A bill of lading is a document issued by the Carrier to the Shipper as the receipt of cargo on board for the shipment. A B/L provides evidence that the carrier and shipper have entered into a contract of affreightment for the carriage of the said goods from the departure point to the arrival point.The master of the vessel needs to treat the Bill of Lading (PDF, 840kb) as a very important document due to its legal implications. While signing and issuing original Bs/L, he should take care that all potential contractual pitfalls are covered. Shipped Bs/L are signed on behalf of the carrier by the Master or by the agents of the carrying ship. However, when an agent signs a B/L on behalf of the Master, it could jeopardize the owners’ interest if due care is not exercised in doing so.
Comparison of Cargo Conventions
| 13.Limits of liability a. Goods lost or damaged | Art IV Rule 5 £100 per package or unit unless value declared and inserted in the B/L. The £100 limit per package has been held to amount to £100 gold value (see The Rosa S [1988] 2 Lloyd’s Rep. 574), often resulting in a higher limit than the Hague-Visby Rules limitation. | Art IV Rule 5 10,000 Poincare Francs per package or unit or 30 Poincare Francs per kilo of gross weight of damaged or lost goods whichever is higher. By virtue of SDR Protocol 1979 2 SDRs per kg or 666.67 SDRs per package. | 2.5 SDRs per kg or 835 SDRs per package or shipping unit. | Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $500 per package lawful money of the United States, or in cases of goods not shipped in packages, per customary freight unit or the equivalent of that sum in other currency, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the B/L. 46 U.S.C.A. § 1304 (5). | ||
| 13.Limits of Liability b. Goods delayed | No special provisions. | Art 6 2.5 x freight payable on goods delayed, subject to upper limit of total freight on all goods or amount of limitation if goods have been lost or destroyed under formula in (a) above. | No specific provision. | |||
| 14.Loss of right to limit liability | No special provisions. | Art IV Rule 5 (e) Right to limit lost if carrier intends to cause loss or is reckless knowing loss would probably result. | Art 8Carrier will only lose right to limit liability if he intended to cause loss or was reckless knowing such loss would probably result. Deck carriage where expressly prohibited will result in loss of right to limit liability. | No specificprovisions.Unreasonable deviation will oust limitation as a result of case law/precedent. | ||
| 15.Lower limits by agreement | Art VIOnly permitted where not an ordinary shipment, and reasonable in special circumstances. | No specific right to agree lower limits. | Not permitted. 46 U.S.C.A. § 1304 (5). | |||
| 16.Higher limits by agreement | Art VPermitted if recorded in the B/L. | Art 6.4 Art 15 Permitted if agreed. Should be recorded in the B/L. | Permitted if recorded in the B/L. 46 U.S.C.A. § 1305. | |||
| 17.Deviation | Deviating carrier might lose right to rely on defences in Rules and lose right to limit liability. Art IV Rule 4 provides “any deviation in saving or attempting to save life or property at sea, or any reasonable deviation shall not be deemed to be an infringement or breach of the Rules or contract of carriage.”. | No special provisions. Deviation if it causes loss is subject to general test of carrier’s liability (see 6 above). Art 5.6 exempts a carrier from liability where he attempts to save life or “ reasonable measures” are taken to save property. This would apply to deviation as much as any other cause of loss. | Similar to Hague Rules – Any deviation in saving or attempting to save life or property at sea, or any reasonable deviation shall not be deemed to be an infringement or breach of this chapter or of the contract of carriage, and the carrier shall not be liable for any loss or damage resulting therefrom. Provided however that if the deviation is for unloading cargo or passengers it shall, prima facie, be regarded as unreasonable. 46 U.S.C.A. § 1304 (4). | |||
| 18.What is the effect of statements in the bill? | Art III Rule 4. Prima facie evidence of their accuracy. | Art III Rule 4 Prima facie evidence in hands of shipper, conclusive in hands of third party, e.g. consignee to whom the B/L is transferred in good faith. | Art 16 Prima facie evidence of statement in hands of shipper (whether shipped or received B/L). Conclusive in hands of third party who relies on statements. However if freight is payable by holder of the B/L failure to state this is evidence that no freight is payable. | After receiving the goods into his charge the carrier, or the master or agent of the carrier, shall, on demand of the shipper, issue to the shipper a B/L showing among other things: a. The leading marks necessary for identification of the goods as the same are furnished in writing by the shipper before the loading of such goods starts, provided such marks are stamped or otherwise shown clearly upon the goods if uncovered, or on the cases or covering in which such goods are contained, in such a manner as should ordinarily remain legible until the end of the voyage. b. Either the number of packages or pieces, or the quantity or weight, as the case may be, as furnished in writing by the shipper. c. The apparent order and condition of the goods. Provided that no carrier, master, or agent of the carrier, shall be bound to state or show in the B/L any marks, number, quantity or weight which he has reasonable grounds for suspecting not accurately to represent the goods actually received, or which he has had no reasonable means of checking. 46 U.S.C.A. § 1303 (3) (a-c). | ||
| 19.What information must the bill contain? | Art III Rule 3 a. Leading marks necessary for identifying goods. b. Number of packages or pieces, or the quantity or weight as the case may be, as furnished by the shipper. | Art 15 a. The general nature of the goods, the leading marks necessary for identification of the goods, an express statement, if applicable, as to the dangerous character of the goods, the number of packages pieces, and the weight of the goods or their quantity otherwise expressed, all such particulars as furnished by the shipper. b. The apparent condition of the goods. c. The name and principal place of business of the carrier. d. The name of the shipper. e. The consignee if named by shipper. f. The port of loading under the contract of carriage by sea and the date on which the goods were taken over by the carrier at the port of loading. g. The port of discharge under the contract of carriage by sea. h. The number of originals of the B/L, if more than one. i. The place of issuance of the B/L. j. The signature of the carrier or person acting on his behalf. k. Freight to the extent payable by the consignee. l. The statement referred to in paragraph 3 of Article 23, i.e. that carriage is subject to the convention. m. Statement, if applicable, that the goods shall or may be carried on deck. n. The date or the period of delivery of the goods at the port of discharge if expressly agreed upon between the parties. o. Any increased limit or limits of liability where agreed. If the carrier is unable to state any of the matters in (a) above he should express his omission on the B/L. | Prima facie evidence of the receipt by the carrier of the goods as therein described in accordance with the information contained in the B/L. 46 U.S.C.A. § 1303(4). | |||
| 20.Duties of shipper in supplying carrier with information | Art III Rule 5 Shipper is deemed to guarantee accuracy of statement as to weight and quantity of cargo. Shipper to indemnify carrier for loss resulting from errors. | Art 17 Same as Hague Rules. | Same as Hague Rules. 46 U.S.C.A. § 1303 (5). | |||
| 21.Effectiveness of letter of indemnity issued by shipper for carrier not clausing bill | No specific provisions. Void under English law. (Brown Jenkinson & Co., Ltd -v- Percy Dalton (Ldn) Ltd [1957] 2 Lloyd’s Rep. 1). | Art 17 Void for B/L in hands of consignee. Valid against shipper unless carrier intended to defraud consignee. If fraud, carrier may not limit liability. | No specific provisions. If issued, carrier may be stopped from proving pre- shipment condition by case law. | |||
| 22.Notification of damage | Art III Rule 6 Notice of loss or damage must be given in writing to the carrier or his agent – (i) on day of delivery; or (ii) within 3 days where damage is latent. | Art 19 Notice of loss or damage to be given in writing to carrier – (i) by the working day following delivery to consignee; or (ii) within 15 days of delivery where damage is latent. Notice of delay must be given within 60 days of delivery. Carrier must give notice to shipper of complaint within 90 days of delivery. | Same as Hague Rules. 46 U.S.C.A. § 1303 (6). | |||
| 23.Consequences of failing to notify carrier of loss, damage or delay under 22 above | Art III Rule 6 Prima facie evidence of delivery of goods in condition described by B/L. | Art 19 Prima facie evidence of delivery of goods in condition described by B/L. If goods delayed and complaint not made within 60 days the carrier is exempted from liability. | Same as Hague Rules. 46 U.S.C.A. § 1303 (6). | |||
| 24. Limitation of action | Art III Rule 6 “Suit” must be brought within 1 year of delivery or date delivery should have taken place. | Art III Rule 6 Same as Hague Rules. Art III Rule 6 bis Indemnity actions may be brought after 1 year; the period for commencing suit to be not less than 15 months after claim settled or suit served. Local jurisdiction. | Art 20 Litigation or arbitration to be commenced within 2 years from date of delivery of goods or the last day upon which the goods should have been delivered. Indemnity proceedings may be commenced after this period (at least 90 days from date of commencement of action against carrier must be allowed). | Same 1 year statute of limitation as Hague Rules. 46 U.S.C.A. § 1303 (6). | ||
| 25. Where can cargo owner commence} proceedings? | Rules are silent. | Art 21 May sue in court of: a. Principal place of business of carrier; b. Place contract was made; c. Port of loading; d. Port of discharge; e. Place designated by contract of carriage; f. Place of arrest of vessel. This may be challenged by the carrier if he submits to one of the other jurisdictions and provides security for the claim. | No specific provision. | |||
| 26.Arbitration | Rules are silent | Art 22 Arbitration agreement permitted. If incorporating charter party arbitration clause, must be comprised in B/L as “special annotation”. Claimant may choose where to commence arbitration from: a. Place where defendant has principal place of business; b. Place where contract was made; c. Port of loading; d. Port of discharge; or e. Place specified in arbitration clause. No specific provision. | No specific provision. | |||
| 27.General average | Art V “Nothing in these Rules shall be held to prevent the insertion in a bill of lading of any lawful provision regarding general average. ” | Art 24 “The provisions of this Convention relating to the liability of the carrier for loss of or damage to the goods also determine whether the consignee may refuse contribution in general average. ” | Same as Hague Rules. 46 U.S.C.A. § 1305. | |||
| 28.Provisions which conflict with the Rules | Art III Rule 8 Void. | Art 23.1 Void and compensation may be payable where claimant has suffered a loss: see Art 23.4. | ||||