ICC Digital Library Forum

Few points to make

1. Courts construe bills of lading in the same manner as other contracts.

(Amoco Overseas Co. v. S.T. Avenger 387 F. Supp. 589 at p. 594, 1975 AMC 782 at p. 789 (S.D. N.Y. 1975): "The bill of lading, in addition to being a negotiable instrument, is the contract governing the rights of the cargo owner vis-à-vis the shipowner. As such it is to be interpreted according to principles of contract law." For a succinct summary of the common law contractual construction see Lord Steyn, "Contract Law: Fulfilling the Reasonable Expectations of Honest Men" (1997) 113 L.Q.R. 433. )

(Associated Metals & Minerals Corp. v. M.V. Arktis Sky 1991 AMC 1499 at p. 1507 (S.D.N.Y. 1991), rev'd on other grounds, 978 F.2d 47, 1993 AMC 509 (2 Cir. 1992); Union Steel America Co. v. M/V Sanko Spruce 14 F. Supp. 2d 682 at p. 685, 1999 AMC 344 at p. 347 (D. N.J. 1998): "... since the bills of lading constitute a contract, the question of who the parties meant to identify by 'the carrier' in the forum selection clause is one concerning the expressed contractual intent.")

2. There are rules of interpretation used in construing written documents that are also pertinent to bills of lading and these rules are:
a. Contra Proferentem: which means that the benefit of doubt goes against the interest of the author of the contract.
b. Strict construction of exception clauses: which means that non-responsibility clauses & limitation clauses will be interpreted restrictively.
c. Precedence of handwritten or typewritten over printed words
d. Custom & usage: customs and practices before loading & after discharge at the port of loading & discharge may be considered by the courts as part of contact of carriage even if the B/L is silent on them
e. Surrounding circumstances
f. Small-print clauses: the clauses that appear in minuscule type on the back of B/L. Traditionally courts are hostile to theses clauses and the Scrutton L. J’s dictum is famous on theses clauses. “ I desire to protest against the extremely illegible condition of this B/L. shipowners have had a good deal of warnings from courts; and some day they will find themselves deprived of the protection of their exceptions on the ground that they have not given reasonable notice of them as terms of contract”.
g. Ejusdem Generis: it means that “where several words preceding a general word point to a confined meaning the general word shall not extend in its effect beyond the subject of the same class”. Example: B/L authorizes the vessel to call at any ports in any order for bunkering or other purposes”. The English court of appeal in Foscolo Mango v. Stag Line, did not authorize a geographic deviation for the purpose of landing two engineers who had been aboard the vessel in order to test a superheater.

3. We agree that the bill of lading might not be the contract in itself but the best evidence of it.

(Francosteel Corp. v. M/V Kapetan Andreas G. 1993 AMC 1924 at p. 1927 (S.D.N.Y. 1993); Fabrica de Tajidos la Bellota S.A. v. M.V. Mar 799 F.Supp. 546 at pp. 557-558, 1993 AMC 721 at p. 730 (D. V.I. 1992); Seguros Comercial Americas S.A. de S.V. v. American President Line, Ltd. 910 F.Supp. 1235 at p. 1243 note 19, 1996 AMC 1441 at p. 1449 note 19 (S.D. Tex. 1995), judgment vacated on other grounds, 105 F.3d 198, 1997 AMC 1566 (5 Cir. 1996). In International Knitwear Co. Ltd. v. M/V Zim Canada 1997 AMC 1290 at p. 1293 (S.D. N.Y. 1994), the court said: "…the preferred interpretation of a contract is one that gives a reasonable and effective meaning to all terms of a contract as opposed to having a part unreasonable or of no effect." See also Finagra v. O.T. Africa Line [1998] 2 Lloyd's Rep. 622 at p. 630. See also arts. 1157 c.c. (France), 1157 c.c (Belgium); 1428 c.c. (Quebec 1994); art. 2049 c.c. (Louisiana). )

(The Ardennes [1951] 1 K.B. 55 at p. 59, (1950) 84 Ll. L. Rep. 340 at p. 344. See Chap. 1: "Application of the Rules Generally", supra. In addition to the bill of lading, the contract may comprise such components as the booking note, the carrier's advertisement and tariff, the oral arrangements and correspondence between the parties, and even customs and usages of the ports of loading and discharge which are known to, and accepted by, the shipper. )

4. The bill of lading might consist of more than one page, but these extra pages become integral part of it. Here lies the issue, which is of a legal manner now and outside the scope of UCP. How would a banker know from the face of the attachment that this particular attachment is the genuine integral part of the bill of lading? Why should he come to this area where angles fear to tread? What about strict compliance with UCP 500? What if the document checker does not know all the above staff, which I assume many do not know?

All these issues come into surface because the attachment is not signed or stamped or authenticated by the carrier.

Dear Mr. Lee

Until a time comes and we arrange that you deliver a workshop on transport document for bankers it is better to restrict the issue to UCP500 only.



[edited 10/28/01 9:16:24 AM]

Dear Hatem, thanks for your citation of the cases for sharing with members here. However, we would like to share with you and other members our experience in using the cases to support our asssertions.

When we quote the dictum of maritime precedent cases, we have to make sure that they are referring to the NEW VERSION of Carriage of Goods by Sea Act 1992 (COGSA) of UK upon which many similar maritime codes are based, such as the China Maritime Code. Some early cases based on the previous version of COGSA may not hold now due to drastic changes in the COGSA 1992. For example the different concepts of carriage by sea waybills and other documents are to be introduced only in the 1992 version but not sooner.

Since it may take many years to complete the litigation, some eight years or more, for example. So a case published in 2001 may still refer to the old COGSA version before 1992. We have the experience in handling a case using UCP 400 many years after UCP 500 is effective but this is not a frequent occasion. Parties may waste three years just for out-of-court negotiation before going to court.

http://www.tolee.com

[edited 10/28/01 8:22:23 PM]

Hence was my conclusion paragraph that acknowledged you as an expert in the subject matter and this not to flatter you but an honest statement, simply because trasport issues are not my especialty, nor a very well and deeply understood by bankers.

If you notice I have selected some for Scrutton who has been famous with some litigation issues.

Thanks for your comments

What a business! Hallo all from Turkey! A short answer: If an attachment to b/l does not bear any signature, stamp, chop etc. I would consider it as discrepant, it is so simple... Moreover, our local law is prohibiting that kind of attachment and if the desc. of goods is too long, I would insert to the credit terms 'any attachment to the b/l should be duly signed by the carrier/agent/master... No need to argue more and to debate, we do not consider ourselves mystic creatures or detectives, what we intend is to be clearly required on the opening of credits.
regards, Cengizhan Kaptan - Certified Documentary Credits Specialist from Turkey. By the way, MR T.O. Lee I appreciate your URL and follow it regularly. It is a pity for me not to meet you in F.furt since I had to left my bank going out of business and had to start in another one. God knows, hope to meet you and you ather colleagues. Kind regards again... you may always reply to: cenkap@superonline.com

Dear Mr. Blue Hawk,

OUR SKILLS WRITTEN IN OUR NAMES

As a banker, it is good for you to have the sharp eyes of a cool blue hawk in examination of documents. You should not have missed any single discrepancy.

My previous secretary is named Elsie. That means I cannot get away from L/C.

Hope you would settle down quickly in your new venture and come to Frankfurt for the ICC Banking Commission meetings next week. Then you should be able to meet me there. I will be staying at the Steigenberger Franfurter Hof Hotel.

OUR EMAIL SYSTEM IS DOWN, PLEASE SEND FAX

It is good to hear that our DC website is of some help to you. But it has been down for one week and our ISP is trying to fix the problems. Now we can only send out emails but receipt is impossible. If you have sent us emails for the last few days or have a new message for us please send it by fax to Toronto (905) 883 5427.

We are sorry for the inconvenience so caused.

http://www.tolee.com

[edited 11/4/01 5:08:45 PM]

In my response to a query here in DC PRO I referred to an ICC banking commission opinion that we could draws some lessons of it regarding the query inhere. The opinion I am referring to is R351.

HERE IS AN EXCERPT FROM IT

“Sub-Article 23(a)(iv) requires that the presentation of the marine or ocean bill of lading consist of a sole original bill of lading or, if issued in more than one original, the full set as so issued. The credit would have called for a full set of marine or ocean bills of lading with the expectation that the bill of lading would indicate the number of originals issued in order that this can be checked against the originals presented.

The bills of lading that were presented did not indicate the number of originals that had been issued. The shipping company produced an additional certificate stating the number that had been issued.

The certificate should be from the carrier and should have been issued as an official addendum to the bill of lading, i.e. indicate that the document is an integral part of B/L No. ... dated ... . As presented, the additional certificate from the shipping company was not required by the credit and therefore would not be examined in accordance with sub-Article 13(a) of UCP 500.”