Atlantic Container, Line AB Bill of Lading - Terms and Conditions - Case Study Example

Abstract Bills of lading fall under shipping or maritime law. Its components include; vessel charter, general average (a kind of mechanism made use of in the sharing of losses in voyage participants) salvage, contracts of affreightment (for instance bills of lading), maritime liens (a special form of legal claim made use of against marine property and ships) and seaman’s wage claims. Bill of lading is comprised of rules and regulations (clauses) that govern the relationship between a forwarding company and a customer. The paper defines the clauses available in Atlantic Container, Line AB Bill of Lading terms and conditions. It stipulates the type of relationship that exists between a merchant and carrier. A bill of lading is a contract which allows for an easy and efficient association between a merchant and a carrier. Table of Contents Abstract i Table of Contents 2 Introduction 4 Body of Response 6 i. Clauses ii. Meaning and effect of bill iii. Panel Instructions Conclusion 16 References Atlantic Container, Line AB Bill of Lading Terms and Conditions Introduction Atlantic Container (2011) define the following different types of bills of lading; shipped bill of lading, through bills of lading, received bill of lading and groupage bill of lading, claused bills of lading, transshipment bill of lading and clean bills of lading. Shipped bill of lading is the type of bill that the shipper is allowed to demand so as to prove that the goods on transit have actually been shipped. This type of bill is very satisfactory as it shows that the goods are already in transit and can facilitate financial settlement (White, 2007). Received bill of lading is the type which has no word “shipped” on it. According to White (2007) it just confirms that goods have been given to the ship-owner and the goods are in custody of the ship owner. It therefore does not give an okay for payment. In light of this, forwarding agents avoid handling this type of bill. Through bills of lading are forms of bills which facilitate goods being shipped by more than one carrier so as to reach their final destination for instance to Bombay via Seychelles Islands via Mombasa. Todd (2007) states that groupage bill of lading is a form of bill that allows forwarding agents to “group” particular consignments from various individual consignors to a given number of consignees located in the same destination area/country, and distribute the consignment as a single one (Blay et al, 2005). It is advantageous since it allows for less packing, insurance premiums which are lower, the goods being less damaged, quicker transit and lower rates in comparison to the dispatch of a single consignment (Todd, 2007). Transshipment bill of lading is given when there is limited service that exists between particular ports and when the ship owner is able and willing to transship the consignment at an intermediate destination at his expense. The Singapore Logistic Association (2006) states that a clean bill of lading shows that the ship owner admits full liability of the consignment outlined in the bill which is available under the contract and the law. It is mostly utilized by banks for settlement purposes. A claused bill of lading is a form of bill that is drawn to amend a bill that was previously issued. According to Blay et al (2005). The above brings about the use of the following terminologies; foul, unclean and claused. It is not used for financial settlement. The following are definitions of the terms made use of in the bill of lading. “Carriage” it implies the whole or a single part of carriage, unloading, warehousing, loading, storing, handling and the other services undertaken in relation to the consignment by Carrier (Schofield, 2005). “Carrier” implies Atlantic Container Line AB, Sweden. “Container” implies any container flat rack, transportable tank, trailer, platform, pallet or any form of container used to assemble the Goods and connected equipment (Atlantic Container Line, 2011). According to Bennet (2006, p. 1-2); “Freight” encompasses charges payable to a Carrier in accordance to the applicable Tariff and a particular bill of lading. “Goods” implies the entire or part of packaging or cargo from a shipper and is inclusive of any given Container that is not supplied on behalf of or by the Carrier. According Schofield (2005), “Hague Rules” implies the provisions by the International Convention made for Unification of particular rules that relate to Bills of Lading as signed off at Brussels in August of 1924 and is inclusive of the amendments given by Protocol and signed in Brussels in 1968. Gold (2007) “Holder” implies the Person who is in possession of the bill of lading and to whom the rights of liability and/or suit contained in the bill have been vested or transferred. “Merchant” implies the Holder, Shipper, Consignee, the Receiver of the consignment and any person entitled to or owning the possession of Goods or who is in possession of the bill of lading and any such person that acts of a person’s behalf or any principal(Chisholm & Nettheim, 2002). “Package” is a situation where a container is packed with a number of packages or a variety of shipping units that are enumerated on the reverse as packed in a given Container and put in a box on reverse hereof and entitled as “Carrier’s Receipt” and therefore labeled Package. “Person” it refers to an individual, legal entity or corporation (Davies & Dickey, 2004). “Terms and Conditions” which refer to the terms, defences, conditions, rights, exceptions, provisions and liberties hereof. “US COGSA” implies the US Carriage of Goods by Sea Act 1936. “COGWA” implies the Carriage of Goods by Water Act of Canada which was amended in 1993. “Hague Visby Rules” implies Hague rules as reformed by the Protocol which was signed in 1968 and where applicable that in 1979 (Gold, 2007). Body of response 1.1 Clauses Preliminary clauses (Paramount and Certain Immunities clauses) Paramount clause i) It states that the bill of lading will take effect according to the U.S carriage of Goods by Sea Act of 1936. It stipulates that the act will be made use of on all shipment plying the United States route. It will take effect before loading and also after discharge (Bennet, 2006). ii) For trade routes other than that of the USA, The Hague Visby or Hague rules of 1968 will be made use of which is inclusive of the 1979 Protocol or that of COGWA. iii) The Carrier’s tariffs can also be made use of in conjunction to the bill of lading. iv) The carrier in conjunction with the client is entitled to the benefits that come with the bill of lading. It also provides for the ability of the parties to be able to make copies of the sub-contracts. v) Bennet (2007) states that a carrier is allowed by law to carry cargo in the form of boats, vehicles, machinery or other bulk cargo in containers. The packaging can either be done by the Carrier or Shipper on the deck. The goods will be subject to COGWA or COGSA. vi) The Carrier will be entitled to exemptions and liability as stipulated in shipping Act’s revised statutes of the parts that fall in the range; 4281 to 4289. vii) In the event that the goods being transported are damaged then the Merchant will have to prove that the damage occurred due to negligence on the carrier’s part. Only after proof will the Carrier be liable to compensate the same. In the event of lack of proof; the client will not be compensated. viii) The carrier is allowed to forward any of the goods that are supposed to be shipped in the event of their being left behind without informing the client. The carrier is also allowed to choose any means of transport to do the same. Certain Immunities and Rights for the Other Persons and Carrier i) The carrier will abide by the rules on the sub-contract throughout the shipment of the goods. ii) The merchant is only allowed to make allegations against the client and not on a vessel or any other person. For instance the merchant is not allowed to make allegations against Carrier’s Agents or Servants, his agents or servants, Independent contractors, servants or any other person who comes into contact with the shipment either directly or indirectly. This is because the Carrier stands for all the aforementioned persons and vessels. iii) The merchant shall only be allowed to hold the Carrier accountable to the damage done and not on anything more than what the Carrier is liable for. The merchant is therefore vested with the responsibility of defending and indemnifying the carrier in case of such an occurrence as stipulated in the Bill of Lading. iv) The limits and defenses of liability are stipulated in the bill of lading and shall only be applicable on the carrier’s action as stipulated in the contract. Package handling clauses (package definition, declared values and time bar) Definition of the unit or package The container that holds the units on transit has to be marked and units clearly outlined on the Bill of lading. The quantities will be outlined under the columns labeled; “MARKS + NOs. CONTAINER LABEL NO.” The container shall be seen as a package or unit in the incident it is transported under seal. The terminology unit refers to a piece of cargo or physical unit that is not shipped as a package, it includes vehicles, boats and machines that is the opposite of measurement or weight unit as made use of in the calculation of freight charges (Atlantic Container Line, 2011). For the goods transported in bulk, the restriction made use of will be the one provided for in legislation or rules as seen. The weight will be measured and freight charges calculated. Declared value or package i) The limitation with regard to U.S Trade Route In the event the shipment is from the inland points or from the ports in the United States then the carrier’s utmost liability should not be more than $500 per package. In the event the goods are not shipped as packages worth $500 as customary freight units. This only applies in the event the declared value has been attached as per section (4) below. ii) The restrictions stipulated for Visby Trade Routes As per Hague Visby Rules or Hague Rules or any other legislation thereof, the carrier is not liable for unit limitations or higher packages unless the cargo values have been fixed and declared at a high limit as stipulated in section (4) below. The limits as seen in the 1924 Hague Rules is at 100 sterling pounds the current value and 2SDR’s per kilo or 667.67 SDR’s per package. iii) Restrictions for other trades In the event the Hague Visby, Hague or COGSA or COGWA are not applicable then the Carrier’s Liability should not be more than $2.00 per kilo of the total gross weight of lost or damaged goods the value of their c.i.f, whichever value is less. The declared value of the goods; Ad valorem The carrier’s liability should be put at a high value of (1), in the event the value and nature of goods are established to the Carrier by the use of a shipper and writing before shipment. The declared higher value is put on the front of the Bill of Lading and located in the space provided. The extra freight costs as stipulated in the tariff are therefore paid. The partial damage or loss will following be adjusted on pro rata basis of such a declared value. Time Bar Bundock (2007) defines time bar as a time limit to which damage of the goods should be reported. It is required that the damage be reported immediately and in the event is not apparent then it should be reported no later than three days after the recipient of the goods have taken the goods into their custody. A suit against a carrier in the event of damage or loss should be brought within one year after the delivery of goods or the date on which the goods would be delivered. Merchant clauses (merchant responsibilities, container and temperature control) Merchant’s responsibility i) The merchant is required to vividly outline the particulars and description of the goods. The merchant should clearly stipulate the content, marks, measure, quality, numbers, weight and their correct values. ii) The merchant is required to abide by the rules and regulations of ports, customs and other authorities and hence pay all the fines, losses, duties, expenses and taxes that are incurred by one of the following insufficient marking, addressing of goods or numbering. iii) The merchant ensures that the goods are packed in an adequate manner that allows them to withstand risks of carriage in light of their nature, regulations and requirements as applicable. iv) The merchant is vested with the responsibility of declaring the nature of the goods should they be inflammable or damaging to the carrier. In the event the carrier accepts the responsibility of transporting the goods then they will be clearly labeled. In the event dangerous goods are delivered to the carrier without notice then the goods are liable to destruction and without merchant being compensated. v) The merchant is entirely responsible for the merchandise on transit. vi) The merchant will be vested with the responsibility of defending the Carrier against loss, damage, liability, expense or claim in the event the merchant goes against the requirements stipulated in this clause. Containers i) The goods on transit may be put in containers together with other goods. ii) The merchant is vested with the responsibility of checking the container and ensuring that it is satisfactory in every manner for the goods on transit. The carrier will therefore not be liable in the event the goods are damaged or destroyed during packing, stowage, checking and securing of stuffed goods. The carrier will also not be liable for the merchant’s lack of checking of the goods and container before dispatch. Temperature Controlled Cargo i) The merchant is required to clearly give written notice to the carrier in the event the merchant is looking to transport goods that are temperature controlled. The merchant is also required to give the temperature at which the goods are to be transported in and ultimately maintained at. The merchant is also required to inspect the goods and ensure that they are being transported at the required temperatures. In the event that the merchant does not fulfill his requirements then the carrier will not be held liable of any damage that arises from the lack of merchant cooperation. ii) The carrier will not be liable if the goods on transit are damaged due to the defect of the container should it breakdown during transit provided that it was in working condition during dispatch. Performance clauses (Matters affecting performance, delivery of goods, charges and lien) Matters affecting performance According to Churchill (1999) the matters that affect performance can be defined as the carriage affected by any risk, hindrance, delay of difficulty of any particular nature then the carrier is allowed to: a) Abandon the carriage without notifying the merchant and when convenient place part of the goods at a place that is convenient for the carrier but accessible to the merchant. b) The costs incurred due to damage will be covered by the merchant. c) The responsibility of the carrier will duly cease after the delivery of the goods in light of governmental recommendations or authority. Method of transportation and route i) The carrier is allowed use any transportation means or storage method without consulting the merchant. The carrier is also allowed to transfer the goods during shipment whether named upfront or not. The carrier is also allowed to proceed at any particular speed that the merchant deems fit. ii) The liberties stipulated by the Carrier for any given purposes shall be invoked during the carriage. Delays arising from the change of means of transport will not be deemed as deviation from the contractual agreement. Delivery of goods In the event the merchant fails to pick the goods after delivery then the carrier is allowed to remove the goods from the container and store them solely at the merchant’s risk and expense (Churchill, 1999). Charges i) The charges shall be paid on receipt of goods and are not refundable at any cost. ii) The charges are based on particulars on the invoice and payment is made upon production of the invoice. iii) The charges will be offset without any deduction, counter claim, set off or execution stay. iv) Freight and the amounts that pertain to it are at ACL’s option to make payment based on the country’s currency or as the currency stipulated in the Bill of Lading. Lien The carrier is provided for to have lien on the goods. General Average According to Mandaraka-Sheppard (2007), the general average is adjustable at any place or port of the Carrier’s option and is best offset in accordance to York Antwerp Rules that were adjusted in 1974. The aforementioned cover all goods whether carried under or on deck. The Jason Clause comes into play and security measures may be taken. For instance cash deposit is put into play as per carrier’s request and also the special charges that pertain to the goods. Jurisdiction clauses (law, separability and jurisdiction) Law and Jurisdiction The contract is governed by Sweden laws and no does not abide by any other courts. In the event a dispute occurs while the goods are on transit then the dispute shall be heard by U.S District court and in line with United States’ laws. Separability The terms and conditions stipulated in the bill of lading are separate in that clauses are independent of each other (Institute of Maritime Law, 2008). Panel Instructions The bill of lading is defined in such a manner that provides for the aforementioned clauses. The addresses and names of both the merchant and carrier are provided for to clearly outline the parties bound by the contract. The places and ports of arrival and departure are also clearly stipulated. The description of goods are also clearly outlined and duly noted with charges set out beside them (Institute of Chartered Shipbrokers, 2010). 1.2 The overall meaning and effect of the bill According to Birnie & Boyle (2002), a bill of lading is a set of rules and regulations that stipulates the relationship between the merchant and carrier. It strives to ensure a seamless flow of activity between the aforementioned parties and thus provides for a clear method for dispute resolution. It clearly outlines the conduct that both the carrier and merchant are supposed to adhere to. This gives a distinct and concise mode of association and thus allows for laws to take effect (Cremean, 2008). It defines who a merchant is and consequently who a carrier is. This serves to bring out which kinds of people are coming into business together. It further stipulates what goods are and the different ways different natured goods are handled. It therefore shows who is liable for the goods at each and every particular instance and ultimately serves for accountability (Birkland, 2001). The description of different types of goods allows the parties coming into a contract to account for the goods efficiently. According to Chisholm & Nettheim, (2002) it brings about the concept of the use of special containers and thus special handling provisions. According to Birkland (2001), the bill shows how the goods should be shipped from point A to point B and who is accountable at each and every instance. Jervis (2007) states that it also gives an insight of how goods of different nature are handled and also how the charges are arrived at by clearly stipulating their limitations. The bill ultimately breaks down the manner in which goods are handled from their assembly to dispatch. Bridgman & Davis (2004) states that a bill binds parties’ who sign it upto a point where their goods change hands. It shows how different situations that come into play are handled and bring about fairness. Hendriske et al states that after delivery of goods the merchant is totally liable for them and in the event that the merchant does not pick up the goods on time then the carrier will account for the goods at the expense of the merchant. Conclusion A bill of lading is a step by step stipulation of the rules of engagement between freight urgency and a customer. It is a binding contract between the same. The bill of lading which is formulated as part of admiralty law has been effective as aforementioned from 1968 to date. It has seen its share of amendments by the addition of different protocols but has maintained its founding clauses. It ultimately ensures that the shipment of goods is done efficiently. The bill defines a merchant as a person who is transporting goods and a carrier as a person who provides the transport services. It defines the rules that both the carrier and merchant are to adhere by so as to ensure a fair and easy transaction. It does this by ensuring that the accountability of the goods at each and every instance is clearly stipulated. The bill therefore ensures that the exchange of goods is carefully monitored and regulated. It thus ensures that any breaches to it are resolved since the parties to it are held accountable in a court of law as per the bill of lading that was signed. References Atlantic Container, Line AB (2011). Bill of Lading Terms and Conditions. Retrieved March 23, 2011 from http://www.aclcargo.com/billofLading.php#. Bennett, H. 2006, The Law of Marine Insurance, 2nd edn, Oxford University Press, Oxford. Birkland, T.A. 2001, An Introduction to the Policy Process: Theories, Concepts, and Models of Public Policy, M.E.Sharpe, Inc., New York. Birnie, P.W. & Boyle, A.E. 2002, International law and the Environment, 2nd edn, Oxford University Press, Oxford. Blay, S., Piotrowicz, R. & Tsamenyi, M. 2005, Public International Law: An Australian Perspective, 2nd edn, Oxford University Press, Sydney. Bridgman, P. & Davis, G. 2004, Australian Policy Handbook, 3rd edn, Allen & Unwin, Crows Nest. Bundock, M. 2007, Shipping Law Handbook, 4th edn, Informa Law, London. Chisholm, R. & Nettheim, G. 2002, Understanding Law, 6th edn, Butterworths, Chatswood. Churchill, R. R. & Lowe, A.V. 1999, The Law of the Sea, 3rd edn, Manchester University Press. Cremean, D.J. 2008, Admiralty Jurisdiction: Law and Practice in Australia, New Zealand, Singapore and Hong Kong, 3rd edn, The Federation Press, Annandale. Davies, M. & Dickey, A. 2004, Shipping Law, 3rd edn, Law Book Company, Sydney. Gold, E. 2007, Gard Handbook on Protection of the Marine Environment, 3rd edn, Gard AS, Arendal, Norway. Hendriske, M.L., Margetson, N.H. & Margetson, N.J. 2008, Aspects of Maritime Law: Claims under Bills of Lading, Kluwer Law International, The Netherlands. 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