The Aegean Sea

Under the Carriage of Goods by Sea Act, 1992, which replaced the Bills of Lading Act, 1855, the connection between the passing of property and the transfer of contractual rights is removed. Section 2(1) provides that “a person who becomes (a) the lawful holder of a bill of lading… shall have transferred to and vested in him all rights of suit under the contract of carriage as if he had been a party to that contract. Title to sue now derives from enquiring whether the bill of lading is lawfully held rather than by how or when the property passed. A holder is defined in section 5(2). Essentially holders will be consignees in possession, indorsees with possession of the bill by way of delivery and holders of ‘order’ bills. A person shall be regarded as having become a lawful holder of a bill of lading wherever he has become the holder of the bill in good faith. In The Aegean Sea (1998) “good faith” in section 5 connoted honest conduct. Under section 3 if the person in whom rights are vested by virtue of section 2 takes or demands delivery from the carrier of any of the goods to which the document relates; makes a claim under the contract of carriage against the carrier in respect of any of those goods, or is the person who at the time before these rights vested in him took or demanded delivery from the carrier of any of those goods, that person shall become subject to the same liabilities under the contract as if he had been party to that contract. The Act also applies to any sea waybill which is defined as a document which is not a bill of lading but which has the functions of a receipt and evidence of a contract of carriage and which identifies the person to whom delivery of the goods is to be made by the carrier in accordance with the contract. The Act also extends rights of suit in respect of ships delivery orders.