1 CARRIAGE OF GOODS BY SEA

Carriage is frequently the final step in a contract for the sale of goods . The shipper is often the vendor of the cargo. The ultimate consignee is often the buyer of the cargo. Risk and title to the goods will often pass during the course of the contract of carriage. There is a general presumption that title passes when risk passes but this is a rebuttal presumption. The exact point at which risk and title pass depends on the terms of the contract of sale and the intention of the parties. Contract of Affreightment: A contract to carry goods by sea is called the contract of affreightment and the consideration or charges paid for the carriage is called the freight. A contract of affreightment may take either of the two forms, namely (i) a charter party, where an entire ship, or a principal part of a ship is placed at the disposal of merchant known as a charterer); A charter party may be for a particular period, or for a particular voyage. In the former case it is called a time charter party and in the latter case, a voyage charter party has no specific form; the form varies from trade to trade depending on the customs of the trade. (ii) a bill of lading where the goods are to be carried in a general ship and the person consigning the goods is known as a shipper. There are three persons involved in a contract of affreightment. These are:1) Ship-owner: A person who is the owner of the ship and undertakes to transport the goods is called a ship-

owner. In other words, he is the carrier of the goods. 2) Charterer: A person, who hires the ship and delivers the goods to the ship-owner for transportation, is called a charterer. In other words, he is the consignor of the goods and is also known as a shipper. 3) Consignee: - A person to whom the goods are addressed and to whom the ship-owner should deliver the goods is called a consignee. TYPES OF FREIGHT
1) Lump sum freight : - While freight is normally arranged according to weight, measurement or value, the

shipper may agree to pay a lump sum as freight for the use of the entire ship or a portion thereof. In this case, the amount of freight payable by the shipper is fixed and invariable and , if the ship-owner is ready to perform his contract, is payable whether the shipper uses the hired space to full capacity, or loads below capacity or does not load at all. Moreover, in the absence of agreement to the contrary, the whole lump sum freight is payable if only part of the loaded cargo is delivered by the ship-owner at the port of destination and the remainder is lost. However, the ship-owner cannot claim lump sum freight if he is unable to deliver at least part of the cargo. 2) Pro rata freight: - It is the freight which is payable proportionate to the goods loaded on the ship or to the use of carrying capacity of the ship. Sometimes, ship-owner agrees to load the full cargo. But only loads and carries a part of it. In such cases also, he will be entitled to pro-rata freight only unless there is an express agreement for the payment of the whole freight. 3) Dead freight: - Where the shipper fails to load the cargo or the full cargo after arranging with the shipowner for its carriage, he is in breach of the contract of carriage and is liable to pay the agreed freight as damages (dead freight). But the ship-owner, who uses the freight space which would have been taken up by the goods of the defaulting shipper, and carries therein goods of other shippers, has to deduct the earned freight when claiming damages. 4) Back freight: - When the delivery of the goods has been prevented by events beyond the control of ship owner or
his master, the master is empowered to take steps in dealing with the goods. The ship owner then becomes entitled to charge the shipper or the cargo owner back freight to cover expenses incurred by the shipmaster. 5) Primage: - It is the extra freight which is payable, by an agreement, to the captain of the ship. It is

calculated at a fixed percentage on the ordinary freight. As a matter of fact, it is a sort of reward to the captain of a ship for taking care of the cargo put on board the ship. Nowadays, the payment of primage is not a common practice. THE CARRIERS ( IMPLIED)RESPONSIBILITIES UNDER A BILL OF LADING

2 The common law implies three undertakings by the carrier into a contract of carriage by sea. These terms may be excluded by express terms in the contract. The common law differs in these matters from the HagueVisby Rules. The three terms relate to the seaworthiness of the vessel, to deviation from route and to delay.

SEAWORTHINESS When goods are to be carried by sea the fitness of the vessel which is to do so is obviously a matter of concern to any person having an interest in the goods. At common law it is an implied term of the contract of contract that the ship shall be seaworthy. A ship is not seaworthy if it has a defect which a prudent owner would have required to be rectified before sending the ship to sea. This requirement is absolute; the ship must be seaworthy and it is not enough that every effort has been made to make it so. The ship must be seaworthy in two respects. It must be fit to sail on the particular voyage or a particular stage of the voyage and it must be fit to receive the particular cargo. As regards the ship itself, unseaworthiness can take many forms. It may be a physical defect, such as inefficient engines but it may also take the form of incompetence on the part of the crew. In this respect the ship must be seaworthy when it sails and there is no breach of term if it is so but becomes unseaworthy while on the voyage. E.G. The Maori King (Cargo owners) v Hughes1, a ship was held to be unseaworthy in respect of a cargo of frozen meat because refrigeration equipment was defective. In this respect the ship must be seaworthy when the cargo is loaded and there is no breach of the implied term if it becomes unfit for the cargo after the cargo has been loaded. The legal effect of a breach of the term will depend on the effect of the breach on the contract. If the breach results in unseaworthiness which is such as to frustrate the commercial purpose of the contract of carriage the cargo owner will be entitled to repudiate the contract. If it is not so serious he must rely on the action for damages. Under a contract for carriage in a general ship the cargo owner will normally be in the latter position unless he is the original shipper. Also, if there is a breach of the implied term, the carrier cannot rely on a clause absolving him from liability for some cause of loss or damage unless the loss/ damage was actually caused by the unseaworthiness. On the other hand, under the Hague-Visby Rules, the carrier is liable before and at the beginning of the voyage, to exercise due diligence to make the ship seaworthy, properly man, equip and supply the ship and make the cargo spaces fit and safe for the reception, carriage and preservation of goods. This is identical with the common law but in this case, the burden on the carrier is only to exercise due diligence to make the ship seaworthy. It is not absolute like that in common law. If due diligence has not been used to make the ship seaworthy the carrier will be liable for any loss or damage resulting from the unseaworthiness even though the primary cause of the loss of damage was one for which the carrier would not otherwise be liable under the Rules. DEVIATION There is an implied undertaking at common law in any contract for the carriage of goods by sea that the vessel will at unreasonably deviate for the agreed route or, if there is no agreed route, form the usual route or, if there is no usual route, from the direct route. Since the undertaking is implied it can be excluded by an express term in the contract. There is no breach of the term if a ship deviates on reasonable grounds as, for example, to avoid the dangerous weather or to save the life at sea, although deviation to save property at sea is not a permitted deviation art common law as it is under the Hague-Visby Rules. 2 The importance of the term for the cargo owner lies in the legal effect of a breach of the term by the carrier. Any voluntary and unjustified deviation is a fundamental breach of the contract of carriage. In consequence, the cargo owner is entitled to repudiate the contract and, if he does so, the carrier will lose the benefit of any immunity in the contract protecting him from liability for loss or damage except those available to a

3 common carrier and even the common carriers defences will only be open to him if he can prove that the loss or damage would have occurred even if there had been no deviation. Example:-Joseph Thorley Ltd. V Orchis Steamship Co 3.-A vessel carrying goods from Cyprus to London deviated, at the beginning of the voyage, to ports of Eastern Mediterranean. When the vessel arrived at London the cargo was damaged by the negligence of the stevedores unloading it. When the cargo owner sued in respect of this damage the carrier pleaded a clause in the contract absolving him from liability for any such damage. It was held that because the vessel had deviated the cargo owner was entitled to repudiate the contract of carriage and the carrier was not then entitled to the benefit of the community unless he should show that the damage by stevedores in London would have occurred even if the vessel had not deviated in the Eastern Mediterranean, a demonstration which clearly presented some difficulties. A cargo owner is not bound to repudiate the contract in these circumstances. He may waive the breach of the undertaking either expressly or by implication. Any such waiver will not, however, affect the rights of a subsequent indorsee of a bill of lading who takes it without knowledge of the deviation. Under the Hague-Visby Rules any deviation in saving or attempting to save life or property at sea or any reasonable deviation is not deemed to be an infringement or breach of the Rules or of the contract of carriage and the carrier is not liable for any resulting loss or damage. The Hague-Visby Rules are silent as to the legal effect of an unreasonable deviation on the contract of carriage and the position will therefore be as at common law. A deviation, in addition to being a breach of the contract of carriage by sea, may amount to a breach of a contract of sale by a seller who has agreed, expressly or by implication, that the goods will be carried on a particular route. The legal effect of such a breach would, of course, be a matter to be decided under the law on the sale of goods. DELAY At common law there is an implied undertaking by the carrier that the voyage will be carried on without undue delay. In many cases delay will amount to deviation. The Hague-Visby Rules are silent on this matter. DUTIES OF A CARRIER BY SEA In case of carriage of goods by sea, the carrier is the ship-owner or the charterer who enters into a contract with the consignor (shipper) for the carriage of goods. The duties of a carrier by sea are:1) Duty to exercise due diligence: - It is the most important duty of a carrier by sea. The duty requires that the carrier shall be bound, before and at the commencement of the voyage, to exercise due diligence in respect of the following:(a) To make the ship seaworthy (b)To properly man, equip and supply the ship (c) To make the holds, refrigerating and cool chambers, and all other parts of the ship in which the goods are carried, fit and safe for their reception, carriage and preservation. The words before and at the beginning of the voyage are important in respect of the above stated duties. This means the period from at least the beginning of the loading until the vessel starts on the voyage. If there is failure to exercise due diligence during that period, the carrier will be held liable for the loss. Thus, where the ship was seaworthy when the cargo was loaded but was lost in fire before the beginning of voyage, the carrier was held liable for the loss. 2) Duty to load and handle the goods properly :-It is another duty of the carrier to be careful in dealing with the goods to be carried on board the ship. This duty requires that the carrier shall properly and carefully load, handle, stow (i.e. store or fill properly), carry, keep, care for and discharge the goods carried by him. THE CARRIERS IMMUNITIES

4 Under the Hague-Visby Rules the carrier will not be liable for loss of or damage to the cargo caused by the events below4. It should however be noted that these immunities will not avail the carrier if he ahs not exercised due diligence to make the ship seaworthy and the loss or damage was caused by the unseaworthiness. (a) Act, neglect or default of the master, mariners, pilot or the servants of the carrier in the navigation or in the management of the ship. While few problems have arisen concerning navigation, difficulties have arisen on what is meant by management of the ship. It does not include care of the cargo, which is a separate duty. (b) Fire, unless caused by actual fault or privity of the carrier. (c) Perils, dangers and accidents of the sea or other navigable waters. These are dangers to which the sea transit is particularly prone, such as stranding, storms, collision and seawater damage. To come within the immunity it must be shown that the loss or damage was caused by something more than the ordinary action of wind and waves. There must be an element of fortuity about the event and it must not be some occurrence which in the ordinary course of events should have been foreseen and guarded against. Also, the carrier may be protected by this immunity even though the peril of the sea was not the immediate cause of the loss or damage. (d) Act of God. This is any natural event for which no human agency is responsible and against which precautions could not reasonably have been taken. Thus, a carrier could not plead Act of God when a ship went aground in a fog, since human agency was necessary to steer the ship on the shoal.5 (e) Act of war. This is any direct hostile act resulting from war. War probably includes civil war and does not necessarily involve an official declaration of war. (f) Public enemies. The nature of these is unclear, though most authorities instance pirates. (g) Arrest or restraint of princes, rulers or people or seizure under legal process. The phrase princes, rulers or people in effect means established governments and the immunity covers cases of government action such as embargoes, import bans, quarantine restrictions and the like. (h) Quarantine restrictions. In view of the preceding immunity there appears to be no reason for the appearance of this as a separate immunity as far as English law is concerned. (i)Act or omission of the shipper or owner of the goods, his agent or representative (j) Strikes or lockouts or stoppages or restraints of labour whatever cause whether partial or general. (k) Riots or civil commotions. A civil commotion has been said to be an intermediate stage between a riot and a civil war.6 (l) Saving or attempting to save life or property at sea. (m) Wastage in bulk or weight or any other loss or damage arising from an inherent defect, quality or vice of the goods. This exception, which in the common law is known as inherent vice, covers any loss occurring through some natural defect or quality in the goods themselves, as, for example, acid in the fertilizers eventually rotting the bags in which they were packed.

5 The immunity will naturally not avail the carrier if the damage, though arising from the nature of the goods, was caused by bad stowage. (n) Insufficiency or inadequacy of marks (o)Insuffiency of packing. This immunity, like the previous one, will not apply where there has been bad stowage. (p) Latent defects not discoverable by due diligence (q) Any other cause arising without the actual fault or privity of the carrier or without the fault or neglect of the agents or servants of the carrier.The carrier will be able to claim the benefit of this immunity only to the extent that he can prove the absence of fault, privity or neglect. BILL OF LADING The term bill of lading may be defined as a document acknowledging the shipment of the goods, and containing the terms and conditions upon which the goods are to be transported by the ship. It is signed by the ship-owner or his authorized agent or by the master of the ship. It should also be stamped. 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. The Hague Rules. ii. The Hague/Visby amendments. iii. The Hamburg Code. iv. Hybrid systems based on the Hague/Visby and Hamburg regimes FUNCTIONS OF THE BILL OF LADING7 1. Bill of Lading as a Receipt: - The bill of lading will acknowledge the quantity of goods put on board, their description and their condition. The bill of lading form will usually be completed by the shipper or his forwarding agent and sent to the carrier. As the goods are loaded they will be checked by tally clerks and if the particulars are found to be correct the bill of lading will be signed for the carrier by his agent, the loading broker. 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

6 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: Bill of lading usually contains the printed words, Shipped in good order and condition. At common law, in the hands of the shipper, this statement is not even prima facie evidence of the condition of the goods when shipped. It amounts merely to evidence of the condition and if the goods arrive damaged the onus remains with the shipper to show that the goods were shipped in In Compania Naviera Vasconzada V Churchill and Sim 8 timber was stained with oil when shipped but a clean bill of lading was nonetheless issued to the shipper who indorsed it to a third party. The indorsee sued the carrier in respect of the damage. The carrier was estopped, by the statement in the bill of lading, from denying that the timber was in good condition when loaded and was thus liable to the indorsee for the damage. On the other hand, in Canadian and Dominion Sugar Co Ltd v Canadian National (West Indies) 9 Steamships the bill of lading contained the phrase signed under guarantee to produce ships clean receipt, thus clearly incorporating the receipt terms into the bill of lading. The receipt stated, Many bags stained, torn and re-sewn. The bill of lading statement thus qualified did not estop the carrier from proving the condition of the timber when shipped. Statements as to leading marks: Leading marks are the distinguishing marks, code marks, symbols etc. placed on the goods or their containers by the shipper. Where the Hague-Visby Rules apply, the carrier can refuse to enter them on the bill of lading unless they are such as should ordinarily remain legible until the end of the voyage. At Common law the carrier is entitled to show that goods shipped were marked otherwise than as noted I the bill of lading as long as the marks in question are not material to the description of the goods. In Parsons V New Zealand Shipping Co.10 some carcasses of frozen lamb were found on arrival to bear marks different from those in the bill of lading. The marks in question only reflected details in the shippers storage system and were not related to the quality or description of the carcasses. The carrier was thus entitled to prove that the carcasses delivered were the ones actually loaded. It appears, however, that the carrier is not bound by any statement as to the marks that indicate quality, on the grounds that he is not a judge of quality. THE BILL OF LADING AS A DOCUMENT OF TITLE

A document of title is one which the law recognizes as representing the goods so that the transfer of the document to a party will vest in that party the ownership or possession of the goods to which the document relates, provided that this transfer of rights was intended by the parties. Some documents of title are so by virtue of the common laws recognition or mercantile usage while others have been made so by statute. The ability to transfer property rights in goods by the transfer of a document is the keystone of international trade practice. The bill of lading has long been recognized by the courts, following mercantile usage, as having this quality. In E Clemens Co V Bidell Bros11, the buyer under a CIF contract was offered a bill of lading but refused to pay until the goods themselves were delivered. It was held that since possession of the bill of lading amounted in law to the possession of the goods the seller was entitled to perform his part of the contract by handing over the document. BILL OF LADING AS A NEGOTIABLE INSTRUMENT A bill of lading is a document of title of the goods mentioned in it i.e. it is a symbol of the ownership of the goods. Thus, the consignee named in a bill of lading is the owner of the goods mentioned in it, and cans ell them while they are still in sea i.e. in transit. The goods can be sold by the consignee by transferring the bill of lading to the purchaser. For the purpose of transferring, the bill of lading may be classified into two types:1) Order bill of lading: - In this case, the goods shipped under a bill of lading are made deliverable to a particular person or to his order. 2) Bearer bill of lading:-In this case, the goods shipped under a bill of lading are made deliverable to a name left blank or to a bearer. An order bill of lading can be validly transferred by making an indorsement in favour of the transferee, and then delivering the same to him. And a bearer bill of lading can validly be transferred by its mere delivery to the transferee. When the bill of lading is validly transferred, the transferee becomes entitled to the goods mentioned in the bill of lading. This characteristic of a bill of lading resembles that of a negotiable instrument. On account of this similarity between the two kinds of instruments, a bill of lading is generally described as quasi negotiable or as good as negotiable. It may be noted that a bill of lading is negotiable only in the sense that it is transferable. Thus, in the strict legal sense of the term, a bill of lading is not a negotiable instrument. The points of difference between a negotiable instrument and a bill of lading:1) A negotiable instrument is a contract to pay money, and entitles its holder to receive the money due on it. On the other hand, a bill of lading is not a contract to pay money. It entitles its holder to obtain the goods covered by it i.e. mentioned in it. 2) In case of a negotiable instrument, a transferee who gets in good faith and for value (e.g. a holder in due course) gets a better title than that of the transferor. But, the transferee of a bill of lading does not get a better title than that of the transferor e.g. if he acquires it bonafide and for value i.e. the transferee of the bill of lading gets it subject to any defect in the title of the transferor.
Statement of Principles as per The (Indian) Bills of Lading Act, 1856.
The standard short form bill of lading is a part of the contract of carriage of goods and it serves a number of purposes:
y it is evidence that a valid contract of carriage exists and it incorporates the full terms of the contract between the consignor and the carrier by reference (i.e. the short form simply refers to the main contract as an existing document, whereas the long form of a bill of lading (connaissement intgral) issued by the carrier sets out all the terms of the contract of carriage); y it is a receipt signed by the carrier confirming whether goods matching the contract description have been received in good condition (a bill will be described as clean if the goods have been received on board in apparent good condition and stowed ready for transport); and

8
y it is also a document of transfer, but not a negotiable instrument, i.e. it governs all the legal aspects of physical carriage but, unlike a cheque or other negotiable instrument, it does not affect ownership of the goods actually being carried. This matches everyday experience in that the contract a person might make with a commercial carrier like FedEx is separate from any contract for the sale of the goods to be carried.

KINDS OF A BILL OF LADING A bill of lading is of the following types:1) Clean bill of lading: - It is a bill of lading which acknowledges the receipt of the goods in their perfect condition. The perfect condition of the goods is indicated by using certain words in the bill of lading such as shipped in good order and condition. As a matter of fact, a bill of lading begins with these words, and the ship-owner may cancel these words if the goods are not in a perfect condition. It may be noted that in case of a clean bill of lading, the ship-owner is bound to deliver the goods in the same condition in which they were at the time of loading, excepting the ordinary depreciation of voyage. In this case, the ship-owner cannot take the defence that the gods were not in a good order and condition when they were loaded on the ship. 2) Qualified bill of lading: - It is a bill of lading which does not acknowledges the receipt of goods in the perfect condition. The use of certain words such as goods shipped in a damp condition: or weight, value and contents unknown: indicate that the goods are not in a perfect condition. If the goods are not in a perfect condition, the ship-owner may retain these words, and cancel the opening words reading as shipped in good order and condition. In this case, the ship-owner qualifies his liability and is not bound to deliver the goods in the perfect condition. 3) Through bill of lading: - It is a bill of lading which is issued by a ship-owner for the transportation of goods partly in his own ship, and partly in the ship of another ship-owner for an inclusive freight. Sometimes the goods are to be carried partly by sea and partly by land, and the ship-owner has charged for both the carriages i.e. by sea and land. In such cases also, the bill of lading issued by the ship-owner is a through bill of lading. It may be noted that in such cases, in the absence of any contrary provision, a contract is considered to be made with the ship-owner who issues the bill of lading , and he would be liable for the loss occurring on any part of the journey. 4) Received for shipment bill of lading: - It is a bill of lading which states that the goods have been received for shipment. It may be noted that it is not a proper bill of lading. It operates only as a receipt of the goods received for shipment. A proper bill of lading, also called the shipped bill of lading is issued only after the goods are loaded on the ship. If a received bill of lading is held by the charterer, he must after the loading of the goods, surrender it to the ship-owner and obtain from him the shipped bill of lading. OTHER DOCUMENTS (RELATED TO CARRIAGE BY SEA) Mates receipt: - It is a temporary receipt given by the person incharge of the ship as an acknowledgement that the goods have been received on board the ship. After the bill of lading is prepared, this receipt is handed over to the master in exchange for the bill of lading. It may be noted that a mates receipts is not a document of title. It simply entitles the holder to receive the bill of lading from the master of the ship. Sea way- bill: - A sea way bill is a receipt for goods carried by sea but differs from a bill of lading in that it is not a document of title. It contains or evidences an undertaking by the carrier to the shipper to deliver the goods to an identical person. The shipper may, at any time before the delivery of the goods, change the identity of the person to whom delivery is to be made. The consignee obtains delivery not by presenting the way-bill, which remains in the hands of the shipper, but by production of acceptable evidence of his identity as consignee. The sea way-bill cannot be used as a security. Its chief advantage lies in the fact that it does not have to be transmitted to the consignee to enable him to obtain the goods.

9 Delivery orders:-An exporter, who ships the bulk cargo and receives one bill of lading in respect of it, or an indorsee of this bill of lading, may afterwards, while the goods are in transit, sell various unascertained portions of the cargo to different buyers. He clearly cannot transfer the bill of lading to all the buyers and must find some other way to satisfy each buyers demand for some document evidencing his right to the goods he has bought which will enable him to collect or resell them. In such cases a delivery order may be used, delivery order is not a precise term and the legal status and effect of such a document will depend on its nature and the circumstances in which it is issued. A delivery order is not a document of title unless proved to be so by reason of mercantile custom. CLAUSES OF A BILL OF LADING A bill of lading issued in case of a general ship contains the clauses in respect of terms of the contract of affreightment. These are generally the same as contained in a charter party. The clauses of a bill of lading should state the following particulars:1) Name of the parties 2) Name of the ship 3) Port of loading 4) Port of destination 5) Name of the consignee 6) Marks for the identification of the goods such as number of package 7) Statement regarding the condition of the goods and their quantity or quality or weight 8) Other terms and conditions of contract of affreightment such as amount of freight, expected perils etc COMPARISON BETWEEN A CHARTER PARTY AND A BILL OF LADING Charter party Bill of lading

1) It is a document by which the charterer enters into a contract with the ship-owner for the hire of the whole or substantial part of the ship. 2) It always contains all the terms and conditions of the contract mutually agreed between the ship-owner and charterer. 3) It is the governing document between the ship-owner and charterer. It does not acknowledge the receipt of the goods. 4) It is not a document of title to the goods. 5) It does not possess any characteristic of a negotiable instrument. And thus, it cannot be transferred to a third person.

It is not the document by which the ship is in contract with the charterer.It acknowledges the receipt of goods by the ship -owner for carriage. It may or may not contain all such terms and conditions.

It is an acknowledgement of the receipt of the goods loaded on the ship. It is a document of title to the goods mentioned in it. It possesses some of the characteristics of a negotiable instrument. However, it is not negotiable in the legal sense of the term. It is always for a particular destination. It requires a stamp of less amount as compared to a charter party.

6) It may be for a particular voyage or for a particular period of time. 7) It requires a stamp of higher amount.

10 8) It may amount to lease of the ship to the charterer. AN ELECTRONIC BILL OF LADING12 Bills of lading have always been issued as paper documents. However, the replacement of a paper bill of lading with an electronic bill of lading seems a sensible step forward in the new electronic commerce world. A major problem facing an electronic bill of lading is the negotiability of such documents of title. A document of title relies upon the transferability of the document by physical possession. An electronic bill of lading cannot be handled in physical possession with the result that it cannot be produced on delivery, nor endorsed to a new holder. Therefore, this inhibits the capability of it representing a document of title. Various ways around this problem have been sought. In 1985, a bill of lading registry was suggested by the Chase Manhattan bank and INTERTANKO, which was established Sea Dock Registry Ltd. Unfortunately this survived only six months. The idea of a registry was further developed by the CMI Uniform Rules for Electronic Bills of Lading adopted in 1990. Also, established in 1996, the UNICTRAL Model Law on Electronic Commerce aims to solve many of the problems affecting the legal effect of electronic documents. The registry system is designed to be a depository for documents, while the rights to the goods are transferred by the communicating of authenticated messages between the registry and the parties who have an interest in the goods. The registry facilitates the transfer of title from one party to another, canceling the first partys title at the moment the title is transferred to the new holder. The newest project in this area is called BOLERO, whose name stands for Bill of Lading Electronic Registry Organization. BOLERO is an internet-based system and therefore, relatively inexpensive. BOLERO builds on the CMI Rules but has established a central registry as the secure third party. BOLERO has set up an electronic registry for bills of lading called the title registry. The registry is a database application. It creates and transfers the rights and obligations relating to an electronic bill of lading. The title registry deals with any change of interest in the goods. Where the BOLERO system is used, the carrier creates a BOLERO bill of lading, sends the instructions to the title registry and the shipper is logged as holder of the BOLERO bill. If the holder of the bill wishes to transfer his constructive possession to the bill to another, he can make the transfer by attornment. Attornment occurs when the holder sends instructions to the registry that name the new holder. Once these instructions are received the registry sends a message confirming the new holder. The cargo is delivered to the last holder of the bill by the registry giving up the BOLERO bill to the carrier. BOLERO incorporates security for all transactions. Digital signatures of relevant parties are used and all messages are secure from unauthorized access. In the UK the Electronic Communications Act 2000 regulates the provision of electronic signatures, encryption technology and reliance on third parties such as BOLERO. However, service providers must have a connection with the jurisdiction, i.e. the service must be provided from premises in the UK or to persons carrying on a business in the UK. This Act, therefore, does not support electronic commerce. The EU Electronic Directive deals with the certain legal aspects of information society services. The liability of BOLERO or other similar information society service providers is generally set out in Rule 4 of the Directive. The Article provides for the conclusion of contracts electronically, although there is no provision for sanctioning the recognition of a contract made and evidenced by an electronic instrument. The UNICTRAL Model Law on Electronic Commerce (as amended 1998) was created because of the inadequate legislation which existed in relation to international trade and electronic commerce. It covers the main legal issues like requirements for writing, signature, admissibility and probative value and actions related to contracts of carriage of goods. Its provisions have generally found their way into national laws and the UK Electronic Communications Act 2000 is consistent with the provisions of the UNICTRAL Model Law. It can never amount to lease of the ship to the charterer.

11 The International Chamber of Commerce also launched an e-business tool that provides secure online contracting based on ICCs model international sale contract. It enables the speed and convenience of dealing over the web. Thus, with the e-commerce era moving ahead, the electronic bill of lading is also gaining ground. INCOTERMS13 i.e. INTERNATIONAL COMMERCIAL TERMS USED FREQUENTLY IN THE COURSE OF CARRIAGE OF GOODS
There are a number of special trade terms ,such as INCOTERMS 2000 ,open to traders to apply to their contract of sale .These have been laid down by the relevant trade association ,such as the International Chamber of Commerce .They are often referred to during the course of drafting the Bill Of Lading during the carriage of goods by sea. 1. EXW (Ex Works) The buyer bears all costs and risks involved in taking the goods from the seller's premises to the desired destination. The seller's obligation is to make the goods available at his premises (works, factory, warehouse). This term represents minimum obligation for the seller. This term can be used across all modes of transport. 2.FCA (Free Carrier) The seller's obligation is to hand over the goods, cleared for export, into the charge of the carrier named by the buyer at the named place or point. If no precise point is indicated by the buyer, the seller may choose within the place or range stipulated where the carrier shall take the goods into his charge. When the seller's assistance is required in making the contract with the carrier the seller may act at the buyers risk and expense. This term can be used across all modes of transport. 3.CPT (Carriage paid to.) The seller pays the freight for the carriage of goods to the named destination. The risk of loss or damage to the goods occurring after the delivery has been made to the carrier is transferred from the seller to the buyer. This term requires the seller to clear the goods for export and can be used across all modes of transport. 4.CIP (Carriage and insurance paid to.) The seller has the same obligations as under CPT but has the responsibility of obtaining insurance against the buyer's risk of loss or damage of goods during the carriage. The seller is required to clear the goods for export however is only required to obtain insurance on minimum coverage. This term requires the seller to clear the goods for export and can be used across all modes of transport 5.FOB (Free on Board) Once the goods have passed over the ship's rail at the port of export the buyer is responsible for all costs and risks of loss or damage to the goods from that point. The seller is required to clear the goods for export. This term should only be used for sea or inland waterway transport. 6.CFR (Cost and Freight) The seller must pay the costs and freight required in bringing the goods to the named port of destination. The risk of loss or damage is transferred from seller to buyer when the goods pass over the ship's rail in the port of shipment. The seller is required to clear the goods for export. This term should only be used for sea or inland waterway transport.

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7.CIF (Cost, Insurance and Freight) The seller has the same obligations as under CFR however he is also required to provide insurance against the buyer's risk of loss or damage to the goods during transit. The seller is required to clear the goods for export. This term should only be used for sea or inland waterway transport. 8.DES (Delivered Ex Ship) The seller has fulfilled his obligation to deliver when the goods are available to the buyer on board the ship uncleared for import at the main port of destination. The seller is responsible for all costs and risk of loss or damage in bringing the goods to the named port of destination. This term should only be used for sea or inland waterway transport. 9.DEQ (Delivered Ex Quay) The seller has fulfilled his obligation to deliver when the goods are available to the buyer on the quay (wharf) at the named port of destination, cleared for importation. The seller is responsible for all risks and costs including duties, taxes in making available the goods at the port of destination. This term should only be used for sea or inland waterway transport. Thus an INCO Term must be accompanied by a "named place" ex. "FOB Sydney", "EXW Tahiti"