Bill of Lading

MARITIME LAW
Course Coordinator
Mr. Jagdish Khobragade Subject: Maritime Law
Assistant Professor of Law B.A.LLL.B. (Hons.), IX semester
MAHARASHTRA NATIONAL LAW UNIVERSITY, NAGPUR

July 2021
What is the Bill of Lading?
The Bill of Lading of is a document that

establishes the terms of contract between
a shipper and a transportation company.
(Glossary of Port and Shipping Terms, 2014)
The Bill of lading is one of the most

important documents in the shipping
industry.
What is the Bill of Lading?
Some important functions of the bill of
lading are:
It is used as a proof of receipt of shipment

by the carrier
It is a document of title
It is used as evidence for a contract of
carriage
History of the Bill of lading
The Bill of Lading is preceded by:
No International Rules prior to 1924

Strict Liability of Ship owner
Common Law or Civil Law
The Bill of lading was invented in the 13 th
century
 Its functions were gradually created by

the practical needs of substantial and
tangible evidence of contract for all
primary parties (i.e. shipper, carrier and
consignee) alongside technical
development over time.
It is widely accepted that Italy is the
birthplace of the bill of lading, because of
the growing economies of the Italian
city states due to the sea commerce
between Italy and the Roman Empire in
Constantinople.
 Its first copy was written in 1564.

The initial functions of the bill of lading during
its inception were:
A receipt for goods received by master or

ship owners,
contract of carriage between shipper and
carrier,
negotiable document of title.

 The Bill of lading became necessary when
merchants stopped travelling on board ships with
their goods.
Evolution of the Bill of Lading
 Evidence of the evolution of the bill

of lading can be seen in the revision of
The Hague rules to the Hague-Visby
rules (which both influenced the terms
of contract included on the bills of
lading.)
 Additional advancement can be seen in
the numerous conventions established
and their constant revisions as well as the
creation of electronic bills of lading, even
though there has been much resistance
towards it.
Bill of lading written in
1765
Formalization of the Bill of lading
Ocean trade in the United States

and Britain depended heavily on
British Ship Owners.
A point of crisis was reached
between these two domains
concerning the struggle between
ship owning and cargo interest.
As a result, legislations were amended to
remove the chaos and abuse produced by
unlimited freedom of contract.
 After considerable discussion amongst

major actors of the maritime nation, a set
of rules were drafted by the maritime
law committee of the international law
association at a meeting held in Hague
1921.
These rules came to be known as the
Hague rules which constituted the various
Bills of lading.
 The rules were amended in London at

a CMI (Comite Maritime International)
conference in 1922.
Further amendment was made at an
international convention in Brussels, 1922.
 Eventually an International Convention

was ultimately signed on August 25, 1924,
at which time the Bill of Lading became a
formal document of the Mercantile System.
Bill of Lading in India
 Up to 1982 – Hague rules
 After 1982 – Hague visby

rules
Please see the schedule
to the Carriage of Goods
bySea Act, 1925
Bill of Lading in India
The Hague Rules of 1924 (formally the

"International Convention for the
Unification of Certain Rulesof Law
relating to Bills of Lading, and Protocol of
Signature")
International Convention forthe
Unification of CertainRules of Law
relating to Billsof Lading (1924)/First
Protocol (1968)/Second Protocol (1979)
Hague Rules/Hague–VisbyRules
Sewell v Burdick: HL 1884, (1884)
10 AC 74
What does the word ‘property’ encompass in the context of the assignment of a bill
of lading? Is it limited to the general property in the goods, that is, the legal title to
the goods as is transferred by a sale? Or does it include the special property which
signifies the right to possession?
Held: It should be limited to the passing of the general property. Bills of lading are
often used as security documents facilitating the financing by banks of merchants’
sale transactions. A bank’s interest is to use the possessory right to the document
and the goods it represents as security; its interest is not to enter into contractual
relations with the carrier, still less, to undertake contractual obligations towards the
carrier. a transaction of pledge accompanied by the endorsement of the bill of lading
over to the pledgee did not come within the scope of s.1 and did not transfer to the
pledgee any contractual rights nor subject the pledgee to any contractual liabilities
under the bill of lading. A person who had had the bill of lading endorsed to him
while the goods were at sea and who then chose to take advantage of his
possession of the bill of lading to ‘take the position of full proprietor upon himself
with its corresponding burdens if he thinks fit’ ‘and that he actually does so as
between himself and the shipowner if and when he claims and takes delivery of the
goods by virtue of that title.’
Sewell v Burdick: HL 1884, (1884)
10 AC 74, Lord Bramwell said
Smurthwaite v Wilkins: 1862
The endorser of a bill of lading is not liable after he has endorsed over the
bill of lading to another who is liable; the shipper remains liable as an
original party to the contract. ‘Looking at the whole statute it seems to
me that the obvious meaning is that the assignee who receives the
cargo shall have all the rights and bear all the liabilities of a contracting
party; but that if he passes on the bill of lading by endorsement to
another, he passes on all the rights and liabilities which the bill of lading
carries with it.’ Rejecting the argument that the endorser having passed
on all his rights to the endorsee should retain all his liabilities in respect
of the goods: ‘Such a construction might be very convenient for the
shipowner but it would be clearly repugnant to one’s notions of justice.’
and ‘The contention is that the consignee or assignee shall always
remain liable like the consignor although he has parted with all interest
and property in the goods by assigning the bill of lading to a third party
before the arrival of the goods. The consequences which this would
lead to are so monstrous so manifestly unjust that I should pause
before I consented to adopt this construction of the act of parliament.’
ASIATIC STEAM NAVIGATION CO LTD VERSUS JETHALAL
DHARAMSHI AND CO LNIND 1958 CAL 221
Admiralty Recovery of Money Damages Consignment Trial Court passed

decree in favour of Plaintiffs-Respondents for recovery of sum as
damages for non-delivery of certain quantity of bags of products.
Whether, Impugned order of Trial Judge warranted interference Held,

Evidence concluded that damage was caused wholly and entirely by
grossly careless and negligent stowage of misconsignment of product
by carrier Consignment of bags of products was lost and damaged
entirely by acts of omission and commission amounting to negligence
and carelessness on part of Defendant-carrier while these goods were
in their custody No ground being furnished by Plaintiffs-Respondents to
explain why no appeal was filed by them by claiming full amount of
damages, not interfered with finding of Trial Judge in respect of
concerning number of bags Award of Trial Judge of half damage, in
respect of concerning number of bags, was not disturbed.
Trial Judge rightly held that as ultimate liability to pay excise duty was on
first plaintiff, amount of excise duty which was not paid, as yet could not
be deducted from market value of goods Uphold decree in favour of
Plaintiffs-Respondents for recovery of money as allowed by Trial Judge
J V GOKAL & CO PRIVATE LTD VERSUS THE ASSISTANT
COLLECTOR OF SALES TAX INSPECTION AND OTHERS -
LNIND 1960 SC 18 1960
Constitution— Bombay Sales Tax Act, 1953, Section 46—Assistant

Collector of Sales Tax imposed tax—Under Article 286(1)(b) sales
which took place in course of import of goods into territory of India, were
not liable to Sales Tax—Held, Sale of Goods by Petitioner to
Government of India took place when goods were on high seas—Sales
taken place in course of import into India—Exempted from sales tax
under Article 286(1)(b)—Importer can, if he receives the shipping
documents, transfer the property in goods when they are on high seas
to third party by delivering shipping documents against payment and
such a sale is one made in the course of import—Not liable to sales tax
under Article 286(1)(b)—Bombay.
State would have no power to impose sales tax on said sales—Order of

Assistant Collector of Sales Tax set aside—Order of sales tax officer
restored.
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MARITIME LAW

MAHARASHTRA NATIONAL LAW UNIVERSITY, NAGPUR

The Bill of Lading of is a document that

The Bill of lading is one of the most

It is used as a proof of receipt of shipment

The Bill of Lading is preceded by:

No International Rules prior to 1924

 Its functions were gradually created by

 Its first copy was written in 1564.

A receipt for goods received by master or

 Evidence of the evolution of the bill

Ocean trade in the United States

 After considerable discussion amongst

 The rules were amended in London at

 Eventually an International Convention

 Up to 1982 – Hague rules

 After 1982 – Hague visby

The Hague Rules of 1924 (formally the

Admiralty Recovery of Money Damages Consignment Trial Court passed

Whether, Impugned order of Trial Judge warranted interference Held,

Constitution— Bombay Sales Tax Act, 1953, Section 46—Assistant

State would have no power to impose sales tax on said sales—Order of

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