Article

Note: Under a contract for carriage of printing machinery issued by Mediterranean Shipping Company SA (Carrier), to Seller and consigned to Buyer, J.I. MacWilliam and Company, four containers of printing machinery were damaged in the course of carriage. Buyer sued Carrier over the amount of damages and contended that the carriage contract" was covered by 'a bill of lading or similar document of title' within the meaning of s 1(4) of the [U.S.] Carriage of Goods by Sea Act 1971 and article I (b)of the [U.K.] Hague-visby Rules ... ."

The bill of lading in this case was a straight bill of lading, providing for delivery of goods to a named consignee and not to order or bearer, and so was not transferable by endorsement. Carrier contended that the contract of carriage was not covered by "a bill of lading or similar document of title" within the scope of the Hague-visby Rules and was, therefore, subject to the U.S. Carriage of Goods by Sea Act, which is significantly less generous in its financial limits than the Hague-visby rules.

Initially the matter had been referred to London marine arbitrators (Mssrs Mabbs, Hamsher, and Moss), who found that a straight bill of lading did not fall within the scope of the Hague-visby Rules. The Commercial Court, Langley, J., agreed with the arbitrators. The Court of Appeal, Gibson and Rix, LJJ, and Jacob, J., reversed the decision of Langley, J., and Carrier appealed. The House of Lords, Bingham, Nicholls, Steyn, Rodger, and Brown, LJJ., dismissed the appeal, ruling that a straight bill of lading was a "a bill of lading or similar document of title" sufficient to fall within scope of the Hague-visby Rules.

Lord Bingham noted that by their terms the Hague-visby Rules applied to:

(a) any bill of lading if the contract contained in or evidenced by it expressly provides that the rules shall govern the contract, and

(b) any receipt which is a non-negotiable document marked as such if the contract contained in or evidenced by it is a contract for the carriage of goods by sea which expressly provides that the Rules are to govern the contract as if the receipt were a bill of lading.

He also stated that the provisions permitting parties to contract out of the rules are "very restrictive and hard to satisfy."

Lord Steyn noted that "it contained the usual terms regarding the matters relevant to the allocation of risks between the parties which are to be found in bills of lading." He then noted that

In the hands of the named consignee the straight bill of lading is his document of title. On the other hand, a sea waybill is never a document of title.... Except for the fact that a straight bill of lading is only transferable to a named consignee and not generally, a straight bill of lading shares all the principal characteristics of a bill of lading ....

He further stated "[t]here is simply no sensible commercial reason why the draftsmen would have wished to deny the CIF buyer named in a straight bill of lading the minimum standard of protection afforded to the CIF buyer named in an order bill of lading."

Lord Rodger concluded that "the crucial characteristic of the 'document of title' in [the Hague visby Rules] is that it regulates the relations between the carrier and the holder. ... the document in this case, if not a bill of lading, would be a 'similar document of title'."

[JEB/lhd]

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