Care of Cargo Article III Rule 2 of the Myanmar Carriage of Goods by Sea Act (India Act XXVI, 1925)

provides that “subject tothe provision of Article IV, the carrier shall properly and carefully load, handle,
stow, carry, keep care for and discharge the goods delivered.The point was considered by the House of
Lords in Albacora v. Westcott and Laurance Line (1966), the crates of wet salted fish had been shipped at
Glasgow for Genoa.Those crates were marked “keep away” from engines and boilers but otherwise no
special instructions for carriage were given by the shippers.That fish of this type could not be safely
carried on such a voyage without refrigeration, although this fact is unknown to the carrier.The cargo
was found deteriorated as a result of bacterial action at the destination port.The question was whether
it has been carried “properly” within the meaning of Art III.Lord Reid was held that “properly’ meant in
accordance with a sound system depending on the nature of goods. The goods required any different
treatment from that which the goods received. The fact that the goods arrive damaged does not of itself
constitute a breach of the carrier’s obligation.In Gosse Millerd Ltd. V. Canadian Government Merchant
Marine Ltd. (1929, A.C. 223), a cargo of tinplates was shipped in a vessel under a bill of lading
incorporating the Hague Rules. During the voyage she had to go into dock for repairs.After these were
being executed, the hatches were left open so that the workmen could go in and out of the hold more
easily. The hatches were not protected when rain was falling and the tinplates were damaged in
consequence. It was held that the ship owners were liable for they had failed “properly and carefully to
carry the goods” as required by Article III Rule 3. They could not rely on Article IV Rule 2 (a) for the terms
“management of the ship” did not include negligence in the management of the hatches.In the absence
of any law in Burma, which ordinarily governs the carriage of goods by sea from ports outside Burma,
neither the carrier nor the ship shall be liable for any loss or damage to or in connection with goods in
amount exceeding £ 100 per package per unit, or the equivalent of that sum in other currency, unless
the nature and value of such goods have been declared by the shipper before shipment and inserted
inthe bill of lading

The Hague Rules of 1924 (formally the "International Convention for the Unification of Certain Rules of
Law relating to Bills of Lading, and Protocol of Signature")[1] is an international convention to impose
minimum standards upon commercial carriers of goods by sea. Previously, only the common law

The Hague–Visby Rules is a set of international rules for the international carriage of goods by sea. They
are a slightly updated version of the original Hague Rules which were drafted in Brussels in 1924.

The premise of the Hague–Visby Rules (and of the earlier English common law from which the Rules are
drawn) was that a carrier typically has far greater bargaining power than the shipper, and that to protect
the interests of the shipper/cargo-owner, the law should impose some minimum affreightment
obligations upon the carrier. However, the Hague and Hague–Visby Rules were hardly a charter of new
protections for cargo-owners; the English common law prior to 1924 provided more protection for
cargo-owners, and imposed more liabilities upon "common carriers".[1]

The official title of the Hague Rules the "International Convention for the Unification of Certain Rules of
Law relating to Bills of Lading". After being amended by the Brussels Amendments (officially the
"Protocol to Amend the International Convention for the Unification of Certain Rules of Law Relating to
Bills of Lading") in 1968, the Rules became known colloquially as the Hague–Visby Rules.
A final amendment was made in the SDR Protocol in 1979. Many countries declined to adopt the Hague–
Visby Rules and stayed with the 1924 Hague Rules.[2] Some other countries which upgraded to Hague-
Visby subsequently failed to adopt the 1979 SDR protocol.

there are now five different sets: Hague, Hague-Visby, Hague-Visby/SDR, Hamburg and Rotterdam. (The
Rotterdam Rules are not yet in force).

The Hamburg Rules are a set of rules governing the international shipment of goods, resulting from the
United Nations International Convention on the Carriage of Goods by Sea adopted in Hamburg on 31
March 1978

t came into force on 1 November 1992.

A bill of lading (/ˈleɪdɪŋ/) (sometimes abbreviated as B/L or BOL) is a document issued by a carrier (or
their agent) to acknowledge receipt of cargo for shipment. Although the term historically related only to
carriage by sea, a bill of lading may today be used for any type of carriage of goods.[1] Bills of lading are
one of three crucial documents used in international trade to ensure that exporters receive payment
and importers receive the merchandise.[2] The other two documents are a policy of insurance and an
invoice.[a] Whereas a bill of lading is negotiable, both a policy and an invoice are assignable. In
international trade outside the United States, bills of lading are distinct from waybills in that the latter
are not transferable and do not confer title. Nevertheless, the UK Carriage of Goods by Sea Act 1992
grants "all rights of suit under the contract of carriage" to the lawful holder of a bill of lading, or to the
consignee under a sea waybill or a ship's delivery order.

A bill of lading must be transferable,[3][b] and serves three main functions:

it is a conclusive receipt,[4] i.e. an acknowledgement that the goods have been loaded;[c] and

it contains, or evidences,[d] the terms of the contract of carriage; and

it serves as a document of title to the goods,[5] subject to the nemo dat rule.

Typical export transactions use Incoterms terms such as CIF, FOB or FAS, requiring the exporter/shipper
to deliver the goods to the ship, whether onboard or alongside. Nevertheless, the loading itself will
usually be done by the carrier or by a third party stevedore.

bill of lading is a standard-form document that is transferable by endorsement (or by lawful transfer of
possession).[6] Most shipments by sea are covered by the Hague Rules, the Hague-Visby Rules or the
Hamburg Rules, which require the carrier to issue the shipper a bill of lading identifying the nature,
quantity, quality and leading marks (identification marks and numbers) of the goods. it may be
superseded by the term "transport document" as defined by proposed Articles 1:15 & 1:16 of the
Rotterdam Rules

Roles and purposes of bill of lading

As cargo receipt

The principal use of the bill of lading is as a receipt issued by the carrier once the goods have been
loaded onto the vessel. This receipt can be used as proof of shipment for customs and insurance
purposes, and also as commercial proof of completing a contractual obligation,[12] especially under
INCOTERMS such as CFR[e] (cost and freight) and FOB (free on board).

Although the Hague-Visby Rules provide that a bill of lading is only prima facie evidence of receipt, the
Carriage of Goods by Sea Act 1992 s.4 declares a BoL "conclusive evidence of receipt".[f][13][14]

A "clean bill of lading" (aka "on-board bill of lading") is used when there is full compliance with no
discrepancies between the description filed by the shipper and the actual goods shipped. A clean bill of
lading indicates that the goods have been properly loaded onboard the carrier's ship in accordance with
the contract.

A "dirty bill of lading" (aka "claused bill of lading") will be issued if the goods to be shipped differ in
quality or quantity from the contract description. The buyer's bank is entitled to reject a dirty bill of
lading, but will often accept it after an agreed reduction in price.[15] For examples, cargo could be
leaking, or package could be damaged where the carrier has the right to issue a clause BL.

"STC": if the cargo cannot be effectively examined, such as goods in a sealed container), the carrier will
issue a bill of lading describing the goods as "container (identified by number) said to contain" the
contracted cargo. The carrier or the agent mentions "STC" in BLs to safeguard themselves from shipper
declaring wrong information on BL. Even this term is more favourable to the carrier in FCL shipping and
there are instances where the carrier become at least partially liable in LCL shipping even after
mentioning "STC" under cargo description. This is due to the carrier or agent do the stuffings of cargo for
the shipper's LCL shipment. If the cargo within the container does not comply with the description, the
consignee will take action against the seller, and the carrier will not be involved.

As evidence of the contract of carriage

The bill of lading from the carrier to the shipper can be used as evidence of the contract of carriage by
the fact that the carrier has received the goods and upon the receipt, the carrier would deliver the
goods. In this case, the bill of lading would be used as evidence of contract of carriage. In this case, the
bill of lading can be used if the shipper does not properly ship the goods then the shipper cannot receive
the bill of lading from the carrier. Eventually, the shipper would have to deliver the bill of lading to the
seller. In this case, the bill of lading is used as evidence of contract of carriage between seller and
carrier. However, when the bill of lading is negotiated to a bona fide third party then the bill of lading
becomes conclusive evidence where no contradictory evidence can be introduced. It is because the third
party cannot examine the actual shipment and can only pay attention to the document itself, not survey
or examination of the shipment itself.[14] However, the bill of lading will rarely be the contract itself,
since the cargo space will have been booked previously, perhaps by telephone, email or letter. The
preliminary contract will be acknowledged by both the shipper and carrier to incorporate the carrier's
standard terms of business. If the Hague-Visby Rules apply, then all of the Rules will be automatically
annexed to the bill of lading, thus forming a statutory contract.

The bill of lading is not a contract of carriage as it is only signed by the carrier. Yet, it acts as evidence of
contract due to the activities taken place between the shipper and the consignee.

As title

When the bill of lading is used as a document of title, it is particularly related to the case of the buyer.
When the buyer is entitled to receive goods from the carrier, the bill of lading in this case performs as a
document of title for the goods. In simple words, the function of BL as a document of title shows who
owns the cargo. Whoever has the duly endorsed BL is the rightful owner of the cargo described in the
BL. Carrier becomes responsible before the law if they issue cargo to a party who is not the authorised
person to claim the goods under this function. Further, if the BL is a "Seaway BL" document of title
function will not be applicable.

Simply, the bill of lading confers prima facie title over the goods to the named consignee or lawful
holder. Under the "nemo dat quod non habet" rule ("no one gives what he doesn't have"), a seller
cannot pass better title than he himself has; so if the goods are subject to an encumbrance (such as a
mortgage, charge or hypothec), or even stolen, the bill of lading will not grant full title to the holder.[16]

Types of bills of lading

Bills of lading may take various forms, such as on-board and received-for-shipment.[17]

An on-board bill of lading denotes that merchandise has been physically loaded onto a shipping vessel,
such as a freighter or cargo plane.

A received-for-shipment bill of lading denotes that merchandise has been received, but is not
guaranteed to have already been loaded onto a shipping vessel.(Typically, it will be issued by a freight-
forwarder at a port or depot). Such bills can be converted upon being loaded.[g] The received for
shipment BLs are used to deliver documents to the consignee faster. Yet these BLs are not accepted if
the payment method is LC (Letter of Credit).

Charter-party bill of lading

Charter-party bill of lading, for a sulfuric acid bulk cargo

A straight bill of lading is used when payment has been made in advance of shipment and requires a
carrier to deliver the merchandise to the appropriate party.

An order bill of lading is used when shipping merchandise prior to payment, requiring a carrier to deliver
the merchandise to the importer, and at the endorsement of the exporter the carrier may transfer title
to the importer. Endorsed order bills of lading can be traded as a security or serve as collateral against
debt obligations.[15]

Bills of lading and charterparties compared

A charterparty is the contract governing the relationship between the shipowner and the charterer. The
bill of lading governs the relationship between the shipper and the carrier (who will be either a
shipowner or a demise charterer). If the exporter (the shipper) is shipping a small amount of cargo, he
will arrange for a carrier to carry the goods for him, using a bill of lading. If the exporter needs the whole
(or a very substantial part) of the ship's cargo capacity, the exporter may need to charter the vessel, and
he will enter into a charterparty agreement with the shipowner.

If the charter party is a time or voyage charterparty, the shipowner will still have control of the ship and
its crew. If there is a demise (or "bareboat") charterparty, the charterer will effectively have a long lease
and will have full control of the vessel. When the master (captain) issues a B/L to a shipper, he will be
acting as an agent for the carrier, who will be either the shipowner (time or voyage) or the charterer
(demise).

In a time-charterparty or voyage-charterparty, if the charterer is shipping his own cargo (rather than the
cargo of a third party) he will receive a bill of lading from the master, acting as agent of the shipowner;
but that B/L will serve solely as a receipt and document of title, and its terms will (subject to contrary
intent) be secondary to the terms of the charterparty, which remains the dominant contract.[18]

Sea waybills and electronic data interchange (EDI)

Under Art. III of the Hague-Visby Rules, a carrier must, on demand, provide the shipper with a bill of
lading; but if the shipper agrees, a lesser document such as a "sea waybill" may be issued instead. In
recent years, the use of bills of lading has declined, and they have tended to be replaced with the sea
waybill. (If a so-called bill of lading is declared to be "non-negotiable", then it is not a true B/L,[19] and
instead will be treated as a sea waybill.)

The main difference between these two documents is that the waybill gives the bearer the right to
possession of the cargo, but does not confer title in the goods. As a result, there is no need for the
physical document to be presented for the goods to be released. The carrier will automatically release
the goods to the consignee once the import formalities have been completed. This results in a much
smoother flow of trade, and has allowed shipping lines to move towards electronic data interchange
which may greatly ease the flow of global trade.[citation needed]
For some time, it has been the case that the cargo may arrive at the destination before the bill of lading;
and a practice has arisen for the shipper (having sent the bill of lading to the banks for checking) to send
to the consignee a letter of indemnity (LOI) which can be presented to the carrier in exchange for the
cargo. The LOI indemnifies the carrier against any cargo claim, but the document is not transferable and
has no established legal status. For letter of credit and documentary collection transactions, it is
important to retain title to the goods until the transaction is complete. This means that the bill of lading
still remains a vital document within international trade.

Alternatively, to overcome the possibility of the goods reaching the destination ahead of the cargo,
majority of the Shipping Lines offer an “Express release” service (formerly known as “Telex release”). By
surrendering the full set of bills of lading issues at the port of loading, the shipping line can instruct the
port of discharge to release the cargo without the physical presentation of bills of lading at destination.
[citation needed]

Electronic bills of lading

For many years, the industry has sought a solution to the difficulties, costs and inefficiencies associated
with paper bills of lading. One answer is to make the bill an electronic document.[20] An electronic bill
of lading (or eB/L) is the legal and functional equivalent of a paper bill of lading.[21] An electronic bill of
lading must replicate the core functions of a paper bill of lading, namely its functions as a receipt, as
evidence of or containing the contract of carriage and as a document of title.[citation needed]

The UNCITRAL Model Law on Electronic Transferable Records enables the issuance of bills of lading in
electronic form that are functionally equivalent to paper-based ones. As a result, electronic bills of
lading may be issued in the jurisdictions that have enacted that Model Law. These are Singapore and
Bahrain.[citation needed]

Besides that, German law allows the usage of electronic Bills of Lading and other documents of title, see
sec. 516 of the German Commercial Code.[22] The German priniciple of functional equivalence matches
with the MLETR.

Step 1: Seller consigns the goods to a carrier in exchange for a bill of lading.

Step 2: Seller provides the bill of lading to bank in exchange for payment. Seller's bank then provides the
bill to buyer's bank, who provides the bill to buyer.

Step 3: Buyer provides the bill of lading to carrier and takes delivery of the goods.
The Hague rules are slightly in favor of shippers. The Hague Visby rules are considered to have an
advantage to the carrier compared to the Hague rules.

The ship owning countries have ratified the Hague-Visby rules. Where as the shipper prominent
countries like Malaysia has not ratified the Hague visby rules and are happy with Hague rules.

Hague Rules

Carrier must exercise due diligence before and at beginning of voyage to:

(a) make ship seaworthy;

(b) properly man, equip and supply the ship;

(c) make holds etc. fit and safe for reception,carriage and preservation of cargo.

Carrier must properly and carefully load,handle, stow, carry, keep, care for and discharge goods

Hague Visby Rules

Carrier must exercise due diligence before and at beginning of voyage to:

(a) make ship seaworthy;

(b) properly man, equip and supply the ship;

(c) make holds etc. fit and safe for reception,carriage and preservation of cargo.

Carrier must properly and carefully load,handle, stow, carry, keep, care for and discharge goods

Hamburg Rules

Carrier, his servants and agents must take all measures that could reasonably be required to avoid the
event causing loss and its consequences

Rotterdam Rules

Deviation
Hague Rules

Deviating carrier might lose right to rely on defences in Rules and lose right to limit liability. Art IV Rule 4
provides “any deviation in saving or attempting to save life or property at sea, or any reasonable
deviation shall not be deemed to be an infringement or breach of the Rules or contract of carriage”.

Hague Visby Rules

Deviating carrier might lose right to rely on defences in Rules and lose right to limit liability. Art IV Rule 4
provides “any deviation in saving or attempting to save life or property at sea, or any reasonable
deviation shall not be deemed to be an infringement or breach of the Rules or contract of carriage”.

Hamburg Rules

No special provisions. Deviation if it causes loss is subject to general test of carrier’s liability . Art 5.6
exempts a carrier from liability where he attempts to save life or “reasonable measures” are taken to
save property. This would apply to deviation as much as any other cause of loss.

Rotterdam Rules

Deviation of itself shall not deprive the carrier of any defence or limitation.

Carrier to “properly and carefully receive,load, handle stow, carry, keep, care for,unload and deliver the
goods”, unless specifically agreed otherwise in respect of loading, handling, stowing or unloading.

Carrier to exercise due diligence before, at the beginning of and during the voyage by sea to:

(a) make and keep the ship seaworthy;

(b) properly crew, equip and supply the ship and keep the ship so crewed, equipped and supplied
throughout the voyage; and

(c) make and keep the holds etc. fit and safe for the reception, carriage and preservation of goods

Live Animals

Hague Rules
Excluded from Rules

Hague Visby Rules

Excluded from Rules

Hamburg Rules

Rules apply but carrier not liable for inherent “special risks”.If carrier complies with shipper’s nstructions
he will be presumed not to be liable

Rotterdam Rules

Contract of carriage may exclude or limit obligations/liability, unless claimant can prove that loss of or
damage to or delay in delivery resulted from act or omission of carrier or performing party, with the
intent to cause such loss or recklessly

Deck Cargo

Hague Rules

Excluded from Rules if stated to be carried on deck on face of B/L. Undeclared deck carriage may affect
carrier’s ability to rely on defences, although the carrier may still rely on package limitation under

Hague Visby Rules

Excluded from Rules if stated to be carried on deck on face of B/L. Undeclared deck carriage may affect
carrier’s ability to rely on defences, although the carrier may still rely on package limitation under

Hamburg Rules

Rules do not exclude deck cargo. Carrier can undertake deck carriage if agreed with shipper or accords
with the “usage of a particular trade or is required by statutory rulesor regulations”. Must be statement
in the B/L that goods carried on deck. Failure to agree deck carriage makes carrier liable for damage, loss
or delay resulting solely from carriageon deck. Carrier cannot limit liability when deck carriage is in
breach of express agreement to carry below deck.

Rotterdam Rules
Rules will apply to deck cargo so carried if:

carriage required bylaw; or

carried in containers; or

In accordance with contract of carriage

or the “customs, usages or practices of the trade in question”. If not and loss or damage due to carriage
on deck, then carrier loses entitlement to defences. Further, carrier cannot limit liability when deck
carriage is in breach of express agreement to carry below deck. Contract particulars to state goods may
be carried on deck if carrier to have protection against third parties acquiring negotiable transport
document

Dangerous cargo

Hague Rules

Inflammable, explosive or dangerous goods if loaded without knowledge of the master (or carrier’s
agent) may be discharged, rendered harmless or destroyed at shipper’s expense.

If carrier knows of their nature but they prove dangerous they may still be discharged, rendered
harmless or destroyed without liability on the part of the carrier, save in general average.

Hague Visby Rules

Inflammable, explosive or dangerous goods if loaded without knowledge of the master (or carrier’s
agent) may be discharged, rendered harmless or destroyed at shipper’s expense.

Hamburg Rules

Similar provisions apply and the shipper is obliged to mark and label dangerous goods ina suitable
manner

Rotterdam Rules

Carrier (or a performing party) may decline to receive/load and may unload, destroy or render goods
harmless
What is the effect of statements in the bill?

Hague Rules

Prima facie evidence of their accuracy.

Hague Visby Rules

Prima facie evidence in hands of shipper, conclusive in hands of third party, e.g. consignee to whom the
B/L is transferred in good faith.

Hamburg Rules

Prima facie evidence of statement in hands of shipper (whether shipped or received B/L). Conclusive in
hands of third party who relies on statements. If freight is payable by holder of the B/L failure to state
this is evidence that no freight is payable

Rotterdam Rules

Prima facie evidence of the carrier’s receipt of the goods as stated. Proof to contrary not admissible
where contract is negotiable or nonnegotiable but requires it be surrendered for delivery and the
document is in the hands of a consignee/third party acting in good faith

Duties of shipper in supplying carrier with information.

Hague Rules

Shipper is deemed to guarantee accuracy of statement as to weight and quantity of cargo. Shipper to
indemnify carrier for loss resulting from errors.

Hague Visby Rules

Shipper is deemed to guarantee accuracy of statement as to weight and quantity of cargo. Shipper to
indemnify carrier for loss resulting from errors.

Hamburg Rules
Same as Hague Rules

Rotterdam Rules

Shipper is deemed to have guaranteed the accuracy of the information provided.

Notification of damage.

Hague Rules

Notice of loss or damage must be given in writing to the carrier or his agent:–

on day of delivery; or

within 3 days where damage is latent.

Hague Visby Rules

Notice of loss or damage must be given in writing to the carrier or his agent:–

on day of delivery; or

within 3 days where damage is latent.

Hamburg Rules

Notice of loss or damage to be given in writing to carrier:

by the working day following delivery to consignee; or

within 15 days of delivery where damage is latent.

Notice of delay must be given within 60 days of delivery.

Carrier must give notice of complaint to shipper within 90 days of delivery

Rotterdam Rules

Shipper is deemed to have guaranteed the accuracy of the information provided.

Limitation of action.

Hague Rules

“Suit” must be brought within 1 year of delivery or date delivery should have taken place

Hague Visby Rules

Same as Hague Rules.

Indemnity actions may be brought after 1 year; the period for commencing suit to be determined by
local law but not to be less than 3 months after claim settled or suit served

Hamburg Rules

Litigation or arbitration to be commenced within 2 years from date of delivery of goods or the last day
upon which the goods should have been delivered.

Indemnity proceedings may be commenced after this period (at least 90 days from date of
commencement of action against carrier must be allowed

Rotterdam Rules

2 years after delivery or when goods should have been delivered.