QUESTION ONE (1)

1. Discuss the types of a bill of lading under the carriage of goods by sea

a. Stale Bill of Lading

Bill of lading is a transport document used in carriage of goods by sea. The meaning of
“Stale” can be said expired or out of due date. Stale bill of lading is a transport document that
present after the expected or agreed due date to receive the document. For example of
situation that lead to the bill of lading become “stale” is, in case of short over seas cargo has
been shipped and the cargo arrives to the port before the bill of lading received by consignee
or nominated agent. Another situation is when the exporter and importer involved in sale
contract with agreed to pay the cost by using letter of credit. Normally bank will be given 21
days to submit the related document once the goods are shipped to destination port. In this
case if the exporter failed to provide the bill of lading to the nominated bank and present it
after the due date called as a “Stale bill of lading”. Late presentation discrepancy condition
has been fulfilled. Not only for bill of lading but all the document present after the due date
by the exporter become stale.

b. Multimodal Bill of Lading

This bill of lading is issued when the goods have been carried by two more than two modes
of transport to reach to the final destination. It can be any type of transport like air, rail, road
or ocean. This kind of bill of lading may cover more than one mode transport to transfer
goods like via ocean and rail, ocean, rail and road or ocean and road that covers all the mode
of transfer. In this case, the carrier is responsible to from the place receipt to place of delivery
of the cargo. Carrier can hire or subcontract to carry the cargo in one or more mode of
transfers. Normally in multimodal transport involved one unit of load shipped from port of
discharge to port of destination by using several mode of transportation without breaking the
unit. Multimodal bill of lading is a transport document that is evidencing more than one mode
of transport, one of which is typically by sea shipment, although it is not required. These
types of multimodal bills of lading are issued by a multimodal transport operator and mostly
printed on FIATA (International Federation of Freight Forwarders Associations) standard
pre-printed form.

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Multimodal transport operator (MTO) means any person who concludes a multimodal
transport contract and assumes responsibility for the performance thereof as a carrier for the
whole journey.

2. “As in the case of a voyage of charter-party, it is implied in all bills of lading that
no deviation will be made from contractual route, unless such deviation is
justified.”m (Payne & Ivamy’s Carriage of Goods by Sea, p.117)

When carrier involved in a contract of carriage of goods by sea his is automatically under the
obligation to delivery the goods to the agreed place and to the identifisble person usually
consignee in the bill of lading or endorsee without any delay and unjustified deviation.
Deviation means unauthorized, not mentioned or not allowed route taken by the carrier
instead of following normal geographical or mention route by charterer. Based on the
obligation contract the carrier should perform the voyage from one point to another point by
having normal voyage route even the charterer did not mention the route. For example, a
vessel that sail off from Penang Port (port of discharge) to the way of Shanghai Port (port of
destination) the vessel had been stopped at one of the Singapore port and continue the
voyage. It was doesn’t mean the vessel have been made deviation because its take usual route
between 2 ports. But in some cases the vessel deviation from the usual route are justified. If
the carrier made a deviation from normal route to safe the life are justified but deviate made
to safe the property consider as unjustified based on the case Scaramanga Vs Stamp (1880).
Other than that, if the carrier made deviation to avoid imminent perils or to avoid danger to
the vessel or cargo in the ship are justified. As conclusion that, if the carrier made unjustified
deviation, he is liable to pay for damage and delays to the charterer.

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QUESTION TWO (2)

1. Discuss regulations relating to the registration of ship and its advantages with
reference to the Merchant Shipping (Amendment) Act 2017 and decided cases.

Merchant Shipping is refer to the term a ship that involved in commerce activity by
the traders. In Malaysia, the Dewan Rakyat and Dewan Negara was passed the The
Merchant Shipping Amendment act 2017 on 9 and 16 August respectively by ament
the existed Merchant Shipping Ordinance 1952. However, the law come to the force
on the date appointed by the Minister even it was gazetted and become a law on 1
December 2017. The key element that amend from Merchant Shipping Ordinance to
Merchant Shipping Amendment Act 2017 are related to the registration of the
Malaysian ship (International) register, bareboat charteredout ships, the reqisters new
power, licensing of ships, increment of penalties, the rights of mortgagees and
Malaysia Shipping Development Fund.

Based on the section 11(1) Merchant Shipping Amendment Act 2017 elaborate the
meaning of register which is the Malaysia ship register or Malaysia International Ship
Register maintained by the registerar under section 14. In Malaysia, the ship
registration will be made by the public officer appointed by the director of Marine.
The appointed public office are become the Deputy Registrar of Ship. They are
responsible to control, perform function of registrar of ship and have all power of
registrar based on the requlations stated in the Act.

There are particular requirement needed by registrar to register the Malaysia Ship
according to the section 14(2) in Merchant Shipping Amendment Act 2017 is
particular information of the ship like capacity and type of the ship, owners detail
including bareboat charterers, mortgagees and representative person involved and the
respective interest in the ship. The registration must be maintained by the registrar in
physical and electronic form as maybe determined by the Director of Marine

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According to the section 18(1) Merchant Shipping Amendment Act 2017, no ship can be
allowed without registration to stay or enter within the Malaysian water or exclusive
economic zone. Only the ship that registered in Malaysia as Malaysian ship or register in
other country are allowed. There are several qualification needed to own a Malaysia ship.
Based on the section 19 explained the qualification needed by someone to own and register a
Malaysia ship. First of all, he or she should be a Malaysian citizen or to the extent as may be
determined by the Minister (usually by regulations to be issued in due course), a body
corporate incorporated in Malaysia to register under Malaysia Ship Register. If the person are
non-Malaysian citizen wants to register, he may register the as a Malaysia ship under the
Malaysia International Ship Register by appoint a representative person so long as the said
ship remains registered. The representative person must be a Malaysian citizen who has his or
her permanent residence in Malaysia or a body corporate incorporated in Malaysia that has its
principal place of business in Malaysia.

Secondly, application to register as a Malaysian ship under the Malaysia Ship Register or
Malaysia International Ship Register made according to the form determined by the Director
of Marine. The shipowner have to submit any document that certify the safety standard of
ship, the risk of pollution from the ship and the safety and welfare of person engaged on
board the ship and other document that containing the name of the ship and existing tonnages.
Moreover, a statement of the date when and the place where the ship was built, a statement
that proof he or she is the owner of the vessel and his citizenship of the owner and if the ship
is owned by more than one person then the number of shares each owner should be entitled.
One more statement that shows no other person is entitled as a owner to any legal or
beneficial interest in the ship or any share of the ship. Besides that, other document should be
submitted according to the requirement determined by the Director of Marine.

In section 21(1) Merchant Shipping Amendment Act 2017 explained that the ship owner
before going to register his ship as a Malaysian ship the owner should ask the surveyor to
surveyed and measured the ship and the tonnage. The surveyor have to check and certified
the measurement and surveyed ship are fulfil the requirement of the registrar. After certified,
the certificated should be submit to the registrar for further process. Based on the section
22(2) the registrar having the authority denied to approve a proposed name for the ship if the
name is undesirable, unacceptable or inappropriate, a name with intention to mislead, made
up of initial only, register in the register to another ship and a name that has been de-registred

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in the register, unless for the purpose of the re-registration of the same ship it was registered
under. The owner of the ship cannot change the name of the ship without earlier written
permission from the registrar and the payment of the prescribed fee. A person may subject to
the payment of prescribe fee, apply to reserve a prefix or suffix for a ship in accordance with
the regulation made under the ordinance.

Advantage of Merchant Shipping Amendment Act 2017 is non-citizen of Malaysia also able
to register under Malaysia International Ship Register by nominated a representative who is
Malaysia citizen. It will attract more international traders to invest in Malaysia. Other than
that, if the ship is already register at other country, still can be register at Malaysia by
terminate the registration at the country registered before. MSAA 2017 is intended to arrest
the steady decline of Malaysian shipping tonnage by encouraging shipowners and bareboat
charterers to flag their ships in Malaysia by introducing more categories of registration and
imposing less stringent registration requirements under the Ship Registers.

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QUESTION THREE (3)

Sarip asked his broker, Burn to arrange insurance for four crates of computer games to
be shipped from Seoul, South Korea to Kuala Lumpur, Malaysia. Burn arranged
insurance for four crates of computer games. During loading the stevedores dropped
one crate of computer games into the harbour. The crate was totally destroyed. The
remaining three crates were loaded onto the ship. When the ship arrived in Port of
Kelang, Malaysia; the crates were unloaded and stored in a warehouse to await
collection by Sarip’s agent. The night before crates were to be collected two crates were
stolen. Advise Sarip whether he can claim for the losses under the contract of insurance
and support your answer in relevant cases.
ANSWER:
Whould Sarip can claim insurance for the losses and damages under the contract of insurance
from the insurer?
Is that the insurer is liable for total lost under the Marine Insurance Act,1906?
Is that the Sarip in insurable interest while the cargo damage and loss ?
The question when the person insured the cargo willing to claim for the loss and damage is
finds the answer in the section 55(2)(a) Marine Insurance Act 1906, which provides the
definition the insurer is not liable for any loss attributable to the wilful misconduct of the
assured but, unless the policy provides, he is liable for any proximate caused by perils insured
against, even thought the loss would not have happened but for the misconduct or negligence
of the master or crew the losses can be covered. In the case of Sarip, 1 out of 4 create of
cargo he has been shipped from Seoul, South Korea to Kuala Lumpur was damaged due to
the negligence of the stevedore while, 2 out of 3 create that was shipped and arrived at port of
destination. While, stored at the warehouse has been stolen.
Based on the policy of insurance, the insurance will cover all the risk of damages and loss to
the subject matter insured except as a provided clause 4,5,6, and 7. Thus, the court decision in
the case Jasib Shipyard & Engineering (M) Sdn Bhd v Tune Insurance Malaysia Bhd thought
decision in respect the court held, and the balance of probabilities that their claim aslo fell
within Clause 1, which regards to “This insurance covers all risk of loss or damage to the
subject matter insured except as provided in Clauses 4,5,6 and 7”The court was view that, in
order with Clause 1, the defendant had undertaken to indemnify the plaintiffs against all risks
of loss to the insured cargo in the course of transit, including loading and unloading.

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Therefore, there was no doubt that loss of the crane during the unloading process was covered
by the insurance policy.
So, based on the particular case, we can say that Sarip can claim the losses for the one
computer game create that has been destroyed by the stevedore while loading into vessel.
This is because any loss occur due to the negligence or misconduct held by the master or its
crew is covered under the Marine insurance act 1906 and the insurer is liable to pay. Apart
from that, the insurance policy covered all kind of risk including loading and unloading
period except from the clause 4,5,6,7. So the action of the stevedore has be fall into this act
and policy which is considerable at plaintiff side. At this point, Sarip have rights to claim the
losses from the insurer.
Moreover, Based on the cargo clause 8, the insurance is attached from the time the goods
leave from the place or warehouse that place named for the commencement of the transit ,
continues during the ordinary course of transit and termination the insurance when the goods
delivery to the consignee, final warehouse or any place of the storage at the destination
named in the policy of insurance. Decided case support the statement is Kotak Malaysia
(KOM) Sdn Bhd v Perbadanan Nasional Insurance Sdn Bhd, In this case the defendant have
issued an off cover policy. The plaintiff have shipped the cargo from Tacoma, USA and
transit at Kobe, Japan and finally arrived at Port Klang. the plaintiff appointed Lautan Tujuh
Sdn Bhd as their forwarding agent while the haulier is from Konsortium Perkapalan Berhad.
The operater of the particular warehouse known as a Gudang No 3B which is located at Port
Klang. Once the goods arrived at the goods as been custom clearence and send directly to the
Gudang No 3B.
While the goods are stored in that particular warehouse, fire broke out and goods are
destroyed. The plaintiff commenced the present suit against the defendant on the basis that
the Off-Cover Policy mistakenly states that the voyage was 'from Tacoma, USA to Kuala
Lumpur via Port Klang' instead of 'from Tacoma, USA to Warehouse in Malacca via Port
Klang'. It was the plaintiff's contention that the Off-Cover Policy was in force and the goods
were insured, and the goods became total loss as a result of fire at Gudang 3B. The defendant,
on the other hand, contended that the plaintiff's claim was outside the duration of the
coverage under the Off-Cover Policy, having terminated when the goods were delivered to
Gudang 3B before the fire broke out and therefore, the defendant was not liable.
The Court Held, that Off-Cover Policy is not terminated when the goods have been delivered
to Gudang 3B at Port Klang. He said policy was still in force when the fire broke out

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happened. Based on the findings, the court is satisfied and announced the plaintiff are
qualified to claim against the defendant. Therefore, the plaintiff's claim is allowed with costs.

According to this case, the balanced 3 computer game create have been unloaded at the port
of destination and stored at the warehouse while waiting for the Sarip forwarding agent to
collect. During the period of stored 2 create was stolen. In this point, Sarif have to see the
agreed place where the Contract of insurance of goods end between the insurar and him. if
the policy state the period of insurance end when the carrier delivered at that particular
warehouse. Then Sarip cannot claim the losses for the particular 2 computer game create.
But, if the policy state, it will be not end until the cargo received by consignee, his warehouse
or agent warehouse or any place named by Sarip, then he can claim for the rest 2 computer
game crete which has been stolen as refer to the transit clause 8 in Marine Insurance Policy.
Section 56(1) of the Marine insurance Act state that a loss can be consider the total cargo has
been destroyed or lost known as a total loss or only a part of the cargo has been destroyed or
lost define as a partial loss. Although the assured person bring an action for the total loss but
the evidence proof that only part of the cargo has been destroyed or lost, then the insurer can
be pay for partial loss unless it not state in policy that loss have to recover in total loss.
In the case Asfar & Co.V Blundell (1896) a policy was affected the insurer to be made profit
on freight. Part of the cargo were dates which arrived at port of destination in damaged
condition due to the ship sunk. Even the damaged cargo have some commercial value for
distilling purposes but no longer answered the description of the dates. Therefore no freight
has been paid and the ship owner lost profit. In this case the court held, the ship owner can
claim loss from insurer in term of total loss. Besides that, in case of Lidgett v. Secretan
(1871) LR 6 CP 616. An underwriter was fully liable under a valued policy for a total loss by
fire during the currency of that policy. Though he was also liable for an unrepaired partial
loss under a policy immediately preceding the policy in question.

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According to this case, the insurer are liable to pay for the damage and loss. But the value to
be paid for the loss and damages is depended on the insurance policy and type of loss. In
Sarip case, from the insured 4 create only 2 and 1 creates were lost and destroyed
approximately. So, the insurer may pay the losses in term of partial loss while one more
create are still in a merchantable condition.
In section 6(2) Marine Insurance Act 1906, defines when the insurable interest must be
attached. According to this section if assured person no interest at the time of the loss, he
cannot acquire interest by any act or election after he is aware of the loss.

In the case, Colonial Insurance Company of New Zealand Adelaide Marine Insurance
Company (1886) 12 AC 128, PC a shipment of wheat was to be delivered from New Zealand
to England under a selling deal The buyer took out an insurance policy in the ship Duke of
Sutherland which provided cover for wheat cargo now on board or to be shipped After the
loading had begun, but before the entire cargo had been loaded both the ship and the cargo
were lost due to sea dangers The insurers contended on an inverter by the buyers on the
contract that the buyers did not have an insurable interest on the covered wheat at the time of
disclosure. The court ruled that threats to buvers began when and when some component of
the wheat cargo was placed on board.
According to the case of Sarip, he is already inform the broker to arrange the insurance policy
for 4 create cargo before the “cargo to be shipped from Seoul, South Korea to Kuala Lumpur,
Malaysia” it shows he is having a insurable interest. As noticed the cargo was lost while
waitingvfor the the Sarip agent to collect. It shows maybe the sales contract between his
buyer is based on CIF term which Sarip is the one bear the cost, insurance and freight or
Sarip export the goods for he’s own business at other country. Still the cost and risk fall into
him. If the arranged insurance policy and other document can be proof that Sarip are the one
have the relationship between the insured object at the moment cargo loss and damage than
he is having a rights to claim for the cargo. For example, father buy a insurance policy for his
son. The relationship between father and son is transparent and its shows he have a insurable
interest. If the grandparent wants to buy insurance policy for his grandchild, they have to
proof they have the relationship with that particular grandchild. Then only can proven they
have a insurable interest. Same goes to the case of Sarip.

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As a conclusion, Sarip can be claim the loss for 1 create that destroyed at the port of loading
from the insured person according to the insurance policy, institute of cargo clause. At the
same time for the rest 2 create lost at the destination warehouse, he have to make sure he
insured for the cargo until which point of delivery. If he is insured the cargo until the goods
delivered to the customer or any particular place, then he is eligible to claim for the rest 2
cargo. Amount he can be claim is depend on the value of policy or insurer perception seems
only 3 cargo have been damage while 1 more are still merchantable the insurer maybe pay for
the partial loss. At last, the relationship between Sarip and insured cargo are proved that his is
the guardian of the cargo, then he have the insurable interest during the loss and he is eligible
to claim the insurance

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