The Legal Nature and Functions of the Bill of Lading
Article 119 of the Maritime Code of Georgia defines the bill of lading as a document of title to goods which confirms the contract of carriage by sea and the receipt or loading of the goods by the carrier. The same article provides that on presentation of the bill of lading the carrier is obliged to deliver the goods. This statutory definition shapes the entire logic of bill of lading disputes: the document performs simultaneously the functions of confirmation of the contract, of a receipt and of a document disposing of the goods.
Article 120 extends these rules to the issue procedure: after receiving the goods on board, the carrier is obliged, at the request of the shipper, to hand over to him a bill of lading (or a sea waybill) confirming that the carrier has received the goods indicated in the bill of lading. The carrier may instead of a bill of lading or sea waybill issue another document confirming the receipt of the goods for carriage — such a document constitutes primary evidence of the carrier’s receipt of the goods and of the contract of carriage by sea. The bill of lading is drawn up on the basis of a document signed by the shipper which must contain the data referred to in Article 121 of the Code, and the shipper himself answers to the carrier for the consequences of entering incorrect, inaccurate or incomplete data in that document.
The Mandatory Contents of a Bill of Lading
Article 121 lists the data that must be indicated in a bill of lading: the general characteristics of the goods, the main marks necessary for their identification, an express statement of any dangerous or special properties of the goods, and the number of places or objects and the weight or quantity of the goods — all data as presented by the shipper; the apparent order and condition of the goods; the name of the carrier and the address of its principal place of business; the name of the shipper; the name of the consignee (a straight bill of lading), delivery to the order of a named person (an order bill of lading) or delivery of the goods against presentation of the document (a bearer bill of lading); the port of loading in accordance with the contract and the date on which the carrier received the goods for shipment; the port of discharge; the number of originals, if more than one; an indication whether the carriage is governed by the Hague-Visby Rules or by the Hamburg Rules; where appropriate, an indication that the goods are or may be stowed on deck; the amount of freight payable by the receiver; the place and date of issue; and the signature of the carrier or of a person acting on its behalf.
The Hague-Visby Rules are the International Convention for the Unification of Certain Rules of Law relating to Bills of Lading of 1924, while the Hamburg Rules are the United Nations Convention on the Carriage of Goods by Sea of 1978. The indication of which rules govern the carriage is not a formality: the grounds and limits of the carrier’s liability follow directly from it. When examining a bill of lading, attention should therefore focus first on precisely this indication, since it determines the strategy of the dispute from the outset.
Types of Bill of Lading, Transfer and Delivery of the Goods
Article 123 determines the rules for transferring a bill of lading: a straight bill of lading may be transferred by a named endorsement or in any other form corresponding to the established procedure for the assignment of a monetary claim; an order bill of lading may be transferred by a named or blank endorsement; and a bearer bill of lading is transferred in the ordinary manner, that is, by handing over the document itself.
Article 148 provides that at the port of destination the goods are delivered to the holder of the original bill of lading: under a straight bill of lading — to the consignee named in it or to the person to whom the bill was transferred by endorsement or by another form of assignment; under an order bill — to the consignee or the shipper, depending on whether the bill is drawn up to the order of the shipper or to the order of the consignee, and where endorsements exist — to the person named at the end of the unbroken chain of endorsements or to the presenter of the last blank-endorsed bill; under a bearer bill — to the presenter of the bill of lading. It follows that a dispute over to whom the goods should have been delivered is resolved by examining possession of the original and the unbroken chain of endorsements.
Receipt of the Goods and the Significance of a Written Statement
Article 150 lays down the critical rules for taking delivery: if, on receiving the goods carried under a bill of lading, the receiver has not notified the carrier in writing of a shortage or damage, the goods are deemed to have been delivered to the receiver in conformity with the bill of lading, unless the contrary is proved. Silence thus operates evidentially in favour of the carrier.
There are two exceptions: first, where the receiver and the carrier have jointly surveyed and inspected the goods, a written statement of shortage or damage is not required; second, where the loss, shortage or damage could not be detected by an ordinary method of inspection, the receiver may make a statement to that effect within 3 days of receiving the goods. The practical conclusion for the receiver is clear: for visible defects, a written statement or a joint inspection must take place immediately, while for hidden defects the 3-day requirement must be observed precisely.
Carrier Liability and the Calculation of Damages
Article 157 defines the ground on which the carrier is relieved of liability: for the loss, shortage, damage or spoilage of goods, other than cargo carried by cabotage, the carrier is not liable if it proves that the loss occurred through the negligence or other act of the captain, other members of the crew or the pilot in the navigation or management of the ship. In contrast, where such a loss is caused by the act or negligence of those persons during loading, stowage, carriage, unloading or delivery of the goods, the carrier is liable in accordance with the relevant provisions of the Code.
Article 160 establishes how the damage is calculated: the value of goods lost or in short supply is determined according to the prices prevailing at the port of destination at the time of the ship’s entry into or stay in that port; where that is impossible, according to the prices current at the port of shipment at the relevant time, to which the costs of carriage are added. From the amount of compensation there are deducted the costs of carriage (freight, duties and others) which the shipper was to have paid but which, owing to the loss, shortage, damage or spoilage, could not be realised. Article 164 adds a reminder of the mirror-image liability: for the non-sailing of the ship, late or non-delivery of goods, delays in loading and discharging operations carried out by the forces of the shipper or receiver, and other breaches conditioned by their actions, it is the shipper or the receiver who answers under the contract of carriage by sea.
Frequently Asked Questions
Which international rules govern the bill of lading?
Under Article 121, the bill of lading must indicate whether the carriage is governed by the Hague-Visby Rules — the 1924 convention — or by the Hamburg Rules, the 1978 convention.
How is an order bill of lading transferred?
Under Article 123, an order bill may be transferred by a named or blank endorsement, while a bearer bill is transferred in the ordinary manner, by the simple handing over of the document.
What happens if the receiver makes no written statement of damage?
Under Article 150, the goods are deemed delivered in conformity with the bill of lading; where the defect could not be detected by ordinary inspection, a statement may be made within 3 days of receipt.
When is the carrier relieved of liability?
Under Article 157, save for cabotage cargo, the carrier is not liable if it proves that the loss was caused by an act of the captain, crew or pilot in the navigation or management of the ship.
How We Help on Legal.ge
On Legal.ge you will receive a qualified analysis of bill of lading disputes: we will examine the contents of the bill and the chain of endorsements, assess the grounds of the carrier’s liability, plan the written statement and the presentation of the claim, and defend your interests in court. Contact our team at the earliest stage of the dispute.