June 1999
(Sea Venture Volume 18)
The general principle used to identify whether a bill of lading is an owner’s or charterer’s bill was summarised by Legatt LJ in The "Rewia"¹ as follows:
"... a bill of lading signed for the Master cannot be a charterer’s bill unless the contract was made with the charterers alone, and the person signing has authority to sign and does sign, on behalf of the charterers and not the owners…".
Further, in the same case Dillon LJ observed:
"…the key words in the bills are the words "for Master"... Unless the words "for Master" can be rejected as ... surplusage... or repugnant to the references to the sub-charterers in the heading of the bills, these bills must, on the English Authorities... be held to be owners bills signed for the Master so as to bind his employers, the owners ...".
Thus in the majority of cases a bill of lading signed "for Master" will constitute an owner’s bill of lading and is evidence of a contract between the cargo interests and the vessel owners. However, the recent decision in Sunrise Maritime Inc. -v- UVISCO Ltd.² (The "Hector") may have caused some uncertainty to this general rule.
In the case of The "Hector", the vessel was time chartered by owners on NYPE terms to USEL, with the charter containing the normal authority to charterers to sign bills of lading on owners’ behalf, in conformity with mate’s receipts. The vessel was sub-chartered under a GENCON charterparty to UVISCO. A Conline form bill of lading was signed in London by an associate company of the sub-charterers underneath the pre-printed words "for and on behalf of the Master". The bill recorded on its face "Carrier : US Express Lines" (i.e. USEL). Set out on the reverse side was a clause identifying the owner of the vessel as the carrier unless"adjudged that any other is the carrier and/or bailee … hereunder". The judge, Rix J, decided that the bill was a charterer’s bill and was evidence of a contract between cargo and USEL as "carrier", which term he described as "...the expression in which the party with the obligations to carry out the bill of lading contract is clothed".
In reaching his decision Rix J followed the approach taken by both the Court of Appeal in The "Rewia" and Clarke J (as he then was) in The "Ines"³ by first construing the bill of lading terms as a whole, and then reviewing whether the conclusion was supported by the surrounding circumstances. It is, however, noteworthy that Rix J circumvented the identity of the carrier clause on the reverse of the bill of lading. Indeed, this would appear to be in complete contrast with the decision of Brandon J in The "Berkshire"4: "…all the demise clause does is to spell out in unequivocable terms that the bill is intended to be a shipowner’s bill of lading…". In this respect Rix J held that where there is conflict with the identity of carrier clause: "…the typed stipulation of USEL, as carrier on the face of the bill must be regarded as superseding the printed provisions of [the identity of Carrier Clause]…".
The apparent conflict between the identity of carrier clause and signature "for and on behalf of the Master" on the one hand, and the identification of USEL as "carrier" on the other was resolved in favour of the stipulation "carrier" on the face of the bill of lading: "… the only party which is identified by name in the bill of lading as the carrier is USEL. For all that anyone reading the bill of lading knows USEL are the owners, and there is no conflict between the stipulation that USEL are the carrier ……and the signature for the master and the [identity of carrier clause]…". This is in contrast to The "Berkshire", but as Rix J pointed out "…The term "carrier" is a critical term",and the Hague Rules, to which the bill of lading was subject defines the "carrier" as including "the owner or charterer who enters into a contract of carriage with a shipper…" (Article 1(a)).
Further, the decision is confusing in relation to the way in which the third element of the bill of lading was dealt with by Rix J. That is the capacity in which the bill of lading was signed. In The "Hector" the bill of lading was ante dated. The Court found that USEL had not been authorised by the Master to issue an ante dated bill of lading and thus the bill of lading was a charterer’s bill notwithstanding that it had been signed "For and on behalf of the master". Rix J held "…The rule is only that in the ordinary way a bill signed by or for the master will be an owners’ bill, not that it must be..."This is in contrast to The "Rewia" and may lead to the conclusion that to determine whether a bill of lading is an owners’ or charterers’ bill will now require an investigation of the actual authority pursuant to which a particular bill of lading was signed. This is often not readily apparent or easy to establish.
In summary, the approach adopted by Rix J in The "Hector" is an indication of the willingness of the English Courts to look at a bill of lading as a whole in order to identify the contracting carrier, and that charterers issuing their own form bills of lading may be more likely now to be held to be the carrier under that bill. However, the requirement to identify whether a bill of lading has been signed with or without the master’s authority will more often than not be impossible to determine from an inspection of that bill of lading. This can only lead to uncertainty particularly on the part of a claimant under the bill of lading.
¹ (1991) 2 Lloyd's Rep 325
² (1998) 2 Lloyd's Rep 287
³ (1995) 2 Lloyd's Rep 144
4 (1974) 1 Lloyd's Rep 198
