TT Talk - The expressions ‘O/B’ and ‘C/O’ on carriage documents
The Hong Kong Association of Freight Forwarding and Logistics Ltd (HAFFA) provides a number of interesting 'Recommended Practices' on its website www.haffa.com.hk. HAFFA RP013 examines the expressions 'O/B' and 'C/O' which are sometimes used in the 'shipper' or 'consignee' boxes on the front of carriage documents. HAFFA RP013 explains that customers from Mainland China, who do not have a presence in Hong Kong to organise or handle their exports or imports through Hong Kong, ask Hong Kong forwarders to 'lend their names' for use in the 'shipper' or 'consignee' box of the relevant bill of lading or sea waybill.
In 'Forwarderlaw.com', Mr Vlad Cioarec (International Trade Consultant, Romania) examines the related issue whether a forwarder, who is named 'ABC Logistics on behalf of (name of exporter)', is entitled to endorse the bill:
According to HAFFA RP013, the expression 'o/b' (eg. ABC Forwarder o/b China Trading) is the short form of 'on behalf of'', which indicates that 'ABC Forwarder' acts as agent of 'China Trading', ie. the expression 'O/B' is not likely to make 'ABC Forwarder' the consignee under the bill of lading or sea waybill. However, HAFFA RP013 then explains that the expression 'O/B' in the consignee box might suggest that 'ABC Forwarder' has (apparent) authority to receive the goods for 'China Trading', his principal. In any case, HAFFA RP013 recommends that the carrier demands clear evidence of that 'China Trading' authorised 'ABC Forwarder' and equally that 'ABC Forwarder' would be well advised to obtain such clear evidence.
Conversely, the expression 'c/o' (eg. China Trading c/o ABC Forwarder) stands for 'care of'', which is generally used for addressing correspondence through an intermediary, in which case 'ABC Forwarder' acts on behalf of 'China Trading' for the limited purpose of receiving and passing on correspondence. With regard to release of cargo, HAFFA RP013 again recommends that the carrier demands production of a written authorisation (or other satisfactory evidence) which shows that 'China Trading' authorised 'ABC Forwarder' to take delivery of the goods. However, HAFFA RP013 warns that a carrier could argue that 'C/O' has the 'wider' meaning of 'in the care of' or 'in the charge of', in which case it might justifiably deliver the goods to 'ABC Forwarder'.
HAFFA RP013 provides welcome guidance. It appears to indicate that both 'O/B' and 'C/O' might have more than one meaning. Clearly, as HAFFA RP013 emphasised, ascertaining the meaning of 'O/B' and 'C/O' requires consideration of all relevant documents and surrounding circumstances.
One problem for a forwarder or transport operator who accepts the expressions 'O/B' or 'C/O' onhis carriage document is that, while 'O/B' or 'C/O' might designate an agency contract between the two named parties, the nature or scope of this agency contract may be unclear. Arguably, the expressions 'O/B' and 'C/O' add another dimension to the already rather complex topic of cargo delivery. The Club therefore advises its Members to avoid using the expressions 'O/B' and 'C/O' whenever this is commercially viable.
Apart from complicating delivery, 'O/B' and 'C/O' might also obscure which party is entitled to sue under the carriage document, although in Freight Systems Ltd v Korea Shipping Corporation (1988) the Hong Kong High Court held that 'Freight Systems Ltd o/b Marianne Trading Ltd' meant that Freight Systems were acting clearly as agents and therefore could not sue for an alleged breach of bill of lading terms.
Please use the following web link for the full text of HAFFA RP013 of 13 November 2007:
Source TT Club
You may also be interested in:
An interesting reminder in the multi-layered relationships of the maritime supply chain that care needs to be taken to attend in a timely fashion to securing recourse in all jurisdictions in which a dispute might be brought.
Leading international freight transport insurer, TT Club is ensuring that its Members utilising the burgeoning Asia-Europe rail corridor for container traffic are adequately protected regarding liability exposures.
TT Talk - Legal eagle: packages & contracts
Recent caselaw suggests that English courts will lean towards the selecting interpretations on limits of liability that favour a claimant. Unwelcome to the carrier community, so worth considering how best to describe goods on carriage documents.