Section 4. Cargo Delivery Obligations - PI Rules and Exceptions (2023)

4.4.1 General

Even if the carrier has complied with its obligations to care for the physical well-being of the goods underSections 1 and 2 of these Regulationsand describe it correctly on the bill of lading belowsection 3,the purpose of transportation would still be unfulfilled if you then delivered the cargo to someone who had no right to receive it. Failure to comply with the rules on the correct delivery of goods can cause the carrier to be responsible for the full value of the cargo and more. Coverage, as is, for such liability is described in this section.

4.4.2 Delivery with original bill of lading Delivery requirements

The basic rule for delivery under a bill of lading or other similar negotiable document is that delivery must be made to the first person present at the port of destination who possesses and presents the original bill of lading, issued in the name of the party as consignee or contains an unbroken chain of endorsements in favor of the party.

Before delivery, it is necessary to check the credentials of the bill of lading holder. If the result leaves doubt in the mind of the carrier, or if there are other circumstances indicating that the consignee's title to the goods is in doubt, the cargo should be held pending further investigation, such as presentation of all bills of lading. original shipment. If this request cannot be met, the carrier must leave the decision as to whom the cargo will be delivered to the competent court. Any such complication must be reported to the Club as soon as possible in order to obtain legal advice and assistance. Non-delivery of copies

An attempt was made to introduce a system whereby cargo had to be delivered with a photocopy of the original bill of lading. To give some appearance of validity, such copies are marked "Original First Copy" or similar. Whatever it's called, it's still a copy that should never be given up against. The release of the cargo with a copy of the bill of lading is equivalent to the delivery of the cargo without the presentation of the bill of lading, for which it is not covered by these Rules.See comments in point 4.4.5.. No more than one package of original bills of lading

Under no circumstances should the carrier allow more than one set of original bills of lading to be issued for each shipment. There may be bona fide requests to replace a set of bills of lading after they are issued. The new set should then replace the old one via a direct new-for-old swap. When returned, the old kit must be destroyed or otherwise declared invalid. Members are advised to contact the Club for advice in such cases. The original bill of lading traveling with the ship

Shippers are sometimes asked by the carrier to take one of the original bills of lading to the ship's post office for delivery to the ship's agents at the port of discharge. The idea is that the agents sign it from the consignee in such a way that delivery can be made against that original. However, there is a risk that other originals have been acquired by third parties or are in the hands of the bank that arranged the loan. If the consignee defaults on the letter of credit due to insolvency or commercial disputes between the parties, the bank cannot be reimbursed for the advance purchase price to the consignor. Normally, the bank would be able to verify the situation by having all the original bills of lading in its possession. If the cargo is released on the basis of the original bill of lading on board, the bank credit is not guaranteed. You will no doubt explore a way to obtain compensation from the carrier by challenging the legality of the process by which the delivery was made. Therefore, Grupa Grupa warns against this practice. If members have yet to comply with such a request, the issued bill of lading must clearly indicate the following:

"The original bill of lading held on the ship under which cargo can be delivered in accordance with instructions received from the shipper/charterer."

This would serve as a warning to anyone considering purchasing the remaining bills of lading or giving credit for sales. Members are further encouraged to request a letter of indemnity from the consignee/charterer and strictly follow all instructions from the consignor and verify who is the correct consignee and ask why none of the remaining bills of lading have been submitted. For liabilities arising from delivery under a bill of lading traveling by ship, the Club will consider whether, in the circumstances of the case, it qualifies for coverage under this section. Otherwise, it is up to the affiliate to submit a request for compensation in accordance withRule 19,I'll tell everyone. Change of destination

The carrier's obligation to require the presentation of one of the original bills of lading refers to delivery at the port of destination indicated on the bill of lading. To comply with the request of the owner of the delivery cargo to any other port, the carrier must insist on the presentation and delivery of a complete set of all originals. Delivery to a port not specified in the bill of lading for less than the full amount amounts to the illegal delivery of cargo to an unconventional port (or delivery to a conventional port without presenting the original bill of lading). Said liability is excluded from the coverage by application of clause (a) of this section, as well asRule 11 Section 2(I).See comments in section

If a change of destination of a cargo is requested in the country of chartering that is not in accordance with the port of discharge indicated in the already issued bills of lading, the owner partner must make it a condition, before consent, that the charterers issue a letter of indemnity in exchange for fulfilling the request on terms that indemnify the Member from the risk of misdelivery claims (ie requests for cargo delivery to a non-contracted port).

Although the member's exposure to the risk of misshipment claims in these circumstances is not covered by P&I insurance, solely as a guide to assist the member in negotiations with the charterer (or other party seeking relief for non-compliance), Club Group has set the Text LOI for unloading at a port not specified on the original bill of lading (ver There is also a provision for a bank signature, although such a signature is rarely given.

4.4.3 White Bills of Lading

Captains are sometimes required to sign blank bills of lading as part of the early departure process. Skippers must refuse and immediately contact the Owner and the nearest Club correspondent for instructions and assistance.

4.4.4 False Bills of Lading

Fake bills of lading are used to commit maritime fraud. They can be both for a completely virtual cargo and for a shipment that already exists or has existed and for which there is or was a real set of cargoes in circulation.

The chance of successfully defending against the claim of the owner of a bill of lading is good in most jurisdictions. However, a defrauded consignee will have the sympathy of the local court, especially if the creation of the false bill of lading can be traced back to the carrier's organization. Members should consider whether they need to improve access to information, bill of lading forms, seals, signatures, etc. that could be used to create a fraudulent bill of lading.

Obviously, the problem is much more serious if the shipment is delivered with a false bill of lading before the real owner of the real bill of lading receives his goods. It is difficult to predict the outcome of court proceedings on carrier liability. The carrier will likely have to prove that he acted in good faith, that he prudently verified the authenticity of the document and its endorsements, and that his employees were not involved in the creation and distribution of the forged document.

If the carrier is found liable, it will likely be at least for the full market value of the shipment at the port of destination.

Depending on the particularities of each case, the Club will consider whether the liability derived from a fraudulent bill of lading qualifies for coverage under this clause. Otherwise, the Member must submit a request for compensation underRule 19I told everyone

4.4.5 Delivery of cargo without presentation of the original bill of lading General comments

Ocean freight forwarders often honor requests for expedited shipping, but equally expedited processing of shipping documents, which are often found in the banking system, post office, or government export/import or trade control, is difficult to achieve. . The loaded ship may arrive at the port of discharge before the documents that the consignee must present on the ship to receive the cargo.

In the above cases, the carrier may be requested to release the cargo without presenting the original bill of lading. Consignees may believe that they are entitled to delivery of the cargo once it arrives at the port of destination and that the presentation of the original bill of lading is a mere formality.

Consignees may claim "inability" to present the original bill of lading. However, a delay in the commercial or banking system is not an excuse. Today's communication systems allow documents to be processed and sent all over the world in 24 hours.

Electronic bills of lading could finally make this problem a thing of the past. For more commentsver 4.5.2. No coverage for delivery without presentation of the original bill of lading

In the absence of a valid contractual agreement under the terms of the rental agreement or a contradicting rental agreement, the carrier is not obligated to comply with the cargo release request until the original bill of lading for said cargo is presented. . As set forth in this section, there is no coverage for a carrier that delivers to a bona fide consignee and releases cargo without presenting the original bill of lading. Members must reject any cargo release request without presentation of the original bill of lading, unless (as noted above) they have a contractual obligation to do so under the applicable charter (but this obligation still does not alter the fact that the Risk resulting from wrong delivery liability is not covered by P&I insurance).

This section does not cover even if the cargo was released through no fault of the Member by agents of the ship who acted contrary to or beyond instructions. The member's only recourse is to try to recover from the agents. However, agents may be protected by the contract under which they work or simply lack the means to fulfill their obligations. If they have liability insurance, it probably contains a damage limit. If a Member registers with FD&D, the Club can assist in any recovery action.

There is no coverage even when the carrier is required to release the cargo and accept a bank guarantee when there is no original bill of lading. Compensation can only be claimed underRule 19I told everyone Cargo storage inaccessible to consignee

There are cases where a ship cannot sit idle with cargo on board waiting for a lost bill of lading. Members should then investigate whether it is possible to unload the cargo in a customs or similar warehouse, where it could be stored, inaccessible to the consignee, until the bill of lading appears. Such storage can be difficult to organize for a driver or bulk cargo. The Club's local correspondent can help shipping agents find a solution in such cases. Compensation

If there is no other solution, the carrier may need to consider accepting compensation in your favor. Since the scope of liability risks is significant, and since these risks are excluded from coverage, it is important that the indemnity be written and enhanced in such a way as to protect the carrier to the greatest extent possible.

Since the Member assumes full responsibility for the decision to accept compensation, the Club stands ready to assist the Member in making the appropriate arrangements.

The group should be consulted in time and before the start of the postponement.

Although Member's exposure to the risk of a misdelivery claim arising from the release of cargo without presentation of the original bill of lading is not covered by P&I insurance, merely as a guide to assist Member in negotiations with the charterer (or another part). file a claim) A group of clubs created LOI wording for unloading cargo without presenting the original bill of lading. There is also a provision for a bank signature, although such a signature is rarely given.

The partner is obliged to accept the guarantee signed only by the trustee or lessee. If so, it must be a consignee or lessee whose capacity and willingness to fulfill his obligations is unquestionable. It is always preferable that the guarantee be endorsed by a first-rate bank. However, the hands of shipowners may already be tied by provisions already contained in the government charter.

The deposit amount must be open. If an open guarantee is not possible, the amount must not be less than twice the CIF value of the merchandise. The reason is that the court would find the consignee's claim to be based on breach of contract, which would likely make the carrier unconditionally liable for the loss (without the usual limitations or exclusions of liability under the Hague Rules). -Visby) and indirect consequential damages. (such as loss of earnings). Carrier exposure can significantly exceed the CIF price.

The duration of the guarantee must not be limited. Owners are often offered warranties limited to 13 months from the date of issue. The proposal is that such a guarantee would protect the carrier during the 12 months open to claims under the Hague and Hague and Visby rules (see comments in section 4.1.10) and give you an additional month to file a warranty recovery claim. However, the time limit of the Hague and Hague-Visby Rules cannot be applied to an unlawful service claim. The most likely time limit that would apply would be the six year limit under English or US law, which would require the warranty to be valid for at least that long and would need to be extended beyond that period for at least the full duration of any legal action initiated against the member for improper delivery of cargo. Banks may not be willing to issue a guarantee without a fixed term/limit. Such limitations do not apply to warranties issued by the lessee or consignee. Command declarations

Chartered vessels may be at risk of being declared out of charter due to delays caused by the master's refusal to begin unloading pending presentation of original bills of lading. When the refusal to release the cargo is not caused by an unreasonable action on the part of the master, but in accordance with his duty to protect both the owner and the charterer, when there is no original bill of lading, the charterer has no right. declare the vessel excluded from the charter. The situation may be different if the charterer has agreed to release the cargo without presenting the original bills of lading in exchange for a bond or letter of intent. Owners are advised not to accept clauses to this effect if they wish to avoid uninsured risks in connection with the discharge of cargo.

One situation where the Charterer's routine delivery of cargo may conflict with the Owner's desire to obtain adequate insurance against uninsured risks occurs when the chartered vessel is sailing on an ocean liner. The charterer's agents then arrange the release and delivery of the cargo, often long after discharge. In the event that the charterer or its agent knowingly or negligently releases the cargo without presenting the original bill of lading, the rightful owner of the cargo may attempt to seize the vessel and file a lawsuit against the owner. Even if there is no contract between the owner and the recipient that has been breached, in some jurisdictions the owner may be held liable. When negotiating reliance on liner services where such liability might arise, it is advisable to include a clause in the charter stating that the charterer agrees to release the cargo only on presentation of the original bill of lading and that it assumes full responsibility in respect of to the Member (including the payment of a bond in the event of seizure of the Member's assets) for any request for erroneous delivery resulting from a breach of this obligation. Whether such obligation to the lessee will be enhanced by a guarantee or LOI issued by or on behalf of the lessee is a member's business decision regarding uninsured risk.

4.4.6 Misdelivery Based on Non-Negotiable Shipping Documents

While subsection (a) of this section deals with the status of negotiable instruments, such as bills of lading, subsection (b) deals with nonnegotiable instruments, such as clean or nonnegotiable bills of lading and bills of lading. shipment. Non-negotiable means that the document and the rights associated with it cannot be transferred to third parties. The person must identify himself either as the recipient named on the document or as the person legally designated by the sender as the person to whom delivery is to be made. If a member becomes liable because cargo transported under a nontransferable document is released to someone other than one of those two classes authorized to receive, such liability is excluded under subsection (b) of this section. Before accepting delivery of the cargo to any person not authorized to receive it under the non-negotiable document, the carrier shall consider, at his own risk, whether he should take the precautions and obtain the security described above.

4.4.7 Creating a non-negotiable document

Subparagraph (c) is delivered by way of a non-negotiable bill of lading, bill of lading, or similar document, goes a step further and requires production of the non-negotiable document if it is an express condition of the document itself.

A non-negotiable document is an important part of modern commerce and the filing of the lawsuit would limit the benefit of quick and easy cargo delivery. However, a decision by the House of Lords, The Rafael S, changed that. The most important implication of the decision is that a nontransferable bill of lading is a document of ownership and must be produced unless the document itself makes it clear that presentation is not required. In addition to England, France and the Netherlands have similar interpretations of non-negotiable documents.

Failure to deliver cargo with the presentation of a non-negotiable bill of lading, bill of lading or similar document when required will jeopardize the Club's coverage.


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