BILL OF LADING : An Indian Perspective

INTRODUCTION Bill of lading is one of the most important documents in the shipping process. To ship any goods, a bill of lading is required and acts as a receipt and a contract.1 Bill of lading (BOL) is one of the most important documents in the shipping process. To ship any goods, a bill of lading is required and acts as a receipt and a contract. A completed BOL legally shows that the carrier has received the freight as described and is obligated to deliver that freight in good condition to the consignee.2 A document that establishes evidence and the terms of a contract between a shipper, a transportation company and the agents for providing and receiving the cargo.3 It serves as a document of title, a contract of carriage and a receipt for goods.4

Description: The information in the bill of lading is critical as it directs the actions of personnel all along the route of the shipment - where it's going, the piece count, how it's billed, and how it's to be handled on the dock and trailers. It could be on a prepaid or collect basis.5 The consignee has to check whether the shipment is collect on delivery which means that the driver will collect the cost of the merchandise on delivery of the freight. However, it must be observed that all countries do not follow the same form of legislation globally. The broad categories may be stated as follows: i. ii. iii.
1

The Hague Rules. The Hague/Visby amendments. The Hamburg Code.

http://economictimes.indiatimes.com/definition/bill-of-lading, Accessed on 10th September,

2013
2 3 4 5

Stag Line Ltd v. Fosocolo Mango &Co Ltd., [1932] AC 328 at 350 Lickbarrow v. Mason, (1794) 5 T.R. 683 Day & Griffin, The law of International Trade, 3rd Ed., Butterworths Lexis Nexis Id at 1

iv.

Hybrid systems based on the Hague/Visby and Hamburg regimes.

The Bill of Lading and the Contract of Carriage The carrier or his agent will issue the bill of lading after the goods haven ben placed on board. It will contain contractual terms but will not necessarily be the contract of carriage, which in normal circumstances will have been concluded between shipper and carrier before the bil of lading is issued. The terms printed on the bill of lading may well have been incorporated into the contract of carriage by use of some such phrase as subject to the exceptions of our bill of lading6 or may have been implied into the contract by the parties previous dealings on the bill of lading terms. Nevertheless the bill of lading, atleast as between the carrier and the original shipper, amounts only to evidence of the contract of carriage. 7 In The Heidberg case8 Judge Diamond QC said the transferee of the bill of lading does not, however take precisely the same contract as that made between the shipper and the ship-owner. Which is the similar position in the Indian Context too, that the third party may be well unaware of any terms agreed between the shipper and carrier which are not set out in the bill of lading and will not be bound by them.9 Types of Bill of Lading Chaterparty Bills of Lading : Where a charterer ships goods himself, the terms of the contract of carriage are contained in the charterparty and not the bill of lading. However in the hands of a consignee or indorsee the bill of lading constitutes the contract of carriage, since they cannot be

6 7 8

Armour & Co Ltd v. Leopold Walford (London) Ltd, [1921] 3 KB 473 S.S. Ardennes (Cargo Owners) v. SS Ardennes (Owners), [1951] 1 KB 55 Heidberg case, [1994] 2 Lloyds Law Reports 287, Cho Yang Shipping Co Ltd v. Coral Ltd

[1997] 2 Lloyds Law Reports 641, CA

9

http://www.gard.no/ikbViewer/Content/72486/Bills%20of%20lading%20March%202011.pdf,

Accessed on 10th September, 2013

expected to have knowledge of the terms of the Charterparty. The Hague-Visby rules do not apply to Charterparty bills although most charterparties expressly incorporate the Rules.10 Negotiable and Non-Negotiable Bills: (a) Negotiable Bills. (1) A bill of lading is negotiable if the bill (A) states that the goods are to be delivered to the order of a consignee; and (B) does not contain on its face an agreement with the shipper that the bill is not negotiable. (2) Inserting in a negotiable bill of lading the name of a person to be notified of the arrival of the goods (A) does not limit its negotiability; and (B) is not notice to the purchaser of the goods of a right the named person has to the goods. (b) Nonnegotiable Bills. (1) A bill of lading is nonnegotiable if the bill states that the goods are to be delivered to a consignee. The indorsement of a nonnegotiable bill does not (A) make the bill negotiable; or (B) give the transferee any additional right. (2) A common carrier issuing a nonnegotiable bill of lading must put nonnegotiable or not negotiable on the bill. This paragraph does not apply to an informal memorandum or acknowledgment. Shipped bill of lading: Under the Carriage of Goods by Sea Act 1924, the shipper can demand that the shipowner supplies bills of lading proving that the goods have been actually shipped. For this reason most bill of lading forms are already printed as shipped bills and commence with the wording: "Shipped in apparent good order and condition". It confirms that the goods are actually on board the vessel.11

10 11

Skips A/S Nordheim v. Syrian Petroleum Co. Ltd; The Varenna [1984] Q.B. 599 at 615 Diamond Alkali Export Corporation v. Fl. Bourgeois []1921 3 KB 443, Ishag v. Allied Bank

International, Fuhs and Kotalimbora [1981] 1 Lloyds Law Rep. 92 at 97

This is the most satisfactory type of receipt, and the shipper prefers such a bill as there is no doubt about the goods being on board and consequent dispute on this point will not arise with the bankers or consignee, thereby facilitating earliest financial settlement of the export sale. Received bill of lading: This arises where the word "shipped" does not appear on the bill of lading. It merely confirms that the goods have been handed over to the shipowner and are in his custody. The cargo may be in his dock warehouse/transit shed or even inland. The bill has therefore not the same meaning as a "shipped" bill and the buyer under a C.I.F. contract need not accept such a bill for ultimate financial settlement through the bank unless provision has been made in the contract. Forwarding agents will invariably avoid handling "received bills" for their clients unless special circumstances obtain. Through bills of lading12: In many cases it is necessary to employ two or, more carriers to get the goods to their final destination. The on-carriage may be either by a second vessel (e.g. to the Seychelles Islands via Mombassa or Bombay) or by a different form of transport (e.g. to destinations in the interior of Canada). In such cases it would be very complicated and more expensive if the shipper had to arrange on-carriage himself by employing an agent at the point of transhipment.13 Groupage Bill of Lading: Forwarding agents are permitted to "group" together particular compatible consignments from individual consignors to various consignees, situated usually in the same destination country/area, and despatch them as one consignment. The shipowner will issue a groupage bill of lading, whilst the forwarding agent, who cannot hand to his principals the shipowners' bill of lading, will issue to the individual shippers a Certificate of Shipment sometimes called "house bills of lading".14 At the destination, another agent working in close liaison with the agent forwarding the cargo will break bulk the consignment and distribute the

12

Through Bills are also used wher the on-carriage occurs prior to shipment. The observations in Scrutton, Charterparties and Bills of Lading, 20th Ed. 1996. P369 Comptoir dAchat v. Luis de Ridder; The Julia [1949 AC 293]

the text apply to such bills mutatis mutandis.

13 14

goods to the various consignees.15 This practice is on the increase, usually involving the use of containers and particularly evident in the continental trade and deep sea container services. It will doubtless increase with containerisation development and is ideal to the shipper who has small quantities of goods available for export. Advantages of groupage include less packing: lower insurance premiums; usually quicker transits; less risk of damage and pilferage; and lower rates when compared with such cargo being despatched as an individual parcel/consignment. Transhipment Bill of Lading: This type is issued usually by shipping companies when there is no direct service between two ports, but when the shipowner is prepared to tranship the cargo at an intermediate port at his expense. Clean Bills of Lading: Each bill of lading states "in apparent good order and condition", which of course refers to the cargo. If this statement is not modified by the shipowner, the bill of lading is regarded as "clean" or "unclaused". By issuing clean bills of lading the shipowner admits his full liability of the cargo described in the bill under the law and his contract. This type is much favoured by banks for financial settlement purposes. Claused Bills of Lading: If the shipowner does not agree with any of the statements made in the bill of lading he will add a clause to this effect, thereby causing the bill of lading to be termed as "unclean", "foul", or "claused". There are many recurring types of such clauses including: inadequate packaging; "unprotected machinery; "second-hand cases; wet or stained cartons"; "damaged crates"; "two cartons missing"; etc. The clause "shipped on deck at owner's risk" may thus be considered to be a clause under this heading. This type of bill of lading is usually unacceptable to a bank. Undoubtedly, to the shipper, the most useful type of bill of lading is the clean, negotiable "through bill" as it enables the goods to be forwarded to the point of destination under one document, although much international trade is based on free on board (F.O.B.) or cost, insurance, freight (C.I.F.) contracts and, with regard to the latter, the seller has no further interest in the movement of the goods once they reach their port of destination.

15

FIATA Combined Transport Bill of Lading, Federation Internationale des Associations de

Transitarires et Assimiles.

Both F.O.B. and C.I.F. are two widely used types of contract of sale. F.O.B. means that the price quoted by the vendor includes the price of the goods and all expenses up to and including the cost of loading the goods on to the vessel. It does not include the cost of sea freight. In the case of C.I.F., the price quoted includes the cost of the goods, the cost of insuring the goods to destination, and the freight or cost of transport. Electronic Bills of Lading: Developments in Information and Technology have led to a growing incidence of paperless trading and contracting.16 Various instances of paperless bill of lading have been made an Bills of lading are transferred and issued electronically, in order to avoid late delivery of documents, prevalence of fraudulent documents. Since the admissibility of an electronic bill of lading before a Court of Law in India would depend on the due compliance of the norms laid down in Sec. 65 B of the Evidence Act as included therein vide the amended in 2000, it would be worth while to make a closer examination of the said provision. Sub clause 1 of sec. 65 B mandates that any information contained in an electronic record which is printed on a paper, stored, recorded or copied in optical or magnetic media produced by a computer (hereinafter referred to as the computer output) shall be deemed to be also a document, if the conditions mentioned in the said section are satisfied in relation to the information and computer in question and shall be admissible in any proceedings, without further proof or production of the original, as evidence of any contents of the original or of any fact stated therein of which direct evidence would be admissible. It is interesting to note the words without further proof or production of the original, as evidence of any contents of the original in the said sub clause. It is a moot point whether the said words presupposes the existence of an original in the traditional paper format, in which case the section would lose whole lot of its efficacy. Reading the same as a whole in the light of its objectives of its parent legislation viz., the Information Technology Act, 2000 the section is not capable of such a narrow interpretations as to mean that the same envisages only the electronically retained copies of the original paper document and does not envisage documents which exist only on electronic form.
16

UNCITRAL MODEL LAW on Electronic Commerce.

Proceeding further with Section 65 B, Sub Clause 2 we find that safe guards have been laid down to ensure that the electronic records produced before the Court are genuine and not fabricated. And with the said objective it proceeds to enumerate the conditions which are to be satisfied with respect to the infomration and computer as stated in Sub Clause 1. The conditions are that: (a) the computer output containing the information was produced by the computer during the period over which the computer was used regularly to store or process information for the purposes of any activities regularly carried on over that period by the person having lawful control over the use of the computer; (b) during the said period, information of the kind contained in the electronic record or of the kind from which the information so contained is derived was regularly fed into the computer in the ordinary course of the said activities; (c) throughout the material part of the said period, the computer was operating properly or, if not, then in respect of any period in which it was not operating properly or was out of operation during that part of the period, was not such as to affect the electronic record or the accuracy of its contents; and (d) the information contained in the electronic record reproduces or is derived from such information fed into the computer in the ordinary course of the said activities. Though the said conditions to be satisfied appear to be effective and comprehensive, from the practical point of view question remains as to how the genuineness of or compliance with the said conditions could be ensured and cross checked. Since the information and the computer would in the normal course be in the exclusive control and custody of the party producing the same and the conditions relate to matters earlier in point of time to the production of the electronic document, in the absence of any independent agency which could vouch safe for the genuineness of the conditions, the compliance thereof will have to be taken for granted. So as to care of the situation where the information is generated or retained and is accessible through a combination or net work of computers, as is usually practiced in shipping companies, sub clause 3 of Sec. 65 B provides that all the computers used for that purpose during that period shall be treated for the purposes of the section as constituting a single computer, and references in the section to a computer shall be construed accordingly.

Another important provision form the procedural point of view is sub-clause 4 which mandates that in any proceedings where an electronic document is proposed to be produced as an evidence by invoking Sec. 65B a certificate purporting to be signed by a person occupying a responsible official position in relation to the operation of the relevant device or the management of the relevant activities (whichever is appropriate), identifying the electronic record containing the statement and describing the manner in which it was produced or giving such particulars of any device involved in the production of that electronic record as may be appropriate for the purpose of showing that the electronic record was produced by a computer or dealing with any of the matters to which the conditions mentioned in sub-section(2) relate shall be produced. Such a certificate shall be evidence of any matter stated therein. The party challenging the veracity of the electronic document produced would at this stage get an opportunity (apparently the only opportunity) to test the veracity of the claim for satisfactory compliance of the conditions mentioned above, by cross examining the person who issued the certificate while he appears in the witness box to depose in respect of the certificate issued by him. Sub clause 5 is intended to bring within the ambit of the section various methods or manners by which information is supplied to a computer and the information could be retrieved there from. Thus a bill of lading being an evidence of contract of affreightment stating the terms and conditions subject to which the carriage of goods by sea is to be performed will be admitted in evidence in its electronic form in India subject to the satisfactory compliance of the mandates of sec. 65 B as stated herein above. Unlike the other shipping documents, Bill of lading in its dematerialized form throws up certain issues. Shipping documents like way bills which are non negotiable can easily be dematerialized since it only requires the information to be sent through the computerized system. In its simplest form, a way bill empowers the carrier to deliver the cargo to the person named therein, after obtaining proof of address. Hence the dematerialization does not materially affect the rights and duties ensuing from a way bill. But it is not the same with a bill of lading especially if it is a negotiable one. Towards better understanding the legal status of a bill of lading in India and the effects of its dematerialization, it would be necessary to examine the principal statutes governing the issuance and validity of bills of lading viz., the Carriage of Goods by sea Act, 1925, the Bills

of Lading Act, 1855 and the Multimodal Transportation of Goods Act, 1993. Since Bills of Lading comes within the purview the Sale of Goods Act and the Indian Stamp Act, 1899 whether the provisions in the said statutes as they stand now can accommodate dematerialization will also have to be considered. The Carriage of Goods by Sea Act (COGSA) incorporates in its Schedule, the Rules relating to Bills of Lading which are in pari materia with The Hague Rules evolved at the Brussels Convention. Certain Amendments had been carried out to the COGSA by the Multimodal Transportation of Goods Act, which speaks of another document possessing different but comparable attributes of a bill of lading namely, the Multimodal Transport Document commonly known as the Combined Transport Bill of Lading. The provisions in COGSA has been drafted keeping in mind the Bill of lading to be a tangible paper document and dematerialization had not been in the mind of the legislature at that earlier point of time. A reading of Rule 7 of Article III of the COGSA dealing with shipped bill of lading clearly reveals the same. It has been opined from some quarters that a demand by the shipper for a shipped bill of lading as envisaged in the said provision might create difficulties when it comes to dematerialization. But the difficulties if any regarding existence and content of such a document has been taken care of substantially by the enactment of the Information Technology Act. Moreover, the fear that the courts of law in common law countries as ours would not regard an electronic bill of lading as a document of title also stands alleviated by the coming into force of the said statute. The Bills of Lading Act, 1855 is the enactment that directly concerns the negotiability, the attribute most profoundly affected by dematerialization of the bill of lading. As regards its character as receipt of the cargo and as a contract of affreightment, the dematerialization of the Bill of lading does not create as many problems as it does generate with its nature as a negotiable document. Negotiability being integral to a bill of lading, it cannot be removed or replaced without seriously affecting the international commerce because goods are sold and resold many times during the voyage. A bill of lading being a document of title to goods, it is highly necessary that any electronic replacement should also offer the advantages of a document of title. Doubts have been raised as to whether the vesting of rights under the bill of lading in the consignee or endorsee as provided in sec.1 of the Bills of Lading Act, 1855 would have effect in the absence of physical endorsement and transfer. Though due to the lack of judicial decisions on

the point it is by no means fully certain that the Indian law would have recognized the electronic bill of lading as a document of title, there is nothing in the wordings of the said provision that necessitates actual physical endorsement. But the decisions on the point by the courts especially the decision of the Honble High Court of Kerala in New India Assurance Co. Ltd. V. San Jos e Maritime Ltd. pertaining to indorsement in blank, gives a contrary impression due to the emphasis given therein for the printed form of bill of lading and the clauses type written and incorporated by rubber stamp thereupon. The Indian Stamp Act, 1899 in Schedule I stipulate the stamp duty to be paid with respect to a Bill of lading. A practical issue could arise as to how stamp duty could be levied in the case of an electronic document and the though Sec.6 of the Information Technology Act speaks about payment of fee or charges, the modalities of actual payment remains unclear.

Law has approved the commercially expedient practice of preparing and issuing bills of lading in a set of two or more though there are no specific statutory provisions in India mandating the same. To prevent negotiation of more than one bill of the set, one of them is usually marked original and sent to the consignee and the others are marked duplicate or non-negotiable. It is usual for bill of lading to contain a stipulation that one of these bills of lading being accomplished the other shall stand void. The said practice will have to be altered while using electronic bills of lading. As it is common in maritime practice to transfer the contractual rights and liabilities arising out of a contract of affreightment evidenced by the bill of lading, any electronic replacement for the bill of lading will have to provide its own means for the transfer of contractual rights and liabilities along with the documentation itself. Here too exists, as in the case of negotiability and title transfer, a gaping legal lacuna. At the port of discharge the carrier is bound to deliver the cargo to the person producing the original bill of lading who is presumed to be the bonafide purchaser. The cargo might have been sold and resold during the voyage. If the carrier refused to deliver to the eventual holder, he would certainly be in breach of contract. If he delivers to the wrong party also he will be accused of breach. The legal standard of care expected out of a prudent carrier will have to be stated afresh when electronic bills of lading are used. Any systems that are devised will also need to provide security equivalent to the document of title to goods.

The Multimodal Transportation of Goods Act, 1993 under Sec.9 lays down the mandatory contents of a Multimodal Transport Document (MTD or combined transport bill of lading). As per the same, such a bill of lading has to be signed by the multimodal transport operator or by a person duly authorized by him. Whether the document is negotiable or not has to be specifically stated on its face. The Act, after its amendment in 2000, provides under Sec.2 (la) that "multimodal transport document" means a negotiable or non-negotiable document evidencing a multimodal transport contract and which can be replaced by electronic data interchange messages permitted by applicable law.

1. Bill of lading as a receipt.

When the bill of lading in the hands of the shipper, it becomes a receipt for the quantity of goods received, the condition of goods received and leading marks. However, the evidentiary value of the bills in all these cases is not the same in all case and it depends upon the circumstances of the case such as whether the bill falls within the Carriage of Goods by Sea Act 1971 or not. Bill Of Lading Falling Within The Carriage Of Goods By Sea Act 1971- Under Article III (3) of this Act, the carrier has to include the leading marks, the number of packages or pieces or the quantity or weight of the goods and the apparent order and condition of the goods on the bill of lading. The statements made on the bill of lading are regarded as prima facie evidence of the receipt of the goods as described under III(4). Bill Of Lading Not Falling Within The Carriage Of Goods By Sea Act 1971 Statements as to quantity: According to Common Law, a statement specifying quantity received is a prima facie evidence of the quantity shipped. The burden of proof lies on the carrier to prove that the cargo as specified has not been shipped. This burden is an absolute one. In the case of Smith v/s. Bedouin Steam Navigation Co [1896], the bill of lading stated that 1,000 bales of jute had been shipped, whereas only 988 bales were delivered. It was held that

the carrier could successfully discharge the burden of proof only if he could show that the goods were not shipped, not merely that the goods may not possibly have been shipped. There may be endorsements on the bill of lading with statements such as weight and quantity unknown and the courts recognize these, since information on quantity entered on a bill of lading is based on statements made by the shipper and which does the carrier not normally verify. However, when the statements is contained as quantity unknown alongside the gross weight entered by the shippers for the purposes of Section 4 the weight entered is not a representation that the quantity was shipped. Example: A bill of lading which states that 11,000 tones of cargo were shipped quantity unknown means that the quantity is unknown and not that that amount of cargo was actually shipped, this would be the meaning construed by the Courts.

According to the Hague/Visby Rules, the shipper can demand the carrier issue a bill of lading showing either the number of packages or pieces, or the quantity, weight etc as furnished in writing by the shipper. Accordingly, the carrier may use any of these three methods of quantifying cargo. However, he cannot acknowledge one kind and disclaim knowledge of others.

In the case of Oricon v/s Integraan (1967), the bills of lading acknowledged the receipt of 2,000 packages of copra cake said to weigh gross 1,05,000 Kgs for the purposes of calculating freight only. It was held that while each of the bills of lading being Hague Rules of bills of lading, acknowledged the number of packages shipped as a prima facie evidence. Regarding the evidentiary bill of lading is concerned; the Hague/Visby Rules serve as prima facie evidence of the amount of cargo shipped. Statements as to condition:

This is the second type of statement, in which the bill of lading is a representation by the ship owner as to the condition in which the goods were shipped. In Common Law, the statements as to the condition of the goods shipped are regarded as prima facie evidence in the hands of the shipper, but conclusive evidence in the hands of a bona fide purchaser.

In the case of Compania Naviera Vascongada v/s Churchill (1906), the timber became badly stained with petroleum while awaiting shipment; the master nevertheless issued a bill of acknowledging that the timber had been shipped in good order and condition. It was held that the ship owners were estopped from denying the truth of the statement against the assignee of the bill. In order to make the statement in the bill of lading binding as an estoppel it is necessary that the person so acting upon it would have done so upon a prejudice, wherein in this case the defendants were prejudiced since they accepted the bills of lading as a good tender on the belief that the timber was in good condition. The estoppel will be effective only in respect of defects, which would be apparent on a reasonable inspection by the carrier or his agents. In the case of Silver v/s Ocean Steamship Co (1930), the ship owners had issued clean bill of lading covering cargo of Chinese eggs shipped in 42 - lbs square tins which were not covered with any cloth or packing. When the goods arrived at their destination in a damaged condition, the Court of Appeal held that while the ship owners were estopped from contending either the cargo was insufficiently packed or that the tins were gashed on shipment, they were not estopped from alleging that pin - hole perforations in the tins were present on shipment, since the latter would not necessarily be apparent on reasonable inspection. Statements as to leading marks:

Where the carrier records leading marks on the bill of lading, he will not be estopped at common law from denying the goods were shipped under the marks as described in the bill. However, where the marks are essential to the identification of description of the cargo, the prima facie evidence rule is applied. The distinction between a public and a private mark is an important factor in establishing whether a mark is or is not material to the identity of the goods. Indemnity agreements: Indemnity agreements may be agreed to be entered into by the shipper and the carrier to produce a clean bill of lading, that is, a bill of lading with no reservations on it. It affects its commercial value in number of ways:

i. The consignee normally relies on the bill of lading to establish whether the goods as agreed in the contract of sale have been shipped and where the bill of lading is claused he may refuse payment.

ii. Should the consignee or the shipper want to sell the cargo during transit, it is unlikely to be sold on the basis of a claused bill of lading.

iii. As a document of title the bill of lading is often used to raise money from banks and finance houses. These institutions normally prefer to lend money against a clean of lading. 2. Bill of lading as evidence of contract of carriage.

In the hands of the shipper a bill of lading serves as evidence of the contract of carriage though it contains the terms of carriage. The contract with the shipper is likely to have been concluded orally long before the issue of the bill of lading. The document may vary some of the agreed terms or contains terms that have not been agreed to by the parties. In the case of Crooks v/s Allan (1879) according to Lush J, a bill of lading is not a contract, only evidence of the contract. If a shipper of goods is not aware when he ships them or is not informed in the course of the shipment, that the bill of lading which will be tendered to him which will contain such a clause, he has a right to suppose that his goods are received on the usual terms. In the case of The Ardennes (1951) the ships agent assured the shipper that the vessel of a consignment of oranges would sail directly to London and arrive there before 1 December. The ship however, stopped at Antwerp on her way to London and arrived at London on 4th December. When sued for breach of contract by the shipper, the ship owner relied on the bill of lading, which contained a clause giving the ship liberty to deviate during the course of her voyage. It was held that the oral evidence put forward by the shipper was admissible.

3. Bill of lading as contract of carriage.

Upon endorsement to a third party, the bill of lading is a contract of carriage, but so far as the holder of the bill is the shipper, the bill of lading can be evidenced only as a carriage of contract. Any oral or written agreement between the shipper and the ship owner not expressed on the bill of lading will not affect the third party on the grounds of lack of notice. In the case of Leduc v/s Ward (1888), The endorsee of a bill of lading sued the ship owner for loss to cargo due to deviation in the course. The ship owner contended that they were not liable, since the shipper was aware at the time of shipment that the ship would deviate. The court held that anything that took place between the shipper and the ship owner not embodied in the bill of lading could not affect the endorsee.

4. Bill of lading as document of title.

Until goods are physically delivered, the possession of the bill of lading is deemed to be constructive possession of the goods. Transfer of the bill of lading is deemed to be constructive possession of the goods. Transfer of the bill of lading by the seller to the buyer is deemed to be symbolic delivery of the goods to the buyer and the buyer, on the ships arrival could demand delivery of the goods. In the case of Sanders v/s MacLean (1883), the bill of lading by the law merchant is universally recognized as its symbol and the endorsement and delivery of the bill of lading operates as a symbolic delivery of the cargo. The buyer can sell the goods on while they are at sea to the third party by simply endorsing the bill of lading and delivering it to the third party. The third party, by becoming the holder, can demand delivery of the goods on arrival. Not all bills of lading, however, are transferable. To impart transferability to a bill of lading, it must be drafted as order bills . Upon endorsement, the endorsee takes the place of the original

party to the bill of lading, and will be sue and be sued on all the terms, express and implied int eh bill of lading despite privity of contract. This is due to operation of Section 2 and 3 of the Carriage of Goods by Sea Act, 1992. A bill of lading need not be equated with a bill of exchange, which is a negotiable instrument in the strict legal sense. In the case of Gurney v/s Behrend (1854) it was observed that a bill of lading is not like a bill of exchange or a promissory note, a negotiable instrument that passes by mere delivery to a bona fide transferee for valuable consideration, without regard to the title of the parties who make the transfer. Therefore, bill of lading is a transferable document although in some jurisdictions it is considered as a negotiable instrument. Delivery of documents.

The carrier is under an obligation to deliver the cargo only against the original bill of lading if not, then he will be liable in contract as well as in tort to the bill of lading holder. In the absence of bill of lading, if a person wishes to take delivery of the goods, then he has to prove that he is entitled to the possession of the goods and there is a reasonable explanation for such absence. There are notify party clauses, which are used in which case, the carrier has to notify a customs broker, banker, and warehouseman of the arrival of the goods. In some cases, though not in all, the law of country or custom itself may provide requires the production of a bill of lading. Therefore, in this case, the carrier will not be liable in non - production of the bill of lading. According to Clarke J, there is a difference between the law and custom and such differentiation is as follows:

Law: If it were a requirement of the law of the place of performance that the cargo must be delivered to the agent of plaintiffs with out the presentation of an original bill of lading, the defendants would have performed their obligations under the contract of carriage.

Custom: Equally, if there were a custom of the port that cargo was always delivered to the agent of the person entitled to possession without the production of the original bill of lading, delivery to the agent would probably amount to performance of the defendants obligations under the contract of carriage. Practice: Practice must be distinguished from custom. A vessel may be discharged by any methods, which is consistent with the practice in the port. However, it would not be a good performance of the defendants obligations under the contract if it were merely the practice for vessels to deliver the goods without presentation of a bill of lading. Forgery. Forgery is a common phenomenon is in international trade. There was an issue regarding the position of the innocent carrier delivering goods against the bill of lading. In the case of Motis Exports Ltd v/s Dampskibsselskabet AF 1912 Aktieselskab Akteiselskabet Dampskibsselskabet Svendborg (2000) the cargo was under the Maersk Line Bills of lading which included clause 5(3)(b) which stated the carrier shall have no liability whatsoever for any loss or damage howsoever caused to the goods while in its actual or constructive possession before loading or after discharge over ships rail, or if applicable, on the ships ramp. The carriers released the goods against forged bills of lading. It was held that the delivery against an original bill of lading is obligatory and hence, delivery against a forged bill of lading will not be construed in favour of the carrier. Conclusion Bills of lading are a sine qua non for effective and easy trade to flow from various countries. They have since many centuries easened the burden on the sellers and buyers through effective means of thoroughfare with proper carriage and transfer facilities. The recent developments in the legal regime although have not be uniformly accepted by the Global community and as there exists a deadlock between which rules to follow and which rules to avoid, it becomes amply clear that the contractual freedom of the parties governs their rights and duties to an extent where the Bills of Lading are concerned. In India we have been successful in implementing the newer types of electronic bills of lading and are following the international standards successfully.