defective. In practice this will usually be agreed to only if the shipper provides a
letter of indemnity protecting the carrier for any liabilities that may result. The
potential primary liability of the carrier is in contract to the receiver for the delivery
of damaged goods, the receiver taking advantage of the conclusive evidence rule.
63
The conduct of the carrier in this kind of circumstance will not necessarily be
unjustified. Obviously, if on the facts it is clear that the bill should have been claused,
the carrier, being aware of the potential deception, is acting fraudulently and
consequently the letter of indemnity is void.
64 But situations may arise when there
is genuine uncertainty as to whether the bill should be claused, in which case an
agreement not to clause the bill in return for a letter of indemnity may be an
acceptable way of avoiding a commercial impasse.
65 Also, in this circumstance
there is no implication of fraudulent design and presumably the letter of indemnity
would be valid.
Inaccurate statements in a bill of lading may also be the basis of tortious
liability.
66 To issue a bill of lading that states that the goods have been shipped in
apparent good order condition, knowing the statement to be false and that transferees
of the bill will rely on its accuracy, amounts to a fraudulent misrepresentation and
constitutes the tort of deceit.
67 The advantage of this tortious remedy is that it entitles
the receiver to recover damages from the carrier for all direct loss suffered and,
therefore, beyond that recoverable in an action under the contract of carriage.
68
Apart from the vicarious liability of the carrier, the actual tortfeasor, the party who
signed the bill of lading, is also directly liable.
69
A less likely event in practice is for the bill of lading to be intentional and
maliciously claused, notwithstanding that the goods are in apparent good order
and condition. This again is a dishonest representation which amounts to the tort
of deceit.
There is also the possibility that the carrier may wrongly and negligently clause
the bill of lading with the consequence that the shipper/receiver suffers loss, as where
the associated contract of sale is terminated or the seller is obliged to pay damages or
63 Supra, under the title ‘The evidentiary significance of documentary representations’.
64 Brown Jenkinson & Co Ltd v Percy Dalton (London) Ltd [1957] 2 QB 621; [1957] 2 Lloyd’s Rep
1.
65 See supra n. 30, for the practice relating to party negotiation about the way cargo is to be described
in the bill of lading.
66 Sea Success Maritime Inc v African Maritime Carriers Ltd [2005] 2 Lloyd’s Rep 692 [20] per
Aiken J.
67 The Saudi Crown [1986] 1 Lloyd’s Rep 261, a case where the bill of lading had been incorrectly
dated.
68 Smith New Court Securities v Citibank NA [1997] AC 254.
69 Standard Chartered Bank v Pakistan National Shipping Corp. and Others (No 2) [2002] UKHL
43, [2003] 1 Lloyd’s Law Rep 227.
The Legal Concept and Significance of Clean Shipping Transport Documents
655
letter of indemnity protecting the carrier for any liabilities that may result. The
potential primary liability of the carrier is in contract to the receiver for the delivery
of damaged goods, the receiver taking advantage of the conclusive evidence rule.
63
The conduct of the carrier in this kind of circumstance will not necessarily be
unjustified. Obviously, if on the facts it is clear that the bill should have been claused,
the carrier, being aware of the potential deception, is acting fraudulently and
consequently the letter of indemnity is void.
64 But situations may arise when there
is genuine uncertainty as to whether the bill should be claused, in which case an
agreement not to clause the bill in return for a letter of indemnity may be an
acceptable way of avoiding a commercial impasse.
65 Also, in this circumstance
there is no implication of fraudulent design and presumably the letter of indemnity
would be valid.
Inaccurate statements in a bill of lading may also be the basis of tortious
liability.
66 To issue a bill of lading that states that the goods have been shipped in
apparent good order condition, knowing the statement to be false and that transferees
of the bill will rely on its accuracy, amounts to a fraudulent misrepresentation and
constitutes the tort of deceit.
67 The advantage of this tortious remedy is that it entitles
the receiver to recover damages from the carrier for all direct loss suffered and,
therefore, beyond that recoverable in an action under the contract of carriage.
68
Apart from the vicarious liability of the carrier, the actual tortfeasor, the party who
signed the bill of lading, is also directly liable.
69
A less likely event in practice is for the bill of lading to be intentional and
maliciously claused, notwithstanding that the goods are in apparent good order
and condition. This again is a dishonest representation which amounts to the tort
of deceit.
There is also the possibility that the carrier may wrongly and negligently clause
the bill of lading with the consequence that the shipper/receiver suffers loss, as where
the associated contract of sale is terminated or the seller is obliged to pay damages or
63 Supra, under the title ‘The evidentiary significance of documentary representations’.
64 Brown Jenkinson & Co Ltd v Percy Dalton (London) Ltd [1957] 2 QB 621; [1957] 2 Lloyd’s Rep
1.
65 See supra n. 30, for the practice relating to party negotiation about the way cargo is to be described
in the bill of lading.
66 Sea Success Maritime Inc v African Maritime Carriers Ltd [2005] 2 Lloyd’s Rep 692 [20] per
Aiken J.
67 The Saudi Crown [1986] 1 Lloyd’s Rep 261, a case where the bill of lading had been incorrectly
dated.
68 Smith New Court Securities v Citibank NA [1997] AC 254.
69 Standard Chartered Bank v Pakistan National Shipping Corp. and Others (No 2) [2002] UKHL
43, [2003] 1 Lloyd’s Law Rep 227.
The Legal Concept and Significance of Clean Shipping Transport Documents
655