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DMC/SandT/37/02
APL Co Pte Ltd v Peer Voss
Singapore Court of Appeal: Chao Hick Tin JA, Tan Lee Meng J: 3
October 2002
Ang & Partners for APL
Drew & Napier for Voss Peer
CARGO SHIPPED PURSUANT TO A STRAIGHT BILL OF LADING: WHETHER
CARRIER MAY DELIVER THE CARGO WITHOUT PRODUCTION OF THE BILL OF LADING: WHETHER
THERE IS A DISTINCTION BETWEEN A STRAIGHT BILL OF LADING AND A SEA WAYBILL
Summary
The issue decided in this case is whether, in relation to a
straight bill of lading, i.e. one that makes the goods deliverable to a specific
person as consignee, without the words "to order", the carrier may
deliver the goods to the named consignee without production of the bill of
lading. The Court of Appeal upheld the High Court’s decision that the carrier,
in this case, APL, may not do so, and was in breach of contract to the shipper,
Peer Voss, in delivering the goods to the consignee without production of the
bill of lading.
DMC Category Rating: Developed
This case note has been contributed by Ang
& Partners, International Contributors to the website for
Singapore
Facts
Voss Peer shipped a car from Germany to his buyer, Seohwan in
Korea, under a bill of lading issued by APL. The bill of lading named "Seohwan"
as consignee, without the words "To Order" after the consignee’s
name. Voss Peer had received part payment of the price. Seohwan took delivery of
the car in Korea by producing copies of an invoice and a bank cable purportedly
showing payment of the balance of the price. Voss Peer alleged that he never
received the balance of the price and sued APL for the balance.
Voss Peer alleged that APL was in breach of contract, breach of
its duty as bailee and/or had failed to exercise due care in delivering the car
without requiring production of the original bill of lading.
APL argued that as a straight bill of lading is non-negotiable
and cannot be endorsed to a third party, like a sea waybill, it does not have to
be produced to the carrier for the consignee to take delivery.
The High Court judge, Judith Prakash J., gave judgment for Voss
Peer. She held that the carrier was not entitled to deliver the cargo shipped
under a straight bill of lading without production of the bill of lading. She
held that a straight bill of lading is not the same as a sea waybill. For a note
on that judgment, click here
APL appealed to the Court of Appeal, which dismissed the appeal.
Judgment
The court of appeal held as follows:
1. It is settled law that there is no requirement for a
consignee to present a sea waybill to the carrier before he can take delivery of
the goods.
2. There is no case law, and textbook writers are not unanimous,
on whether a straight bill of lading is to be equated with a sea waybill so that
the carrier is not obliged to deliver the goods only upon its production. The
issue must be resolved on the basis of contract law and the intention of the
parties.
3. While it is true that a straight bill of lading is
substantially similar in effect to a sea waybill (in that both are
non-transferable), that is not to say that they are the same. While the
characteristic of transferability is absent in a straight bill of lading, there
is no reason why one should thereby infer that the parties intended to do away
with the other main characteristic of a bill of lading, i.e., delivery upon
presentation. Clear words must be present to imply that the parties intended the
instrument to be treated, in all respects, as a sea waybill and that its
presentation by the named consignee is not necessary. If the parties had wanted
to have a sea waybill, they would not have issued a bill of lading with three
originals. By issuing the instrument as a bill of lading, it must mean that they
wished to retain all the other features of a bill of lading, other than the
characteristic of transferability.
4. The rule requiring production as a pre-requisite to delivery
has the advantage of certainty and would prevent confusion and avoid the
shipowners having to decide whether a bill is a straight bill or an order bill
and run the risk attendant thereto if the determination they make on that point
should turn out to be erroneous.
5. It is overly restrictive to limit the categories of documents
which could be used by shippers to two categories: either a negotiable bill of
lading which must be presented for delivery, or a straight bill of lading or sea
waybill which need not be produced for delivery. To hold that a straight bill of
lading is not the same as a sea waybill has the advantage of providing a seller
or the bank issuing a documentary credit, with some security against default by
the buyer, and the buyer with some assurance that the seller has shipped the
cargo before he is required to make payment. A sea waybill, unlike a bill of
lading, cannot be used as a security to obtain financing.
6. Adopting the rule that a straight bill of lading is a
pre-requisite to obtaining delivery also avoids the undesirable consequences of
the shipper’s rights of suit under the original contract of carriage surviving
any transfer of the document to the consignee.
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