TT Talk - Hong Kong - 'presentation rule' applies to straight bills of lading
The Court of Final Appeal of Hong Kong SAR has held on 12 May 2009 in Carewins v Bright Fortune Shipping that the 'presentation rule' applies to 'straight' bills of lading like it does to 'order' bills. This confirms the judgments by Stone J (2006) and the Court of Appeal (2007) (TT Talk Editions 90, 93 and 100). The 'presentation rule' means that, for delivery of the goods, the consignee must surrender the 'straight' bill to the carrier.
In Carewins, the parties used 'straight' bills of lading (which name the consignee) for the shipment of footwear products from Hong Kong to Los Angeles. The goods were delivered to the consignee without presentation of the bills. The Hong Kong shipper then sued the carrier for misdelivery.
In the leading judgment in the Court of Final Appeal, Mr Justice Ribeiro saw no valid reason why the essential characteristic of a bill of lading as a document of title to the goods should depend on whether or not the bill was negotiable (i.e. 'to order'). The shipper's ability to withhold the bill of lading pending payment by the consignee was 'a highly important feature of the recognised mercantile arrangement', which applied just as much between shipper and consignee under a 'straight' bill of lading as it did between the parties of an 'order' bill.
Mr Justice Ribeiro found that the 'straight' bill of lading before him had all features of a bill of lading, as it was entitled 'bill of lading', had a bill of lading number and displayed prominently the word 'Original'. Most significantly, the bill included an 'attestation clause' (the text on the front of the bill usually in the bottom-right corner) with the phrase '(...) one of which being accomplished the others to stand void'. Yet the judge added that ('perhaps save in exceptional circumstances') the 'presentation rule' would apply to a straight bill of lading even if an 'attestation clause' were missing. In any case, it did not matter that the 'attestation clause' did not include the phrase 'One of the original bills of lading must be surrendered duly endorsed'.
Confirmation of the 'presentation rule' for 'straight' bills of lading by the highest Hong Kong court is welcome news, because this endorses the now dominant global industry understanding (Carewins flew in Alistair Schaff QC who had fought for the 'presentation rule' in the 'Rafaela S').
The one very important exception on the application of the 'presentation rule' to 'straight' bills of lading are the United States (where the 'misdelivery' in Carewins occurred).
The TT Club reiterates its advice to Members not to deliver goods without presentation of a 'straight' bill of lading
Carewins Development (China) Ltd v Bright Fortune Shipping Ltd, Court of Final Appeal of Hong Kong SAR, 12 May 2009:
. Parties who prefer delivery without the need to produce the sea carriage document should use a simple sea waybill.