Bills of Lading as Receipt

Originally the bill of lading started life as a mere bailment receipt which was required to obtain delivery of the goods at the port of discharge. Even when used in this capacity it would normally include statements as to the quantity and description of the goods shipped together with the condition in which they were received by the carrier. Such representations of fact had important commercial effects. First they formed the basis of any cargo claim by the receiver should the goods be short delivered or damaged on discharge. Secondly, where goods had been sold c.i.f., under the terms of which contract payment had to be made against delivery of documents, the buyer was entitled to reject the documents if the description of the goods in the bill of lading did not correspond with their description in the sales invoice. Similarly, the terms of the c.i.f. contract might entitle the buyer or bank to insist on the production of a ‘clean’ bill, i.e. a bill containing an unqualified statement that the goods had been shipped in good order and condition. Thirdly, such statements of fact might seriously affect the negotiability of the bill in the hands of a consignee, since the goods would not readily be saleable in transit if the bill disclosed that they had been shipped in a damaged condition. In these circumstances it is vitally important for the shipper or consignee that the carrier should be required to make accurate and unambiguous statements as to the quantity and condition of the goods shipped. In the absence of such statements in the bill, a consignee seeking to recover for goods short delivered or damaged on discharge would have the burden of proving the quantity or condition of the goods when shipped. While it is true that such details are normally entered onto the bill by the shipper himself, the natural reaction of the carrier’s agent would be to protect his principal by inserting a clause to the effect that ‘weight, quantity and condition unknown’ or ‘shipper’s count’ before adding his signature to the bill.9
In view of the fact that the carrier is normally in the stronger bargaining position, there is little the shipper can do to prevent him adding clauses of this type. In order to deal with this problem, Art III rule 3 of the Hague/ Visby Rules entitles the shipper to demand the issue of a bill of lading containing certain specified information:  ‘After receiving the goods into his charge the carrier or the master or agent of the carrier shall, on demand of the shipper, issue to the shipper a bill of lading showing among other things – a) The leading marks necessary for identification of the goods as the same are furnished in writing by the shipper before the loading of such goods starts, provided such marks are stamped or otherwise shown clearly upon the goods if uncovered, or on the cases or covering in which such goods are contained, in such a manner as should ordinarily remain legible until the end of the voyage. b) Either the number of packages or pieces, or the quantity, or weight, as the case may be as furnished in writing by the shipper. c) The apparent order and condition of the goods.’ In return, the shipper is ‘deemed to have guaranteed’ to the carrier the accuracy of any information supplied by him in writing for incorporation in the bill,10 and is required to indemnify the carrier against all loss arising in the event of any inaccuracies. The carrier is under no obligation to issue a bill containing such information unless specifically requested by the shipper and, even then, he can refuse if either he has reasonable grounds for believing the information supplied to be inaccurate, or has no reasonable means of checking it.
The Hague/ Visby Rules further provide that such statements in a bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as so described, but conclusive evidence against him once the bill has been transferred to a third party acting in good faith.
The common law had earlier reached much the same position with regard to the evidentiary value of statements in a bill of lading, although it is noticeable that, in the case of third parties, the Hague/ Visby formulation dispenses with the need for action in reliance which was an essential requirement for triggering the estoppel mechanism at common law. There is, however, some ambiguity as to the effect of the failure of a carrier to comply with a request from the shipper to provide information required by Art III rule 3. The obvious answer in such circumstances would be to invoke Art III rule 8 and render any expression such as ‘weight unknown’ null, void and of no effect. Clarke J, however, expressed the view obiter in The Mata K that the operation of rule 8 was restricted to contractual provisions which removed or reduced the liability of a carrier for failure to fulfil his obligations under Art III, i.e. to breaches of Art III rules 1 and 2. ‘The inclusion of the provision “weight unknown” does not have the effect of relieving the carrier from such a liability or lessening such a liability. It merely means . . . that the provisions of Article III rule 4 as to prima facie evidence cannot come into effect.’ Such a conclusion would appear to defeat the object intended by the draftsmen of Art III rule 3, and it is to be hoped that the position will be reviewed in subsequent cases. Should the bill of lading contain a clause to the effect that statements as to the quantity and condition of the goods shipped ‘shall be conclusive evidence’ of the facts stated as against the carrier, then  no evidence will be admitted to rebut such statements even where the claim has been brought by the shipper  and even though the carrier can prove, for example,  that the goods were not shipped. It is now  necessary to consider  each  of the  three  facets of the  receipt  function in more detail.  They will be examined first from the point  of view of the common law and  secondly from the standpoint of the Hague/ Visby Rules. This dual approach is still necessary since, as will be indicated later, there  is a considerable proportion of carriage contracts  to which  the Hague/ Visby Rules are inapplicable.