(back to preceding text)

    45.  The attestation clause expressly provides that "One of the bills of lading must be surrendered duly endorsed in exchange for the goods or delivery order." The carrier argued that the words "duly endorsed" signify that this provision is inapplicable to a straight bill of lading. I would reject this argument. The words "duly endorsed" merely indicate that the bill of lading must be endorsed if appropriate or as may be necessary to perform the right of the presenting party to claim delivery. In any event, the issue of a set of three bills of lading, with the provision "one of which being accomplished, the others to stand void" necessarily implies that delivery will only be made against presentation of the bill of lading. In my view the decision of the Court of Appeal of Singapore in Voss v APL Co Pte Ltd [2002] 2 Lloyds LR 707 at 722 that presentation of a straight bill of lading is a requirement for the delivery of the cargo is right. A connected point is that the logic of the carrier's position is that some standard terms on the reverse side of the bill of lading must be deemed to be inapplicable. That too is not how traders, bankers and insurers would understand a straight bill of lading.

    46.  The carrier tried to equate the function of a straight bill of lading with that of a sea waybill. In Schmitthoff's Export Trade: The Law and Practice of International Trade, 10th ed, 2000, edited by Leo D'Arcy and others, a sea waybill is described as follows (paras 15-033, at p 281):

"A sea waybill is a non-negotiable transport document and its great advantage is that its presentation by the consignee is not required in order for him, on production of satisfactory identification, to take delivery of the goods, thus avoiding delay both for him and the carrier where the goods arrive before the waybill. It is not a document of title but contains, or is evidence of, the contract of carriage as between the shipper and carrier in that it incorporates the standard terms of the carrier on its face. However, unlike a bill of lading, these terms are not detailed on the reverse of the waybill which is blank. A waybill is usually issued in the "received for shipment" form but may, like a bill of lading, be notated once the goods have been loaded."

The suggested comparison is plainly unrealistic. In the hands of the named consignee the straight bill of lading is his document of title. On the other hand, a sea waybill is never a document of title. No trader, insurer or banker would assimilate the two. The differences between the documents include the fact that a straight bill of lading contains the standard terms of the carrier on the reverse side of the document but a sea waybill is blank and straight bills of lading are invariably issued in sets of three and waybills not. Except for the fact that a straight bill of lading is only transferable to a named consignee and not generally, a straight bill of lading shares all the principal characteristics of a bill of lading as already described.

    47.  Moreover, no policy reason has been advanced by the carrier why the draftsmen of the Hague Rules would have wanted to distinguish between a named consignee who receives an order bill of lading and a named consignee who receives a straight bill of lading. There is simply no sensible commercial reason why the draftsmen would have wished to deny the CIF buyer named in a straight bill of lading the minimum standard of protection afforded to the CIF buyer named in an order bill of lading. The importance of this consideration is heightened by the fact that straight bills of lading fulfil a useful role in international trade provided that they are governed by the Hague-Visby Rules, since they are sometimes preferred to order bills of lading on the basis that there is a lesser risk of falsification of documentation.

    48.  On a broader footing it is apparent that the interpretation advanced by the carrier depends on fine and technical distinctions and arguments. Traders, bankers and insurers would be inclined to take a more commercial view of straight bills of lading. This view is supported by Schmitthoff's Export Trade: The Law and Practice of International Trade, 10th ed, 2000, at 276.

    49.  The academic response to the decision of the Court of Appeal is also important. Professor Sir Guenter Treitel QC, The Legal Status of Straight Bills of Lading, (2003) 119 LQR 608, at 611) observed about the Court of Appeal decision that "there seems to be no good policy reason for distinguishing between straight and order bills, so that one can express one's respectful agreement with the actual decision that the Hague-Visby Rules apply to both kinds of bill alike". Professor Charles Debattista, Straight Bills Come In From the Cold - Or Do They?, Lloyd's List 23 April 2003, at 6, also welcomed the decision.

    50.  It is common ground that the Carriage of Goods by Sea Act 1992 treats straight bills of lading as sea waybills. That assumption comes from the view of the Law Commission to that effect: The Law Commission Report No 196, Rights of Suit in Respect of Carriage of Goods by Sea, paras 2.50 and 4.10-4.12. The 1992 Act was enacted three years after the contract of carriage in this case came into existence. Moreover, and more fundamentally, section 5(5) of the 1992 Act specifically provides that it will not affect the Hague-Visby Rules. The terms of the 1992 Act cannot alter the proper construction of article I(b) of the Rules.

    VII Conclusion

    51.  I found the analysis of Rix LJ in his comprehensive judgment entirely convincing. I would affirm it.

    52.  For these reasons, as well as the reasons given by my noble and learned friends, Lord Bingham of Cornhill and Lord Rodger of Earlsferry, I would dismiss the appeal.

LORD RODGER OF EARLSFERRY

My Lords,

    53.  In 1989 the appellants, Mediterranean Shipping Company SA ("MSC"), contracted with Coniston International Machinery Ltd ("Coniston International") to carry four containers of printing equipment from Durban to Felixstowe and onward to Boston. The respondents, J I MacWilliam Company Inc ("MacWilliams"), a company which specialises in supplying printing and similar equipment, were to be the consignees. On 18 December 1989 MSC issued a set of three documents, described on their face as bills of lading. The Consignee box on the document contained the words "Consignee: (B/L not negotiable unless 'ORDER OF')". The box was completed with the name and address of MacWilliams and with nothing more. The effect was, accordingly, that the "B/L" was "not negotiable".

    54.  In these circumstances, as my noble and learned friend, Lord Bingham of Cornhill, has explained more fully, the contention for MSC is that the Hague-Visby Rules did not apply to the contract of carriage since it was not "covered by a bill of lading or any similar document of title" in terms of article I(b) of those Rules. That article is identical to article I(b) in the Hague Rules, which were adopted in the Brussels Convention for the Unification of Certain Rules of Law relating to Bills of Lading (1924) ("the Convention"). As presented to the House, therefore, in substance the appeal turns on the proper interpretation of article I(b) of the Hague Rules as embodied in the Convention.

    55.  In the official English translation, article I(b) of the Convention provides:

"'Contract of carriage' applies only to contracts of carriage covered by a bill of lading or any similar document of title, in so far as such document relates to the carriage of goods by sea, including any bills of lading or any similar document as aforesaid issued under or pursuant to a charterparty from the moment at which such bill of lading or similar document of title regulates the relations between a carrier and a holder of the same."

In fact, however, the Convention was drafted in French and the parties signed the French text (Treaty Series 17 (1931)). In that text article I(b) provides:

"'Contrat de transport' s'applique uniquement au contrat de transport constaté par un connaissement ou par tout document similaire formant titre pour le transport des marchandises par mer; il s'applique également au connaissement ou document similaire émis en vertu d'une charte-partie à partir du moment où ce titre régit les rapports du transporteur et du porteur du connaissement."

(The version of the text on which both sides relied at the hearing contained an obvious misprint, "pour" instead of "par" before "tout document".) As Devlin J held in Pyrene v Scindia [1954] 2 QB 402, 421, if there is an ambiguity, it is permissible to consult the French text in case it sheds light on the meaning.

    56.  In the present case the goods were to be transported by sea. Therefore, in order to succeed, MSC must show that the document which they issued to Coniston International was not, in terms of article I(b) of the Convention, either "a bill of lading" or "any similar document of title". The purpose of the Hague Rules was to provide a set of provisions to regulate the terms on which goods were carried. More particularly, as explained in the Introductory Notes in Appendix IV to the twelfth (1925) edition of Scrutton on Charterparties, the aim is to protect third parties to the contract of carriage, including consignees, who may come to be bound by the terms in that contract without having had any real opportunity of examining them or of assessing the value of the security it affords. The Rules were therefore designed to incorporate certain, reasonable, standard provisions into the contracts of carriage to which they applied.

    57.  The Rules applied, first and foremost, to contracts of carriage covered by a bill of lading. Plainly, however, there was a risk that one or other of the parties might try to avoid the application of the Rules by using some document which, though otherwise serving much the same practical purposes from his point of view, was not actually a bill of lading. The purpose of adding the words "or any similar document of title" in article I(b) was clearly to frustrate any attempt of this kind by extending the range of the definition so that it applied not only to a contract of carriage covered by a bill of lading but also to a contract of carriage covered by "any similar document of title". In short, these words were not included in order to cut down the range of contracts to which the Rules apply by narrowing the class of "bills of lading" as understood in commercial circles; they were intended, rather, to extend that range by including contracts covered by any document of title that is similar to a bill of lading.

    58.  The first question, therefore, is whether the document issued on behalf of MSC was a bill of lading, even though it was not transferable. I have no doubt that it was. Even as a matter of initial impression, MSC's contention that their document was not a bill of lading is surprising, given the contents of their own form. According to its printed terms, the default position is that the document created by the form is not transferable: it becomes transferable only if the shipper chooses to add the words "or order" after the consignee. So, according to MSC's contention, it is only if these words are added that their document becomes a bill of lading - even though the printed form describes it as a bill of lading, even though, also, the form uses the terminology of a bill of lading and even though it contains the kinds of clauses - including clauses placing obligations on the consignee - commonly found in a bill of lading. While appearances cannot, of course, be determinative, everything about this form suggests that the parties issuing or receiving it, whether or not the words "or order" were added, would regard the document as a bill of lading.

    59.  Since the words "or order" were not added in this case, if the document constituted a bill of lading it was not one for goods to be delivered "to order or assigns". In this respect it differed from the paradigm bill of lading which the jury in Lickbarrow v Mason (1787) 2 TR 63; (1794) 5 TR 683 held to be negotiable, ie transferable. But a bill which provides for the delivery of goods to a named consignee simpliciter is still a bill of lading - even though of an unusual kind. It is often referred to as a "straight bill of lading".

    60.  In the fifth edition of Abbott's Treatise of the Law relative to Merchant Ships and Seamen (1827), the last for which he was responsible, Lord Tenterden said, at p 383, "The bill of lading in all its usual forms contains the word 'assigns'...." The author does not exclude the possibility of there being bills of lading, in an unusual form, which do not contain the word "assigns". Not surprisingly, however, the form of bill of lading which he set out, at pp 214-215, prescribed that the goods were to be delivered to Barcelona "unto E.F. merchant there, or to his assigns." A variant which Lord Tenterden envisaged, at p 216, was for delivery "unto order, or assigns....." On the other hand, when Bell set out the uniform British form of bill of lading, originally with a supposed date of 1820, it did not include the words "order or assigns": Commentaries on the Law of Scotland: third edition, 1821, vol I, p 453 note 3; seventh edition, 1870, vol I, p 590 note 5. He appears to have envisaged that the blank could have been filled up simply "to a particular person as consignee": third edition, vol I, at p 454; seventh edition, vol I, at p 591. These authorities suggest that, while it would have been highly unusual, to say the least, there could have been a valid bill of lading for delivery to a consignee simpliciter.

    61.  The decision of the Privy Council, some fifty years later, in Henderson & Co v The Comptoir d'Escompte de Paris (1873) LR 5 PC 253 tends to confirm that conclusion. Sir Robert Collier records, at p 260:

"It has been argued that, notwithstanding the omission of these words, this bill of lading was a negotiable instrument, and there is some authority at nisi prius for that proposition; but, undoubtedly, the general view of the mercantile world has been for some time that, in order to make bills of lading negotiable, some such words as 'or order or assigns' ought to be in them. For the purposes of this case, in the view their Lordships take, it may be assumed that this bill of lading was not a negotiable instrument."

Leaving aside the unidentified nisi prius decisions, the fact that, by 1873, the mercantile world had reached a general view on the point shows that the question of the effect of the omission of the words "order or assigns" must have been discussed. This suggests also that the issue was not entirely academic - even though, on the facts of the particular case, the Board did not reach any view on whether the words had been missed out deliberately.

    62.  What matters for present purposes is that the mercantile community had been discussing whether the inclusion of the words "order or assigns" was necessary to make a bill of lading negotiable - not whether their inclusion was necessary for the document to count as a bill of lading. The general view of the mercantile world, as recorded by the Privy Council, had come to be that without these words the bills of lading were not negotiable - but, as Sir Robert Collier's formulation shows, they were regarded none the less as bills of lading.

    63.  This decision of the Privy Council was accepted without adverse comment in subsequent editions of Abbott's Treatise: for instance, in the fourteenth edition (1901), p 843 note (u). Not surprisingly, also, in a passage that goes back to the first edition, Scrutton on Charterparties, (twentieth edition (1996)), p 184, Article 94, envisages that

"goods shipped under a bill of lading may be made deliverable to a named person, or to a name left blank, or 'to bearer', and in the first two cases may or may not be made deliverable to 'order or assigns'."

The author and his editors have thus consistently accepted that, where goods are made deliverable to a named person but not to "order or assigns", the bill is a bill of lading. Admittedly, when eventually confronted with such a bill of lading in Thrige v United Shipping Company Ltd (1924) 18 Ll L Rep 6, even Scrutton LJ himself was uncertain about one particular aspect of its operation. But neither he nor the other members of that powerful Court of Appeal suggested that the document in question was anything other than a bill of lading. To bring the matter up to date, the decision of the Court of Appeal in Singapore in Peer Voss v APL Co Pte Ltd [2002] 2 Lloyd's Rep 707 likewise proceeded on the basis that a straight bill of lading was indeed a bill of lading, the question being whether a bill of that kind had to be presented to obtain delivery of the goods.

    64.  My Lords, once it is seen that a bill of lading for delivery to a named consignee simpliciter is indeed a bill of lading, it can also be seen that the contract of carriage in this case was covered by a "bill of lading". Therefore, if the Hague Rules are not to apply to this contract, it can only be because the term "bill of lading" in article I(b) is to be given a special, narrow, meaning which does not reflect commercial usage. In The Happy Ranger [2001] 2 Lloyd's Rep 530, 539, at para 28 Tomlinson J did indeed suggest, obiter, that the term "bill of lading" in article I(b) should not be interpreted as including straight bills of lading. In reversing his decision, on other grounds, the Court of Appeal reserved their opinion on the point but expressed doubt about statements to a similar effect in some textbooks: [2002] 2 Lloyd's Rep 357, 363, at paras 30-31, per Tuckey LJ, and 367, at para 49, per Rix LJ. Since, however, for the reasons I have already given, there is no justification in the language or policy of the Hague Rules to narrow the class of bills of lading in article I(b), I would respectfully reject Tomlinson J's suggested approach. Therefore, the contract in this case falls within the definition of a "contract of carriage" in article I(b) of the Hague Rules.

    65.  That is sufficient to dispose of the appeal. Consideration of some of the wider arguments presented to the House tends, however, to confirm this conclusion.

    66.  At the time of the events in this case the Bills of Lading Act 1855 was still in force. Mr Rainey QC submitted, however, that section 1 of the Act did not transfer any rights in favour of, or against, MacWilliams as consignees, since the Act applied only to consignees under a transferable bill of lading. The basis of that submission was the opening words of the preamble to the Act:

"Whereas, by the custom of merchants, a bill of lading of goods being transferable by indorsement, the property in the goods may thereby pass to the indorsee, but nevertheless all rights in respect of the contract contained in the bill of lading continue in the original shipper or owner; and it is expedient that such rights should pass with the property...."

These words might lead the reader to expect that the enactment which followed would be limited to situations where the bill of lading was transferable by endorsement and where an endorsee was involved. Section 1 is, however, in significantly wider terms:

"Every consignee of goods named in a bill of lading, and every indorsee of a bill of lading, to whom the property in the goods therein mentioned shall pass upon or by reason of such consignment or endorsement, shall have transferred to and vested in him all rights of suit, and be subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with himself."

The section specifically covers "every consignee of goods named in a bill of lading..." as well as "every indorsee of a bill of lading". The inclusion of both categories shows clearly that the legislature was not confining the enactment to the particular mischief identified in the preamble. The preamble cannot, therefore, be used to qualify or cut down the enactment: Powell v Kempton Park Racecourse Co Ltd [1899] AC 143, 157 per Earl of Halsbury LC.

    67.  It was in any event necessary for the 1855 Act to apply to consignees as well as to endorsees if many of the problems confronting the courts were to be put right. The parties to the contract of carriage were the shipper and the carrier. The consignee, or any endorsee of the bill of lading, was a third party and, in English law at least, had no rights under the contract, even though he might be the owner of the goods. So, if these were lost or damaged, or if the carrier failed to deliver them, difficult questions of both fact and law arose. Depending on the circumstances, the shipper who had the contractual rights could be said to have no interest in the goods, while the consignee might have an interest in the goods, but no right to sue under the contract. Sir William Shee, the editor of the seventh edition of Abbott's Treatise (1844), described the prevailing situation in this way, at p 325:

"There is often some difficulty in deciding to whom the master and owners are responsible on their contract evidenced by the bill of lading, and whether actions for loss or injury, occasioned by their negligence or misconduct, should be brought by the consignor or consignee. No rule of general application can be laid down for the solution of this difficulty; but it will always be important to consider in whom the right of property, and sometimes in whom the right of possession, was vested, at the time of the breach of contract, or neglect of duty which is complained of."

With studied understatement, he later observed, at p 337, that the results of the cases were not, in all respects, easily reconcilable.

    68.  Many of the difficulties can be seen in the speech of Lord Cottenham LC in Dunlop & Co v Lambert (1839) Macl & Rob 663. The case concerned a puncheon of whisky which the shipowners, Lambert and others, had agreed to carry from Leith to Newcastle. In terms of the bill of lading they were to deliver it to Mr Mathew Robson "or to his assigns". During a storm, for safety reasons, the whisky was thrown overboard. The shippers sued the shipowners for the loss of the whisky. The defenders objected that, in the circumstances, the shippers had no title or interest to sue: any action should have been raised by the consignee. After an elaborate examination of the authorities on the point, the Lord Chancellor held that the Lord President had misdirected the jury by withdrawing from their consideration two questions of fact, relating to the incidence of risk and to the existence of a special contract sufficient to enable the shippers to recover. In part at least, the 1855 Act was designed to make it unnecessary to explore complex issues of this kind merely in order to discover who could sue on the contract of carriage. It was therefore essential for the Act to apply to consignees if it was to achieve its purpose. Nor is there anything in the language, or in the purpose behind the Act, which would justify confining section 1 to consignees under a transferable bill of lading.

    69.  The 1855 Act was passed during that long period when the opinion of Buller J in Lickbarrow v Mason (1787) 2 TR 63, that transfer of a bill of lading always transfers the property in the goods, held sway. Indeed the terms of section 1 reflect that doctrine. But it was decisively rejected by this House in Sewell v Burdick (1884) 10 App Cas 74, when their Lordships adopted the line of reasoning favoured by Bowen LJ in the Court of Appeal, (1884) 13 QBD 159, 170-171. As that decision made clear, whether or not the transfer of a bill of lading transfers the property in the goods is always a question of fact, with the answer depending on the nature of the agreement under which the transfer takes place. In this case the relevant facts about the transaction between Coniston International and MacWilliams have not been established or agreed. I therefore say no more than that, if the consignment of the goods named in the bill of lading transferred the property in the goods to MacWilliams, the relevant rights and liabilities of Coniston International, as shippers, will also have been transferred to them under section 1 of the 1855 Act.

    70.  On the assumption that the rights and liabilities of the shippers under the contract of carriage have indeed been transferred to MacWilliams as consignees of the goods named in this bill of lading, they are just as much in need of the protection of the Hague Rules against unduly onerous terms in the contract of carriage as a consignee - or endorsee - under a transferable bill of lading. In this context, the negotiability or transferability of the bill of lading is irrelevant - as indeed is its status as a presentation document. In short, like Jacob J in the Court of Appeal [2004] QB 702, 754, at para 153, I can see no rational reason for giving the protection of the Rules to a consignee under a transferable bill but not to a consignee under a straight bill. For that reason, it makes sense that article I(b) of the Hague Rules has been worded in a way that does not exclude - and so includes - contracts of carriage that are covered by a bill of lading which is not transferable.

    71.  On the approach that I have taken, it is unnecessary to decide what is meant by the words "any similar document of title" in article I(b). But, since the point was argued and is of general importance, I include some tentative observations on this aspect of the construction of article I(b).

    72.  First, article I(b) tells the reader to what kinds of contract of carriage the Rules apply. It is concerned with types of contract of carriage between shippers and carriers, not with relations between shippers and consignees.

    73.  Secondly, as Mr Rainey submitted, the Hague Rules apply only to carriage of goods by sea. For that reason the clause "in so far as such document relates to the carriage of goods by sea" must modify both "a bill of lading" and "any similar document of title". Similarly, in the French text the words "formant titre pour le transport des marchandises par mer" must modify both "un connaissement" and "tout document similaire".

    74.  Thirdly, in interpreting article I(b), section 4 of the Canadian Water-Carriage of Goods Act 1910 affords no real help, if only because the relevant phrase in that section is "any bill of lading or similar document of title to goods". The last two words are not found in article I(b).

    75.  Next, even though their meaning would then be unclear, the words "document of title" could stand on their own in the English text. Indeed, that is how they are usually read. By contrast, it is plain that the words "tout document similaire formant titre" in the French text are intended to be read along with the following words "pour le transport des marchandises par mer". That is to say, the alternative to a "connaissement ... formant titre pour le transport des merchandises par mer" is "tout document similaire formant titre pour le transport des marchandises par mer". So the alternative document which the French text describes is simply one that entitles the holder to have the goods carried by sea - and, obviously, to have them delivered to the appropriate person at the end of the voyage. Nothing is said about the document having any effect in relation to the title to the goods, in a property sense. The French text would therefore suggest that the words "document of title" in the English version should be read along with the qualifying words "in so far as such document relates to the carriage of goods by sea" and should be understood as applying to any document that entitles the holder to have the goods carried by sea. This would be to give the words a broad interpretation but, since they are designed to prevent parties from circumventing the Rules by devising different forms of shipping document, such an interpretation would not be inappropriate.