UNIVERSITY OF LAGOSSCHOOL OF POSTGRADUATE STUDIES

FACULTY OF LAW

BILL OF LADING AS A RECEIPT OF GOODS AT COMMON LAWAND UNDER INTERNATIONAL CONVENTION

COURSE: MARITIME LAW II CIL (806)

A PAPER PRESENTED TO THE FACULTY OF LAW, UNIVERSITYOF LAGOS.

BY

NDIDI OSAEMEDIKE-OKEKE (Group 5)139061035

IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THEAWARD OF MASTER OF LAWS (LLM) DEGREE

LECTURERS IN CHARGEPROF. FOGAM

DR. W. OLAWOYIN, SAN

TABLE OF CONTENT

1. HISTORICAL INTRODUCTION AND DEFINITION 2. FUNCTIONS OF A BILL OF LADING3. BILL OF LADING AS A RECEIPT OF GOODS

3.1 RECEIPT AS TO QUANTITY AT COMMON LAW ANDUNDER INTERNATIONAL CONVENTIONS

3.2 BILL OF LADING AS A RECEIPT AS TO CONDITIONAT COMMON LAW AND UNDER INTERNATIONALCONVENTIONS

3.3 BILL OF LADING AS A RECEIPT AS TO LEADINGMARKS AT COMMON LAW AND UNDER INTERNATIONALCONVENTIONS

4. CONCLUSION AND RECOMMENDATION

1. HISTORICAL INTRODUCTION AND DEFINITION

Originally societies did not make use of records ordocumentation when transporting goods, because themerchant was also the master of the ship, or at leastaccompanied his cargo at sea until it had been sold1.These Merchants moved about with their cargo in thepursuit of profit2. Commercial activities prospered inthose days, generating increase in commerce. As a resultof this, Merchants remained ashore neither accompanyingtheir cargo nor selling from Port to Port. In a bid toprevent dispute and seek out a practical means of makingsure cargoes did not get stolen or delivered to the wrongpersons, documentation was introduced. This documentationwas to serve as a proof of the shipment, for the benefitof both the consignor and the consignee as the cargo willfor some time be outside the sphere of the control ofboth3. According to De Roover4, the practice of themerchant accompanying the goods (on the sea or on land)began to change in 1250.

1 SF du Toit EVOLUTION OF THE BILL OF LADING (University of Johannesburg) at page 2 http://uir.unisa.ac.za/bitstream/handle/10500/3629/Du%20Toit%208%20December%202005.pdf?sequence=1 retrieved on 34/9/14.2ibid3Polak (n 5) 17-18; McLaughlin “The evolution of the ocean bill of lading” 35 (1925-1926)Yale Law Journal 548 550. According to Grönfors (n 2) 7 the documentation must serve as an instrument to create “a grip on the cargo”, a phrase he subsequently uses often.4 Supra note 2 at page 2

Even though the Corpus luris Civilis5contains provision onmaritime law, there seem to be no trace of anythingsimilar to the bill of lading therein. However, an earlydocument resembling the modern bill of lading in someways can be found in Roman times as far back of 15 AD.The document described the condition and weight of thewheat on board, and therefore it acted as a receipt. Itserved as evidence of an elementary contract of carriage,but without any of the detailed clauses found today.There was only an undertaking to carry the wheat toAlexandria and to deliver it to Dionysus and Phililogus.The text contains no evidence that this was a document oftitle.

From the above, we can posit that there is evidence ofthe existence of receipts for goods loaded aboardmerchant vessels stretching back as far as Romantimes and the practice of recording cargo aboard ship inthe ship's log is almost as long-lived as shippingitself, the modern Bill of Lading only came into use withthe growth of international trade in the medieval world.The growth of mercantilism (which produced otherfinancial innovations such as the Charterparty (once cartapartita), the Bill Of Exchange and the Insurance Policyproduced a requirement for a title document that could betraded in much the same way as the goods themselves. Itwas this new avenue of trade that produced the bill ofLading in much the same form as we know today.

DEFINITION OF BILL OF LADING

A bill of lading is defined by the Black’s Law Dictionaryto be:

5The Corpus Juris (or Iuris) Civilis ("Body of Civil Law") is the modern namefor a collection of fundamental works in jurisprudence, issued from 529 to 534 by order of Justinian I, Eastern Roman Emperor. It is also referred to as the Code of Justinian.

“a document acknowledging the receipt of goods by acarrier or by the shipper’s agent and the contract forthe transportation of those goods for shipment andthat is issued by a person engaged in the business oftransporting or forwarding goods.“6

Lord Bramwell defined a bill of lading in Sewell v. Burdick7asfollows:

“a bill of lading has in the eyes of the law, various aspects:-

I. It is very good evidence of the contract of affreightment,though not the contract itself, for the contract is usuallyentered into before the bill of lading is signed.

II. It is a receipt for the goods shipped and contains certainadmissions as to their quantity and condition when puton board.

III. It is a document of title, without which delivery of thegoods cannot normally be obtained.

There are various types of Bill of Lading, all derivingtheir names from their functions and characteristics.Examples of the function of a Bill of Lading includes,A Straight Bill Of Lading, which is used when payment hasbeen made in advance of shipment and requires a carrierto deliver the merchandise to the appropriate party.An Order Bill Of Lading, used when shipping merchandiseprior to payment, requiring a carrier to deliver themerchandise to the importer, and at the endorsement ofthe exporter the carrier may transfer title to theimporter. Endorsed Order Bills Of Lading can be traded asa security or serveas collateral against debtobligations. Characteristicallydescribed Bills of Lading includes, On-Board Bill Ofof6 B. A. Garner (ed), Black’s Law Dictionary, 8th Edition, (Minnesota:Thompson West 2004, Page 176.7[1884], 10 App. Cas at 105

Lading which denotes that merchandise has been physicallyloaded onto a shipping vessel, such as a freighter orcargo plane. A Received-For-Shipment Bill oOf Ladingdenotes that merchandise has been received, but is notguaranteed to have already been loaded onto a shippingvessel. Such bills can be converted upon being loaded. AClean Bill oOf Lading denotes that merchandise is in goodcondition upon being received by the shipping carrier,while A Foul Bill oOf Lading denotes that merchandise hasincurred damage prior to being received by the shippingcarrier.8

The bill of Lading states the condition and quantity ofgoods when they are transferred into the custody of thecarrier. It also states the date on which they wereloaded, and will identify the vessel as well as the portsof loading and discharge. The bill of lading is usuallymade by the consignor, i.e.the party who is the currentowner of the goods to be loaded onto the vessel. In doingso, reliance will be placed on the “mate’s receipt”9.Bills of lading are issued in sets of three originals. Assoon as the bill of lading is signed, they will be issuedto the party handing over custody of the goods to thecarrier. This party is usually the current owner of thegoods in question and is referred to as the “shipper” orthe “consignor”. The carrier will usually be the ship-owner, but this is not always the case. The carrier mayhave actually chartered or sub-chartered the vessel10.

2. FUNCTIONS OF A BILL OF LADING

8 Supra note 6 at page 1779 A Ship’s record of cargo loaded and presented to an agent of the carrier,such as the captain of the vessel (The ship’s master), for signature.10 Infra note 12 at page 5

Scholars have agreed in a plethora of authorities that abill of Lading has three principal functions. Thesefunctions are:

As evidence of the contract of carriage As a document of title As a receipt 11

Despite the general consensus on these three functions ofthe Bill of Lading, Baughen12added a fourth function. Hestated that a bill of Lading is a potentiallytransferable carriage contract i.e the contractualfunction of a bill of lading. He posited that itfrequently evidenced the terms of the initial contract ofcarriage which allows the contract to be passed down thechain of seller, banks and buyers that may come intoexistence before the ultimate discharge of the goods.

In Wilson’s13 words, “the reverse side of every standard liner bill oflading form is to be found a detailed set of printed contractual terms orof reference to the “long form” bill in which they are set out in full.” Hefurther emphasized that the accepted view among scholarsis that at least so far as the shipper is concerned,these terms do not constitute the contract of carriageitself, but merely provide evidence of it. The contractis normally concluded orally long before the bill isissued, and the terms are inferred from the carrier’ssailing announcements and from any negotiation withloading brokers before the goods are shipped. However,where goods get lost or damaged before a bill of lading11 See Sewell v. Burdick (supra), The Ardennes (owner of cargo) v. The Ardennes (owners), [1950] All E.R 517, Rambler Cycle Co., Ltd v. Penninsular and Oriental Navigation Company & Ors [1968] 1 Lloyd’s Rep, Comet S. A. (Nig) Ltd v. Babbit (Nig) Ltd [2001] 7 NWLR (712) 442.12 Simon Baughen: Shipping Law, 3rd Edition. London: Cavendesh Publishers, 2004 at Page 5-8 13 John F. Wilson, Carriage of Goods By Sea, 6th Edition. London: Longman, 2008, at Page 127.

is issued, the shipper will not be deprived of a remedyfor breach of contract. In the same vein, if the printedterms of the bill of lading which is subsequently issueddo not comply with those of the earlier oral agreement,the shipper is not debarred from submitting oral evidenceto establish the specific terms of that agreement.14

For many intents and purposes, possession of a bill oflading is comparable in law to possession of the goods.According to Payne and Ivamy15, It enables the holder toobtain delivery of the goods at the port ofdestination16and while in transit, it allows him to“deliver” the goods by simply transferring the bill oflading. These rules are particularly important in C.I.F17

contracts. Thus in HORST V. BIDDELL BROTHERS18, the Courtheld that the possession of the bill of lading is in lawequivalent to possession of the goods, and that, under aC.I.F. contract, the seller is entitled to payment onshipping the goods and tendering to the buyer thedocument of title. It is important to note that a copy ofthe tripartite bill of lading suffice as a good documentof title19.

A bill of lading in its standard state is not anegotiable instrument. The holder of a bill of lading who

14 See: The Ardennes Case (1951) Supra, Crooks v. Allan (1879) 5 QBD at page40, M. V. “CAROLINE MMAERSIL” V. NKOYO INVESTMENT LTD [2000] 7 NWLR (Pt.666) 587.15Payne and Ivamy; Carriage of Goods by Sea; 11th Edition. London: Butterworths, 1979, Page 7216Erichsen v. Barkworth (1858).3 H. & N. 84.17(Cost, insurance, freight) contract.A sale contract under which the sellerarranges and pays for the carriage of the goods and their insurance whilst in transit. The seller will assign its insurance policy to the buyer and this will form one of the documents, along with the bill of lading, againstwhich it will receive payments, along with the bill of lading, against which it will receive payment of the purchase price. 18[1912] A. C 18.19Sanders v. Maclean (1883) 11 Q. B. 327.

indorses it to an indorsee, cannot therefore give abetter title than he himself has. Thus, if he has notitle, he cannot pass one. Therefore when the word“negotiable” is used in relation to a bill of lading, itsimply means it is transferable20. It still remainsunsettled whether delivery of a bill of lading which ismarked “non-negotiable” transfers title at all.

3. BILL OF LADING AS A RECEIPT OF GOODS SHIPPED

According to Payne and Ivamy21, a bill of lading isusually signed by the loading broker under modernconditions, but sometimes by the master, acknowledgingthe quantity and condition of the goods when put onboard. The specific effect of this acknowledgment is mostsignificant in view of the rule of law that the ship mustdeliver “What she received as she received it, unlessrelieved by the excepted perils”22

A Bill of Lading forms the basis of any cargo claim bythe receiver should the goods be short delivered ordamaged on discharge. It also forms the basis upon whicha buyer can reject the document and or cargo in a C.I.Fcontract where the description of the goods does notcorrespond with their description in the sale invoice23.

Sometimes, the bill of lading refers to the “leadingmarks” inscribed on the goods, and sometimes there is astatement as to their quality.

3.1 RECEIPTAS TO QUANTITY20Kum v. Wah Tat Bank, Ltd, (1971) 1 Lloyd’s Rep. 439, P. C., at Page 446 (Per Lord DEVLIN)21 Supra note 15 at page 64.22Per Lord SUMMER in Bradley v. Federal Steams, etc., Co [1927] 137 L. T. 266, at p. 267.23 Supra note 13 at page 116.

Position At Common Law

The bill of lading is prima facie evidence that thequantity of goods alleged to have been shipped was trulyshipped. The shipper is entitled to show that the goodswere never shipped24. Where he successfully proves this,he escapes liability in respect of them.

In Grant v. Norway25, A bill of lading was signed by themaster for twelve bales of silk, which the shipownerproved had not been put onboard. Held, that the master hadno authority to sign for goods not shipped, and theholders of the bill of lading had no claim against theshipowner for non-delivery of these bails.

It is important to note that if the bill of ladingcontains the words “weight and quantity unknown”, it isnot still a prima facie evidence, and to succeed in anaction for non-delivery, the shipper must show that thegoods were indeed shipped26

Under the Carriage of Goods Act CAP C2 LFN 2004, the billof lading is prima facie evidence that the quantity ofgoods alleged to have been shipped has been indeedshipped27. To however avoid liability, the carrier has theburden of proving that the goods were not shipped asstated in the bill.

The duty and the burden of proof of the shipper issuccinctly captured as follows28:

3. After receiving the goods into his charge, the carrier, orthe master or agent of the carrier, shall, on demand of the

24 Smith v. Bedouin S. N. Co., [1896] A. C. 7025 (1851), 10 C. B. 665.26 AG of Ceylon v. Scindia Steam Navigation Co., LTD (1961)3 ALL ER 68427Section 4, Article III of the Carriage of Goods Act.28 Sections 3,4 and 5 Article III of the Carriage of Goods Act

shipper, issue to the shipper a bill of lading showing amongother things-

(a) the leading marks necessary for identification of thegoods as the same are furnished in writing by the shipperbefore the loading of such goods starts:

Provided such marks are stamped or otherwise shownclearly upon the goods if uncovered, or on the cases orcoverings in which such goods are contained, in such amanner as should ordinarily remain legible until the end ofthe voyage;

(b) either the number of packages or pieces, or the quantity,or weight, as the case may be, as furnished in writing by theshipper;

(c) the apparent order and condition of the goods:

Provided that no carrier, master or agent of the carrier shallbe bound to state or show in the bill of lading any marks,number, quantity, or weight which he has reasonablegrounds for suspecting not accurately to represent thegoods actually received, or which he has had no reasonablemeans of checking.

4. Such a bill of lading shall be prima facie evidence of thereceipt by the carrier of the goods as therein described inaccordance with sub-paragraphs 3 (a), (b), and (c) of thisSchedule.

5. The shipper shall be deemed to have guaranteed to thecarrier the accuracy at the time of shipment of the marks,number, quantity, and weight, as furnished by him, and theshipper shall indemnify the carrier against all loss, damagesand expenses arising or resulting from inaccuracies in suchparticulars. The right of the carrier to such indemnity shallin no way limit his responsibility and liability under thecontract of carriage to any person other than the shipper.

From the above, the burden of the shipper is a not a light onesince he must clearly establish that the goods were shipped,

not merely that it is unlikely on a balance of probability29.Thus in ECU-LINE NV v. ADELAKAN30 A shipment of goodssupposedly consisting of a photoplotter Miva 25 machine and aSTC photo processing machine was placed aboard the “MV Kagoro”.The bill of Lading was faxed by the Appellant to theRespondent. The bill of lading did not list the photoplotterMiva 25 machine as part of the cargo. On arrival at the portin Nigeria, the Respondent proceeded to claim the cargo butwas alarmed at the absence of the photoplotter Miva 25. TheAppellant was accused of having misplaced the machine at hiswarehouse and was sued at the Federal High Court for the sumof N 14, 585, 752. 25 being damages for breach of contract orin the alternative being damages for negligence. Judgment wasgiven in favour of the Respondent at the Federal High Court.However, on appeal, the court allowing the appeal held that acontract of affreightment or transportation of any item by seamust be evidenced by the bill of lading. Where the bill oflading does not mention or list particular goods, it is clearevidence that the same was not placed aboard the ship.

Position Under the Hague and Hague/Visby Rules

Under international conventions, the carrier is under noobligation to issue a bill of lading neither is he obligatedto acknowledge the quantity of cargo shipped, unless requestedby the shipper.31Article III rule 3 of the Hague/Visby Rulesprovides that:

3. After receiving the goods into his charge the carrieror the master or agent of the carrier shall, on demandof the shipper, issue to the shipper a bill of ladingshowing among other things:18

(a) The leading marks necessary for identification of thegoods as the same are furnished in writing by theshipper before the loading of such goods starts,provided such marks are stamped or otherwise shownclearly upon the goods if uncovered, or on the cases or

29 Supra note 13 at page 11830[2001] 10 NWLR (721) 261

31 The Atlas [1996] 1 Lloyd’s Rep 642

coverings in which such goods are contained, in such amanner as should ordinarily remain legible until theend of the voyage.19

(b) Either the number of packages or pieces, or thequantity, or weight, as the case may be, as furnished inwriting by the shipper.20

(c) The apparent order and condition of the goods.21

Provided that no carrier, master or agent of the carriershall be bound to state or show in the bill of lading anymarks, number, quantity or weight which he hasreasonable ground for suspecting not accurately torepresent the goods actually received, or which he hashad no reasonable means of checking.

If no such request is made, then consignees or assignees ofthe bill are prejudiced, since they have no right to demandcompliance with the rule. However, in practice carriers alwayswant to issue a bill of lading for personal reasons.

The shipper is free to choose which of the three methods ofquantifying cargo he wishes to use. His choice may beinfluenced by the nature of information supplied by theshipper. However, the carrier is not obligated to acknowledgemore than one and can disclaim knowledge of others. In Oriconv. Intergraan32, the bill of lading acknowledged the receipt of2,000 packages of copra cake “said to weight gross 105, 000kgs… for the purpose of calculating freight only”. RoskillJ.was of the opinion that “ while each of the bill of lading,being Hague Rules bills of lading, acknowledged the number ofpackages shipped, and are prima facie evidence of thosenumbers, neither bill of lading is any evidence whatever ofthe weight of the goods shipped”. According to Wilson33 In thissituation, the burden of proof rested with the consignee to

32 [1967] 2 Lloyd’s Rep 61433 Supra note 13 at page 120-121

establish the weight of cargo shipped before he could succeedin his action for short delivery34.

The evidentiary value of the bill of lading under theHague/Visby Rules follow the common law in regarding the billof lading in the hands of the shipper as prima facieevidence/proof of the amount of cargo shipped. The differencehowever lies in Article III rules 435, which treats the bill asconclusive evidence once it has been transferred to a thirdparty acting in good faith. It is important to note that thereexists no requirement that the third party should have givenvalue to raise the estoppels, only good faith is required onhis part. Where the Hague/Visby Rules are applicable, theinconsistent principle in Grant v. Norway would be excluded.

3.2 BILL OF LADING AS A RECEIPT AS TO CONDITION

A Bill of Lading has additional characteristics whichshow a representation by the shipowner as to thecondition in which the goods were shipped. This refers tothe apparent condition in so far as the carrier or hisagent is able to judge by reasonable outward inspection.36

According to Wilson,37 in recent times, cargoes arecontainerized making statements as to condition of limitedvalue since they will only refer to the outward appearance of34 The Courts are prepared on many occasions to assist the claimant in establishing his case by allowing the introduction of alternative evidence,e.g. by calculating the weight of missing sacks from the average weight of sacks actually delivered: AG of Ceylon v. Scindia Steam Navigation [1962] AC 60; by allowing the claimant to rely on tally records compiled by persons acting under duty to port authorities: The Atlas [1996] Lloyd’s Rep642.35Rule 4. Such a bill of lading shall be prima facie evidence of thereceipt by the carrier of the goods as therein described in accordancewith paragraph 3 (a), (b) and (c). However, proof to the contrary shallnot be admissible when the bill of lading has been transferred to athird party acting in good faith.

36The Galatia [1980] Lloyd’s Rep 453.37 Note 13 at page 121

the container or any other packaging and not really to thecondition of the goods inside. The agent of the shipper willonly document any defect or damage observed during examinationon the bill of lading and will be under an yobligedobligatiionobligation to deliver the goods in the samecondition as that received, only subject to contractualexceptions.

In Practice, many shippers get anxious to avoid anyendorsement of damage or defect on their cargoes in order forthe financing institution to sight a “clean bill of lading”38.Nonetheless, a shipper may not be entitled to clause a bill oflading, even where an inspection reveals a damage or a defect,if its condition is adequately described in the bill.39 Thus,In SEA SUCCESS MARITIME v. AFRICAN MARITIME CARRIERS40 a pre-loading survey conducted by the shipowner’s P and I Club foundthat a cargo of hot rolled steel coils was rusty and hadsuffered other superficial damage. Nevertheless the trialJudge, Aikens J, held that the shipowners were not entitled toclause the bill of lading if the charterer intended toincorporate into the bill the description of the goods asappeared in the pre-loading survey report. His Lordship opinedthat the word “good” in the phrase ‘apparent good order andcondition‘meant ‘proper’ in the sense that the cargo wasproperly described in the bill. Therefore if cargo isaccurately described in the bill as damaged or imperfect insome way, it can still justifiably be stated to be in“apparent good order and condition”. While on the surface thismay appear a somewhat surprising conclusion, from a practicalpoint of view any transferee of the bill should be aware ofthe condition of the goods as if the bill had been claused. Itis doubtful that such a bill would qualify as a ‘clean bill.41

Position At Common Law

The Shipowner will be estopped by the admission contained inthe bill of lading where evidence shows that the indorsee didnot act to his detriment on the face of the bill.42 To38ibid39ibid40[2005] 2 Lloyd’s Rep 692.41Ibid.42Supra Note 15 at page 68.

establish such an estoppels, the statement in the bill oflading must be clear and unambiguous: if the words “ receivedin apparent good order and condition” are qualified by otherclauses in the document, this may prevent the bill from beinga clean bill and in such a case estoppels will not arise. Thusin CANADIAN AND DOMINNION SUGAR CO. LTD v. CANADIAN NATIONAL(WEST INDIES) STEAMSHIP, LTD43, a bill of lading relating to ashipment of sugar contained the qualifying word “shipped underguarantee to produce ship’s clean receipt” and the ship’sreceipt was not clean, in that it contained the phrase “ manybags stained, torn and re-sewn”. The Court held that the billwas not a clean bill and the shipowners were not estopped.

Accoding to Ivamy and Payne44, An admission as to the conditionof goods on shipment will bind the shipowner only as a defectwhich ought to be apparent on reasonable inspection. Thus inCANPANIA NAVIERA VAZCONGADA v. CHURCHILL45, Timber, althoughobviously stained with petroleum was stated in the bill oflading as “shipped in good order and condition”. The Courtheld that the assignee of the bill of lading could sue theshipowner for damages, and the latter was estopped fromdenying that the timber was shipped in good condition. Oncemore, in PETER DER GROSSE,46 a bill of lading acknowledged thereceipt of goods “shipped in good order and condition… weight,contents, and value unknown”. The goods were delivered bothextremely and internally damaged. The Court held that the billof lading was evidence that there was no obligation on theconsignee to show how the damage has arisen. The shipownerswere therefore liable.

If estoppels is validly established, it will operate infavour of a blameless or innocent indorsee even if the masterhas been induced to sign by the shipper’s fraud.47 Where anindorsee of the bill of lading happens to be the same as thecharterer, the position of the law will not be altered. Insuch a case, he sues not qua charterer, but qua indorsee ofthe bill.48

43[1974] A.C 46.44Supra note 4145[1906] 1 K. B 23746[1875], 1 P. D. 41447EVANS v. JAMES WEBSTER & BROTHERS LTD [1928] T.L.R 13648UNITED MOLASSES Co. v. NATIONAL PETROLEUM Co. [1934], 50 T. L. R. 266.

Position Under the Hague and Hague/Visby Rules

Under Article III of the Rules as mentioned earlier, theshipper is entitled to demand the issue of a bill of ladingincorporating a statement as to the apparent order andcondition of the goods when received by the carrier. The saidbill of lading is prima facie evidence of receipt by thecarrier of the goods as described in the bill, but conclusiveevidence when the bill has been transferred to a third partyacting in good faith.49 In the last instance, there is norequirement for unfavorable reliance, as at common law.

Masters of ships will most often enter secondary endorsementon the bill to indicate the actual condition of the goods, butotherwise he is not entitled to introduce clauses relievinghim of obligation imposed by Article III rule 8 which renderssuch clauses “ null and void and of no effect”. Unfortunately,the Court most often than not gives credibility to suchqualifications of liability on the part of the shipowners ongrounds of technicality. In CANADIAN AND DOMINNION SUGAR CO.LTD v. CANADIAN NATIONAL (WEST INDIES) STEAMSHIP, LTD50 it wasargued that the provision of the Hague Rules rendered void theshipowner’s qualification that the bill of lading had been“signed under guarantee to produce ship’s clean receipt. LordWright responded by pointing out that Article III rule 3 oftthe Hague Rules “ expressly applies only if the shipperdemands a bill of lading showing the apparent order ancondition of goods. There is no evidence that the shipper heremade such a demand: indeed, no demand of this nature isalleged. The condition of the rule is thus fulfilled.” Thisposition has also been given assent by the US Court in TOKIOMARINE & FIRE INC Co. v. RETLA STEAMSHIP Co.,51Where the Courtheld that the consignee was caught by the qualification which,in its view, was not invalid under the Hague Rules. It wouldseem unreasonable that consignees or assignees should bedeprived of their protection by the device of a clause of thatnature.

49Supra Note 15 at page 124,50Supra51[1970] 2 Lloyd’s Rep. 91.

Similarly, under the Hague/Visby Rules, the carrier isentitled to refuse to acknowledge the condition in which thegoods are received in circumstances where there is noreasonable means or opportunity to inspect them. This mayprovide another situation for the use of an indemnity infavour of the carrier where shipper was anxious to obtain aclean bill. Only in the case where the carrier was actuallyaware of falsity of declaration would the indemnity beineffective52.

The Article is however silent on the validity of suchindemnity in a situation where the carrier knows that theinformation supplied is false, nor does any obligation appearto be imposed on the carrier to inspect the cargo beforeacknowledging such a statement in the bill. In suchcircumstances, if the carrier is in any doubt, it wouldobviously be in his interest not to enquire, provided ofcourse that the shipper is solvent and the carrier can rely onhis ability to meet the indemnity.

3.3 BILL OF LADING AS A RECEIPT AS TO LEADING MARKS

A bill of lading normally has a leading mark appearing onthe goods shipped. These are marks that go to theidentity of the goods carried rather than to theiridentification. This mark is different from the ordinaryquality marks and identification marks. The quality andidentification marks only possess prima facie effectwhile the leading mark posses a conclusive effect.

Position At Common Law

The common law estoppels also applies in relation tostatement as to leading marks53. The law does not precludethe person who has signed the bill of lading of lading52BROWN, JENKINSON & Co. Ltd v. Percy Dalton [1957] 2 QB 621. See also STANDARD CHATERED BANK v. PAKISTAN NATIONAL SHIPPING CORP [1995] 2 Llloyd’sRep 365 (intentionally issuing antedated bills of lading).53 Supra note 12 at page 71.

from showing that the goods shipped were marked otherwisethan as stated, unless the marks are material to thedescription of the goods. InPARSON v. NEW ZEALANDSHIPPING Co.,54 608 carcasses of frozen lamb shipped werestated to be shipped, marked “Sun Brand 622x”. Only 507were, in fact, so marked, but 101 were marked “Sun Brand522x”. The Price of Lamb having fallen, the indorseesrefused delivery of the carcasses marked 522x and suedfor non-delivery. It was held that, as the 522x carcasseshad the same character and value as those marked 622x,the shipowners were entitled to establish as against theindorsees of the bill of lading that these were the samecarcasses as those marked 622x. Had the marks gone to theidentity of the goods the plaintiff would have been ableto rely on statutory estoppels contained in section 3 ofthe Bill of Lading Act 1855.55However, the number merelyrecorded the date of freezing for the shipper’s ownconvenience and per KENNEDY J. “…the meat as a commercialarticle is absolutely unaffected in its character or value, whether it ismarked 522 or 622”. In the view of COLLINS LJ, “ it is theidentity of the goods shipped which is the pith of the matter; that issubject of the misrepresentation referred to, and nothing which wouldnot ber material to such identity need be embraced in the estoppels. It isobvious that where marks have no market meaning, and indicatenothing whatsoever to a buyer as to the nature, quality, or quantity ofthe goods which he is buying it is absolutely immaterial to him whetherthe goods bear one mark or another”.56 Later in the judgment, headds that“a mistaken statement as to marks of this class merely

54[1900] 1 QB 71455The decision is based on the assumption that the signature of the shipowners’ agent will bind the shipowners for the purpose of the estoppelsin section 3 of the Bill of Lading Act 1855, contrary to THORMAN v. BURT [1886] 54 LT 349, CA56Note 53 supra at page 564

makes identification more difficult; it does not affect the existence oridentity of the goods.”57

In the final analysis, leading marks may refer to theidentity or description of goods as, for instance, to thetype of fluid in a container or the type of fruit packedin a crate. In such circumstances the marks recorded inthe bill follows the common law rule in providing primafacie evidence against the carrier and conclusiveevidence when the bill is in the hands of a bona fideindorsee for value.58

Position Under the Hague and Hague/Visby Rules

The Hague/Visby Rule follows the common law position andthe presumption raised in Article III rule 4 are onlyapplicable to “leading marks necessary for identification of goods”.The shipper can demand that such marks are acknowledgedby the shipowner provided “they are stamped or otherwise shownclearly upon the goods… in such a manner as should ordinarily remainlegible until the end of the voyage”59

There is no obligation on the shipowner under the Rulesto acknowledge the quality mark attached to the goods inthe bill of lading. This is required only when the marksare crucial to the identity of the goods. Where themaster does so voluntarily, estoppels does not precludehim from subsequently proving that goods of differentquality was shipped. However, as against the shipowner,the master has no apparent authority to insert such markssince, in most cases, he clearly does not possess thecommercial knowledge or expertise necessary to conduct an

57Ibid at page 564 58Supra note 12 at page 126. 59Article III Rule 3(a)

adequate examination on their accuracy.60In COX v. BRUCE,61 the Court of Appeal held that a shipowner was notstopped from establishing, as against an indorsee forvalue, that the quality marks on a consignment of jutehad been incorrectly entered on the bill of lading by themaster: Per Lopes LJ.,” It was no part of the master’s duty toinsert these quality marks at all … and, therefore he had not authorityto make such representation and I do not think that any man of businesswas entitled to assume that he had such authority.”62

4. CONCLUSION AND RECOMMENDATIONS

We have discussed above that the bill of lading providesinformation as to the goods loaded onboard a vessel aswell as contractual terms which are usually found on thereverse of the document. We further discussed that thebill of lading is governed by common law and (Carriage ofGgoods Act) International Conventions. In Nigeria forexample, all bills of lading issued are subject to theHague-Visby Rules. It is important to note that ourCarriage of Goods Act is simply a adirectreplicareproduction of the Hague-Visby Rules.

However, with the widespread of the use of electronicshipping documents, two characteristics of the evolutionof the bill of lading may be highlighted again. Firsts,it can be observed that historically, the process of theevolution of the bill of lading took several years. Thebill of lading only became necessary to take the forms ofand characteristics it is known with today as the needarose. Secondly, it can also be traced that the bill oflading shared a common history among merchants in Europe.60Supra note 12 at page 126.61[1886] 18 QBD 14762Ibid at page 154

It was an instrument with similar characteristics acrossboard in various countries and it was acceptable amongmerchants. This then brings us to the issue of theevolution and acceptance of the electronic bill oflading.

The need for urgency to introduce the electronic bill oflading does not afford it the luxury of the number ofyears to evolve like the bill of lading as we know ittoday. Furthermore, the issue of general acceptance cancouldalso pose a disadvantagedisadvantage, as there seemto be no possibility of an electronic bill of lading thatcan be used by everyone. It is therefore recommended thatthe United Nations, International Maritime Organizationand other international commissions with specialty inInternational Commercial Trade, converge to introduce andelectronic bill of lading that will replicate the corefunctions of a paper bill of lading, such as its functionas a receipt, as evidence of, or containing the contractof carriage and if negotiable, as a document of title63

and will be accepted everywhere inacross the globe.

63“Electronic Bills of Lading (eB/Ls)” Essdocs.com. Retrieved 7/10/2014.