Carriage of Goods under Bills of Lading and Similar Documents

AuthorEdgar Gold; Aldo Chircop; Hugh M. Kindred; William Moreira
1) Introduction
The delivery of goods by sea is processed and regulated in distinctly dif-
ferent ways depending on the nature of the cargo. As explained at the
beginning of Chapter 12, while tramp ships carry goods, such as raw
materials, in bulk under charterparties, liner vessels transport packaged
and unitized goods, typically merchandise and processed products, un-
der bills of lading and similar documents. During the nineteenth and
well into the twentieth century the use of bills of lading to process the
carriage of goods in liner services was practically ubiquitous. Informal
documents, such as mate’s receipts, and delivery orders, designating in-
dividual shares in a cargo, were also used but uncommonly. Later in the
twentieth century, however, the advantageous advances in cargo handling
techniques, achieved by the introduction of containers, and in the pro-
cessing of transactions, made possible by the application of computers,
have transformed the carriage of goods by liner ships. As a result of these
changes, a variety of new transport documents have been developed and
put increasingly into use in place of bills of lading. These documents
include sea waybills, which are simpler instruments than bills of lading,
and combined transport documents, which are used for through carriage
by sea and multimodal movements. In addition these paper-based pro-
cesses have now been widely replaced by electronic transactions.
While the variety of shipping documents used in liner services has
increased in recent years, the law governing all of them has remained sub-
stantially the same since 1924. Unlike charterparties, which have been left
to the freedom of the contracting parties, liner services have been the sub-
ject of government regulation for over a century. To avoid the confusion
that multiple national regimes would create, an internationally uniform
set of rules, known as the Hague Rules after the place of their provisional
preparation, was agreed at an international conference held at Brussels in
1924.1 These Rules have been amended more than once and alternative
sets of rules have been agreed to but not widely applied. Undoubtedly a
new internationally uniform regime that meets the needs of carriers and
cargo owners operating modern, containerized traff‌ic by streamlined elec-
tronic processes is required. The latest effort to establish such a regime
by governmental agreement internationally culminated in 2009 with the
conclusion of the so-called Rotterdam Rules,2 but they have yet to enter
into force and effect. Meanwhile Canada applies3 an amended version of
the Hague Rules, known as the Hague-Visby Rules.4 Accordingly this chap-
ter addresses f‌irst the legal character and functions of the various liner
shipping documents, both paper and electronic, and then the Canadian
application of the international Hague-Visby Rules, and concludes with a
brief review of the Rotterdam Rules as they may impact Canadian law.
2) Bills of Lading
A bill of lading is a document used in international sales to process the
delivery of goods by sea. It is widely employed in liner shipping and on
chartered ships in some trades. Issued by the carrier to the shipper, also
known as the consignor, of the goods, it may be in one of two forms. By
far the most common are order, alias negotiable, bills of lading. Straight
bills of lading constitute the second form and are distinguished by being
non-negotiable. Their characteristics are discussed in the next section
below. Following common practice, this text will use the term “bill of
1 By the International Convention for the Unif‌ication of Certain Rules of Law Relating
to Bills of Lading, 24 August 1924, 120 LNTS 155 [Brussels Convention containing
the Hague Rules].
2 UN Convention on Contracts for the International Carriage of Goods Wholly or
Partly by Sea, 11 December 2008, GA Res 63/122, UNGAOR, 63d Sess, UN Doc
A/Res/63/122 (2 February 2009) Annex [Rotterdam Rules].
3 By the Marine Liability Act, SC 2001, c 6 [MLA], Schedule 3 [Hague-Visby Rules].
4 Protocol to amend the International Convention for the Unif‌ication of Certain Rules of
Law Relating to Bills of Lading, 1924, 23 February 1968, 1412 UNTS 121, English
text at 128 [Visby Protocol].
Carri age of Goods under Bills of Lad ing and Similar Document s 565
lading” to refer to the regular, order or negotiable bill of lading, and will
speak of the “straight bill” when the distinction is legally signif‌icant.
A bill of lading has three functions: (1) as evidence of the contract
of carriage, (2) as a receipt by the carrier for the goods to be carried,
and (3) as a document of title to the goods.5 Early bills of lading were
merely receipts for goods received by a carrier. Progressively conditions
of carriage were included in them, especially as standard form contracts
became prevalent. Their status as documents of title was eventually ac-
cepted by the common law in 1782 when the commercial practice of ne-
gotiating the shipper’s right to the goods by endorsing the bill of lading
in favour of the consignee or purchaser was recognized in the case of
Lickbarrow v Mason.6
Its status as a negotiable document of title is what distinguishes the
ocean bill of lading from all other documents used to process sea car-
riage transactions, in particular straight bills of lading, sea waybills, dock
receipts, and delivery orders. The cases do not so much def‌ine a bill of
lading as describe its three functions and list its typical contents. The
usual indications on the document are its title of negotiable bill of lading
and its directions to deliver the goods to the named consignee “or to or-
der.”7 Transport documents that do not bear this time honoured phrase
are not negotiable title documents (though they most likely are good
evidence of receipt of the goods and the terms of their carriage).
The form of a bill of lading now follows a fairly standardized two
page format in which all the details of the particular cargo and its car-
riage are entered on the front and the shipping company’s standard
trading terms appear in f‌ine print on the back. At the foot of the f‌irst
page, just above the signature line, there is generally a statement that
incorporates the clauses on the back of the form as part of the operative
conditions of carriage. Some shortform or blank back bills of lading
omit the printed clauses and instead incorporate the carrier’s standard
terms by reference to them at their business premises.
The f‌ine print clauses of a typical bill of lading are numerous and
extensive. They set out the carrier’s standard trading conditions as they
vary the terms implied by common law8 while ref‌lecting the manda-
5 See Canadian General Electric v Armateurs du St Laurent Inc (The Maurice Desgagnés),
[1977] 1 FC 215 (TD) [Canadian General Electric] and the def‌inition of a bill of
lading in the Hamburg Rules, art 1(7) enacted in the MLA, above note 3, Schedule
4 (see also note 165, below in this chapter).
6 (1794), 101 ER 206.
7 Henderson & Co v Comptoir d’Escompte de Paris (1873), LR 5 PC 253; Canadian
General Electric, above note 5; see also Hamburg Rules, above note 5, art 1(7).
8 Described in Chapter 12, Section B.

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