#17371 - Bills Of Lading 1 - Shipping and International Trade

BILLS OF LADING (1)

((i) As Evidence of Contract or Contract (ii) As Receipt)

SUMMARY

• NOTE: A substantial part of this topic is about the evidential value of a B/L -> extent to which a carrier is bound by statements in the B/L, whether vis-à-vis the original shipper, or a subsequent endorsee

B/L as Evidence of Contract or Contract

• As between the carrier and the original shipper?

  • B/L is merely evidence (The Ardennes)

    • They made an oral contract to ship straight to London

    • But the B/L, when drawn up, permitted deviations

    • Court held they were BOUND by the oral contract -> B/L only evidenced the CoC

  • Although NOTE: the carrier can still try and argue that the subsequent B/L was a variation to the original oral CoC

    • But then he’d have to make out the elements for variation: consideration, intention etc

• As between the carrier and an indorsee?

  • B/L contains the contract of carriage (Leduc v Ward)

    • Almost the exact reversal of Ardennes, the carrier tried to rely on the original CoC to argue for deviations, but this was rejected, since the B/L contained the CoC vis-à-vis the endorsee

• Does COGSA alter the law on this point?

  • No, although s5(1)(a) is poorly drafted and looks as though it does

TWE is a carrier bound to the original shipper/indorsee by a false statement in the B/L

• <Most important question for this week>

• Two possible routes:

  • 1) Common law

    • Arguing estoppel by representation -> being bound by a statement of fact

  • 2) Statutory

    • Arts 3(3) and 3(4) HV

      • B/L is prima facie evidence of receipt by the carrier of the goods for the shipper

      • For a third party, it becomes conclusive evidence

      • Art 3(3) states what the shipper can demand from the carrier

      • But it does not limit what sort of binding statements can be made by the carrier

      • Otherwise 3(3) would have cut down a lot of the value of a B/L

      • Q: Must the B/L be issued in response to a demand then?

      • A: In the Martha K, the Court considered it would be ridiculous if the protections didn’t apply just because the carrier proactively issued the B/L as opposed to doing it in response to a demand

    • S4 COGSA

      • A bill of lading which—

      • (a)represents goods to have been shipped on board a vessel or to have been received for shipment on board a vessel; and

      • (b)has been signed by the master of the vessel or by a person who was not the master but had the express, implied or apparent authority of the carrier to sign bills of lading,

      • shall, in favour of a person who has become the lawful holder of the bill, be conclusive evidence against the carrier of the shipment of the goods or, as the case may be, of their receipt for shipment.

      • NOTE: only applies to third parties, not the original shipper

• NOTE: Always consider S4 first in a Problem QUestion!

1. The fact that the goods were shipped

• Original shipper

  • Common law (estoppel by representation)? NO

    • 1) Master has no authority to bind the carrier by the statement that goods were shipped (Grant v Norway)

    • 2) If no contract was made when booking shipping space, and goods weren’t even loaded, then there is no contract of carriage (Heskell problem)

      • If there is no contract of carriage, then this would be using estoppel as a sword, which is not allowed in English law

    • 3) Also hard to prove reliance

      • The shipper is on the ground, he should know whether the goods were shipped or not!

  • Statutory argument? NO

    • 1) Art 3(4) only makes the B/L prima facie evidence of receipt of the goods by the carrier for the original shipper, which is the original position anyway

    • 2) S4 COGSA only applies to subsequent lawful holders of the B/L (i.e. not the original shipper)

• Indorsee

  • Common law (estoppel by representation)? NO

  • Statutory argument? YES

    • 1) Art 3(4) HV applies -> but only if the H-V rules apply

      • If there is no contract of carriage, then H-V rules cannot apply

    • 2) S4 COGA should apply

      • Treitel has argued that S4 refers to a “carrier”, and you can’t have a carrier without a contract of carriage

      • But Peel: S4 was intended to get around the Heskell problem, so it would be odd if it were limited by the Heskell problem

2. The quantity of goods shipped (where some of the goods were shipped)

• Original shipper

  • Common law? NO

    • 1) Grant v Norway problem

    • 2) Reliance problem

  • Statutory argument? NO

    • Same as in (a)

• Indorsee

  • Common law? NO

    • Grant v Norway

  • Statutory argument? YES

    • If at least some goods were shipped, there is no Heskell problem

3. The mercantile quality of goods shipped

• NOTE: quality -> inherent quality (e.g. Grade 1 Argentinian beef)

  • Distinguish this from condition, Grade 1 beef that has spoilt is still Grade 1

• Original shipper

  • Common law? NO

    • Captain has no authority to bind shipowners as to quality of goods (Cox v Bruce)

  • Statutory argument? NO

    • Same as (a)

• Indorsee

  • Common law? NO

    • Same as above, Cox v Bruce

  • Statutory argument? NO

    • You cannot make statements as to quality binding against the carrier, because quality is simply not for the carrier to attest to!

    • Even if you could make the statement binding, there would be no cause of action!

    • Your cause of action would be against the seller for supplying you grade 2 beef instead of grade 1

    • It’s not anything the carrier has done that changed your beef from grade 1 to grade 2!

4. The identification marks on the goods shipped

• What is an identification mark?

  • Could be either (a) statement that the goods were shipped or (b) statement as to quantity!

  • Imagine a stamp saying “500 tons of Argentinian beef” and it’s actually pork instead!

    • Identification mark would be statement goods were shipped

  • Imagine stamp says “500 tons of beef” but only 200 tons were shipped

    • Identification mark would be statement of quantity

• Figure out what statement it is -> follow the analysis

  • For both (a) and (b), common law arguments will fail due to Grant v Norway problem

5. The “apparent order and condition” of the goods at the time of shipment

• Original shipper

  • Common law? YES

    • Compania Naviera v Churchill

  • Statutory argument? NO

• Indorsee

  • Common law? YES

    • Compania Naviera v Churchill

  • Statutory argument? PARTLY

    • 1) Can use Art 3(4)

    • 2) But cannot use S4 COGSA -> S4 only applies to the fact of shipment and quantity

• Does carrier have to issue a statement saying “goods in apparent good order and condition”?

  • NO

  • If goods do not even appear to be in apparent good order and condition, he can just say so!

  • But he has to be reasonably precise, has to specify the extent to which they were in apparent good order and condition

Are the rules different if the shipper/indorsee sues the carrier for tortious misrepresentation?

• Three possible grounds of suit: (i) tort of deceit, (ii) negligent misrepresentation, (iii) s2(1) MA

• But s2(1) MA will not work here

  • It only allows you to sue where you enter into a contract in reliance

  • If you’re a shipper, you’re already in a contract with the carrier

  • If you’re an endorsee, you’re saying you relied on a statement in entering into a contract with the seller

    • And then you acquire rights under the contract of carriage, but that won’t suffice for s2(1) MA

• Tort of deceit

  • You get your reliance remedies (as if you’d never entered into the contract)

  • See The Saudi Crown

    • What was the misleading statement in the Saudi Crown?

    • Date of shipment

• If you turn it into a statement that the goods were shipped, could you bring a claim in misrepresentation?

  • NO -> Grant v Norway

  • If master has no authority to bind the shipowner, hard to see how the shipowner can be liable in misrepresentation (no representation)

Are disclaimers by the carrier, e.g. “shippers’ load and count” effective?

• E.g. “weight unknown” “said to contain”

• What is the carrier trying to do here?

  • He’s trying to basically say “I didn’t make this representation”

• Shipper in The Mata K tried to argue that the “weight unknown” clause was invalid under Art III R8

  • But this argument failed

  • The point is that Art III R8 only applies too statements that “have the effect of relieving the carrier from such a liability or lessening such liability”

  • Whereas statements like “weight unknown” only have evidential value typically

• “Said to contain”

  • If carriers are going to rely on qualifying statements, not unreasonable for a shipper to say “well you should be clear when you’re employing a qualifying statement”

  • “Stc” was the subject of ambiguity in River Gurara

    • Phillips LJ thought it arguable that “Stc” just means “I’ve been told this, and I’m passing along what I’ve been told”

  • “Stc” was also present in Kyokuyo, but no one in that case argued that it was a qualifying statement!

    • No one seemed concerned about it at all! Odd

• Policy

  • From a policy perspective, in a world of container transport, how can you know what’s in the container

  • Desirable for carriers to protect themselves via qualifying statements

Remedies against the (a) master of the ship or (b) seller of the goods

1. Master

• Can sue for breach of implied warranty of authority (Rasnoimport)

  • But might you have a Heskell problem?

    • YES!

    • Your remedy -> is to be put in the position had the contract been performed -> i.e. if the agent HAD the authority

    • But if you have no contract of carriage, even if the agent had the authority, then you would have had no remedy against the shipowner!

  • Another problem: S4 COGSA

    • Master might rely on S4 COGSA to argue that you nevertheless have a claim against the carrier!

    • So you’ve not lost anything -> master is no longer liable

2. Seller

• Claim in relation to the goods themselves

  • ...