.

²⁶⁴ Report of the United Nations Commission on International Trade Law (General Assembly, New York, 16 June–3 July 2008, A/63/17), para 146.

²⁶⁵ See the definition in art 1.15 of the Rules.

²⁶⁶ See the discussion below, para 13.29.

²⁶⁷ This provision contains a definition of ‘holder’.

²⁶⁸ Typically, this is required of someone who obtains a sea waybill. See above, para 4.08.

²⁶⁹ See, Časlav Pejović, ‘Article 47(2) of the Rotterdam Rules: The Solution of Old Problems or a New Confusion?’ in Jürgen Basedow et al, The Hamburg Lectures on Maritime Affairs 2011-2013 (Springer 2015) 177.

²⁷⁰ See the definition of ‘documentary shipper’ in art 1.9.

²⁷¹ See Anthony Diamond QC, ‘The Rotterdam Rules’ [2009] LMCLQ 445, 519.

²⁷² See the rather unhelpful definition of this term at art 1.16 (and art 1.20 for electronic transport records).

²⁷³ See G J van der Ziel, ‘Delivery of goods, rights of the controlling party and transfer of rights’ in D Rhidian Thomas (ed), A New Convention for the Carriage of Goods by Sea—The Rotterdam Rules (Lawtext 2009) 242, 255.

²⁷⁴ See above, para 10.45.

²⁷⁵ ie, the person who, pursuant to art 51 of the Rules, is entitled to exercise the ‘right of control’: see art 1.13.

²⁷⁶ See art 1.8.

²⁷⁷ See above, para 10.49.

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Part II Bills of Lading and Other Documents of Carriage, 10 The Carriers’ Delivery Obligation

From: Carriage of Goods by Sea (3rd Edition)

Stephen Girvin

(p. 207) 10 The Carriers’ Delivery Obligation

A. Background

Overview

B. Delivery to the Person Entitled

The presentation rule

Delivery and discharge

Effect of delivery absent notice to the contrary

Interpleading (‘stakeholder applications’)

No obligation to deliver without the bills of lading

Telex release by email

Circumventing the presentation rule

C. Delivery Against Fraudulent Bills of Lading

Fraud in the carriage of goods by sea

Forgeries

Forged pin codes

Responses to fraud

D. Delivery and Exclusionary Terms

Express clauses

Sze Hai Tong Bank

Approach confirmed

The MSC Amsterdam

Exemption by clear wording

E. Delivery and Custom

Custom proved

Approach confirmed

F. Delivery and Straight Bills of Lading

Earlier authorities

Older commonwealth cases

Voss v APL Co Pte Ltd

Approach followed

Views applied

Evaluation

(p. 223) G. Delivery and Sea Waybills

Presentation rule not applicable

H. Delivery Against Letters of Indemnity

The background

Legal status

Insurance cover

Form of indemnity

Named parties and delivery party

Amended wording

Delivery

Provision of security following arrest

Security

Enforceability

No obligation to deliver against an indemnity

I. Consequences of Failure to Take Delivery

Delivery in a reasonable time

Failure to take delivery

Bill of lading clauses

J. Consequences of Misdelivery

Generally

Claim in contract

Conversion

K. Delivery under the Rotterdam Rules

Introduction

Acceptance of delivery by the consignee

Acknowledgement of receipt

Delivery against a negotiable transport document

Negotiable document not requiring surrender

Delivery and non-negotiable transport documents

Delivery and non-negotiable documents requiring surrender

Goods remaining undelivered

Carriers’ rights where goods undelivered

Liability of the carrier

Footnotes:

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