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Identity of parties – bill of lading signed on behalf of line described as “carrier”

The facts

Steel billets were to be shipped from Russia to Guatemala, under a bill of lading which was on the time charterers’ form. On the face of the bill and in a prominent position, the time charterer was described as the carrier. The bill was signed on behalf of the master by a company associated with the time charterers “as agents”.

The shippers sold the cargo of steel to FOB buyers who on-sold to buyers in Guatemala. The notify party and consignee on the bill were the buyers in Guatemala.

The time charterers entered into a voyage charter party with the FOB buyers/sub charterers. The on-sale to the Guatemalian buyers was CIF.

The bill of lading contained an identity of carrier/demise clause stipulating that the owners were party to the bill and that the liner was not liable as carrier.

The time charter party contemplated signature of bills of lading by both the master and the charterers or their agents.

The bills of lading were signed in London by the time charterers’ agents.

The date appearing on the bill was three days before loading had been completed and as the bills were described as “shipped”, the bills constituted a misrepresentation. Furthermore, the bills were clean and not in conformity with the mate’s receipt which described rust and other damage to the cargo of steel billets.

Evidence was led that the terms of the bill of lading were negotiated between the FOB buyers and the time charterers.

At the time of the action, the time charterers were insolvent and did not take part in the proceedings.

The owners bought an action to declare that they were not party to the bill of lading and therefore not obliged to carry the goods to Guatemala. The sub-charterers who were also the holders of the bill and the FOB buyers contended that as the bill was signed on behalf of the master, these were owners’ bills. The sub-charterers relied principally on the Rewia.


The court (Rix J) found that these were charterers’ bills.

His method of analysis was to consider first the construction of the bills. This was an enquiry which was confined by the four corners of the bill itself.

The court then proceeded to look at the circumstances surrounding the issue of the bills.

On both enquires he came to the conclusion which he did.

As a second string to their bow, the owners argued that even if these were construed as owners’ bills, that these bills were not authorized by them as they were pre-dated and not in conformity with the mate’s receipts. The court agreed with this argument.

A further argument was raised by the sub-charterers that they were entitled to rely on the contract of carriage underlying the bills of lading which had been entered into between the owners and the shippers acting on their (the FOB buyers’ / sub-charterers’ behalf). Because counsel for the sub-charterers conceded that the court would not be required to answer this question if these were construed as charterers’ bills, the court did not decide this issue.


The judgment maintains an artificial distinction between:

1. The interpretation of the bills as they stand.

2. The principles of agency.

3. The subjective intentions of the parties.

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Charter Party Casebook