ICC Digital Library Forum

Phil,

Although not negotiable, a ‘straight consigned’ b/l is a document of title in English law I believe, even though not negotiable, and does not have the same status as a waybill. See for example
EAST WEST CORPORATION v DKBS 1912 and AKTS SVENBORG (Neutral Citation Number: [2002] EWHC 83 (Comm)) IN THE HIGH COURT OF JUSTICE QUEENS BENCH DIVISION COMMERCIAL COURT 7 February 2002.

I will continue to refuse any and every blading that gives the carrier the right to release goods without production of the original blading where the credit is subject to English law. This therefore extends to the latest Maersk ‘clause’. I will adopt the same position regarding every other credit not subject to English law unless I can be convinced that under the applicable law the blading is compliant.

Jeremy

[edited 10/3/03 3:42:58 PM]

I would endorse Jeremy's position on straight consigned B/L. Moreover, he raises an important point in that this type of B/L is a document of title. This means that if I ship goods on a straight consigned B/L to the US, but en route I discover that the intended consignee goes out of business, I can then agree with the carrier to substitute the original bills which I hold to read a different consignee or to order. Alternatively, by holding the original B/L, I could instruct the carrier to return the goods at my expense.
In my opinion, the Maersk clause flies in the face of this option available to the legitimate holder of any full set of original Bs/L, whether or not straight consigned.

Laurence

In practice, rejecting on the basis of the 'non-neg' clause will only apply to l/c's specifically calling for straight b/l's and, in my experience, such l/c's are uncommon. On this basis, I doubt that Maersk will feel under pressure to remove this clause so quicky, or if at all

Phil

Phil,

On the 'export' credits side, we do see a fair number of credits that specify bladings and that require goods to be consigned to the issuing bank.

Jeremy

Jeremy,

My experience obviously isn’t as wide as I thought it was!

However, in these circumstances would a court support rejection by an issuing bank of such a b/l on the basis that, effectively, it bears a clause that goods will be delivered to that bank upon identification without production of the b/l?

As Mr Spock would say, ‘it’s not logical, Captain’

Phil

Phil,

I believe the point is that -in the absence of surrender of a blading-the 'Maersk clause' allows the carrier to deliver the goods to a party purporting to be the consignee, but who in fact isn't, without liability.

Jeremy

Unfortunately we have now introduced a clause in our LCs that does not allow for B/Ls that on their face state that goods may be released without presentation of an original. This makes the "new" Maersk version discrepant. Detest adding clauses like this but Applicants agree and we can "happily" finance where we look to the goods as security.
Still does not help open account and collection items.
Added problem is the lack of space on vessels and that Maersk have such a large share of the market.

...but the revised wording mentioning that goods will be released without original b/l only applies to non-negotiable b/l's i.e. straight. The status of a 'to order' b/l is not affected by this part of the clause.

Phil

If exporters wished to ship goods without the recipient needing to show evidence of title to the goods, the obvious choice is to use seawaybills. When they choose to use B/L (with the implied agreement of issuing bank & applicant), this establishes that the B/L is used as a document of title.
The result of the Maersk clause debases the B/L to a transport document which is not a document of title. The document therefore fails to establish itself as a true B/L. Merely printing the words "bill of lading" is not enough to satisfy the definition of a B/L. Seawaybills have also been typed up as "Express B/L". This does not alter the fact that they are not true bills of lading because they are not documents of title.
In my opinion, the Maersk clause demotes the document issued to that of a seawaybill and therefore will be discrepant with any LC calling for a B/L.

Laurence

Have just received via email a document dated 19 January from the ICC stating that the view Banking Commission, "as a whole" is that these bills of lading are to be honored as compliant.

Not having been able to attend the meeting in New Delhi, this is the first news I've had of that decision.

What do other contributers think of this decision?

Judith