The circumstances under which cargo can be released
Concerns expressed by
importers that they are
unable to receive their cargo
if they’re not in possession
of an original bill of lading
(BoL) prompted FTW to seek
legal advice on the issue.
The general principle
of contract of carriage
states that you must be in
possession of an original
BoL, but if that bill goes
missing on its way to you,
or its arrival in your
hands is delayed, are
there any ways that
you can legally
lay your paws on
the cargo that
you may have
been urgently
waiting for to
replenish your
stock or to keep
your assembly
line moving, for
example?
There are,
according to
Andrew
Robinson
and Peter Lamb, Durbanbased
maritime legal
specialists of Norton Rose
Fulbright SA.
“The SA Post Office
strike towards the end
of 2014 generated many
frustrations,” they told
FTW. “Perhaps none more
so than for importers who
desperately needed those
original bills.”
Now, the importer may
well be named as the receiver
or consignee in the BoL. Or
it may be made out with the
receiver or consignee “to
order” - in which case the
importer must present an
original BoL duly endorsed
by the previous holder.
“Although there are some
exceptions, it is often a
contractual requirement that
the carrier need only deliver
the cargo to the party that
presents the original bill,”
our legal eagles said. “This
protects both the shipper
(who may have sold the cargo
on the basis that it would
only release the bill to the
buyer on payment) and a
carrier in the event that a
third party who has no title
to the goods seeks to take
receipt of them.”
But, with this in mind,
it follows that where an
original bill is missing or
delayed, both the carrier and
the receiver are placed in
something of a dilemma.
However, it is not at all
unusual for the delivery of
the BoL to lag behind the
pace of the cargo. “And,” said
the Robinson/Lamb reply,
“in those circumstances, a
carrier may be persuaded
to release cargo without it
- but only where the carrier
has been provided by the
person claiming to be the
receiver with a suitably
worded indemnity and an
appropriately worded bank
guarantee (for as much
as double the value of the
cargo).”
The saving grace here
for the carrier is that - in
the event that a third party
appears who can establish
that it has the right to the
cargo - the carrier can
exercise its rights against the
indemnity and, ultimately,
the bank guarantee.
However, where the
original BoL appears to have
been lost, an SA receiver
can still obtain delivery of
the cargo if it can satisfy a
court that it is entitled to
such delivery, said Robinson/
Lamb.
“This relief,” they added,
“is provided by the Sea
Transport Document Act
(STD Act). The requirements
are, first of all, that this
applies to goods consigned to
a destination in SA or landed,
delivered or discharged
in SA. Secondly that they
must be for any proceedings
instituted in SA relating to
any Sea Transport Document
(which would include
a negotiable BoL) for
those goods.”
So basically,
importers can rely on
the STD Act to take
delivery of the cargo
where they’re not yet
in possession of an
original BoL.
According to our
legal duo, this act will
“deem” someone as
being in possession of,
or as holding possession of,
an original bill if:
(a) It has been lost or
cannot, for any reason, be
produced by that person or
on behalf of that person;
and
(b) That person (or the
agent of that person) would
be entitled to possession of
the document if the original
could be produced.
The carrier, meantime, is
entitled to release the cargo
to the actual or deemed
holder of the BoL.
But, if the carrier refuses
to release the goods, the
deemed holder can approach
the court for an order to
release that cargo. At the
same time, this doesn’t
affect the right of the
importer or exporter to
claim damages - unless it
is otherwise agreed, or the
court orders otherwise.
Now some carriers have
expressed concern that the
actual law applicable to the
contract of carriage (which
is unlikely to be SA law)
may not recognise the court
order as providing a suitable
discharge of its obligation.
“This,” said our fundis,
“could render the carrier
liable to a third party
claiming delivery of
the goods in another
jurisdiction.”
But Robinson and Lamb
made it clear that this issue
had yet to be tested by our
courts. “And,” they added, “it
may well be that, should the
carrier satisfy a court of the
possible harm that it may
incur, the court may require
a ‘deemed holder’ to put up
an indemnity backed by a
suitable guarantee.”
INSERT & CAPTION
Where the original BoL
appears to have been
lost, an SA receiver
can still obtain
delivery of the cargo.
– Peter Lamb
