BMLA Response to the CMI Questionnaire

British Maritime Law Association

Response to Questionnaire

Prepared by CMI Working Group

on Issues of Transport Law

Acknowledgement

I wish to acknowledge the valuable contribution made to this response by the following members of Essex Court Chambers:

Miss Claire Blanchard

Mr Ricky Diwan

Mr Nigel Eaton

Mr David Foxton

Miss Philippa Hopkins

Mr Paul Key

Mr John Lockey

Mr Nathan Pillow

Mr John Snider

I am also grateful to those who read a draft of this response and made comments on it. These included Mr Peter Morgan, Professor Francis Reynolds QC and Mr Andrew Taylor.

Anthony Diamond QC

Chairman

BMLA Standing Committee on Carriage of Goods

30 September 1999

[COMMENT1] 1. Obligations of the Carrier

1.1 Receipt of the Goods

Question 1.1.1

Does the period of the Carrier's responsibility for the goods under your national law commence at the same moment as delivery by the seller under a contract of sale on "shipment terms"?

In English law the period of the Carrier’s responsibility for the goods does not necessarily commence at the same moment as delivery by the seller to the buyer under the contract of sale. The contract of carriage and the contract of sale are two distinct and separate contracts; normally the parties to the two contracts are not the same. The terms of one contract will therefore have little if any relevance to the proper construction of the other contract. The moment when the transfer of risk takes place as between seller and buyer will be governed by the contract of sale. The commencement of the carrier’s responsibility for the goods will depend on the terms of the contract of carriage and will also depend in large measure on the question at what precise time the goods were in fact delivered into the possession of the carrier or the carrier’s servants or agents at the place where the transit began.

A contract on “shipment terms” is understood to mean a contract of sale under whose terms the transfer of risk (though not necessarily of property) takes place when the goods are placed on board ship at the port of shipment. Under English law, the fact that the transfer of risk under the relevant contract takes place on shipment does not involve that “delivery” of the goods takes place at that stage. There is no rule in English law that risk passes on delivery and the meaning of “delivery” in CIF and FOB contracts cannot easily be stated.

Under English law, assuming INCOTERMS are not incorporated into the sale contract, FOB, CIF and C&F contracts are all examples of contracts “on shipment terms”. In all three cases the risk of loss or damage passes to the buyer on shipment though under many FOB contracts and most CIF and C&F contracts the property will not pass until later. Where INCOTERMS are incorporated into the contract those terms expressly provide for each type of contract (namely for FOB, CIF and CFR contracts) that the transfer of risk is to take place when the goods “pass the ship’s rail” at the port of shipment.

Traditionally loading was the joint responsibility of shipper and shipowner and it was the duty of the former at his risk and expense to bring the cargo alongside and to lift it to the ship’s rail and of the shipowner thereafter to receive and stow the cargo.^[1] Nowadays, however, there are a wide variety of different practices in different trades and ports under which goods may be delivered into the possession of the sea carrier at an earlier or later stage and under which one or other party may undertake the obligation to receive load and stow the cargo. Thus it is not uncommon in many liner trades for goods to be delivered by the seller to the sea carrier or his agents before the goods are taken on board ship or even before the ship has arrived at the loading port. In other circumstances a shipper or charterer may undertake to load and stow the goods so that his obligations include that part of the loading and stowing operation that takes place after the goods have passed the ship’s rail.

As an overall generalisation one can say (as noted in para 16 of the introduction to INCOTERMS, 1990) that there is a lack of “synchronisation” between the commencement of the Carrier’s responsibility under the contract of carriage and the passing of risk from seller to buyer under a contract of sale. It was the perceived lack of synchronisation that led to the introduction of sale contracts on FCA, CPT and CIP terms.

Question 1.1.2

Is it desirable that the moment of delivery both under the contract of sale and the contract of carriage should coincide?

In an ideal world the answer to this question might perhaps be “Yes”. But any considered answer to this question should take commercial realities into account. One of the factors bearing on this question is the desire of many buyers and banks to obtain clean on-board bills of lading for the goods they have purchased or on which they are to make an advance. To satisfy this requirement the seller must tender clean bills of lading with the result that if the goods have been lost or damaged while in the custody of the carrier or the carrier’s agents before shipment the seller may have to replace the damaged goods with sound goods so as to be in a position to require the carrier to issue a clean on-board bill of lading.

It thus can make good commercial sense for the parties to enter into a sale contract on “shipment terms” even if the goods are to be delivered to the sea carrier or his agents before the goods are taken on board ship.

The lack of “synchronisation” noted in the introduction to INCOTERMS has not in English law, caused any difficulty in practice. While it would be neater if the moment of delivery both under the contract of sale and the contract of carriage could be made to coincide it is thought that commercial parties must be left to determine for themselves the moment of time at which the transfer of risk is to take place. Many different considerations can play a part and for this reason it is considered impracticable to lay down any general rule to ensure that the moment at which risk passes under the two contracts is made to coincide.

Question 1.1.3

Does the expression “liner terms” or a FIO(S) (free in and out (stowed)) clause define the scope of the contract of carriage and the moment of delivery to the Carrier?

The expression “liner terms” is commonly found in shipping documents and is usually understood to mean that the shipowner undertakes to arrange and bear the cost of loading (at least from the ship’s rail) and of discharge (at least to the ship’s rail). In a recent case dealing with the cost of discharge, the Court said:

“Whilst this (“liner terms”) is not a term of art, and its precise meaning may vary from case to case, its general meaning is clear. The shipowner undertakes both to load and to discharge the goods and to bear the cost of doing so. He may undertake responsibility also, and the question will arise in particular cases whether his undertaking, as regards either risk or expense, or both, in the case of discharge, extends beyond the ship’s rail until the goods are loaded and delivered ashore. Thus, a current dictionary definition:

Liner Terms Qualification to a freight rate which signifies that it consists of the ocean carriage and the cost of cargo handling at the loading and discharging ports according to the custom of those ports. This varies widely from country to country and, within countries, from port to port: in some ports, the freight excludes all cargo handling costs while in others the cost of handling between the hold and the ship’s rail or quay is included. [The Marine Encyclopedic Dictionary by Eric Sullivan, FICS (1992)]

‘Liner terms’ therefore means always that the shipowner undertakes to arrange and to bear the costs of discharge, at least to the ship’s rail”.^[2]

The meaning FIO(S) (free in and out (stowed)) is in a sense, the converse of “liner terms”. It means that the cargo owner, shipper or charterer is to bear the cost to the shipowner of loading, stowing and discharging the cargo, including that part of those operations which take place on board ship. There are however a wide variety of clauses which can be called FIO(S) clauses. The expression “FIO(S)” is commonly found in shipping documents and where it stands alone without further definition its effect is probably confined to dealing with the cost of loading, stowing and discharging the cargo, as opposed to dealing with which party is to arrange for those operations or to assume the risks involved in them.

There have been many reported cases^[3] dealing with the question whether, under the words of particular contracts, the parties have effectively transferred from owners to shippers or charterers the duty to load, stow and discharge the cargo (so that, for example, the charterers are made liable for the consequences of bad stowage) or whether the contract deals only with the question which party is to bear the relevant costs.

A “Liner Terms” or FIO(S) clause may be relevant to the question at what moment the carrier’s responsibility for the goods commences but this is very much dependent on the wording of the particular clause. Such terms standing alone normally deal only with which party is to bear the relevant costs and in such a case they do not define the scope of the contract of carriage or the moment of delivery to the carrier. If the FIO(S) clause goes further and places the whole responsibility and risk of the loading and stowage operation on the shipper it is possible that the stevedores who perform those operations may be treated as the shipper’s agents; if so, delivery to the carrier would be held to occur when the stevedores place the cargo in the ship’s holds. Conversely if, under a particular clause the carrier undertakes the whole responsibility and risk of loading the cargo (both before and after ship’s rail) it will be clear that delivery to the shipowner takes place no later than the stage when the goods are taken up by the stevedores at the commencement of loading.

1.2 Inspection of the Goods and Statements in the Bill of Lading

Before dealing with Questions 1.2.1 to 1.2.6 it should be mentioned that there have so far been comparatively few reported English decisions on the effect of Art III Rule 3 of the Hague Rules and the Hague Visby Rules. This may be due, in part, to the fact that, until the introduction of the Hague Visby Rules the particulars inserted in a bill of lading pursuant to the article were only “prima facie evidence of the receipt by the carrier of the goods as therein described”^[4] and there was no conclusive evidence clause. Partly it may be due to the construction placed on Art. III Rule 3 in a number of cases^[5] that the obligation to issue a bill of lading containing the particulars required by the article arises only “on demand of the shipper” and that simply requesting a bill of lading does not carry with it an implied request that the bill shall contain all the information set out in the article. It has been held that Art. III Rule 3(c) imposes an unqualified or “absolute” duty on the carrier to make an accurate statement of fact as to the apparent order and condition of the goods. The duty is not merely one which the shipowner or master must take reasonable care to perform.^[6]

Question 1.2.1

Under your national law in what circumstances would it be held that the Carrier had reasonable grounds for suspicion that the information given by the shipper was inaccurate?

There is no English authority on the point and it is thought that it would be a question of fact in each case whether the carrier can rely on the proviso. In considering whether a master had “reasonable grounds” for suspecting the particulars not accurately to represent the goods, a Court would probably apply the standard of a reasonably competent master. In one case, where a master refused to sign bills of lading containing figures at variance with the ship’s figures the Court held that he had behaved reasonably in so doing.^[7]

Question 1.2.2

In what circumstances would it be held that the carrier had no reasonable means of checking the particulars furnished by the shipper?

There is again no reported case where a shipper has requested that a bill of lading be issued containing certain particulars specified in Art. III Rule 3 and where the carrier has refused on the ground that he had “no reasonable means of checking” those particulars. It is thought that it would be a question of fact in each case whether the carrier can rely on the proviso. Where packages are stuffed in a sealed container the carrier would normally have no means of checking the numbers or characteristics of those packages.

Question 1.2.3

What is the meaning of “apparent”?

A representation that cargo was shipped in apparent good order and condition constitutes an admission as against the shipowner that the goods were shipped externally to all appearances in good condition. The words constitute no admission as to the internal condition of the goods, or as to their quality.^[8]

In the case of perishable goods, apparent good order and condition includes apparent ability to withstand ordinary methods of transport.^[9]

The Court applies the test whether a Master or Chief Officer having a reasonable degree of skill and expertise, would regard the goods as being externally to all appearances in good condition. Since only external condition is in question a Master has no obligation or right to open packages to inspect their internal condition or quality.

Question 1.2.4

What is the legal effect of clauses such as: “shipper’s load and count”, “said (by shipper) to contain”, “particulars provided by shipper” and “weight (etc) unknown”?

Clauses such as these give rise to considerable difficulty in view of the terms of Art. III Rule 3 which oblige the carrier “on demand of the shipper” to issue a bill of lading containing certain particulars of the goods, as furnished in writing by the shipper, unless the proviso applies.

At common law, where the statement of the amount or quantity of the goods in the bill of lading is qualified by such words as “weight or quantity unknown” the bill of lading is not even prima facie evidence against the shipowner of the amount or quantity shipped provided that such amount or quantity is not drastically at odds with the quantity actually loaded^[10] and the onus is on the cargo-owner of proving what in fact was shipped.^[11]

Where the shipper has demanded a bill of lading showing the number of packages or pieces, or the quantity or the weight as provided by him in writing the carrier is bound under Art. III Rule 3 to issue a bill of lading showing one of these matters. The obligation is alternative. Therefore if the carrier issues a bill of lading showing both the number of pieces and the weight, he may qualify the statement as to weight, e.g. by the words “weight unknown”. Such a bill of lading will then be prima facie evidence of the number of pieces but not of the weight.^[12]

There remain difficulties in English law as regards the effect of including a qualification such as “weight unknown” in a bill of lading in circumstances where a bill of lading stating “weight unknown” would not comply with the requirements of Art. III Rule 3. It is possible that if there were evidence before the Court that the shipper had requested an unqualified statement as to the number of packages or pieces or the quantity or weight of the goods in circumstances where he was entitled to such a statement under Art. III Rule 3, a qualification such as “weight (etc) unknown” might be held to be ineffective. There has been no such evidence in any of the cases which have so far come before the Courts and, as noted above,^[13] it has been held that simply requesting a bill of lading does not carry with it an implied request that the bill shall contain all the information set out in the article.

A distinction must be drawn between “weight (etc) unknown” and the other qualifications mentioned in the question such as “shipper’s load and count”, “said by shipper to contain” and “particulars provided by shipper”. The effect of the latter clauses is far less certain since it may be held in an appropriate case that by signing the bill of lading the Master has impliedly accepted the shipper’s particulars or figures. A container packed by the shipper is usually acknowledged as “one container in apparent good order and condition said to contain (the contents) as declared by the shipper”. An acknowledgement in this form does not it is thought, constitute conclusive evidence as to the condition or description of the contents in favour of an indorse of the bill of lading.^[14]

The questionnaire requests that, in dealing with the qualifications, the position both as between the Carrier and the shipper and the Carrier and subsequent holders of the bill of lading should be considered. Where a bill of lading contains the qualification “weight unknown” and there is no evidence before the Court that the shipper had requested an unqualified statement as to the weight of the goods or the proviso to Art. III Rule 3 applies, then (a) the bill will not be prima facie evidence of the weight of the goods shipped (provided, at any rate that the weight is not drastically at odds with the weight actually shipped) and both the shipper and any subsequent holder of the bill of lading will have the onus of proving the weight which in fact was shipped and (b) where the bill of lading has been transferred to a third party acting in good faith no estoppel can arise by reason of Art. III Rule 4 of the Hague Visby Rules. It is not logically possible to envisage a case where an estoppel can arise in respect of any particulars set out in a bill which are qualified by an effective reservation such as “weight (etc) unknown”. It is thought that the same would apply under Art. 16.3 (b) of the Hamburg Rules.

Question 1.2.5

Do you consider that the conclusive evidence rules (Hague-Visby Rules Art. III Rule 4; Hamburg Rules Art. 16 Rule 3; CMI Uniform Rules for Sea Waybills Rule 5(ii)(b)) should be maintained/introduced as regards marks, the number, quantity or weight as furnished by the shipper, and the apparent order and condition of the goods?”

It is considered that there are defects both in Art. III Rule 3 of the Hague Rules and Art. 15 of the Hamburg Rules. The former does not deal sufficiently with the effect of reservations such as “weight etc unknown” and the circumstances in which they are to be effective; the latter extends the required particulars to be included in the bill to an unnecessary extent; for example, the carrier is required to specify both the number of packages or pieces and “the weight of the goods or their quantity otherwise expressed”. It is considered that the conclusive evidence rules should be limited to particulars of the goods which would be apparent on a reasonable external examination of the goods. To go further and to require particulars of weight to be stated in the circumstances where it is not customary to weigh the goods at the time of shipment is to invite unnecessary litigation as to the effect of reservations inserted by the shipowner and to risk making a shipowner liable for matters over which he has no control.

More generally, it is considered that the provisions of both the Hague Visby Rules and the Hamburg Rules fulfil a useful commercial function in supporting the function of a bill of lading as a receipt for the goods and in excluding or limiting the right of shipowners to resile from clear statements in the bill of lading where a third party has relied on the accuracy of the bill of lading, usually by paying for the goods shipped.

It is considered that Art. 16 Rule 3 of the Hamburg Rules constitutes an improvement over Art. III Rule 4 of the Hague Visby Rules in one respect; namely in requiring reliance on the description of the goods set out in the bill of lading as a condition for the carrier being deprived of the right to prove that the statement was inaccurate. Art. III Rule 4 of the Hague Visby Rules requires that the third party must have been acting in good faith but does not prescribe that the transferee must have relied on the statements in the bill when accepting the transfer.

It is considered that these or similar provisions (suitably amended) should be maintained for situations where negotiable bills of lading are issued and that they should be extended to cases where the contract of carriage is covered by a sea waybill so that the conclusive evidence clause would be available to a third party consignee who could show that in good faith he had acted in reliance on the description of the goods set out in the waybill. The position where no transport document is issued requires further study. There could be a case for introducing conclusive evidence rules where no transport document as such has been issued but where the contract of carriage is evidenced by electronic means, provided however that the clause should not operate unless a third party has acted in good faith in reliance on the description of the goods given by the carrier.

Question 1.2.6

Under your national law do the conclusive evidence rules benefit a fob buyer?

The answer to this question depends on whether the fob buyer was the original party to the contract of carriage or the bill has been transferred to him as “a third party acting in good faith” (Art. III Rule 4 of the Hague Visby Rules).

If the fob buyer is named in the transport document as the shipper this will usually be because he was the original party to the contract with the carrier so that the conclusive evidence clause will not benefit him.

If however the fob seller is named as the shipper, it is possible that the bill may have been transferred to the fob buyer on payment of the price of the goods. Under English law an unpaid vendor may take a bill of lading making the goods deliverable to his order and if he takes a bill in this form and not as agent for, or on behalf of, the purchaser, he thereby reserves to himself the power of disposing of the goods^[15] (the ius dispondendi); in these circumstances the property in the goods will not pass to the fob buyer on shipment but only when he pays or tenders the price against delivery of an indorsed bill of lading. If therefore the bill is taken to the order of the fob seller and is subsequently indorsed to the fob buyer the latter will probably be able to rely on the conclusive evidence clause in Art. III Rule 4.

If the fob buyer is shown in the bill of lading as the named consignee it may still be possible that the power of disposing of the goods was, on the facts, reserved by the seller so that in these circumstances, too, the fob buyer may be able to show that the bill of lading was transferred to him as a third party acting in good faith. But where the buyer is shown as the named consignee it might be held that the shipper took the bill on behalf of the buyer (the purchaser) or as his agent. This is far less likely if the bill was made out to the order of the seller.

1.3 Delivery of the Goods at Destination

Question 1.3.1

Does the period of the Carrier's responsibility for the goods under your national law end at the same moment as delivery to the buyer under a contract of sale on “delivered” terms?

In English law, the time at which the goods are deemed to have been delivered under the contract of sale and the time at which the carrier is released from responsibility for the goods under the contract of carriage do not necessarily coincide. The contract of sale and the contract of carriage are two quite distinct contracts (which are likely to have been made between different parties), and it is the contract of carriage which determines when the carrier’s responsibility ends.

The Hague-Visby Rules,^[16] as they have been interpreted by the English courts, do not provide an answer to the question, “when does the carrier’s responsibility for the goods end?” A literal reading of Art. III Rule 2^[17] might suggest that the carrier is under an obligation to discharge the goods from the vessel, such that the carrier’s responsibility for the goods cannot end before discharge is completed. However, the English courts have rejected the literal construction in favour of the view that the Rules do not define the scope of the carrier’s obligations, they only determine the manner in which the obligations must be performed: the scope of the carrier’s obligations (including when they begin and end) is a matter which the parties are free to determine by their own contract.^[18] Accordingly, the terms of the sea waybill or bill of lading represent the starting point for determining when the carrier’s responsibility ends.

Many bills of lading contain clauses which make express provision for when the carrier’s responsibility for the goods shall end.^[19] Consistent with the principle that the parties themselves are free to determine the scope of the carrier’s obligations, the Court will generally give effect to such a clause^[20] according to its terms.^[21] Plainly the effect of such a clause (depending upon its terms) may be that the carrier is released from responsibility for the goods before there is any delivery to the buyer or other consignee.^[22] But if the clause purports to relieve the carrier from liability for loss of or damage to the goods arising from a negligent act occurring in the course of discharge (as opposed to defining the scope of the carrier’s obligation to discharge the ship) the clause may be held to be invalidated by Act III Rule 8 of the Hague-Visby Rules.

Absent any express clause, the point at which the carrier’s responsibility for the goods ends falls to be determined by reference to common law principles governing the bill of lading. At common law, the carrier’s obligations under the bill of lading are discharged by performance (and thus the carrier’s responsibility for the goods ends) when the goods are delivered to the consignee entitled to receive them under the bill of lading contract.^[23] “Delivery” in this context involves placing the goods completely under the control of the consignee.^[24]

The precise moment at which the goods will be taken to have been placed under the control of the consignee will depend on the facts of each case, and, in particular, on how the goods are discharged. Delivery to the consignee’s agent is equivalent to the consignee itself.^[25] Accordingly, in the typical case where the goods are discharged by stevedores, the carrier will be released as the goods are discharged if the stevedores are (as between carrier and consignee) to be treated as the consignee’s agents. On the other hand, if the goods are discharged by the carrier’s agents, then there will be no delivery until the goods are released to the consignee.^[26]

In determining whether or not the stevedores are the consignee’s agents, the terms of the sea waybill or bill of lading again represent the starting point. The bill may state expressly that the stevedores are the consignee’s agents. Alternatively, the stevedores will be treated as the consignee’s agents if the terms of the bill make the consignee responsible for discharge.

If the bill is silent as to the position of the stevedores or as to responsibility for discharge, it may be necessary to ask whether, on the facts, the stevedores who handled the cargo were the servants or agents of the carrier or of the consignee. Relevant factors would include who appointed and paid the stevedores and whether they acted under a contract made by the carrier or the consignee. In one case, where it was customary for discharge to be effected by the dock company’s servants at the quay it was held, in the context of a claim for demurrage, that the stevedores were ^[27]the carrier’s agents for the purposes of bringing the cargo out of the hold, but thereafter became the consignee’s agents for the completion of discharge^[28].

Accordingly, the moment at which delivery takes place under a bill of lading varies depending upon the terms of the bill of lading and the facts of the case. Thus, in any individual case, the moment of delivery will not necessarily coincide with the moment of delivery under a contract of sale on “delivered terms”.

Question 1.3.2

Does a FIO clause define the scope of the contract in this respect?

An FIO clause may be relevant to the question at what moment the carrier’s responsibility ends but this is very much dependent on the wording of the particular clause. As explained earlier (see the answer to Question 1.1.3) the expression FIO, standing alone, has the limited effect of providing that the shipper or consignee shall pay the cost to the shipowner of loading and discharging the cargo. A clause in that limited form cannot affect the question where the carrier’s responsibility ends. If the clause goes further and provides that the consignee undertakes the obligation to discharge the cargo, it is possible that the stevedores who perform the discharge may be treated as the consignee’s agents; if so, delivery may be held to occur when the stevedores take up the cargo in the ship’s holds.

Question 1.3.3

Is the co-operation of the consignee/bill of lading holder necessary to complete delivery?

There is scant authority on this point in English law.

It may be argued that, conceptually, delivery is a bilateral process: the carrier must release the goods to the consignee, but equally the consignee must receive them, and there can be no delivery (and thus no end to the carrier’s responsibility) unless and until the consignee does receive them.

Further, it is settled that the carrier does not fulfil the obligation to deliver simply by discharging the goods on arrival at the discharge port and leaving them in a place from which the consignee may collect them. The consignee must be given a reasonable opportunity to collect the goods. If the goods are lost or damaged after arrival but before the consignee has had reasonable opportunity to collect them, then the carrier remains liable.^[29]

What happens however if the carrier does afford the consignee a reasonable period to collect the goods, but the consignee refuses or fails to do so? Does the carrier cease to be responsible for the goods at the end of the reasonable period: in other words, is a tender of delivery sufficient to discharge the carrier’s obligations, whether or not the consignee accepts the tender?

There does not appear to be any English authority directly on point in the context of carriage of goods by sea. However, in a recent decision in a different context,^[30] there was held to be an implied term of a contract of bailment that the bailee’s responsibility for the goods would cease after the expiry of a reasonable time for their collection. A bill of lading contract is a contract of bailment, and application of this decision to bills of lading would suggest that the carrier who tenders goods for collection ceases, by virtue of an implied term, to be responsible for the goods if the consignee fails to collect them within a reasonable time.^[31] If so, then the carrier is able, by tendering the goods for delivery, to obtain a release from responsibility without the consignee’s co-operation.

Question 1.3.4

What are the carrier’s rights if the consignee (bill of lading holder) does not co-operate or refuses to receive the goods?

Under English law a consignee who is a bill of lading holder only incurs liability under the contract of carriage if he takes or demands delivery of the goods or makes a claim under the contract of carriage; see the answer to Question 2.2.1 (post). Assuming, however, that the consignee eventually takes or demands delivery and thus becomes liable under the contract, his failure to collect the goods within a reasonable period will constitute a breach of contract and render him liable to the carrier for damages. Accordingly, if the carrier keeps the goods aboard the vessel, and as a result the vessel is detained waiting for the consignee to come to collect them, the carrier may be entitled to recover demurrage, if the contract so provides or damages for detention in the absence of any provision for demurrage.^[32] But the carrier would be under a duty to mitigate his damages and in practice the cost and inconvenience involved in detaining the vessel may be such that the carrier’s reasonable course is to discharge the goods and store them ashore. In principle, (subject to the proviso mentioned above) the carrier’s storage costs should be recoverable from the consignee as damages for breach of contract.

1.4 Delivery of the Goods Without Surrender of the Bill of Lading

Question 1.4.1

Under your national law what are the rights of the holder as regards the goods after delivery to the person entitled to the goods under the contract of sale?

Under English law a bill of lading is a document of title to goods in a rather special sense. It acts as a kind of transferable “key to the warehouse”^[33] and is thus a symbol of constructive possession of the goods. A bill of lading may also be used as part of the mechanism whereby the property in goods is transferred from a seller to a buyer or whereby a pledge of the goods is conferred on a lender but in such cases the transfer of the bill passes only such property or title to the goods as was intended to pass under the underlying contract of sale or pledge.^[34]

Once the shipowner has delivered the goods to a person entitled to have them delivered to him a bill of lading in respect of those goods is extinguished as a document of title.^[35]