IBT - Part 3

Question 1

What is a single-ship company?
The flag of the vessel?

Answer 1

Vessel as the only asset of the company.
Legal connection of the vessel with a jurisdiction.

Question 2

Who are the shipper/cosignor, carrier, and cosignee?

Answer 2

Shipper/Consignor: The party that places the goods in the charge of the carrier (typically, the seller)

Carrier: The party that undertakes to take possession of and transport the goods to a named destination (shipowner vs. charterer)

Consignee: The party named on the bill of lading as the person who is entitled to take delivery of the shipped goods (typically, the buyer)

Question 3

BIMCO

Answer 3

Baltic and International Maritime Council

Question 4

What are indorsees, forwarding agents, shipping brokers, and stevedores?

Answer 4

Indorsee: The party that received the bill of lading through indorsement
Forwarding agent: The party that assists shippers in finding freight space
Shipping broker: The party that assists carriers to find cargoes
Stevedores: Independent contractors that are responsible for loading/unloading and stowing the goods on-board the vessel

Question 5

In what situation would we not have a carriage of goods contract?

Answer 5

When the shipper and the cosignee are the same.

Question 6

What are the two different types of carriage of goods contract?

Answer 6

Charterparty: The shipper hires the entire carriage capacity of the vessel / Applicable state law

Plain carriage of goods contract/Bill of lading contract: The shipper hires part of the vessel’s carriage capacity / International uniform law (e.g. Hague-Visby Rules)

Question 7

What different types of Charterparties are there?

Answer 7

Bareboat/Demise charterparty: Possession of the vessel in exchange for an agreed sum of money

Time charterparty: Entire capacity of the vessel for an agreed period of time in exchange for an agreed sum of money

Voyage charterparty: Entire capacity of the vessel for an agreed journey in exchange for an agreed sum of money

Question 8

What different purposes does the bill of lading have?

Answer 8

• Receipt of the goods by the carrier
• Evidence of shipment and general state and condition of the goods
• Evidence of the carriage of goods contract terms
• Incorporation of the goods

Question 9

Are Waybills, Mate’s receipts, or delivery order documents of title?

Answer 9

No.

Question 10

What can be found on the backside of the bill of lading?

Answer 10

Terms and conditions of the carriage of goods contract.

Question 11

How many bill of ladings are there?

Answer 11

Three in equal original copies. One at the office of the carrier, one at the vessel, one in the holder of the bill of lading. The latter will go to the port and claim the goods, compare the bill and also contact the headquarter, to make sure that all the three.

Question 12

What happens if there are discrepancies between what was noted and what was delivered?

Answer 12

it causes an “unclear bill of lading” and exposes the carrier to liability.

Question 13

What information must be contained in a bill of lading?

Answer 13

That depends on the relevant applicable law.
However, the Hague-Visby Rules mandate that marks are necessary for identification of the goods; number of
packages/units; apparent order and condition of the goods

Question 14

According to the Hague-Visby Rules, the Information on the bill presumed correct between the original parties. However, what happens if a third-party makes claims against the original parties?

Answer 14

A third party, who acquires the negotiable instrument in good faith and for value (such as a subsequent holder or a holder in due course), encounters discrepancies or claims regarding the instrument, the information stated on the instrument itself (as per the original parties’ agreement) is considered conclusive evidence.

In other words, the original terms stated on the instrument cannot be challenged by a third party who has acquired it in good faith, even if there are discrepancies or claims against it.

Question 15

According to British Imex Industries Ltd v Midland Bank Ltd [1958] 1 QB 542, what is a clean bill of lading?

Answer 15

“[A] clean bill of lading is one that does not contain any reservation as to the apparent good order or condition of the goods or the packing […] [T]he bills of lading in this case are plainly clean bills of lading. They contain no reservation by way of indorsement, clausing or otherwise, to suggest that the goods or the packing are or may be
defective in any respect.”

Question 16

From a legal point of view, what happens if the bill of lading passes onto a new owner?

Answer 16

The new holder takes constructive possession of the goods and, depending on the applicable law, ownership in the goods.

The new holder becomes party to the carriage of goods contract substituting the previous holder.

Question 17

What is the privity of contract? What does it have to do with a key?

Answer 17

That is the special rule under which the new holder of the bill of lading becomes the holders of the rights.
The bill of lading is like a key to access the physical goods.

Question 18

How is the CISG different from the Hague-Visby Rules?

Answer 18

1) The latter must be enacted by statute. Shipping ordinance in Hong Kong, for example.
2) The Hague-Visby Rules contain more mandatory overriding rules than the CISG.

Question 19

In what situations does the HVR apply?

Answer 19

“The provisions of these Rules shall apply to every bill of lading relating to the carriage of goods between ports in two different States if:
a. The bill of lading is issued in a contracting State, or
b. The carriage is from a port in a contracting State, or
c. The contract contained in or evidenced by the bill of lading provides that these Rules or legislation of any State giving effect to them are to govern the contract; whatever may be the nationality of the ship, the carrier,
the shipper, the consignee, or any other interested person.”

Question 20

In what important area are the HVR mandatory and overriding?

Answer 20

Liability. “Any clause, covenant, or agreement in a contract of carriage relieving the carrier or the ship
from liability for loss or damage to, shall be null and void and of no effect.”

Question 21

Does the HVR govern the choice of law?

Answer 21

No. In 95% of the cases, UK law is chosen.

Question 22

If cargo is being carried on deck, it has to be according to a special agreement.
Two leading cases.

Answer 22

Svenska Traktor Aktiebolaget v Maritime Agencies (Southampton) [1953]
Encyclopædia Britannica Inc v SS Hong Kong Producer [1969]

Question 23

Carrier’s duties - on due diligence. Which case?

Answer 23

“The exercise of due diligence is equivalent to the exercise of reasonable care and skill. Lack of due diligence is negligence […].”

Papera Traders Co Ltd v Hyundai Merchant Marine Co Ltd (The Eurasian Dream) [2002] EWHC 118 (Comm)

Question 24

Seaworthiness cannot be delegated. Which case?

Answer 24

Riverstone Meat Co Pty Ltd v Lancashire Shipping Co Ltd (The Muncaster Castle) [1961]

Question 25

“A sound system does not mean a system suited to all the weaknesses and idiosyncrasies of a particular cargo.”

Answer 25

Albacora v Westcott [The Maltasian] [1966]

Question 26

“A common carrier is not liable for any accident as to which he can show that it is due to natural causes, directly and exclusively without human intervention, and that it could not have been prevented by any amount of foresight and pains and care reasonably to be expected from him.”

Answer 26

Nugent v Smith (1876)

Question 27

What is a “latent test”?

Answer 27

“‘[L]atent defect’ does not mean latent to the eye. It means latent to the senses, that is, it may be hammer-tested, or there may be any other test. […] I think it means such an examination as a reasonably careful man skilled in that matter would make […].

Charles Brown & Co Ltd v Nitrate Producers’ Steamship Co Ltd (1937)

Question 28

Nugent v Smith (1876)

Answer 28

“A common carrier is not liable for any accident as to which he can show that it is due to natural causes, directly and exclusively without human intervention, and that it could not have been prevented by any amount of foresight and pains and care reasonably to be expected from him.”

Question 29

Albacora v Westcott [The Maltasian] [1966]

Answer 29

“A sound system does not mean a system suited to all the weaknesses and idiosyncrasies of a particular cargo.”