International Transport

Deliver the cargo without bill of lading disputes

France Dafill Ship Ltd Co. vs Hunan Technology Import and Export Ltd and Hunan Xiangyuan Forwarder Ltd. Co for the Case of Delivery of Goods against Letter of Indemnity without Presentation of B/L

Min Cho


Case Brief:

In September 2010, in order to perform the trading contract with Syrian Energy Ltd. Co, Hunan Technology Import and Export Ltd (short for “Technology Company”) entrusted Hunan Xiangyuan Forwarder Ltd. Co (short for “Xiangyuan Company”) to export the goods needed by the Syrian company fromChangsha,HunantoLatakia,Syria. France Dafill Ship Ltd Co (short for “Dafill Company”) as carrier of the goods, issued to the shipper Technology Company 3 original bill of ladings indicating that the consignee shall be designated by the Fifth Branch of Syria Commercial Bank. The terms of the bill of ladings prescribed that in case of damage or loss of the goods, the liabilities of the carrier shall be determined pursuant tothe HagueRules or any domestic law compulsorily applicable to this bill of lading. After the ship’s arrival at the destination port, the goods were taken by someone with a letter of indemnity. Failure of obtaining compensation from the Dafill Company and the Xiangyuan Company, the Technology Company filed a lawsuit against the two parties.



Legal Analysis:

This is a case arisen from delivery of goods without presentation of bill of lading. The applicable law of the bill of lading shall be fixed firstly in order to find out the liabilities of the parties involved. Presuming the parties of this case failing to make consent with law application, the applicable law shall be determined according to the conflicts rules ofChina. In consideration of the conclusion of contract of carriage of goods existing first and issuance of bill of lading subsequently, the first bill of lading holder (the shipper) shall request to cancel the transportation contract or reissue the bill of lading within reasonable time if he thinks the terms of the bill of lading are not beneficiary to him. In this case, the applicable law was indicated on the bill of lading, moreover, the Technology Company as the bill of lading holder did not raise objection to it. Therefore, the Hague Rules are deemed to have been accepted by the Technology Company as applicable law.

But the Hague Rules do not make clear prescriptions on the issue of delivery of goods without presentation of bill of lading. Paragraph 2 of Article 3 of the Hague Rules only sets forth that the carrier shall load, unload, move, deliver, keep and take care of the goods it carried properly and with due diligence. Meanwhile, Paragraph 2 of Article 4 ascertains the scope of liabilities of the carrier by excluding the liabilities that shall be borne by him. Based on these two articles, some scholars reckon that the carrier shall take liabilities arising from its delivery of goods without presentation of bill of lading (which is not excluded from the scope of liabilities.) I think that the carrier shall deliver goods only to the bill of lading holder, otherwise, it is not a way of loading and unloading properly and with due diligence as prescribed in paragraph 2 of Article 3. Moreover, to strengthen our argument, we can, pursuant to the civil laws ofChina, further choose applicable law according to conflict rules for the legal issues that are not covered by international treaties or customs. Thus, in light of the Doctrine of the Most Significant Relationship, the PRC Maritime Code, the Contract Law and the Interpretation of the Supreme People’s Court on Several Issues about the Application of Laws for the Trial of Cases of Delivery of Goods without Presentation of Original Bill of Lading shall be applied, which have very clear terms on the carrier’s liabilities of delivery of goods without presentation of bill of lading.

As to Xiangyuan Company, it did not assist the carrier to deliver goods improperly and had fulfilled its obligation as a forwarder, so it is free from liabilities of delivery of goods without presentation of bill of lading.