CARRIAGE OF GOODS BY SEA

Bill of Lading
 THE BILL OF LADING
Definition

“A bill of lading is a legal document between the shipper of

goods and the carrier detailing the type, quantity and
destination of the goods being carried. The bill of lading
also serves as a receipt of shipment when the goods are
delivered at the predetermined destination.”

Characteristics/Function
A bill of lading has the following characteristics:

1. Receipt
2.Evidence of contract of carriage;
3. Document of title .
 Types of Bill of Lading
1.Straight Bill of Lading: This is typically used when shipping to a customer. The “Straight Bill
of Lading” is for shipping items that have already been paid for.
2. Clean Bill of Lading: A Clean Bill of Lading is simply a BOL that the shipping carrier has to
sign off on saying that when the packages were loaded they were in good condition. If the
packages are damaged or the cargo is marred in some way (rusted metal, stained paper,
etc.), they will need issue a "Soiled Bill of Lading" or a "Foul Bill of Lading.
3. Ocean Bill of Lading: Ocean Bills of Lading allows the shipper to transport the cargo over
seas, nationally or internationally.
4. Through Bill of Lading: Through Bills of Lading are a little more complex than most BOLs.
It allows for the shipping carrier to pass the cargo through several different modes of
transportation and/or several different distribution centers. This Bill of Landing needs to
include an Inland Bill of Landing and/or an Ocean Bill of Landing depending on its final
destination.
5. Multimodal/Combined Transport Bill of Lading: This is a type of Through Bill of Lading
that involves a minimum of two different modes of transport, land or ocean. The modes of
transportation can be anything from freight boat to air.
6. Claused Bill of Lading: If the cargo is damaged or there are missing quantities, a Claused Bill
of Landing is issued.
IS THE BILL OF LADING A NEGOTIABLE INSTRUMENT?
A bill of lading possesses some of the characteristics of a
negotiable instrument. It is a document of title and it can be
transferred by endorsement and delivery. But it is not a true
negotiable instrument because of the following 2 reasons :

l. It is not included in the definition of the term

negotiable instrument as given in the Negotiable
Instruments Act.
2. The transferee of a bill of lading gets only the rights of the
transferor of the instrument. If the title of the transferor is
defective, the transferee gets a defective title. 'But in the
case of a negotiable instrument a bona fide purchaser for
value without notice of defect, becomes a holder in due
course and gets a good title in cases where the title of the
transferor is defective.
• http://www.admiraltylawguide.com/conven/
haguerules1924.html

• http://www.mot.gov.my/SiteCollectionDocu
ments/Maritim/Akta-Ordinan-
Warta/Carriage%20Of%20Goods%20By%
20Sea%20Act%201950%20(act%20527).
pdf
Malaysian Contract of Carriage of
Goods by Sea Act 1950
Definition and Characteristics of Contract
of Carriage of Goods by Sea

A contract of carriage of goods by sea is a

contract under which the carrier, against
payment of freight, undertakes to carry by sea
the goods contracted for shipment by the
shipper from one port to another.
The parties to the contract
Charter Party
ship-owner , charterer

Bill of Lading
carrier ,shipper
 Types of Charter Party
Contracts
• 1. Time Charter – 1 year
• 2.Voyage Charter – single- return voyage
• 3. Charter Party by Demise or Demise Charter
• Parties to contract of carriage – between
seller/shipper and carrier/ship
• Carrier – charterer or shipowner
• Parties to Charter Party contract- between charterer
and ship-owner
 1 The Basic Rights and
Responsibilities of the Carrier
The
Basic
Rights
and
Responsi
bilities
of the
parties
The Basic Rights and
2
Responsibilities of the shipper
 Responsibilities of the Carrier
1. to provide a ship and make it seaworthy

(Hague Rule) H.R. Art. 3(1) :

The carrier shall, before
and at the beginning of the
voyage, exercise due diligence
to make the ship seaworthy,
properly man, equip and supply
the ship and to make the holds,
refrigerating and cool
chambers and all other parts of
the ship in which goods are
carried, fit and safe for their
reception, carriage and
preservation.
 2、Responsibility to cargo

H.R. Art.3(2):
The carrier shall
properly
and carefully load,
handle, stow, carry, keep,
care for and discharge
the goods carried.
3.without unreasonable
deviation

The carrier shall

carry the goods to
the port of discharge
on the agreed or
customary or
geographically
direct route.
 Any deviation in
saving or attempting
to save life or property
at sea or any
reasonable deviation
shall not be
deemed to be an
act deviating
from the provisions of
the preceding
paragraph.
4 to reasonable dispatch 5 Liability to compensate
damage
Delay in delivery
occurs when the
goods have not been
delivered at the
designated port of
discharge within the
time expressly agreed
upon.
During the period the
carrier is in charge of
the goods, the carrier
shall be liable for the
loss of or damage to
the goods, except as
otherwise provided
for in this Section.
 Where loss or damage or delay in delivery has occurred from causes
from which the carrier or his servant or agent is not entitled to
exoneration from liability, together with another cause, the carrier shall
be liable only to the extent that the loss, damage or delay in delivery is
attributable to the causes from which the carrier is not entitled to
exoneration from liability; however, the carrier shall bear the
burden of proof with respect to the loss, damage or delay
in delivery resulting from the other cause.
 The basic rights of the carrier
（1） （2）

advance freight to
1.The right of
freight/freight claims collect/freight
prepaid for freight,
dead freight , payable at
demurrage and
other charges
destination
 2. Lien on cargo

If the freight, contribution

in general average,
demurrage to be paid to the
carrier and other necessary
charges paid by the carrier
on behalf of the owner of
the goods as well as other
charges to be paid to the
carrier have not been paid in
full, nor has appropriate
security been given, the
carrier may have a lien, to
a reasonable extent, on the
goods.
 3. Immunities
1

Hague Rules: Art.4(2).

The carrier shall not be
liable for the loss of or
damage to the goods
occurred during the period
of carrier’s responsibility
arising or resulting from
any of the following
causes:
 (1)
Fault of the Master, crew members, pilot or servant of the carrier in
the navigation or management of the ship;

(2)
Fire, unless caused by the actual fault of the carrier;

(3)
Force majeure and perils, dangers and accidents of
the sea or other navigable waters;

(4)
War or armed conflict;
 (5)
Act of the government or competent authorities, quarantine
restrictions or seizure under legal process;

(6)
Strikes, stoppages or restraint of labour;

(7)
Saving or attempting to save life or property at sea;

(8)
Act of the shipper, owner of the goods or their agents;
 (9)
Nature or inherent vice of the goods;

(10)
Inadequacy of packing or insufficiency or illegibility of marks;

(11)
Latent defect of the ship not discoverable by due diligence;

(12)
Any other causes arising without the fault of the carrier
or his servant or agent.
Basic responsibilities of shipper
(1) Obligation to provide the agreed and properly packaged goods

The shipper shall have the goods properly packed

•The
and carrier's
shall rightthe
guarantee to indemnification
accuracy of the as provided
description,
mark,
for number
in the of packages
preceding or pieces,
paragraph weight
shall not affectorthe
quantity of theofgoods
obligation at theunder
the carrier time of shipment
the contractand
of
Shall indemnity
carriage the towards
of goods carrier against any loss
those other than
resulting from inadequacy of packing
or inaccuracies in thethe shipper.
above mentioned information.
(2) Obligation to export goods in time for the formalities required

The shipper shall perform all necessary procedures

at theshipper
The port, customs,
shall be quarantine,
liable for anyinspection
damage toor
other competent
the interest authorities
of the with respect
carrier resulting fromto the
the
shipment of the goods and shall furnish to the
inadequacy or inaccuracy or delay in delivery
carrier all relevant documents concerning the
proceduresof such
the documents
shipper has gone. through.
(3) The obligation to pay the freight and other charges

1 2

The shipper shall The shipper and the carrier

may reach an agreement that
pay the freight to the freight shall be paid by
the carrier as the consignee. However, such
agreed. an agreement shall be noted
in the transport documents.
 The shipper shall not be liable for the
loss sustained by the carrier or the actual
carrier, or for the damage sustained by
the ship, unless such loss or damage was
(4) Shipper caused by the fault of the shipper, his
Indemnification
obligation servant or agent.
Basis of liability
Responsibility The servant or agent of the shipper shall
for the fault， not be liable for the loss sustained by the
But Art. 66, 67, 68
Except Outside.
carrier or the actual carrier, or for the
damage sustained by the ship, unless the
loss or damage was caused by the fault of
the servant or agent of the shipper.
Cancellation of the contract of carriage of goods by
sea
(1)

Sailing before any lifting

The shipper may request the cancellation of the contract
of carriage of goods by sea before the ship sails from the
port of loading. However, except as otherwise provided for
in the contract, the shipper shall in this case pay half of the
agreed amount of freight;

(2)

Any lifting of sailing

If the goods have already been loaded on board, the shipper
shall bear the expenses for the loading and discharge and
other related charges.
 2. (frustration of contract)

（1）
Either the carrier or the shipper may request the cancellation
of the contract and neither
shall be liable to the other if, due to force majeure or other causes
not attributable to the fault
of the carrier or the shipper, the contract could not be
performed prior to the
ship's sailing from its port of loading.

If the freight has already been paid, it shall be refunded

to the shipper, and, if the goods have already been
loaded on board, （2）
the loading/discharge expenses shall
be borne by the shipper.