The Bill of Lading as a Document of Title

by Torsten Schmitz

TABLE OF CONTENTS

Introduction................................................................................................................................... 3

I Characteristics of a bill of lading as a document of title......................................................... 4 A Lack of a uniformly accepted definition................................................................................5 B Evolution of the modern bill of lading...................................................................................6 1 Evidence of delivery..................................................................................................... 6 2 Memorandum of the terms and conditions of the contract of carriage............................. 7 3 Document of title to goods............................................................................................... 7 C What does the term document of title mean?...................................................................... 8 D The landmark case of Lickbarrow v Mason.......................................................................... 9 1 False implications............................................................................................................. 10 2 Actual dictums.................................................................................................................. 11 E The negotiability question...................................................................................................... 12 1 The Embodiment Doctrine v The Mercantile View......................................................... 13 2 Concluding remarks.......................................................................................................... 13 F Types of bills of lading...........................................................................................................15 1 Bearer and order bills of lading........................................................................................ 15 2 Straight or non-negotiable bills of lading......................................................................... 16 3 Concluding remarks.......................................................................................................... 16 G Exhaustion: When does the bill`s quality as a document of title cease?............................... 17

II Effects of the bill of lading`s indorsement............................................................................... 17 A Proprietary effects between sellers and buyers......................................................................18 1 Presumptions as to intention in the absence of express terms.......................................... 19 2 Requirements for a transfer of ownership in the goods.................................................... 20 B The bill`s use as a means of security..................................................................................... 22 1 Nature of the bank`s proprietary interest.......................................................................... 22 a) Manner of the pledge`s constitution.................................................................... 23 b) Manner of the pledge`s possible loss.................................................................. 24 2 The bill`s function in financing contracts of sale............................................................. 24

III The crisis of the bill of lading.................................................................................................. 25 A Simplification and standardisation........................................................................................ 26 B Setting up a central registry system....................................................................................... 26 1

1 The SeaDocs project...................................................................................................... 27 2 Concluding remarks.......................................................................................................... 27 C Electronic transmission of information..................................................................................27 1 Atlantic container data freight system.............................................................................. 28 2 Electronic Data Interchange............................................................................................. 28 a) CMI Rules and BOLERO.................................................................................. 29 b) Remaining legal uncertainty.............................................................................. 29 D Conclusion............................................................................................................................. 30

Bibliography................................................................................................................................... 31

INTRODUCTION Since historic times, bills of lading have been the most important commercial documents in international carriage of goods by sea and have played an unparalleled role in facilitating the financing of international sales contracts1. As bills of lading evolved, they began to include more information in order to continue to serve the procedural and practical needs of international trade2. Documents which had previously served solely as a recitation of the quantity of goods were modified to adhere reports of the good`s condition and became an instrument of protection for ship owners who included exceptions to liability in case of damage to cargo in their bills of lading3. However, it is the bill of lading`s role as a document of title, which enables it to play the central part it does in international trade4.

Due to the fact that the bill is a symbol of the goods and that its possession gives the holder control over the goods during transit, it is able to fulfil a number of important functions5. As a start, it allows the person in the bill`s possession to claim delivery of the goods at the port of destination. Further, it facilitates trade since it allows speculations on the market by selling the bill on while the goods are still in transit6. For instance, in the case of bulk cargos of grain, ore, and coal, or in oil tanker trade, the cargo is often the subject of repeated negotiations while in transit7. Besides, it is possible for the contracting parties to use the bill`s strength as a security instrument to raise the finance necessary to effect an international sale of goods 8. In so doing, bills of lading have also been able to provide the basis of the documentary letter of credit as a means of financing international sales contracts9.

In recent years, however, technological innovations, such as faster ships, containerised processing and multimodal transporters with integrated transport systems have resulted in the introduction of documentary standardisation10. Though bills of lading are still widely used in any trade that may re-

W. Bennet The History and Present Position of the Bill of Lading as a Document of Title to Goods (Cambridge University Press, Cambridge, 1914) 4; Carol Proctor The Legal Role of the Bill of Lading, Sea Waybill and Multimodal Transport Document (Interlegal, Pretoria, 1997) 2. 2 B. Wheble Combined Transport A Banking View (1975) 10 European Transport Law 648. 3 Stasia Williams Something Old, Something New: The Bill of Lading in the Days of EDI (1991) 1 Transnat`l L. & Contemp. Probs. 555, 557; Alan Mitchelhill Bills of Lading: Law and Practice (Chapman and Hall, London, 1982) 7; Daniel Murray History and Development of the Bill of Lading (1983) 37 U. Miami L. Rev. 689, 691. 4 Hugh Kindred Modern Methods of Processing Overseas Trade (1988) 22 J. World Trade 5, 8. 5 Clive Schmitthoff Schmitthoff`s Export Trade: The Law and Practice of International Trade (11th ed, Thomson/Sweet & Maxwell, London, 2007) 590; see Sanders v Maclean (1883) 11 QBD 327. 6 Charles Debattista Bills of Lading in Export Trade (3rd ed, Tottel Publishing, West Sussex, 2009) 13. 7 Stasia Williams, above n 3, at 565. 8 John Wilson Carriage of Goods by Sea (5th ed, Pearson Longman, Harlow, 2004) 143-147; Edward Ivamy Payne and Ivamy`s Carriage of Goods by Sea (13th ed, Butterworths, London, 1989) 72. 9 Carol Proctor, above n 1, at 17. 10 Heiko Giermann The Evidentiary Value of Bills of Lading and Estoppel (LIT Verlag, Muenster, 2004) 1.

quire the sale of goods during the voyage, such as commodity trades, new forms of transport documents have emerged as result of these developments in the transport industry, particularly to circumvent the problem of the late arrival of documents at the port of destination usually associated with the use of the bill of lading11. However, the bill`s unique feature as document of title, which made its application fundamental in international trade, may also limit its usefulness in the future12.

Part I of this essay closely outlines and examines the characteristics a bill of lading holds as a document of title. In Part II, special attention is given to the proprietary effects a transfer of the goods in transit can have as well as the bill`s use as a means of security. Part III then addresses the document`s attributes that are likely to limit its application in modern international commerce in the future, concerning both its scope and value.

CHARACTERISTICS OF A BILL OF LADING AS A DOCUMENT OF TITLE

The bill of lading is a commercial document with a long history. The purpose of this Part is to provide some general background of the document`s nature. Generally, a bill of lading is a document signed and issued by or on behalf of a carrier of goods by sea to the person usually known as the shipper with whom he has contracted for the carriage of the goods13. The bill of lading acknowledges the receipt of goods by the carrier in the condition stated and sets out the terms under which the goods are carried14. In so doing, it also evidences the existence of a contract of carriage, which in the simplest case will be concluded between the owner of the ship on which the respective goods are carried and the person who has delivered them to the ship owner for the purpose of carriage. In reality, however, the circumstances are often more complicated. For instance, difficulties may arise in identifying the parties, where goods are carried in a chartered ship since the carrier may be either the ship owner or the charterer. Also, the person who shipped the goods may have done so as agent of another person. In addition, the bill of lading commonly provides for the goods to be delivered to a person other than the shipper15. Further, a bill of lading can qualify as a document of title, which then may confer on the holder control of the cargo.

11 12

Carol Proctor, above n 1, at 17. Anthony Lloyd The Bill of Lading: Do we really need it? (1989) Lloyd`s MCLQ 47, 49. 13 Guenter Treitel Overseas Sales in General in Anthony Guest (ed) Benjamin`s Sale of Goods (7th ed, Thomason/Sweet & Maxwell, London, 2006) 1132. 14 John Mo International Commercial Law (3rd ed, Reed International Books Australia Ltd, Melbourne, 2003) 236. 15 Guenter Treitel, above n 13, at 1133.

Lack Of A Uniformly Accepted Definition

The bill`s three traditional legal functions are also evident in the definition given in the Hamburg Rules, a set of rules governing the international shipment of goods, resulting from the United Nations International Convention on the Carriage of Goods by Sea`s idea to form a uniform legal base for the transportation of goods on oceangoing ships, adopted in Hamburg in 197816. According to article 1(7), the term bill of lading means:17
[...] a document which evidences a contract of carriage by sea and the taking over or loading of the goods by the carrier, and by which the carrier undertakes to deliver the goods against surrender of the document. A provision in the document that the goods are to be delivered to the order of a named person, or to order, or to bearer, constitutes such an undertaking.

In contrast, the Hague-Visby Rules, another set of international rules for the carriage of goods by sea, originally drafted in Brussels in 1924, do not expressly define a bill of lading. However, they incorporate some basic features of the bill of lading at common law18. First, under article 3(3), the carrier, or the master of the ship or an agent of the carrier, is required to issue a bill of lading on demand of the shipper. According to article 3(5), if the carrier makes out a so-called clean bill of lading, meaning that the cargo has been received in an appropriate order and condition, without the presence of defects, on the basis of the information provided by the shipper, the latter is obliged to indemnify the carrier against any claims or expenses arising from errors and inaccuracies in the information19. Second, the Hague-Visby Rules provide that a bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein described in accordance with paragraph 3(a), (b) and (c)20. This provision, however, also implicitly allows the parties to rebut the presumption by stating that proof of the contrary shall not be admissible when the bill of lading has been transferred to a third party acting in good faith21. In other words, the contrary proof may be used against the shipper22. Another definition could be found in the INCOTERMS 1990, a standardized shipping term, defined by the International Chamber of Commerce that apportions the costs and liabilities of international shipping between buyers and sellers23:

16 17

Carol Proctor, above n 1, at 41. Hamburg Rules (1978), Art. 1(7). 18 Guenter Treitel, above n 13, at 1132; Alan Mitchelhill, above n 3, at 4. 19 Michael Bridge The International Sale of Goods Law and Practice (2nd ed, Oxford University Press, Oxford, 2007) 180. 20 Hague-Visby Rules (1968), Art. 3(4). 21 Hague-Visby Rules (1968), Art. 3(4). 22 Rosenfeld Hillas & Co Pty Ltd v The Ship Fort Laramie (1923) 32 CLR 25. 23 Bryan Garner Black`s Law Dictionary (9th ed, Thomson Reuters, St. Paul, 2009) 835; INCOTERMS 1990, I.C.C. Publication No. 450 (I.C.C. Publishing Corp. New York, 1990).

10. As used in these rules the term bill of lading is a shipped bill of lading, issued by or on behalf of the ca rrier, and is evidence of a contract of carriage as well as proof of delivery of the goods on board the vessel. 11. A bill of lading may be either freight prepaid or payable at destination. In the former case the document is usually not obtainable until freight has been paid.

As will be analysed below, the absence of uniformly accepted definitions also causes controversies regarding other aspects of the bill of lading as a document of title. As a start, both the bill`s historical development and the legal status in its modern form as a document of title will be examined closely in the following.

Evolution Of The Modern Bill Of Lading

Information covering the early history of bills of lading is sparse. This is mainly due to the customary nature of the so called Lex Mercatoria, a body of customs and trading principles used by merchants and sea-farers along the main trade routes throughout Europe in the medieval24. In consequence of the expeditious nature of the law merchant`s procedure and practice, no proper records of pleas and trials exist25. Although there is evidence that a similar document was used in Roman times, the birth of the modern bill of lading was in the eleventh century, which marked the rise of the great commercial cities in the Mediterranean26. To provide record of the goods shipped, ship`s registers, compiled by the respective ship`s mate, were introduced. Though use of such registers began informally, it was soon in some ports at least placed upon a statutory footing27. The exchange of goods increased significantly when more and more individuals began starting business transactions with other trade participants at a distance. Since most of them were without transportation facilities, a third party was needed to forward the merchandise by sea from one place to another. This gap was filled by the carrier.

1 Evidence of delivery As international trade grew, disputes inevitably arose in many cases between the cargo owners and the carriers as to exactly what goods had been delivered on board28. In order to guard against these conflicts the need for evidence of delivery was apparent in cases where neither the merchant himself nor his clerk intended to travel with the goods29. The fact that merchants simply wanted to dispatch their goods to a consignee also meant that it became necessary to issue more than one copy of
24 25

Carol Proctor, above n 1, at 21. W. Bennet, above n 1, at 3. 26 Chester McLaughlin The Evolution of the Ocean Bill of Lading (1925) 35Yale L. J. 548, 550. 27 Enrico Bensa The Early History of Bills of Lading (Stabilimento d`Arti Grafiche, Genoa, 1925) 5. 28 William Astle Legal Developments in Maritime Commerce: Matters of General Interest and Importance Arising out of Selected Legal Issues (Fairplay Publications, London, 1983) 61. 29 Chester McLaughlin, above n 26, at 551.

the bill of lading since proof would be required that the person demanding delivery of the goods at the port of destination was entitled to do so. A copy of the bill of lading signed by or on behalf of the carrier would be the most reliable indication30. The bill of lading`s character as a non-negotiable receipt originated around the fourteenth century. It contained usually statements as to the type and quantity of the goods shipped and the condition in which they were received31.

2 Memorandum of the terms and conditions of the contract of carriage In the course of time, the document started to perform another function. Experience led to the incorporation into the document of the terms and conditions of the contract of carriage in order to help resolve arising disputes32. However, it is accepted that these terms do not constitute the contract of carriage itself but provide merely evidence of it33. Generally, the actual contract of carriage is closed between the shipper of the goods and the ship owner before the bill of lading is issued34. This can be better understood if one keeps in mind that a bill of lading is issued only when the ship actually leaves the port of loading. In other words, the bill of lading serves as a memorandum of the contract of carriage, merely repeating in detail the contract`s terms and conditions35.

3 Document of title to goods Finally, by the eighteenth century the bill of lading began to acquire its third characteristic. At first glance, it appeared to be negotiable by indorsement in order to meet the needs of those merchants who wished to dispose of their goods before the vessel reached its destination36. Literally, the term indorsement means anything written or printed upon the back of a deed or writing37. In matters of bills of lading, it specifically refers to the placing of a signature, sometimes with an additional notation, on the back of a negotiable instrument to transfer or guarantee the instrument or to acknowledge payment. The various types of indorsements in relation to bills of lading and its effects will be discussed later in this essay. Whether or not the attribution of the bill as being a negotiable instrument are true will be subject of close examination.

However, it can be said that the bill of lading was used as a symbol of the goods by all means. As Bowen, L. J. stated in the English case of Sanders v Maclean:38
30

Boris Kozolchyk Evolution and Present State of the Ocean Bill of Lading from a Banking Law Perspective (1992) 23 JMLC 161, 165. 31 John Wilson, above n 8, at 115. 32 Boris Kozolchyk, above n 30, at 167. 33 See Crooks v Allen (1879) 5 QBD 38; North of England Steamship Co Ltd v East Asiatic Co (SA) Ltd (1932) NLR 1. 34 David Glass and Chris Cashmore Introduction to the Law of Carriage of Goods (Sweet & Maxwell, London, 1989) 161; Michael Bridge, above n 19, at 164-165. 35 Nicholas Kouladis Principles of Law Relating to Overseas Trade (Blackwell Publishers, Oxford, 1994) 262. 36 John Wilson, above n 8, at 115. 37 John Burke Jowitt`s Dictionary of English Law (2nd ed, Sweet & Maxwell Limited, London, 1977) Vol.1, 962. 38 Sanders v Maclean (1883) 11 QBD 327, 341.

A cargo at sea while in the hands of the carrier is necessarily incapable of physical delivery. During this period of transit and voyage, the bill of lading by the law merchant is universally recognized as its symbol, and the indorsement and delivery of the bill of lading operates as a symbolical delivery of the cargo.

The need for transferring the property in the goods shipped before they arrived at their planned destination emerged with the rapid spread of commercial exchange and the increasing complexity of business39. In order to make this possible, the originally non-negotiable bill of lading needed to become at least transferable. To constitute a document of title, a bill of lading must have been originally made out so that the cargo is deliverable to a named consignee or order or assigns or similar wording to indicate that the named consignee may substitute an alternative deliveree 40. The function of the bill of lading as a document of title lies at the very centre of its use in commercial trade. It sets international sales on shipment terms apart from domestic sales by granting traders the right to effect delivery of the goods through the transfer of documents41. What Does The Term Document Of Title Mean?

Given the importance of this function to the commercial utility of bills of lading as well as the role it has played so far in court decisions concerning international trade, it is rather surprising that there seems to be little agreement on the precise definition of a document of title. To this day, there is no authoritative definition of title to goods at common law42. It is the word title which causes difficulty because it is not clear what title the bill of lading actually represents. Does it mean that the holder of a bill owns the goods or is he just entitled to ask for their delivery? Can he pass one or all of these rights on to others by transferring the document? Does he have title to sue the carrier if the cargo is damaged in transit? Due to this lack of agreement on a crisp definition, the term document of title is typically used to count for any number of these quite different matters 43. One reason for this predicament may be the phrase document of title itself. It rather takes its significance from the context in which it is used than from any agreed sense as to its meaning44. In other words, the attempts to encapsulate diverse legal concepts under one convenient label have led to a chameleon-

39

Secretariat of the United Nations Conference on Trade and Development Bills of Lading (United Nations, New York, 1971) para. 58. 40 Sarah Dromgoole and Yvonne Baatz The Bill of Lading as a Document of Title in Norman Palmer and Ewan McKendrick (eds) Interests in Goods (2nd ed, LLP, London, 1998) 547, 556; Henderson v Comptoir d`Escompte de Paris (1873) L. R. 5 P. C. 253, 259; Nicholas Gaskell, Regina Asariotis and Yvonne Baatz Bills of Lading: Law and Contracts (LLP Professional Publishing, London, 2000) 146. 41 Charles Debattista Sale of Goods Carried by Sea (Butterworth & Co Ltd, London, 1990) 15. 42 Roy Goode Proprietary Rights and Insolvency in Sales Transactions (2nd ed, Sweet & Maxwell, London, 1989) 59. 43 Charles Debattista, above n 6, at 26. 44 Charles Debattista, above n 41, at 16.

like use of the term45. The plurality of meanings, symptomatically concealed in the phrase document of title, is best illustrated by David Sassoon:46
The bill of lading enables the buyer or his agent to obtain actual delivery of the goods on their arrival at the port of destination. But the bill of lading has greater significance than that. Possession of the bill of lading is equivalent to possession of the goods, and delivery of the bill of lading to the buyer or to a third party may (if so intended) be effective to pass the property in the goods to such person. The bill of lading is a document of title [as defined in s 1(4) of the Factors Act 1889] enabling the holder to obtain credit from banks before the arrival of the goods, for the transfer of a bill of lading can operate as a pledge of the goods themselves. In addition, it is by virtue of the bill of lading that the buyer or his assignee can obtain redress against the carrier for any breach of its terms and of the contract of carriage that it evidences. In other words the bill of lading creates a privity between its holder and the carrier as if the contract was made between them.

This extract clearly shows the several concepts at play: Possession, both actual and constructive, the right to claim delivery as well as the power to transfer that right; further, property, whether by way of ownership or security and finally the title to sue47. Though, to seek unanimity on a definition of a document of title is difficult and likely to be unsuccessful, there are numerous practical problems whose resolution depends essentially on whether or not the bill of lading qualifies as a document of title in certain situations. For instance, a bank`s readiness to open and to pay under a letter of credit will depend heavily on whether the document of title tendered by the seller gives it adequate security against non-payment by the buyer48. Thus, it is crucial to identify the constituent features of a document of title. In so doing, it is helpful to isolate the main functions which traders expect a bill of lading to fulfil. In applying a functional search for a definition, questions like who issued the bill of lading and who holds it, how is it made out, indorsed and transferred, have a direct impact on its quality as a document of title. In the following, these issues relating to the detailed features of the bill of lading will be examined closely.

The landmark case of Lickbarrow v Mason

Whether or not the bill of lading also has a proprietary function was the pivotal question which occupied the courts in the 18th century49 . The problem was ultimately settled in the controversial landmark case of Lickbarrow v Mason50. The difficulties which this trial posed for the judiciary can
45 46

Charles Debattista, above n 6, at 26. David Sassoon C.I.F. and F.O.B. Contracts (4th ed, Sweet & Maxwell, London, 1995) 113. 47 Thomas Carver Carriage of Goods by Sea (13th ed, Stevens and Sons, London, 1982) 1596; Andrew Bell Modern Law of Personal Property in England and Ireland (Butterworths, London, 1989) 59; Richard Aikens, Richard Lord and Michael Bools Bills of Lading (Informa, London, 2006) 209. 48 Charles Debattista, above n 6, at 28. 49 Michael Bools The Bill of Lading A Document of Title to Goods (LLP Limited, London, 1997) 8; Norman Miller Bills of Lading and Factors in Nineteenth Century English Overseas Trade (1956-57) 24 Chicago L. R. 257. 50 Lickbarrow v Mason (1787) 2 T. R. 63, 69 (King`s Bench decision).

be gathered from the fact that the case was argued for more than six years, going from King`s Bench to the House of Lords and back again51. The action arose on the following facts: Turing & Sons, merchants in Holland, shipped goods for Liverpool by the order and on the account of Freeman. The ship`s master signed four copies of the bill of lading unto the order or assigns. The master retained one of them, two parts were indorsed in blank by Turing & Sons and sent to Freeman, and the final one was retained by the Dutch merchants themselves. Three days later Turing & Sons drew a bill of exchange upon Freeman for the price of the goods, which he dully accepted. A bill of exchange, also known as draft, is an unconditional written order signed by one person directing another person to pay a certain sum of money on demand or at a definite time to a third person or to a bearer52. Freeman sent the two bills of lading to the plaintiff, a Liverpool merchant so that he might sell the goods on behalf of him. As was common at the time, though the plaintiff was ostensibly a factor for sale, Freeman drew bills of exchange upon the plaintiff for a sum in excess of the cargo`s value. These bills of exchange were accepted and paid by the plaintiff. Unfortunately, Freeman became bankrupt before the bills of exchange drawn on him by Turing & Sons became due. Since this incident turned Turing & Sons into unpaid vendors, they instantly sought to stop the goods in transit. In order to achieve this goal, they sent the bill of lading, which they had retained, to their agent, the defendant, instructing him to take possession of the goods on their behalf. On the arrival of the ship at the port of Liverpool, the defendant did exactly as he was told to. He later sold the goods in question for their principals, Turing & Sons. The Liverpool merchant successfully sued for action in trover53.

1 False implications The case has been held out as deciding many different things. For instance, it has been implied that the courts supposedly said that, by the customs of merchants, the transfer of a bill of lading always transfers constructive possession of the cargo to the transferee 54. In addition, Lickbarrow v Mason has been construed to make bills of lading negotiable in the same way that bills of exchange are negotiable55. Furthermore, it has often been insinuated that it makes bills of lading negotiable instruments as against stoppage in transit only56. However, none of these readings fits the truth. The reasons for these false implications of this case are rooted in the varying interpretations of the Exchequer Chamber`s, the House of Lords` and the King`s Bench`s decision57.

51 52

See Lickbarrow v Mason (1790) 1 H. Bl. 357 (Exchequer Chamber); (1793) 2 H Bl. 211 (House of Lords). Bryan Garner, above n 23, at 566. 53 See Lickbarrow v Mason (1787) 2 T. R. 63-66 (King`s Bench decision). 54 Michael Bools, above n 49, at 9. 55 Charles Abbott Of the Carriage of Goods in Merchant Ships in Samuel Prentice (ed) A Treatise of the Law Relative to Merchant Ships & Seaman, in Six Parts (12th ed, Shaw, London, 1881) 308-316. 56 See Fuentes v Montis (1886) L. R. 3 C. P. 268, 276. 57 Michael Bools, above n 49, at 10-17.

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2 Actual dictum Despite these controversies, the decision offers valuable solutions to the legal status of the shipped bill of lading as a document of title. The jury on a special verdict found, inter alia, that58:
By the customs of merchants, bills of lading, expressing goods or merchandises to have been shipped by any person or persons to be delivered to order to assigns, have been, and are, at any time after such goods have been shipped, and before the voyage performed, [...] negotiable and transferable [...] by endorsing such bills of lading [...].

At first, the indorsement of a bill of lading can transfer not only possessory rights but also possibly rights of ownership in the goods described therein, if that was the parties` intention when indorsing the bill59. The decision stated merely that the bill of lading was capable of transferring property. In other words, it is quite common for property in the goods shipped to pass on indorsement of the bill of lading, but it does not always do so. Even though the bill`s transfer raised a prima facie presumption that property passed, it was a rebuttable one. As provided by Lord Blackburn in Sewell v Burdick:60
During [the] period of floatation and transit the bill of lading becomes and remains a token or symbol of the goods, and the delivery and indorsement of the bill of lading is equivalent, so far as the passing of property is concerned, to a symbolical delivery of the goods. Upon principle and reason, therefore, apart from authority, one would suppose that it is to the agreement between the original parties [...] that we should look to determine the legal consequences that follow on the corporate delivery of the goods.

Then he continued by emphasising that:

Neither the statement of the customs of merchants in the special verdict in Lickbarrow v. Mason, nor the opinion of Buller J., justifies the inference that the indorsement of a bill of lading for a valuable consideration must pass the entire legal property, whatever was the intention of the parties.

This judgment clarified that there exists no general rule that an indorsement passes the whole legal property in the goods shipped. Quite the contrary, the effect of the indorsement of a bill of lading depends entirely on the particular circumstances of each indorsement61. Until complete delivery of the goods has been made at the port of destination to someone rightfully claiming them, the bill of lading remains in force as a symbolical key which is intended to unlock the door of the floating warehouse, potentially not only carrying the full ownership of the goods, but also all rights created

58 59

Lickbarrow v Mason (1794) 5 T. R. 683, 685. Simon Baughen Shipping Law (3rd ed, Cavendish Publishing Ltd, London, 2004) 8. 60 Sewell v Burdick (1884) 10 App. Cas. 74, 95. 61 Stephen Girvin Carriage of Goods by Sea (Oxford University Press, Oxford, 2007) 81, 83.

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by the contract of carriage62. As the parties` intention as requirement for the bill of lading`s possible proprietary function shaped up as the crucial statement of Lickbarrow v Mason, it has been quickly absorbed into the English common law63. The custom of merchants has adopted this aspect of the decision as precedent of its own and incorporated it into the Law Merchant as effectively settled law64. The judgment also pointed out that there is no distinction between a bill of lading indorsed in blank, and an indorsement to a named person. Moreover, it held that the right of stoppage in transit, being equitable, only applied as between a buyer and seller. In case of the consignee`s insolvency generally the consignor can stop the dispatched goods in transit. However, the consignor`s right is divested if the consignee assigns the bill of lading to a third party for a valuable consideration. In other words, the right of stoppage in transit cannot be asserted against a bona fide purchaser of the goods65.

The negotiability question

During the period of transit by sea, a cargo is a valuable but inaccessible asset. While physical delivery of the goods is not possible, the bill of lading, operating as a document of title, can symbolise these goods66. Thus, with a bill of lading, goods can be bought and sold, time and again, while they are still on the high seas, with the bill of lading circling the globe from one buyer to another. In fact, this is a common practice in international trade. For instance, Persian Gulf oil can change hands twenty or thirty times in the six weeks that it takes a tanker to reach U.S. waters 67. This unique flexibility has made the documentary sale essential to world trade and has helped tremendously to facilitate commercial transactions68. The fact that the carrier promises only to deliver to the bill`s lawful holder means that the document`s possession will provide sufficient control over the cargo. Thus the holder will obtain constructive possession of the cargo69. A party is said to have constructive possession when it has legal possession but another party, in this case the carrier, has actual, physical possession of the goods70. Accordingly, as already pointed out above, possession of

62

Martin Dockray Cases and Materials on the Carriage of Goods by Sea (2nd ed, Cavendish Publishing Ltd, London, 1998) 171. 63 See Harold Berman and Colin Kaufman The Law of International Commercial Transactions (Lex Mercatoria) (1978) 19 Harv. Intl. L. J. 221, 226. 64 Goodwin v Roberts (1875) L. R. 10 Ex. 337, 346. 65 P. Atiyah, John Adams and Hector MacQueen The Sale of Goods (9th ed, Longman, London, 2001) 412-413. 66 Richard Schaffer, Beverly Earle and Filiberto Agusti International Business Law and its Environment (5th ed, International Thomson Publishing, USA, 2002) 150, 153. 67 Richard Schaffer, above n 66, at 153. 68 Andrew Tettenborn Transferable and Negotiable Documents of Title A Redefinition? (1991) Lloyd`s MCLQ 538, 540. 69 Sarah Dromgoole and Yvonne Baatz, above n 40, at 549. 70 Frederick Pollock and Robert Wright An Essay on Possession in the Common Law (Clarendon Press, Oxford, 1888) 26-28.

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the bill of lading will be treated for many purposes as equivalent to possession of the goods 71. However, confusion arises as the precise meaning of the term negotiability and its relationship to the concept of transferability is ambiguous. The absence of a uniformly accepted definition leads back to the second trial of Lickbarrow v Mason, where the jury referred to the bill of lading as being n egotiable and transferable72.

1 The Embodiment Doctrine v The Mercantile View The transfer of property interests in goods by transfer of a bill of lading as a document of title has been explained by two theories. According to the Embodiment Doctrine, the bill represents the cargo and the indorsee of the bill acquires only those proprietary rights that the indorser could have vested him with by an actual delivery of the cargo 73. In other words, possession of a bill of lading cannot have a greater force than the actual possession of the goods 74. However, under the second theory, the so-called Mercantile View, the bill of lading is analogised to the bill of exchange or promissory note, and by its negotiation the indorsee may receive a better title than the indorser had or than he could have given by delivering the goods themselves75. The mercantile theory thus goes beyond the Embodiment Doctrine and invests the bill of lading with broad negotiability.

2 Concluding remarks There is, however, no lack of support for the view that a bill of lading is negotiable in a less than complete sense, meaning that it resembles a negotiable instrument only in the mode by which it can be transferred, but not in the full sense of the word from a mercantile view76. Two reasons can be put forward to support this view. The first refers to the strength of the title conferred on the holder of the document as against the true owner. As provided in The Future Express:77
A bill of lading is not a negotiable document in the sense in which a bill of exchange is negotiable. It is a document which is transferable by delivery. Since it is not negotiable, the transferee of the bill can only acquire such interest as the transferor is capable of transferring.

This finding is best expressed in the legal rule of nemo dat quod non habet, literally meaning that no one can give what he does not have. Accordingly, the indorser can generally not pass by in-

71 72

See Cole v North Western Bank (1875) L. R. 10 C. P. 354. Lickbarrow v Mason (1794) 5 T. R. 683, 685. 73 Ira Lustgarten Notes: Ocean Bills of Lading and Some Problems of Conflict of Laws (1958) 58 Colum. L. Rev. 212, 225. 74 Thomas Carver, above n 47, at 733-737. 75 Ira Lustgarten, above n 73, at 226. 76 See Kum v Wah Tat Bank Ltd (1971) 1 Lloyd`s Rep. 439, 446; Finlay v Liverpool and Great Western Steamship (1870) 23 L.T. 251, 257. 77 The Future Express (1993) 2 Lloyd`s Rep. 542, 547.

13

dorsement any rights in the goods greater than those he already has 78. This is where the bill of lading differs from a bill of exchange. The latter, as a document of title to money, is negotiable in the sense that it can pass to a bona fide transferee for value without notice a better title than that enjoyed by the transferor; documents of title to goods are not negotiable in this sense79. Therefore, while the holder in due course of a bill of exchange takes the entitlement to payment totally free of defects in title and of the equities of all previous holders, the same cannot be said of the holder of a bill of lading. At common law, such a holder generally succeeds in a very real sense to the title, which has been enjoyed by his predecessor80.

The second reason why bills of lading are said to be less than negotiable derives from the Doctrine of Consideration and its application to bills of exchange. According to sections 27(2) and 30(1) of the Bills of Exchange Act 1882, consideration is assumed in certain situations in the holder`s favour without it having to be proved81. This relaxation of the regular requirements for consideration does not apply to bills of lading. Hence the transfer of it does not pass property or title unless value is given for the transfer82. Also, it is not clear whether the gratuitous transfer of a bill of lading might operate by way of gift, if so intended. If this is right, then a gratuitous transferee of a bill of lading in good faith from a transferor with a weak title could be defeated83. In the context of bills of lading, the word negotiable thus is used merely in terms of meaning transferable. For this reason they have also been referred to as quasi-negotiable instruments84. The ambiguity inherent in Lickbarrow v Mason can be overcome by saying that the word negotiable was not used in the sense in which it is used as applicable to a bill of exchange, but as passing the property in goods only85. The point of describing bills of lading as merely transferable is to exclude bills or copies expressly marked not transferable or not negotiable, probably other straight bills and waybills86. The latter term refers to a receipt for goods that contains or evidences the contract of carriage and also identifies the person to whom delivery of the goods is to be made by the carrier in accordance with that contract. It is commonly used in container transport and, unlike a bill of lading, does not have to be produced at the port of discharge in order to obtain delivery87. Also, it is worth noting that neither the Hague-Visby Rules nor the Hamburg Rules deal with the allocation of rights between succes-

78 79

Simon Baughen, above n 59, at 77. Charles Debattista, above n 6, at 76. 80 Factors Act 1889 (UK), ss 2, 8, 9; Sale of Goods Act 1979 (UK), ss 24, 25; Roy Goode, above n 42, at 477. 81 Ibid, at 494. 82 Guenter Treitel, above n 13, at 1133. 83 Charles Debattista, above n 6, at 77. 84 Clive Schmitthoff, above n 5, at 573. 85 Thompson v Dominy (1845) 14 M. & W. 403, 408. 86 Guenter Treitel and Francis Reynolds Carver on Bills of Lading (2nd ed, Sweet & Maxwell, London, 2005) 304. 87 Jonathan Law and Elizabeth Martin A Dictionary of Law (7th ed, Oxford University Press, Oxford, 2009) 496; John Mo International Commercial Law (3rd ed, Reed International Books Australia Ltd, Melbourne, 2003) 248.

14

sive holders of the bill of lading when it has been transferred. These additional aspects in regard of transferability thus are left to national law to determine.

Types Of Bills Of Lading

A bill of lading can be made out in one of three ways, which have been categorised as bearer bills, order bills and straight or non-negotiable bills. The way in which the bill of lading is issued determines whether or not the cargo may be sold or transferred during transit and identifies the person to whom goods are to be delivered88.

1 Bearer and order bills of lading A bearer bill is one where the goods are shipped under a bill of lading which does not name the person to whom the goods are to be delivered. It simply makes them deliverable to bearer, which is the holder or person in possession of the bill89. Such a bill is a transferable document of title as the bearer of it can sell the goods and transfer the proprietary rights in these goods by simply delivering the bill to the buyer90. In other words, if the space for the consignee`s name is left blank, it may be transferred by delivery without indorsement91. Such bills, however, are seldom used in practice92. On the contrary, an order bill is one which provides for delivery of the goods to be made to the order of a person named in the bill. Such bills are of two kinds. The first provides for delivery of the cargo to a named consignee or to his order or assigns or contains in some part similar words ind icating transferability93. The second type simply makes the goods deliverable to order or assigns without naming the consignee. Again, any similar words implying transferability will have the same effect94. In case of the second type, it is only the shipper who is entitled to transfer the bill and so to determine the transferee to whom the carrier must deliver the cargo. Thus, such bills are said to be made out to the shipper`s order. It is also worth noting that transfer can be undertaken in one of two ways. The bill may be indorsed in full, whereby the transferor signs the bill and names the party to whom delivery should be made. This is sometimes referred to as a special indorsement95. Alternatively, it may be indorsed in blank, whereby the transferor merely signs its own name, also known as general indorsement96. Such an open indorsement turns the bill from an order bill into a bearer

88 89

Guenter Treitel, above n 13, at 1133. Carol Proctor, above n 1, at 63. 90 Nicholas Gaskell, Charles Debattista and Richard Swatton Chroley and Giles` Shipping Law (8th ed, Pitman, London) 188. 91 Stanley Halsbury and James Mackey Halsbury`s Laws of England (5th ed, LexisNexis Butterworths, 2008) 514. 92 Clive Schmitthoff, above n 5, at 572; Nicholas Gaskell, above n 40, at 148. 93 Union Industrielle et Maritime v Petrosul International Ltd (The Roseline) (1987) 1 Lloyd`s Rep. 18, 22. 94 Lane Kendall and James Buckley The Business of Shipping (7th ed, Cornell Maritime Press, Centreville, 2001) 236. 95 Thomas Carver, above n 47, at 1598. 96 Sewell v Burdick (1884) 10 App. Cas. 74, 83.

15

bill. Bearer bills are transferable by delivery only, without the legal need for indorsement. Bills of lading starting life as order bills may be converted to bearer bills and vice versa97. The mere indorsement of an order bill is not enough to transfer constructive possession to the indorsee: Delivery of the bill to the transferee is also necessary to effect the transfer 98. The good`s delivery covered by either a bearer or an order bill must be made merely against presentation of the bill. The carrier is thus liable to the person lawfully in possession of such a bill of lading if he wrongly delivers the goods to anyone else99.

2 Straight or non-negotiable bills of lading In contrast to order bills, a straight or non-negotiable bill is one in which the goods are deliverable to a named consignee only. Such a bill lacks words importing transferability by the deletion of the words or order after the consignee`s name. It may also contain terms like not transferable or not negotiable100. Due to the fact that such a bill requires delivery of the goods to the named consignee and to no other and is not transferable by indorsement, the carrier is not bound to see the bill to determine the identity of the person entitled to delivery of the goods; nor can the identity of that person be changed by any purported indorsement of the bill101. Alternatively, the bill may simply be a non-negotiable receipt issued by the carrier in which he acknowledges that he has received the goods in his charge or that he has shipped them102. In other words, the straight or non-negotiable bill does not allow the transfer of title.

3 Concluding remarks If a document is marked as non-negotiable or similar it seems to follow that such a bill of lading would not be a document of title in the common law sense103. In order to qualify as a document of title it must be issued either to order, or to bearer104. The bill`s transferability cannot be implied. Hence, some indication must appear in the space where the consignee is named. In addition, the bill must state that the cargo has been shipped because it is well established in the customs of intern ational commercial trade that a received for shipment or an on board bill of lading does not qualify either as a document of title at common law105. The shipper may, only when these two main requirements are fulfilled, direct the carrier to deliver the cargo to another person106.
97 98

Roy Goode, above n 42, at 903. Sarah Dromgoole, above n 40, at 556. 99 Guenter Treitel, above n 86, at 272; Bristol and West of England Bank v Midland Rly Co (1891) 2 QB 653. 100 Carol Proctor, above n 1, at 64; Guenter Treitel, above n 13, at 1136. 101 Ibid, at 1192. 102 Clive Schmitthoff, above n 5, at 579. 103 Jl MacWilliam Co. v Mediterranean Shipping Co. SA (The Rafaela S) (2002) EWHC 593; East West Corp. v DKBS 1912 AF A/S (2002) EWHC 83 (Comm.). 104 Stephen Girvin, above n 61, at 84. 105 Diamond Alkali Export Corp v Fl Bourgeois (1921) 3 KB 443. 106 Mitchell v Ede (1840) 11 Ad & El 888, 903.

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Exhaustion: When does the bill`s quality as a document of title cease?

The bill of lading remains a living instrument only so long as the carrier`s obligation remains u nfulfilled107. This matter was first addressed in Barber v Meyerstein, where the court declared that the bill`s quality as a document of title ceases as soon as complete delivery of the possession of the goods has been made to a person with a right to claim them under the bill108. In other words, the bill of lading retains its character as a document of title at least until the contract of carriage by sea is discharged by delivery of the cargo against the bill109. This concept was further elaborated in Barclays Bank Ltd v Commissioners of Customs & Excise. The court provided that:110
The contention of the Customs and Excise is that as soon as (1) a contract of carriage evidenced by the bill of lading is complete, or at any rate the contract of carriage evidenced by the bill of lading is complete, and (2), the bill of lading is in the hands of the person entitled to the property in, and possession of, the goods, and is in a form which would entitle him upon mere presentation to obtain delivery of the goods from the shipowner that is indorsed to him or indorsed in blank it ceases to be a document of title by delivery and indorsement of which the rights and property in the goods can be transferred.

However, the bill of lading may remain a document of title even if the respective goods have been deposited in a warehouse by the carrier, for such a case the carrier retains the cargo`s constructive possession111. This is due to the fact that the good`s arrival at the port of destination does not necessarily indicate that the contract of carriage has been performed. For instance, if the warehouse issues a delivery warrant, which the carrier will instruct it not to do until the freight has been paid, the bill of lading will then become exhausted as well as the carrier`s constructive possession and lien for unpaid freight112. Besides, where the goods are delivered to someone other than the named consignee, termination of the carrier`s primary obligations under the contract of carriage does not result in the bill`s exhaustion as a document of title113.

II

EFFECTS OF THE BILL OF LADING`S INDORSEMENT

As shown above, bills of lading making goods deliverable to order or to order or assigns are considered transferable instruments by mercantile custom. In these cases, the issue of indorsement, which may affect the property in the goods shipped, can be conducted in two ways. On the one

107 108

Martin Dockray, above n 62, at 175; see The Delfini (1990) 1 Lloyd`s Rep 252. Carol Proctor, above n 1, at 77. 109 Clive Schmitthoff, above n 5, at 591. 110 Barclays Bank Ltd v Commissioners of Customs & Excise (1963) 1 Lloyd`s Rep 81. 111 Carol Proctor, above n 1, at 77. 112 Charles Debattista, above n 41. at 41; Hayman & Son v M`Lintock (1907) SC 936. 113 The Future Express (1992) 2 Lloyd`s Rep 79.

17

hand, the shipper or consignee may write his name on the bill of lading`s back, which is called an indorsement in blank. On the other hand, the shipper or consignee may name the party to whom delivery should be made114. So long as the indorsement is in blank, the bill of lading may pass from hand to hand by mere delivery, or may be redelivered without any indorsement to the original holder, so as to affect the property in the goods115. However, the indorsement and delivery of a bill of lading by the person entitled to hold it generally have effects depending partly on custom and partly on statute.

As regards mercantile custom, indorsement and delivery of a bill of lading, made after the cargo`s shipment and before complete delivery of their possession has been made to the person having a right under the bill of lading to claim them, generally transfer such property as it was the parties` intention to the indorsement to transfer116. As regards statute, under the Carriage of Goods by Sea Act 1992, the lawful holder of a bill of lading has transferred to him all the rights and may become subject to liabilities under the contract evidenced in the bill of lading. In addition, the Carriage of Goods by Sea Act 1971 provides that the indorsement to a third party of a bill of lading issued to a charterer may create a contract in different terms from the charterparty, even though the bill of lading expressly incorporates the charterparty117. Below, the different effects an indorsement can have on property are discussed at great length. This matter is closely connected with the bill of lading`s function as a means of security, which is thus comprised in the analysis as well.

Proprietary Effects Between Sellers And Buyers

In attempting to answer the pivotal question what a bill of lading actually transfers to the indorsee, metaphorical language has often been used in literature. Perhaps the most common metaphor is one, which likens the bill of lading to a symbolic key to a floating warehouse118. However, it is far from clear what is locked up in this symbol. Is it property, title, full possession, full ownership or the rights created by contract of carriage? In any case, as already pointed out above, the transfer of the bill of lading will only pass those rights in the goods that the parties intended to pass119. Generally, indorsement and delivery of the bill of lading during transit will transfer the ownership in the goods covered by it to the indorsee. However, in the absence of contractual terms expressly defining
114

Stewart Boyd, Andrew Burrows and David Foxton Scrutton on Charterparties and Bills of Lading (20th ed, Sweet & Maxwell, London, 1996) 184; Ishag v Allied Bank International (1981) 1 Lloyd`s Rep. 92, 98-99; Elder Dempster Lines v Ishag (1983) 2 Lloyd`s Rep. 548. 115 Stewart Boyd, above n 114, at 184. 116 See Lickbarrow v Mason (1794) 5 T. R. 683; Barclays Bank Ltd v Commissioners of Customs & Excise (1963) 1 Lloyd`s Rep 81. 117 Stewart Boyd, above n 114, at 186. 118 Charles Debattista, above n 41, at 27. 119 Sewell v Burdick (1884) 10 App. Cas. 74, 95.

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which kind of property is meant to pass, it is left to the courts to ascertain the parties` intention in this regard120.

1 Presumptions as to intention in the absence of express terms The manner in which the bill is issued and the way it is transferred to the buyer are significant factors in discerning the parties` intention121. Though it is hard to foresee with certainty what intention the courts will infer in a particular case, section 19(2) of the Sale of Goods Act 1979 itself provides a lead for some useful starting points. It states that where goods are shipped, and by the bill of lading the goods are deliverable to the order of the seller or his agent, the seller is prima facie to be taken to reserve the right of disposal122 . However, there are three main sets of circumstances, which may be deduced by this section and thus may establish assumptions upon which decisions are arrived at by the courts123. First, where the bill of lading is made out to the order of the seller or his agent, a strong prima facie presumption is raised that the seller means to reserve the right of disposal124. If this presumption applies, the property in the cargo is presumed to pass not on shipment, but on payment or on the occurrence of any other condition construed by the court125. This does not, however, necessarily preclude the property`s transfer on shipment in all cases. Hence, where the seller takes a bill of lading as the buyer`s agent, or where the bill is made available to the buyer, property may pass on shipment notwithstanding the fact that the bill has been made out to the seller`s order126. Second, it seems to follow from section 19(2) of the 1979 Act that where the bill is issued to the buyer`s order, it would signify that the parties intended property to pass on shipment127. However, the impact upon the transfer of property must always be assessed on the facts as a whole128. For example, it was held that where the seller took a bill of lading made out to the buyer`s order, but retained possession of it until payment, property did not pass on shipment of the goods but on transfer of the bill of lading129. Third, where the contract provides for payment cash against documents, this is taken to be the most distinct sign that the parties intend the property in the goods to pass on payment of the price130.

120 121

Charles Debattista, above n 6, at 116. See Hibbert v Carter (1787) 1 TR 746. 122 Sale of Goods Act 1979 (UK), s 19(2). 123 Guenter Treitel, above n 86, at 269; Jl MacWilliam Co. v Mediterranean Shipping Co. SA (The Rafaela S) (2002) EWHC 593, 612. 124 Jenkyns v Brown (1849) 14 QB 496, 502; Ross T Smyth & Co Ltd v T D Bailey, Son & Co (1940) 3 All ER 60, 67. 125 The Albazero (1977) AC 774, 796-799; Biddell Brothers v E Clemens Horst Company (1911) 1 KB 934, 956. 126 Charles Debattista, above n 6, at 117; see Joyce v Swann (1864) 17 CB NS 84. 127 Sales of Good Act 1979 (UK), s 18, rule 5(2). 128 Arnold Karberg & Co v Blythe, Green, Jourdain & Co (1915) 2 KB 379, 387; The Kronprinsessan Margarita, The Parana (1921) AC 486. 129 Charles Debattista, above n 6, at 118; The Lycaon (1983) 2 Lloyd`s Rep 548, 554; The Julia (1949) AC 293, 309; The Kronprinsessan Margarita, The Parana (1921) AC 486, 511-517. 130 Guenter Treitel, above n 86, at 315; Stein, Forbes & Co v County Tailoring (1917) 86 LJKB 448; Eastwood & Holt v Studer (1926) 31 Com Cas 251.

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The presumption raised by agreed terms like by check against documents or the above mentioned is so strong that it survives even the physical delivery of the cargo to the buyer before the bill of lading arrives at the port of discharge131. It was held, for instance, that where the seller took a bill of lading to his order under a contract stipulating for payment against documents, and where the seller then tendered a ship`s delivery order to the buyer entitling the buyer to take possession of the goods from the carrier, that the good`s delivery to the buyer did not perturb the presumption that the property was to pass on payment of the price132.

2 Requirements for a transfer of ownership in the goods Ownership will only be transferred, if the following four requirements are met. First, the bill of lading must be transferable on its face133. That is, it must be an order bill made out to the order or assigns of the shipper or consignee134. A straight or non-negotiable bill of lading lacks the needed transferability135. Often bills are issued in sets of three to six originals. In the absence of any special agreement to the contrary, however, the indorsement of one bill of a set is enough to transfer the ownership in the goods covered by it. From this it follows that no subsequent indorsement of any of the remaining originals will have any effect on the ownership of those particular goods136. Amongst other things, Barber v Meyerstein provided that:137
[...] the first person who for value gets the transfer of a bill of lading, though it be only one of a set of three bills, acquires the property, and all subsequent dealings with the other two bills must in law be subordinate to that first one and for this reason, because the property is in the person who first gets a transfer of the bill of lading.

Also, if a ship owner, who has no notice of a first dealing with the bill of lading, is being presented a second bill by another party, he is justified in delivering the goods to the latter party. Though this result may be a discharge to the ship owner, it does not affect the legal ownership of the goods in any respect, for this ownership must still remain in the first holder for value of the bill of lading since he had the legal right in the property138.

131 132

See In re an Arbitration between Shipton, Anderson & Co and Harrison Bros & Co (1915) 3 KB 676, 680. Ginzberg and Others v Barrow Haematite Steel Company, Ltd and Mc Kellar (1966) 1 Llyod`s Rep 343; see Nippon Yusen Kaisha v Ramjiban Serowgee (1938) AC 429, 444; Charles Debattista, above n 6, at 118. 133 John Wilson, above n 8, at 133. 134 Carol Proctor, above n 1, at 64. 135 Lane Kendall, above n 94, at 238. 136 John Wilson, above n 8, at 134. 137 Barber v Meyerstein (1870) L. R. 4 H. L. 317, 336. 138 Ibid, at 336.

20

The risk of fraud with sets of bills has long been recognised139. To avoid problems in practice, buyers would be well-advised, where payment is not to be effected through a letter of credit, to stipulate for the tender by the seller of the full set of originals if more than one original is issued 140. The second requirement for the transfer of ownership calls for the goods to be in transit at the time of indorsement141. But this does not mean that the cargo need be at sea. The goods, however, must not yet have been handed over to the party entitled to delivery at the destination port 142. This in turn means that the right to assign is lost once delivery has been made or a warrant for delivery has been accepted. The seller who is unpaid, however, can retain the right to stop the goods in transit. This right though will be defeated by a resale of the goods by the buyer, accompanied by a transfer of the bill of lading to the new buyer143. Furthermore, the transfer of ownership requires the bill of lading to be initiated by a person with a good title. In other words, the transfer must be valid. As has been noted earlier, a bill of lading does not possess all attributes of a negotiable instrument. Possession of the bill is equivalent to no more than possession of the shipped goods. This means that an indorsee is not able to attain a better title than that held by the indorser144. In other words, where the indorser has no property to pass, no consideration for indorsement has been achieved or the circumstances clearly show that no property was intended to pass, an indorsee does not secure any title. In essence, indorsement of a bill of lading merely assigns the right to receive the goods described at their destination and operates to discharge the ship owner145. At last, the indorsement must be accompanied by an intention to transfer the ownership in the goods covered by it. As has been mentioned earlier, only such interest will be transferred as the parties intended at the time of the indorsement146. Three different solutions are possible: First, the parties intend to pass property absolutely as, for instance, in performance of a contract of sale147. Second, there is no intention to pass any property. This could be due to a sole in-house movement of goods between branches of the same company, for example. Alternatively, a seller, when shipping goods under a contract of sale, may wish to retain ownership as security for payment of the price or reserve the right of disposal of the goods, for instance to prevent the ownership from passing until the price has been paid 148. Third, it is possible that the indorsement merely intends to effect a pledge as temporary security for a loan149. However, ownership in the goods shipped will only pass if all four requirements are met.

139 140

Indira Carr International Trade Law (4th ed, Routledge Cavendish, London, 2010) 195-197. See Sanders v Mclean (1883) 11 QBD 327. 141 London Joint Stock Bank v British Amsterdam (1910) 16 Com. Cas. 102, 105. 142 John Wilson, above 8, at 134. 143 The Argentina (1867) L. R. 1 A & E 370. 144 Finlay v Liverpool and Great Western Steamship (1870) 23 L.T. 251, 255. 145 John Wilson, above n 8, at 134. 146 William Tetley Marine Cargo Claims (3rd ed, International Shipping Publications, Montreal, 1988) 220. 147 John Wilson, above n8, at 134. 148 The Aliakom (1986) 2 Lloyd`s Rep 1; see Sale of Goods Act 1979 (UK), s 18 rule 5(1). 149 Sewell v Burdick (1884) 10 App. Cas. 74.

21

The Bill`s Use As A Means Of Security

Generally, there are three purposes for which possession of the bill of lading may be regarded as equivalent to possession of the goods specified on its face. The first two, that is to say the holder`s entitlement to delivery of the goods at the port of discharge and his ability to transfer the good`s ownership during transit by merely indorsing the bill of lading, have been closely examined above. Below, the document`s character as security for a debt and its utilisation by the banks is described. One must keep in mind that seller and buyer have opposing interests. The buyer does not want to pay before he is in possession of the goods and can examine whether they are in conformity with the contract. The seller, however, does not want to dispatch the goods as long as he is not certain that the agreed price will be paid150. The bill of lading as a document of title, inter alia, may help to reconcile these diverging interests151.

1 Nature of the bank`s proprietary interest Banks play an important role in the financing of international commercial trade. Although it is highly unlikely for a bank to rely solely on the security of the goods, it is safe to say that the ultimate assurance against non-payment of the sum of the credit by the customer, for instance the buyer, is the security afforded the bank by possession of the bill of lading as a document of title to the goods152. However, the question is what exactly is the nature of the bank`s proprietary interest. The bank may be a mortgagee, a pledge or the holder of a lien. Though the classification of the bank`s security interest over the goods represented by the bill of lading may be thought of as only a matter of academic pursuit, especially since the difference between mortgages and pledges appears to be immaterial from a commercial point of view, it is rather uncommon that such important commercial devices lack precise legal definitions153. Despite the absence of conclusive case-law, the major works on banking law have declared themselves strongly in favour of assessing the bank`s interest as that of a pledge154. Generally, a pledge means any act of providing something as security for a debt or obligation155. More precisely:156
A pledge is a bailment of personal property to secure an obligation of the bailor. If the purpose of the transaction is to transfer property for security only, then the courts will hold the transaction a pledge, even though in form it may be a sale or other out-and-out transfer.
150 151

Hans Van Houtte The Law of International Trade (Sweet & Maxwell, London, 1995) 258. Paul Todd Modern Bills of Lading (2nd ed, BSP Professional, Oxford, 1990) 41. 152 Charles Debattista, above n 41, at 36. 153 Stewart Boyd, above n 114, at 192-197. 154 See Eliahu Ellinger Modern Banking Law (2nd ed, Clarendon Press, Oxford, 1994) 568-573; Richard King, Harold Gutteridge and Maurice Megrah Gutteridge & Megrah`s Law of Bankers` Commercial Credits (8th ed, Europa Publications, London, 2001) 211-212. 155 Bryan Garner, above n 23, at 1272. 156 Ray Brown and Walter Raushenbush The Law of Personal Property (3rd ed, Callaghan, Chicago, 1975) 622.

22

If the bank were a mortgagee, then it would own the cargo subject to the mortgagor`s right of redemption. Further, if it simply held a lien over the respective goods, then it would be entitled to hold on to the them until payment of the credit`s sum is made by the buyer 157. However, in order to secure a trade the bank needs merely a right to claim possession of the goods together with the right of selling them. In other words, a pledge is something more than a mere lien and something less than a mortgage158. In essence, a bill of lading may be pledged so as to give the indorsee security over the goods159. Where the bill of lading operates this way, the pledge has the power to obtain delivery of the goods on arrival at the discharge port and, if necessary, may realise them for the purpose of the security160. Two questions are raised, however, in conjunction with bills of lading held by a bank in security.

a) Manner of the pledge`s constitution The bill`s function as a document of title, providing the holder with constructive possession of the goods shipped, becomes apparent in the event of a pledge since the goods are in the hands of the carrier and not in the actual physical possession of the bank161. There has been some controversy on whether the existence of the pledge depends on the manner in which the bill`s front page is completed though. It may either be issued to shipper`s order or to the order of the bank. Alternatively, it is debatable whether it is possible to constitute the bank a pledgee by transferring to it a bill of lading made out, as it normally would be, to the buyer`s order. Unfortunately, there seems to be no authority in the case-law on this matter162. However, it appears to be common ground that so long as the bill is an order bill, the pledge is effective whether or not it is issued to the order of the buyer.

This view is preferable due to three reasons: Firstly, it is the bill`s character as an order bill which makes it a freely transferable commercial document at common law passing the right to claim possession from holder to holder163. Secondly, if the bank`s security depended on the manner in which the bill of lading is completed, it would be strange to find no stipulation on the matter either in Uniform Customs and Practice for Documentary Credits (hereinafter referred to as UCP) or in applications for the opening of letters of credit164. The latter is an instrument under which the issuer, usually a bank, at a customer`s request, agrees to honour a draft or other demand for payment made by
157 158

Charles Debattista, above n 41, at 38. Leonard Jones and Edward White A Treatise on the Law of Collateral Securities and Pledges (3rd ed, Bobbs-Merrill, Indianapolis, 1912 ) 4. 159 Owners of the SS Glamorganshire v Owners of the Clarissa B Carver (1888) 13 App. Cas. 454. 160 Stephen Girvin, above n 61, at 83. 161 See Bristol and West of England Bank v Midland Rly Co (1891) 2 QB 653; Inglis v Robertson and Baxter (1898) AC 616. 162 Richard King, above n 154, at 212. 163 See page 15 of this essay. 164 Charles Debattista, above n 41, at 39.

23

a third party, the beneficiary, as long as the draft or demand complies with specified conditions, and regardless of whether any underlying agreement between the customer and the beneficiary is satisfied165. Thirdly, if banks are named as consignees on the face of bills they might find themselves in the unwelcome position of assuming liabilities which they would not usually expect to shoulder. Hence, it is suggested that an order bill indorsed to a bank is effective to create a pledge of the cargo it embodies. This is regardless of its issuance to shipper`s order, bank`s order or buyer`s order166.

b) Manner of the pledge`s possible loss The second question arises from a commercial practice which comprises the surrender of the document of title by the bank before it is paid by the customer. In case the buyer of the goods has been unable to put the issuing bank in funds for the sum of the credit, the only way the buyer may please the bank would be to sell the goods. However the only way he can do so is by acquiring the documents167. But if surrender of the document of title to the buyer were to terminate the pledge, it would be difficult for an otherwise unsecured bank to agree to such surrender. The only way out of this impasse is an instrument called 'trust receipt168. It recognises in the buyer a trustee for the benefit of the bank of the documents, goods and proceeds thereof169. Accordingly, handing over the bill of lading does not annihilate the pledge170. In case the buyer becomes insolvent before having sold the goods, the ban can even claim the goods as its own without competing with the general body of creditors171. However, using the trust receipt is not entirely free of risk172. For instance, if the buyer sells or pledges the goods to a bona fide third party and fails to account for the proceeds to the bank, the title of the third party will prevail over that of the bank173.

2 The bill`s function in financing contracts of sale Under the above mentioned system of documentary credits, the prospective buyer asks his bank to open a credit in the seller`s favour. The seller is required to ship the contract cargo and to submit appropriate documents in the needed form to the bank if he wants to draw on this credit 174. The UCP, provided by the International Chamber of Commerce, can act as standard formats for such arrangements175. For instance, if goods are shipped under a c.i.f. contract, the seller must tender the
165 166

Bryan Garner, above n 23, at 987. Charles Debattista, above n 41, at 39. 167 Ibid, at 40. 168 Charles Debattista, above n 6, at 61. 169 Richard King, above n 154, at 215-216. 170 See North Western Bank Ltd v John Poynter, Son and Macdonalds (1895) AC 56. 171 Eliahu Ellinger, above n 154, at 572. 172 Charles Debattista, above n 41, at 40. 173 Llyods Bank Ltd v Bank of America National Trust and Savings Association (1938) 2 KB 147; Factors Act 1889, s 2. 174 The Future Express (1993) 2 Lloyd`s Rep 542, 547. 175 See International Chamber of Commerce Uniform Customs and Practice for Documentary Credits (ICC Services,

24

bill of lading together with the original sales invoice to the bank176. A c.i.f. contract (cost, insurance, freight contract) is a type of contract by which the seller agrees not only to supply the goods but also to make a contract of carriage with a sea carrier, under which the goods will be delivered at the contract port of destination177. Also, the seller needs to present a policy of insurance covering the goods during transit before he is then entitled to payment of the contract price 178. At the initial stage the bank is able to check the information on the bill of lading to ensure compliance 179. Furthermore, the bank is interested in the bill`s character as a document of title, capable of providing the required security for the credit allowed180. In the event of non-payment or credit defaulting, the bank is qualified to assume control of the goods through the bill and so recoup its loss181. But there exists one possible security weakness in this layout. As seen earlier, bills of lading are usually issued in sets of several originals182. Thus, there is always a certain risk that the holder of one of the other originals may obtain delivery of the goods at the port of discharge before the bank 183. However, this situation can easily be avoided by a stipulation in the terms of the credit providing for the delivery of all bills in the set before any money is advanced by the bank184.

III

THE CRISIS OF THE BILL OF LADING

Though the bill of lading has served the commercial community extremely well in the past, the document in its present state has been the subject of a number of concerns. Issuing bills of lading in several originals and making out clean bills in exchange for a letter of indemnity or bank guarantees to complete delivery cause serious difficulties185. These kind of malpractices may very well jeopardise the bill`s transferability function and could thus lead to the bill`s substitution by other documentary practices. However, the greatest impediment to the efficient transportation of goods is probably the need to physically move the bill of lading from the exporting to the importing country. Bills of lading just move too slowly to be available at the port of destination to facilitate the lawful delivery of the goods to the party entitled to them. Different solutions have been considered in the past. In the following, the pros and cons of the three main approaches, which were proposed to meet the bill`s need of reform, are presented: The bill`s simplification and standardisation, the creation of a central registry system and the electronic transmission of information.
Paris, 2006) 176 John Wilson, above n 8, at 135. 177 Jonathan Law, above n 87, at 95. 178 Horst v Biddell Bros (1912) AC 18. 179 See UCP 600, Art. 31. 180 Michael Bridge, above n 19, at 167. 181 John Wilson, above n 8, at 147. 182 See page 20 of this essay. 183 See Glyn, Mills & Co v E & W India Dock Co (1882) 7 App. Cas. 591. 184 John Wilson, above n 8, at 136. 185 Carol Proctor, above n 1, at 145.

25

Simplification And Standardisation

The development of uniform layouts for the bill of lading in assistance with various organisations like the International Chamber of Shipping or SITPRO, has helped to speed up the production of documents remarkably186. One of the first data-aligned documents to be used was the so-called short form, blank back, bill of lading187. In this format of the bill, the contract of carriage`s printed terms are removed from the bill`s back and replaced with a clause incorporating the carrier`s standard terms and conditions188. The short form`s advantage is that it comprises all the qualities of the standard long form bill of lading. It serves as a receipt, it provides evidence of the contract of carriage and it constitutes a transferable document of title in international trade, even including the provision of security in documentary credit transactions189. However, this approach simply proposes modifications of already existing documentary practices, but in recent years there has been a call for a more radical approach to the problem which would make full use of modern technology190. The latter`s employment is both necessary and appropriate.

Setting Up A Central Registry System

The second approach involves the creation of a central registry system at which a regularly made out bill of lading would be deposited by the shipper as soon as it has been issued by the carrier191. After the deposition, no further physical transfer of the bill would be necessary. Subsequent dealings with the document would merely need to be recorded at the registry. These recordings would be regarded as having the same effect as a physical transfer of the bill of lading192. Access to the central registry would be granted by a correctly coded key only193. The registry system`s major advantage is that it uses existing documents and procedures and at the same time solving the problem of the bill`s late arrival. In addition, there is no possibility of competing claims from the holders of different original bills since no physical bill would be in circulation 194. However, a number a difficulties would arise from such a solution. Besides persuading the banks and insurance companies of the security of their interests, one important concern would be establishing the identity of the person entitled to delivery with certainty195.
186 187

John Wilson, above n 8, at 161. Clive Schmitthoff, above n 5, at 561. 188 John Wilson, above n 8, at 162. 189 Carole Murray Ridley`s Law of the Carriage of Goods by Land, Sea and Air (8th ed, Shaw & Sons, Crayford, 2007 ) 113; see UCP 600, Art. 23a. 190 John Livermore and Krailerk Euarjai Electronic Bills of Lading: A Progress Report (1997) 28 JMLC 55. 191 George Chandler The Electronic Transmission of Bills of Lading (1989) 20 JMLC 571. 192 Carol Proctor, above n 1, at 148. 193 John Wilson, above n 8, at 166. 194 George Chandler, above n 191, at 573-575. 195 Carol Proctor, above n 1, at 149.

26

1 The SeaDocs project A first attempt to create a registry was made in 1986 by Chase Manhattan Bank and INTERTANKO, an association of independent oil tanker operators196. The private project called SeaDocs intended to achieve the electronic transfer of rights effected by transmission of a paper bill of lading and it was set up to accommodate the particular needs of bulk cargo shipping, especially oil197. Unfortunately, the SeaDocs project only lasted for about a year.

2 Concluding remarks This was due mainly to the following reasons: Firstly, it proved difficult to assess the risk run by the central registry in regard of malfunctions. Thus providing appropriate insurance coverage of the liability that could be incurred was complicated198. Secondly, using a central registry also means adding an additional layer of operation and administration that someone must pay for 199. Thirdly, major trading companies did not perceive the Chase Manhattan Bank to be sufficiently neutral to act as a central registry. They feared that the bank would use the trade information they possessed for their own risk assessment. In addition, it was feared that collecting all trade information in a central location would make them readily available to competitors or intrusive governments200. However, despite its demise, SeaDocs showed that an international, centralised bill of system could work on a world wide scale in principle201.

Electronic Transmission Of Information

There is a growing trend to replace written documents such as the bill of lading with a computer-tocomputer messaging system, which allows electronic filing at a central database. Electronic data interchange technology can save money and improve the efficiency of international shipping without compromising the legal security provided by traditional physical documents such as the bill of lading202. Developments relating to paperless trading in general have been supported and even anticipated203. For instance, as a result of the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Electronic Commerce, contracts concluded electronically are now

196 197

Boris Kozolchyk, above n 30, at 227. Roger Jones, Jeffrey Kinsler and Gabriel Moens International Trade and Business Law Annual (Cavendish Publishing Pty Limited, Newport, 2000) 171. 198 George Chandler Maritime Electronic Commerce for the Twenty First Century (1997) 32 European Transport Law 647, 652. 199 Ibid, at 656. 200 Boris Kozolchyk, above n 30, at 228. 201 Ibid, at 229. 202 Stasia Williams, above n 3, at 556. 203 See Carriage of Goods by Sea Act 1992 (UK), s 1(5).

27

recognised in many jurisdictions204. Below, the different proposals arguing for the developments of electronic alternatives to the traditional paper bill of lading are discussed.

1 Atlantic container data freight system The first venture into the electronic field took the form of the so-called Atlantic container datafreight system. It facilitates the issue of a computer-printed data freight receipt comprising all the relevant information205. The first printout is certified and given to the shipper. All the particulars in the computer will then be transferred to the carrier`s computer at the destination port. There, advance notice of the cargo`s arrival and a copy of the data freight receipt will be forwarded to the consignee. This system solves the problems posed by delay in the arrival of the bill in that no presentation of documents is required, while it conforms to existing business practices and involves no basic change in the underlying body of law206. The disadvantage of the system, however, is that it fails to provide a document of title. This factor makes it unsuitable to situations where the consignee intends to sell the goods during transit.

2 Electronic Data Interchange To begin with, the term electronic bill of lading describes a type of a bill of lading based on computer or electronic technology. Its use as a document of title raises many legal questions such as the form in which an electronic bill exists and is transferred, the identity of the issuer or consignor, and the authenticity of the message207. The so-called electronic data interchange (EDI) has been d esigned to dispense entirely with any form of documentation208. In general, EDI can be used to transfer electronic documents from one trading partner to another. Its ultimate goal is to create a multiuser system which is able to link carrier, shippers, banks and other parties in a single network in order to achieve a fully integrated electronic trade process 209. EDI aims to accommodate all the physical bill of lading`s functions, including the sale of goods while in transit210. In practice, the information usually contained in the bill is fed into the carrier`s computer and the shipper is provided with a private key to access such material and control the cargo while in transit. A transfer of the goods in transit is done by passing on the private key. On each transfer, however, the existing private key is cancelled and replaced by a new key issued to the transferee211.

204 205

Indira Carr, above n 139, at 198. John Wilson, above n 8, at 168. 206 Ibid, at 169. 207 John Mo, above n 14, at 250; see Malcolm Clarke Transport Documents: Their Transferabilityas Documents of Title; Electronic Documents (2002) LMCLQ 356, 359. 208 John Wilson, above n 8, at 169. 209 George Chandler, above n 191, at 571. 210 John Livermore, above n 190, at 56. 211 Stasia Williams, above n 3, at 583.

28

a) CMI Rules and BOLERO If the parties both agree to transact their business on the basis of EDI, the so-called CMI Rules for Electronic Bills of Lading can be incorporated into the respective contract of carriage to provide a procedure for the operation of the EDI system212. The CMI Rules` success will depend on whether or not merchants are willing to relinquish their control over the bill of lading. Under this regime, it is the carrier who bears a large responsibility in the transfer of rights 213. For instance, inter alia, he must acknowledge receipt of the cargo, confirm notification of intended transfer of control, transmit data to a new holder, receive the new holder`s acceptance message, cancel the old private key and issue the new one, et cetera214. However, since merchants were unhappy in giving information to banks, as seen in the SeaDocs project, it is more than doubtful if they trust a carrier. Unlike the CMI Rules, the so-called BOLERO Rules (Bill of Lading for Europe) are not freely available to all but require membership to a closed network215. BOLERO is conducted through an exchange of EDI messages between users and a centralised online registry, incorporating strong security controls to protect the messages` integrity by using digital signatures216. BOLERO is a closed system based on contract though, which requires all parties to the transaction being members of the club. It remains to be seen whether this set of rules will prove to be a feasible solution to the problems of electronic documentation217.

b) Remaining legal uncertainty Regardless of which specific procedure is applied for the operation of the EDI system, there are some fundamental advantages to be derived from the use of an electronic bill of lading. First, it allows buyers and sellers to track goods that are in transit and enables the parties to make necessary adjustments when the goods are delayed. Second, the faster transmission of an electronic bill of lading enables the seller to obtain faster payment for goods, which in turn translates into an improved cash flow for the seller. At last, the elimination of the need to manually prepare multiple copies of documents reduces the redundancy of paperwork and improves efficiency and accuracy218. On the other hand, an EDI system also raises legal problems. For instance, one principal concern is security. Even though written signatures can be replaced by digital ones, such documents may be hard to protect against unauthorised access. Also, not all geographic regions have reliable telecommunication networks. Another concern is the issue of liability. Who bears responsibility for electronic transfers that are sent but not received? Who bears responsibility for unauthorised access to the
212 213

George Chandler, above n 191, at 572. Indira Carr, above 139, at 203. 214 See Richard Kelly The CMI Charts a Course on the Sea of Electronic Data Interchange: Rules for Electronic Bills of Lading (1992) 16 TMLJ 349. 215 Indira Carr, above n 139, at 203. 216 John Livermore, above n 190, at 58. 217 John Wilson, above n 8, at 171. 218 Richard Schaffer, above n 66, at 162.

29

documents219? Moreover, it is the large number of other parties besides the buyer and seller, such as carriers, forwarders, bankers, underwriters, and various government agencies that are usually involved in a shipment of goods, which causes substantial problems. Since each of these entities may have its own documentary requirements, it is likely to prove difficult to devise a comprehensive and functional EDI system220.

Conclusion

Despite the many encouraging signs described above, the effort to abolish the traditional paper bills of lading in favour of an EDI system still faces many challenges. As technology advances, the legal categories and definitions sometimes seem overstretched and ready to burst221. However, if EDI can principally serve the same legal functions as the traditional paper bill of lading, while also increasing efficiency and saving money, tradition and commercial customs are not sufficient to abstain from using modern technology. Since EDI could very well revolutionise documentary procedures, it is worth accepting a certain degree of legal uncertainty before new laws that fit the new shape of technology are in place.

219 220

Ibid, at 164. John Livermore, above n 190, at 59. 221 Stasia Williams, above n 3, at 587.

30

BIBLIOGRAPHY

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Astle, William Legal Developments in Maritime Commerce: Matters of General Interest and Importance Arising out of Selected Legal Issues (Fairplay Publications, London, 1983). Atiyah, P., Adams, John and MacQueen, Hector The Sale of Goods (9th ed, Longman, London, 2001). Baughen, Simon Shipping Law (3rd ed, Cavendish Publishing Ltd, London, 2004).

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Bensa, Enrico The Early History of Bills of Lading (Stabilimento d`Arti Grafiche, Genoa, 1925). Bools, Michael The Bill of Lading A Document of Title to Goods (LLP Limited, London, 1997).

Boyd, Stewart, Burrows, Andrew and Foxton, David Scrutton on Charterparties and Bills of Lading (20th ed, Sweet & Maxwell, London, 1996). Bridge, Michael The International Sale of Goods Law and Practice (2nd ed, Oxford University Press, Oxford, 2007). Brown, Ray and Raushenbush, Walter The Law of Personal Property (3rd ed, Callaghan, Chicago, 1975).

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Debattista, Charles Sale of Goods Carried by Sea (Butterworth & Co Ltd, London, 1990). Dockray, Martin Cases and Materials on the Carriage of Goods by Sea (2nd ed, Cavendish Publishing Ltd, London, 1998). Dromgoole, Sarah and Baatz, Yvonne The Bill of Lading as a Document of Title in Norman Pa lmer and Ewan McKendrick (eds) Interests in Goods (2nd ed, LLP, London, 1998). Ellinger, Eliahu Modern Banking Law (2nd ed, Clarendon Press, Oxford, 1994). Garner Bryan Black`s Law Dictionary (9th ed, Thomson Reuters, St. Paul, 2009).

Gaskell Nicholas, Asariotis, Regina and Baatz, Yvonne Bills of Lading: Law and Contracts (LLP Professional Publishing, London, 2000). Gaskell, Nicholas, Debattista, Charles and Swatton, Richard Chroley and Giles` Shipping Law (8th ed, Pitman, London).

Giermann, Heiko The Evidentiary Value of Bills of Lading and Estoppel (LIT Verlag, Muenster, 2004).

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Goode, Roy Proprietary Rights and Insolvency in Sales Transactions (2nd ed, Sweet & Maxwell, London, 1989). Halsbury, Stanley and Mackey, James Halsbury`s Laws of England (5th ed, LexisNexis Butterworths, 2008). Ivamy, Edward Payne and Ivamy`s Carriage of Goods by Sea (13th ed, Butterworths, London, 1989). Jones, Leonard and White, Edward A Treatise on the Law of Collateral Securities and Pledges (3rd ed, Bobbs-Merrill, Indianapolis, 1912 ).

Jones, Roger, Kinsler, Jeffrey and Moens, Gabriel International Trade and Business Law Annual (Cavendish Publishing Pty Limited, Newport, 2000). Kendall, Lane and Buckley, James The Business of Shipping (7th ed, Cornell Maritime Press, Centreville, 2001).

King, Richard, Gutteridge, Harold and Megrah, Maurice Gutteridge & Megrah`s Law of Bankers` Commercial Credits (8th ed, Europa Publications, London, 2001).

Kouladis, Nicholas Principles of Law Relating to Overseas Trade (Blackwell Publishers, Oxford, 1994). Law, Jonathan and Martin, Elizabeth A Dictionary of Law (7th ed, Oxford University Press, Oxford, 2009).

Mitchelhill, Alan Bills of Lading: Law and Practice (Chapman and Hall, London, 1982). Mo, John International Commercial Law (3rd ed, Reed International Books Australia Ltd, Melbourne, 2003). Murray, Carole Ridley`s Law of the Carriage of Goods by Land, Sea and Air (8th ed, Shaw & Sons, Crayford, 2007).

33

Pollock, Frederick and Wright, Robert An Essay on Possession in the Common Law (Clarendon Press, Oxford, 1888).

Proctor, Carol The Legal Role of the Bill of Lading, Sea Waybill and Multimodal Transport Document (Interlegal, Pretoria, 1997). Sassoon, David C.I.F. and F.O.B. Contracts (4th ed, Sweet & Maxwell, London, 1995).

Schaffer, Richard, Earle, Beverly and Agusti, Filiberto International Business Law and its Environment (5th ed, International Thomson Publishing, USA, 2002). Schmitthoff, Clive Schmitthoff`s Export Trade: The Law and Practice of International Trade (11th ed, Thomson/Sweet & Maxwell, London, 2007).

Secretariat of the United Nations Conference on Trade and Development Bills of Lading (United Nations, New York, 1971). Tetley, William Marine Cargo Claims (3rd ed, International Shipping Publications, Montreal, 1988). Todd, Paul Modern Bills of Lading (2nd ed, BSP Professional, Oxford, 1990). Treitel, Guenter Overseas Sales in General in Anthony Guest (ed) Benjamin`s Sale of Goods (7th ed, Thomason/Sweet & Maxwell, London, 2006). Treitel, Guenter and Reynolds, Francis Carver on Bills of Lading (2nd ed, Sweet & Maxwell, London, 2005).

Van Houtte, Hans The Law of International Trade (Sweet & Maxwell, London, 1995). Wilson, John Carriage of Goods by Sea (5th ed, Pearson Longman, Harlow, 2004).

34

Journal Articles:

Berman, Harold and Kaufman, Colin The Law of International Commercial Transactions (Lex Mercatoria) (1978) 19 Harv. Intl. L. J. 221.

Chandler, George Maritime Electronic Commerce for the Twenty First Century (1997) 32 European Transport Law 647.

Chandler, George The Electronic Transmission of Bills of Lading (1989) 20 JMLC 571.

Malcolm Clarke Transport Documents: Their Transferabilityas Documents of Title; Electronic Documents (2002) LMCLQ 356.

Kelly, Richard The CMI Charts a Course on the Sea of Electronic Data Interchange: Rules for Electronic Bills of Lading (1992) 16 TMLJ 349.

Kindred, Hugh Modern Methods of Processing Overseas Trade (1988) 22 J. World Trade 5.

Kozolchyk, Boris Evolution and Present State of the Ocean Bill of Lading from a Banking Law Perspective (1992) 23 JMLC 161.

Livermore, John and Euarjai, Krailerk Electronic Bills of Lading: A Progress Report (1997) 28 JMLC 55.

Lloyd, Anthony The Bill of Lading: Do we really need it? (1989) Lloyd`s MCLQ 47.

Lustgarten, Ira Notes: Ocean Bills of Lading and Some Problems of Conflict of Laws (1958) 58 Colum. L. Rev. 212.

McLaughlin, Chester The Evolution of the Ocean Bill of Lading (1925) 35Yale L. J. 548.

Miller, Norman Bills of Lading and Factors in Nineteenth Century English Overseas Trade (195657) 24 Chicago L. R. 257.

Murray, Daniel History and Development of the Bill of Lading (1983) 37 U. Miami L. Rev. 689.

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Tettenborn, Andrew Transferable and Negotiable Documents of Title A Redefinition? (1991) Lloyd`s MCLQ 538. Wheble, B. Combined Transport A Banking View (1975) 10 European Transport Law 648.

Williams, Stasia Something Old, Something New: The Bill of Lading in the Days of EDI (1991) 1 Transnat`l L. & Contemp. Probs. 555.

Cases:

Arnold Karberg & Co v Blythe, Green, Jourdain & Co (1915) 2 KB 379.

Barber v Meyerstein (1870) LR 4 HL 317.

Barclays Bank Ltd v Commissioners of Customs & Excise (1963) 1 Lloyd`s Rep 81.

Biddell Brothers v E Clemens Horst Company (1911) 1 KB 934.

Bristol and West of England Bank v Midland Rly Co (1891) 2 QB 653.

Cole v North Western Bank (1875) L. R. 10 C. P. 354.

Crooks v Allen (1879) 5 QBD 38.

Diamond Alkali Export Corp v Fl Bourgeois (1921) 3 KB 443.

Eastwood & Holt v Studer (1926) 31 Com Cas 251.

East West Corp. v DKBS 1912 AF A/S (2002) EWHC 83 (Comm.).

Elder Dempster Lines v Ishag (1983) 2 Lloyd`s Rep. 548.

Finlay v Liverpool and Great Western Steamship (1870) 23 L.T. 251.

Fuentes v Montis (1886) L. R. 3 C. P. 268. 36

Ginzberg and Others v Barrow Haematite Steel Company, Ltd and Mc Kellar (1966) 1 Llyod`s Rep 343.

Glyn, Mills & Co v E & W India Dock Co (1882) 7 App. Cas. 591.

Goodwin v Roberts (1875) L. R. 10 Ex. 337.

Henderson v Comptoir d`Escompte de Paris (1873) L. R. 5 P. C. 253.

Hibbert v Carter (1787) 1 TR 746.

Horst v Biddell Bros (1912) AC 18.

Inglis v Robertson and Baxter (1898) AC 616.

In re an Arbitration between Shipton, Anderson & Co and Harrison Bros & Co (1915) 3 KB 676.

Ishag v Allied Bank International (1981) 1 Lloyd`s Rep. 92.

Jenkyns v Brown (1849) 14 QB 496.

Jl MacWilliam Co. v Mediterranean Shipping Co. SA (The Rafaela S) (2002) EWHC 593.

Joyce v Swann (1864) 17 CB NS 84.

Kum v Wah Tat Bank Ltd (1971) 1 Lloyd`s Rep. 439.

Lickbarrow v Mason (1787) 2 T. R. 63, 69. (King`s Bench decision)

Lickbarrow v Mason (1790) 1 H. Bl. 357 (Exchequer Chamber).

Lickbarrow v Mason (1793) 2 H Bl. 211 (House of Lords).

Llyods Bank Ltd v Bank of America National Trust and Savings Association (1938) 2 KB 147.

London Joint Stock Bank v British Amsterdam (1910) 16 Com. Cas. 102. 37

Mitchell v Ede (1840) 11 Ad & El 888.

Nippon Yusen Kaisha v Ramjiban Serowgee (1938) AC 429.

North of England Steamship Co Ltd v East Asiatic Co (SA) Ltd (1932) NLR 1.

North Western Bank Ltd v John Poynter, Son and Macdonalds (1895) AC 56.

Owners of the SS Glamorganshire v Owners of the Clarissa B Carver (1888) 13 App. Cas. 454.

Rosenfeld Hillas & Co Pty Ltd v The Ship Fort Laramie (1923) 32 CLR 25.

Ross T Smyth & Co Ltd v T D Bailey, Son & Co (1940) 3 All ER 60.

Sanders v Maclean (1883) 11 QBD 327.

Sewell v Burdick (1884) 10 App. Cas. 74.

Stein, Forbes & Co v County Tailoring (1917) 86 LJKB 448.

The Albazero (1977) AC 774.

The Aliakom (1986) 2 Lloyd`s Rep 1.

The Argentina (1867) L. R. 1 A & E 370.

The Delfini (1990) 1 Lloyd`s Rep 252.

The Future Express (1993) 2 Lloyd`s Rep. 542.

The Julia (1949) AC 293.

The Kronprinsessan Margarita, The Parana (1921) AC 486.

The Lycaon (1983) 2 Lloyd`s Rep 548.

38

Thompson v Dominy (1845) 14 M. & W. 403.

Union Industrielle et Maritime v Petrosul International Ltd (The Roseline) (1987) 1 Lloyd`s Rep. 18.

Legislation:

Factors Act 1889 (UK).

Sale of Goods Act 1979 (UK).

Carriage of Goods by Sea Act 1992 (UK).

Treaties:

Hamburg Rules (1978).

Hague-Visby Rules (1968).

Other Sources:

INCOTERMS 1990, I.C.C. Publication No. 450 (I.C.C. Publishing Corp. New York, 1990).

International Chamber of Commerce Uniform Customs and Practice for Documentary Credits (ICC Services, Paris, 2006).

39