7.1 Issuance of the Transport Document

7.1.1 Requirement to Issue a Transport Document

After a carrier receives the goods, the contracting carrier must issue a transport document if the [contracting shipper/consignor] requests one.

This provision corresponds to existing law and practice in most countries, and to the current international regimes (including the Hague Rules, the Hague-Visby Rules, and the Hamburg Rules). Implicit in 7.1.1 is the concept that the carrier need not issue a transport document if the shipper does not request one.

This provision specifies, in light of the discussion at the ISC’s third meeting in July, that any carrier (not necessarily the "contracting carrier") may be the first to receive the goods from the consignor, and that the contracting carrier (not necessarily the carrier who received the goods from the consignor) is the one with the duty to issue a transport document if the shipper requests one.

It is still ambiguous as to which "shipper" has the right to request a transport document–the contracting shipper or the consignor. The issue was discussed but not resolved at the ISC’s third meeting in July. In this context, it may make sense to give both the contracting shipper and the consignor the right to request some transport document. Even if it is the contracting shipper who is entitled to a negotiable transport document under 7.1.2, the consignor should presumably be entitled to a receipt for having delivered the goods to a carrier.

7.1.2 Shipper’s Entitlement to a Negotiable Transport Document

The contracting shipper and the contracting carrier may agree that the transport document will be non-negotiable. Such an agreement may be express or implied. In the absence of such an agreement, the [contracting shipper/consignor] is entitled to a negotiable bill of lading or other negotiable transport document.

This provision alters the existing law and practice in most countries. Under the current international regimes, a shipper is generally entitled to a negotiable bill of lading. In some trades, however, such as short ferry voyages, shippers never ask for a negotiable bill of lading and a negotiable document would serve no purpose. 7.1.2 permits a carrier to offer a service in which negotiable documents are simply not available. The contracting shipper and the contracting carrier may expressly agree (e.g. in the booking note) that a negotiable transport document will not be issued. In some circumstances, the contracting shipper and the contracting carrier will be deemed to have so agreed by implication (e.g. by the custom of the trade). But if there is no agreement, either express or implied, then the shipper (subject to the ambiguity discussed in the following paragraph) will continue to be entitled to a negotiable bill of lading or other negotiable transport document. (It is important to recognise that electronic documents may some day supersede bills of lading entirely. The proposal leaves open the possibility that a negotiable transport document other than a bill of lading (e.g., an electronic equivalent) may some day be as fully acceptable in commerce as the current negotiable bill of lading.)

This provision (like 7.1.1) is still ambiguous as to which shipper is entitled to a negotiable bill of lading or other negotiable transport document in the absence of an agreement to the contrary. The issue was discussed but not resolved at the ISC’s third meeting in July. On the one hand, it seems logical to give the contracting shipper the right to control entitlements under the contract of carriage. On the other hand, the contracting carrier may not know the identity the contracting shipper (e.g., in the case of an FOB shipment when the consignor is paying the freight on the consignee/contracting shipper’s account). At the very least, a carrier had dealt with the consignor, and the consignor should presumably be entitled to a receipt for having delivered the goods. Perhaps the solution would be to give the contracting shipper the right to a negotiable bill of lading or other negotiable transport document if the contracting carrier knows the identity the contracting shipper. The consignor could then have the right to a negotiable transport document if the contracting carrier does not know the identity the contracting shipper, and the right to a non-negotiable receipt in any event.

7.2 The Contents of the Transport Document

7.2.1 Required Contents of the Transport Document

If the carrier issues a transport document, the transport document must–

(a) describe the apparent order and condition of the goods at the time a carrier receives them from the consignor;

(b) show the leading marks necessary for identification of the goods as furnished in writing by the shipper before the carrier receives the goods;

(c) show the number of packages, the number of pieces, the quantity, and the weight as furnished in writing by the consignor before a carrier receives the goods;

(d) state the date–

(i) on which a carrier received the goods, or

(ii) on which the goods were loaded on board the vessel, [or][and]

(iii) on which the transport document was issued.

(e) adequately identify the contracting carrier [and the contracting shipper]; and

(f) be signed by the contracting carrier.

7.2.1(a) confirms the understanding that is clearly expressed in the travaux préparatoires of the Hague Rules and carried forward in subsequent international conventions. See, e.g., Hamburg Rules arts. 15(1)(b), 16(1)-(2). The courts in some countries have departed from this principle.

7.2.1(b) and (c) generally correspond to existing law and practice in most countries, and to the current international regimes (including the Hague Rules, the Hague-Visby Rules, and the Hamburg Rules). The proposed draft does alter the existing law in one significant respect: The carrier’s obligation to issue a transport document showing the information furnished by the shipper in this proposal is not qualified by any exception when the carrier has no reasonable means of checking the information furnished by the shipper. Under current law, the carrier may (in theory) simply omit this information if it has no reasonable means of checking the accuracy. Under this proposal, the carrier must issue a transport document showing the information furnished by the shipper even if it has no reasonable means of checking the accuracy (but it may protect its interests with a qualifying clause under 7.3). Also 6.3, 6.4 and 6.5 refer.

7.2.1(b) also omits the requirement that "the marks must be stamped or otherwise shown clearly upon the goods if uncovered, or on the cases or coverings in which the goods are contained, in a manner that would ordinarily remain legible until the end of the voyage." In view of the alteration noted above (which means that the carrier must include information furnished by the shipper even if it has no reasonable means of checking the accuracy), it seems inappropriate to permit the carrier to omit information furnished by the shipper concerning the marks if the carrier believes that the marks might not remain legible until the end of the voyage. Once again, the carrier’s remedy should be to protect its interests with a qualifying clause under 7.3. This change is unlikely to make any difference in practice.

With respect to 7.2.1(b) and (c), the ISC agreed at its second meeting in April that the shipper must furnish the necessary information in writing before the carrier receives the goods, and that it is not sufficient to furnish the information before the carrier issues the transport document. With respect to 7.2.1(c), the ISC also agreed at its second meeting that the transport document must include all of the listed information furnished by the shipper (e.g. the number of pieces and the weight), and that it would not be sufficient to include only one of the items on the list (e.g. the number of pieces or the weight) when the shipper desires fuller information.

7.2.1(d) gives effect to the ISC’s view, clearly expressed at its second meeting in April, that some date should be included in the transport document. This draft gives the carrier three choices of date that may be used. Perhaps there should be an open-ended fourth choice, e.g., "such other date as the parties may agree is relevant in the context of the contract of carriage." This option is not included in the draft because the ISC did not discuss this possibility (although it was highlighted in the Agenda Paper for the ISC’s third meeting in July).

7.2.1(e) gives effect to the ISC’s view, clearly expressed at its second meeting in April, that the carrier and the shipper should be identified in the transport document. The question of what identification is "adequate" will vary with the circumstances. As a general rule, the transport document should list at least the name and address for both the carrier and the shipper. The reference to the contracting shipper is in brackets, however, because it remains unclear whether the contracting shipper must be identified or if it is sufficient to identify the consignor (or perhaps, in case of a negotiable document, the first holder).

7.2.1(f) gives effect to the ISC’s view, clearly expressed at its second meeting in April, that the transport document should be signed on behalf of the carrier. 7.2.1(f) does not define signature, but a definition section of the final Instrument should include a provision comparable to article 14(2)-(3) of the Hamburg Rules. 7.2.1(f) also does not address the consequences of an unauthorised signature, on which there was no consensus and very little discussion. More guidance will be necessary before a draft can address that issue. Finally, 7.2.1(f) uses the phrase "signed by the contracting carrier" rather than "signed on behalf of the contracting carrier" because the ISC, at its fourth meeting in October, agreed that a signature "on behalf of the contracting carrier" is a signature "by the contracting carrier" (acting through an agent).

7.2.2 The phrase "apparent order and condition of the goods" in this Chapter 7 refers to the order and condition of the goods that would be known to a reasonable carrier based on (a) an external inspection of the goods as packaged at the time the consignor delivers them to a carrier and (b) any additional inspection that a carrier actually performs before issuing the transport document.

This provision is generally based on the discussion at the ISC’s third meeting in July. Under this definition, the phrase "apparent order and condition of the goods" has both an objective and a subjective component.

Under 7.2.2(a), the carrier issuing the transport document has no duty to inspect the goods beyond what would be revealed by an external inspection of the goods as packaged at the time the consignor delivers them to a carrier. If the goods are unpackaged, the transport document will need to describe the order and condition of the goods themselves. But if the goods are packaged, the transport document’s statement of order and condition will relate primarily to the packaging (unless the order and condition of the goods themselves can be determined through the packaging). For containerised goods, in particular, the transport document’s statement of order and condition is highly unlikely to relate to the goods themselves if the consignor delivered a closed container that the carrier did not open before issuing the transport document.

Under 7.2.2(b), however, if the carrier actually carries out a more thorough inspection (e.g. inspecting the contents of packages or opening a closed container), then the carrier is responsible for whatever such an inspection would have revealed to a reasonable carrier.

7.2.3 Omission of Required Contents from the Transport Document

(a) The absence in the transport document of one or more of the particulars referred to in 7.2.1, or the inaccuracy of one or more of those particulars, does not affect the legal character of the transport document. [The issuer of the transport document is liable to the shipper or other holder of the transport document for any damages that are proximately caused by its breach of 7.2.1.]

The first sentence of this provision gives effect to the non-controversial view that the validity of the transport document does not depend on the inclusion of the particulars that should be included. For example, an undated bill of lading will still be valid, even though a bill of lading should be dated. The first sentence of this section also extends the rationale behind that non-controversial view to hold that the validity of the transport document does not depend on the accuracy of the particulars that should be included. Under this extension, for example, a misdated bill of lading will still be valid, even though a bill of lading should be accurately dated.

The second sentence of this provision, which is in brackets, attempts to address the consequences of failing to accurately provide the information that must be included in a transport document. This is not an issue on which the ISC has reached any consensus, but there seemed to be some support for at least the limited approach taken here. At the ISC’s second meeting in April, there was also some support for denying the carrier the benefit of unit limitation if the carrier knowingly misdates the transport document, and for denying the carrier the benefit of the one-year time bar if the transport document does not adequately identify the carrier. At the ISC’s fourth meeting in October, the bracketed language was criticised on the grounds that it is unnecessary and should be omitted entirely. Others criticised the bracketed language on the ground that the issuer is not always responsible in fact for inaccuracies in the transport document; it may be the consignor who prepared the document with inaccurate information. Perhaps liability should rest not on the issuer but on the party who is factually responsible for the inaccurate information.

(b) If a transport document fails to describe the apparent order and condition of the goods at the time a carrier receives them from the consignor, the transport document is prima facie or conclusive evidence under 7.3.3 that the goods were in apparent good order and condition at the time the consignor delivered them to a carrier.

This provision is generally based on the discussion at the ISC’s third meeting in July. This seems to be the logical place to include this provision, as 7.2.3(a) also deals with the omission of required information on the transport document.

7.3 Qualifying the Description of the Goods in the Transport Document

7.3.1 Circumstances Under Which a Carrier May Qualify the Description of the Goods in the Transport Document.

Under the following circumstances, a carrier issuing a transport document may qualify the information mentioned in 7.2.1(b) or 7.2.1(c) with an appropriate clause in the transport document to indicate that the carrier does not assume responsibility for the accuracy of the information furnished by the shipper:

(a) For non-containerised goods–

(i) the carrier may include an appropriate qualifying clause in the transport document if the carrier can show that it had no reasonable means of checking the information furnished by the shipper, or

(ii) the carrier may include a clause providing what it considers an accurate description of the goods if the carrier considers the information furnished by the shipper to be inaccurate.

(b) For goods delivered to the carrier in a [closed/sealed] container, the carrier may include an appropriate qualifying clause in the transport document with respect to

(i) the leading marks on the goods inside the container, or

(ii) the number of packages, the number of pieces, or the quantity of the goods inside of the container,

unless the carrier in fact inspects the goods inside the container.

(c) For goods delivered to the carrier in a [closed/sealed] container, the carrier may qualify any statement of the weight of goods or the weight of a container and its contents with an explicit statement that the carrier has not weighed the container if (i) the carrier can show that the clause is accurate, and (ii) the contracting shipper and the contracting carrier did not agree in writing prior to the shipment that the container would be weighed and the weight would be recorded on the transport document.

This provision generally corresponds to existing law and practice in most countries. Although current law generally permits the carrier to protect itself by omitting from the transport document a description of the goods that it is unable to verify, this protection is essentially meaningless in practice. Even if the carrier is unable to verify the description, the typical shipper still requires a transport document describing the goods in order to receive payment under the sales contract. Commercial pressures therefore deny the carrier the one form of protection that is clearly recognised under current law. Qualifying clauses represent the carrier’s attempt to regain its protection. Common examples of qualifying clauses include "said to contain" and "shipper’s weight and count." Other qualifying clauses may also be effective, depending on the particular needs of the case.

The standards for including a qualifying clause under 7.3.1(a) and (b) are generally similar to those under the proviso to article 3(3) of the Hague and Hague-Visby Rules and to article 16(1) of the Hamburg Rules, except that this proposal eliminates the Hague Rules and Hamburg Rules language excusing the carrier from including the otherwise required information if there are reasonable grounds for suspecting that the information furnished by the shipper does not accurately represent the goods. The ISC agreed, at its second meeting in April, that if the carrier has reasonable grounds for suspecting that the information furnished by the shipper does not accurately represent the goods, the carrier is obligated to check the information if it has a reasonable means of doing so. Thus the carrier would be excused from including the otherwise required information only if there is no reasonable means of checking it. The reasonable suspicion exception is accordingly redundant.

Clauses regarding the weight of containerised goods create special problems. In some ports, facilities for weighing loaded containers simply do not exist. In such cases, it is an easy matter for the carrier to prove that it had no reasonable means of checking the weight information furnished by the shipper. But even in ports where weighing facilities exist, and could be used, it is often customary to load containers without weighing them. Sometimes this is because the time spent weighing containers would delay the ship’s departure (particularly when the shipper delivers the container to the carrier shortly before sailing). Often it is because the weight is of no commercial importance, and the time and expense of weighing a container is unjustified in the absence of any commercial benefit. In some cases, however, the weight is of commercial importance, and the consignee should be permitted to rely on the statement of weight in the transport document unless it is clear that the carrier has in fact not weighed the container.

In view of these special problems with qualifying clauses regarding the weight of containerised goods, 7.3.1(c) specifically addresses the issue in unique fashion. The proposal requires a clear statement that the carrier has in fact not weighed the container. The carrier can include such a statement only if it is true (i.e., if the carrier did not weigh the container) and if the contracting carrier and the contracting shipper did not agree in writing prior to the shipment that the container would be weighed and the weight would be recorded on the transport document. 7.3.1(c)(ii) recognises that in some cases the container’s weight is of commercial importance, and that in such cases the shipper may legitimately insist on having a weight listed in the transport document without a qualifying clause. A contracting shipper may protect this legitimate interest with an explicit agreement prior to shipment (e.g., in the booking note). In the absence of such a prior agreement, however, the carriers may assume that the container’s weight is of no commercial importance. A carrier may then load the container without weighing it, and any weight listed on the transport document may be qualified–without proof that the carrier had no reasonable means of checking the weight furnished by the shipper.

7.3.1(a)(ii) and 7.3.1(b) also recognise, in keeping with the discussion at the ISC’s third meeting in July, that the carrier may also provide accurate information if it considers the information furnished by the shipper to be inaccurate.

In 7.3.1(b) and 7.3.1(c), the bracketed language reflects the disagreement in the ISC as to whether the container must be sealed or simply closed before the carrier can claim the benefit of 7.3. Some delegates feel that the requirement should be no stronger than "closed" or "shipped packed" (FCL) in recognition of the fact that FCL but unsealed containers are often delivered to a carrier with the expectation that the carrier will then seal them. Other delegates feel that the requirement should be "sealed" so that the carrier will be required to show a "chain of custody" before it is allowed to take advantage of the benefit of this provision.

7.3.2 Reasonable Means of Checking

For purposes of 7.3.1, a "reasonable means of checking" must be not only physically practical but also commercially reasonable.

This provision clarifies the meaning of "reasonable means of checking." Opening a sealed container or unloading a container to inspect the contents, for example, would not be commercially reasonable, even if it might be physically practical in some circumstances. Thus a carrier issuing a transport document would always be permitted to qualify the description of goods delivered by the shipper inside a sealed container–unless the carrier had some physically practical and commercially reasonable means of checking the information furnished by the shipper (which would have to be something other than opening the container). For example, if the carrier had an agent present when the shipper stuffed the container, and that agent verified the accuracy of the shipper’s information during loading, then the carrier would not be permitted to qualify the transport document’s description of the goods.

7.3.3 Prima Facie and Conclusive Evidence

Except as otherwise provided in 7.3.4, a transport document is–

(a) prima facie evidence of the issuing carrier’s receipt of the goods as described in the transport document; and

(b) conclusive evidence of the issuing carrier’s receipt of the goods as described in the transport document [if the transport document has been transferred to a third party acting in good faith or if a third party acting in good faith has paid value or otherwise altered its position in reliance on the description of the goods in the transport document].

7.3.3(a) simply confirms the widely recognised rule that, as a general matter, a transport document is prima facie evidence of the issuing carrier’s receipt of the goods as described in the transport document.

7.3.3(b) recognises that, in order to protect innocent third parties who rely on the descriptions in transport documents, in some circumstances a transport document is not simply prima facie evidence but conclusive evidence. The ISC was unable to reach consensus on the definition of these circumstances, however, and thus the key language in 7.3.3(b) is bracketed to show the need for further discussion. There appears to be much broader support for the first alternative ("if the transport document has been transferred to a third party acting in good faith"), at least in the context of a negotiable transport document that has been duly negotiated to a third party acting in good faith. There appears to be weaker support for the second alternative ("if a third party acting in good faith has paid value or otherwise altered its position in reliance on the description of the goods in the transport document"), particularly in the context of a non-negotiable transport document.

7.3.4 Effect of Qualifying Clauses

If a transport document contains a qualifying clause, then the transport document will not constitute prima facie or conclusive evidence under 7.3.3, to the extent that the description of the goods is qualified by the clause, when the clause is "effective" under 7.3.5.

This provision simply describes the effect of a qualifying clause if it is "effective." It is worth noting that a qualifying clause does not necessarily defeat the prima facie or conclusive evidence of the description of the goods in full. A qualifying clause such as "shipper’s weight," for example, would not affect the evidentiary value of a description of the goods to the extent that it listed the number of packages in the shipment or described the leading marks.

7.3.5 When Qualifying Clauses Are Effective

Subject to 7.3.6, a qualifying clause in a transport document is "effective" for the purposes of 7.3.4 under the following circumstances:

(a) For non-containerised goods, a qualifying clause that complies with the requirements of 7.3.1 will be effective according to its terms.

(b) For goods shipped in a [closed/sealed] container, a qualifying clause that complies with the requirements of 7.3.1 will be effective according to its terms [if the carrier delivers the container intact and undamaged and there is no evidence that the container has been opened after the carrier received it/with the seal intact and undamaged].

There are sharp distinctions between commercial expectations with respect to containerised and non-containerised goods. 7.3.5(a) addresses only non-containerised goods. Whenever the carrier can show that it had no reasonable means of checking the information furnished by the shipper, it is entitled to qualify any statement regarding the leading marks, the number of packages or pieces, and the quantity or weight of the cargo, as appropriate, and the clause will be "effective."

For containerised goods, the carrier will often not be in a position to verify any of the information furnished by the shipper, but this is not always the case. To take the most obvious example, the shipper may have delivered break-bulk cargo to the carrier and the carrier may have stuffed the container. Some containers are not fully enclosed (e.g., "flat rack" and "rag top" containers), and the carrier has at least some ability to verify the contents of such containers. Indeed, sometimes the carrier will have a representative present when a container is stuffed, even though the shipper ultimately delivers a sealed container for shipment. Thus it is arguable that the carrier must show that it had no reasonable means of checking the information furnished by the shipper before it can rely on a qualifying clause–even for containerised goods.

The carrier’s classic rationale for relying on a qualifying clause and escaping liability in a containerised goods case is that the carrier delivered to the consignee exactly what it received from the shipper: a closed/sealed container (the contents of which could not be verified). It is arguable that as soon as the carrier delivers something different (e.g., a container that is so damaged that goods may have been lost during shipment or a container that has been opened during the voyage), the equities shift. At this point the carrier can no longer establish the same chain of custody, and it furthermore appears that the carrier has done at least something wrong. The consignee’s entitlement to rely on the description of the goods in the transport document accordingly becomes much stronger. 7.3.5(b) recognises this shift in the equities.

The bracketed language reflects the differences of opinion within the ISC.

7.3.6 Good Faith Requirement

[Notwithstanding 7.3.5, no qualifying clause will be effective if a person relying on the description of the goods in the transport document can show that the carrier or any of the carrier’s employees or agents responsible for issuing the transport document did not act in good faith when issuing the transport document.]

This provision simply recognises the general maxim that no one should be allowed to profit from his or her own wrong-doing. For example, if the carrier knows that the containers do not in fact weigh anything near to the weight listed in the transport document, and the carrier chooses not to weigh the containers because it knows that it would discover this discrepancy and be required to correct the transport document, a consignee could well prove the carrier’s failure to act in good faith when issuing the transport document. Other situations in which 7.3.6 might apply would be including a qualifying phrase in the transport document that is known to be inaccurate or including a qualifying phrase when the description of the goods in the transport document is known to be inaccurate.

This provision is bracketed because some delegates at the ISC’s fourth meeting felt that it was inappropriate to have any such "good faith" requirement in the Instrument.

7.4 Ambiguities in the Transport Document

7.4.1 Ambiguous Date on a Transport Document

If the transport document is dated but fails to indicate the significance of the date, then the date will be considered to be:

(a) the date on which the goods were loaded on board the vessel, if the transport document is an "on board" bill of lading or a similar document indicating that the goods have been loaded on board a vessel; or

(b) the date on which a carrier received the goods, if the transport document is a "received for shipment" bill of lading or other document that does not indicate that the goods have been loaded on board a vessel.

This provision gives effect to the unchallenged suggestions, made at the ISC’s second meeting in April, concerning the consequences of including a date in the transport document without specifying its significance.

7.4.2 Ambiguous Signature on a Transport Document

If the transport document fails to identify the contracting carrier but does indicate that the goods have been loaded on board a named vessel, then the registered owner of the vessel shall be presumed to be the contracting carrier. The registered owner can defeat this presumption if it proves that the ship was under a bareboat charter at the time of the carriage and the bareboat charterer accepts contractual responsibility for the carriage of the goods.

This provision gives effect to the views expressed in the Uniformity Sub-Committee. The issue remains controversial, but it was agreed at the ISC’s second meeting in April that drafting would proceed (for the time being) on the basis of the report Uniformity Sub-Committee.