The Middle East Branch of the Institute of Chartered Shipbrokers conducted a Masterclass on Bills of Lading by way of a webinar conducted on 28th Nov and 12th Dec 2020. The author was fortunate to attend the webinar and to hear from Capt Norman Lopez1, FICS, Mr Krishna Prasad2,FICS and Mr Jeffrey Blum3,FICS. While most of us in the shipping industry would be involved or aware of Bills of Lading (“Bs/L”) and the important role it plays in International Trade, attending such webinar’s keep us not only aware of the developments but also be aware of the issues which regularly crop up. This article touches on the fourth function propounded by Capt Norman Lopez together with some of the comments made by Mr Vincent O’Brien4 on UCP 600.
- The various “functions” of the BsL developed keeping in line with the technological advances in the shipping industry. Prior to the development of BsL, goods loaded on board a vessel were noted in a Book, known as the Book of Lading (lading in archaic English means the action of loading a ship with cargo) and which formed the basis of freight contributions once the adventure was accomplished. When it was possible for the merchants to avoid travelling with their goods, they were issued a Bill of Lading (“bill” meaning a documentary copy of an extract from the Book of Lading) and which acted as a Receipt for the goods loaded. Subsequently the other functions of the BsL developed such as the Evidence of the contract of carriage and a Negotiable document of Title5. Invariably, all of the leading shipping textbooks list the above 3 functions of the BsL i.e., receipt, evidence of contract of carriage and a document of title.
- During the Master Class, Capt Norman Lopez propounded on a possible Fourth Function of the Bill of Lading as being the evidence of the Facts when the document was issued, say the “Statement of Facts” function. In this regard, the details mentioned in the Bill such as the name of the Vessel, Port of Loading, Cargo details, Date of Issue of the BsL and the Shipped-on Board dates are important facts which are relied upon by the trade. If any of these are incorrect or have been misrepresented, then the parties involved in the transaction may suffer losses such as loss in value, sanction by relevant government authorities, etc. Although this function has not been focussed on in any of the text books, this function of the BsL is an important function, given that it keeps the cogs of trade moving.
- We have pondered on this “Statement of Facts” function and quite agree with Capt Norman. We believe that this is perhaps the most important function of the BsL as fraudulent, or incorrect details have a significant impact in any trade transaction. As time goes by, it is possible for other functions of the BsL to develop or be curtailed, as the case may be, and which would depend on various factors including technological advances and innovations.
- Mr Vincent O’Brien also attended the webinar on 12th Dec 2020 and commented on Clean on Board and Transhipment Bills of Lading with respect to Uniform Customs & Practice for Documentary Credits 600 (commonly known as “UCP 600”). He mentioned that if cargo interests seek a “Clean on Board” endorsed Bills of Lading, they should be directed to Article 27 of the UCP 600 which clearly states that “The word “clean” need not appear on a transport document, even if a credit has a requirement for that transport document to be “clean on board”. With respect to Transhipment, he did mention on the provisions in Art 20 of UCP 600 that even if the letter of credit prohibits transhipment, if the goods have been shipped in container, trailer or lash barge and transhipped, this would be acceptable.
- The Middle East Branch of the Institute of Chartered Shipbrokers have been organising webinars and Master Classes on various topics. The quality of the Tutors together with the interaction with the participants lead it to be a very enjoyable learning experience. While the pandemic has certainly curtailed lot of activities, it has also given opportunities to use other modes of communication and which have a far greater reach than traditional modes such as face to face seminars. The Middle East Branch of the Institute of Chartered Shipbrokers has taken to this new mode of communication with aplomb. We strongly urge shipping professionals to consider attending and participating, in such webinars conducted by the Institute of Chartered Shipbrokers, particularly on topics which may be of their interest.
1. Capt Norman Lopez, FICS, Extra Master, Solicitor, LLB, BAdVocT, MA, Marine Consultant is presently the Education officer of the Australia and New Zealand Branch of the Institute of Chartered Shipbrokers. He has had a chequered career for more than 50 years including sailing in ships, educator, maritime author, Solicitor and a P&I Correspondent.
2. Mr Krishna Prasad, FICS, (KP as he is popularly known as) is presently the Chairman of the Middle East Branch of the Institute of Chartered Shipbrokers. Further details of his extensive CV can be seen at https://www.icsmiddleeast.org/committee
3. Mr Jeffrey Blum, FICS, has been involved in shipping and trading since 1972. He is a member of the Baltic Exchange and has worn many hats including that of a shipbroker, charterer, shipowner & operator, Lloyd’s underwriter, gasoil futures broker and commodities trader in London and abroad. He also acts as an Arbitrator and is frequently involved in giving lectures in Shipping topics at various institutions. Further details of Jeffrey can be seen at https://www.linkedin.com/in/jeffreydblum/?originalSubdomain=uk
4. Mr Vincent O’Brien is the director of ICC UAE. His further details can be viewed at https://www.iccuae.com/images/advocacy/vincent.pdf
5. See an article on The Functions of the Bills of Lading by West of England P&I and which can be viewed at https://www.westpandi.com/getattachment/907f94bf-b7dd-469e-913f-4baae23fca1d/p-i_guide_bills_of_lading_1_2pp_v2_lr.pdf