Completion of Multimodal Transport Bills of Lading - Points to Remember

by Paul Bugden (Hextalls)

The accurate completion of bills of lading generally (but in particular Multimodal bills) is a matter of considerable practical importance. Equally an understanding of why the boxes on bills of lading are there at all and the effect of their completion in different ways is very important. The recent East West v. Dampskibsselskabet AF, 1912 Aktieselskab (‘The Maersk Rotterdam’) case, of the English Court of Appeal demonstrates a number of interesting points in this respect.

Completion of the consignee receiver box

As a matter of English law the words "to order" after the consignee’s name are not strictly speaking necessary provided the bill of lading makes it clear elsewhere (as it almost invariably will by the printed terms on the front of the document) that delivery up is made to the holder rather than the named consignee. Nevertheless the position is not the same in all jurisdictions. In particular contrast the position as to so called "straight" bills of lading in the USA. It is therefore always wise to insert the words "to order" after the consignee’s name if only for the sake of clarity.

Some thought should also be given whether a bill of lading is necessary at all. It is commonly assumed (wrongly at least so far as English law is concerned) that there is no difference between a waybill and a straight, i.e. non-negotiable bill of lading. There is however a difference. A non-negotiable straight bill of lading (even if not capable of transferring rights to the holder and/or amounting to a document of title) still requires presentation, at least in the absence of any specific provision to the contrary. By contrast a party claiming delivery under a waybill merely needs to evidence that he is the party shown on the waybill as the person entitled to delivery in the document as the named consignee.

Completion of the consignor/shipper box

Where the contract of sale is on FOB terms the better practise is for the seller to insert his buyer’s name in this box rather than his own.

Correct identification of the carrier’s name

Most modern liner Multimodal bills of lading provide for the carrier to assume liability as a principal. In on-transport but so-called segmented bills, the land carrier and ocean carrier undertake responsibility only for the carriage they perform. In other bills, not uncommon in non-liner trades, the ocean carrier agrees to act only as an agent for on-carriage by land or inland waterway. When completing the bill of lading care should be taken to identify therefore what exactly the carrier(s) have accepted responsibility for. Similar comments apply very much to the signature of the bill of lading. It is also important (at least for the purposes of letters of credit issued under a contract of sale) that the bill of lading clearly identifies the carrier by its exact legal title rather than a mere trading style. Bills of lading which insufficiently identify the name or place of business of the carrier are to be avoided.

Completion of the place to place and port to port boxes

The place of receipt and place of delivery boxes should only be completed in cases where the bill is intended for Multimodal carriage. It is confusing to complete these boxes when the goods are to be delivered ex-ship at the port. The completion of these boxes in these circumstances can lead to unintended consequences. In the East West case the Court of Appeal held that completion of the place to place boxes by the carrier (even though the carriage was clearly port to port) meant that the carrier was unable to rely upon the post-discharge exclusion clauses which were by the bill of lading terms applicable only to port to port shipments.

Annotations and remarks on the bills of lading

It is well settled that not all such remarks e.g. those as to ‘weight quantity unknown’ are terms of the contract of carriage. Likewise remarks are commonly inserted in Multimodal bills of lading (and similarly on air waybills and CMR notes) for the benefit or attention of subsequent contractors in the distribution chain receiving the goods for which the carrier does not intend to assume responsibility. Such annotations should therefore be entered on the bill of lading (and read with) caution.

April 6, 2003