Legal functions of Bills of Lading related to the risk of disputes

1. Evidence of Receipt of Cargo

2. Evidence of a Contract of Carriage

3. Document of Title to Cargo

Legal functions of Bills of Lading related to the risk of disputes

1.1 Commercial function: Evidence of Receipt of CargoArticle III, rule 3 of the Hague and Hague-Visby Rules (and, similarly, Article 15(1)(b) of the Hamburg Rules), The words “shipped on board in apparent good order and condition” remain the most common form of words used to evidence receipt on board a vessel, in good condition, of a shipper’s cargo.

1.2 The risk of dispute: Carrier: not independently confirm all information about condition and

quantity of cargoCarrier: be liable for any discrepancies between the the quantity and

apparent order and condition of the cargo

Legal functions of Bills of Lading related to the risk of disputes

2.1 Commercial function: Evidence of a Contract of Carriage

• Save for a “received for shipment” bill of lading, a bill of lading will not or, at least, should not, be issued until after all of the cargo covered by that bill of lading has been shipped on board the carrying vessel (see, The Wilomi Tanana [1993] 2 Lloyd’s Rep. 41 @ 45 per Hobhouse J.)

2.2 Risks of disputes: contract based on Bill of Lading like liner contract -> not fair

Legal functions of Bills of Lading related to the risk of disputes

3.1. Commercial function: Document of Title to Cargo

3.2. Risk of disputes: • bills of lading have come to be treated also as

documents of title to the cargo covered, the use of sets of original bills of lading now provides substantial scope for fraudulent dealings; e.g. The Lycaon [1983] 2 Lloyd’s Rep. 548.