8

BILL OF LADING

HISTORICAL INTRODUCTION

Nobody can precisely say when the bill of lading (B/L) was used for the first time. The
first entries in the ships log book of goods shipped on seagoing vessels must be
more than a thousand years old.

In the "Ordonnance Maritime de Triani" (an Italian town) of 1063, it was laid down
that every master was obliged to have a clerk (in fact a writer) on board. It also made
mention of a log book or register. This is the first indication that goods which were
shipped were registered.

The ordinances of the Mediterranean towns and the Consulat de la Mer, made
reference of a "scribanus" or writer. The writer had to enter all the goods that were
loaded on board in a log book and keep it up to date. In accordance with the
"Consulat de la Mer", the master or the crew were not allowed to load or discharge
the goods without the writer being informed. When goods which were entered in the
logbook by the writer were lost, the master was obliged to refund them. If he could
not refund them, his ship could be sold. All entries in the log book had force of law.

Entry of the goods in the log book served thus as evidence that the goods had been
shipped on board. Shippers could receive an excerpt of the log book that could be
presented in case the log book was lost. These excerpts can be considered as the
precursors of the bill of lading.

The bill of lading, just like the insurance policy and the bill of exchange, originated in
Italy. It was found for the first time in 1526, in a decree of the town of Florence under
the name of "polizza di carico" i.e. "police de chargement".

In the sixteenth century, the use of the bill of lading is extended to Western Europe
and the ordinances around that time, contained several provisions which were
related to the bill of lading. We will limit ourselves to the "Ordonnance de Philippe II"
of 1563 regarding maritime commerce, the "Ordonnance d'Anvers" of 1570, the
"Ordonnance d'Amsterdam" of 1598 and the "Ordonnance des villes Hansatiques"
promulgated at Lbeck in 1591. In those days, the bill of lading was merely a receipt,
deliverd by the master which was defined in the "Guidon de la Mer" as follows : "Le
connoissement est la promesse particulire que fait le maistre du navire de la
rception de telle et telle sorte de marchandise appartenant tel marchand, et faut
tant de connoissements comme il y a de diversit de personne qui elles
appartiennent".

Later, with the "Ordonnance de la Marine" from 1681 from Colbert, the bill of landing,
amongst others, received a more definite form.

When, in the beginning of the nineteenth century, by order of Napoleon, the Civil
Code, the Penal Code and the Commercial Code were drawn up, the Ordonnance de
la Marine from Colbert was nearly completely taken over. However, on this
Ordinance, with regards to the bill of lading, an important element was added,
9
namely that the bill of lading could be issued to a named person, to bearer or to
order. And so, the bill of lading became a negotiable document, representing the
property of the goods. As a title deed, the bill of lading was to become the basic
document of every maritime trade transaction.

Initially, the bill of lading contained no exemption or exoneration clauses so that the
master was fully responsible for the goods that were put in his care. The "Consulat
the la Mer" held the master fully responsible for all the goods that were entered into
the log book by the scribanus. The only exceptions to this rule were : Act of God,
Acts of War, hidden defects of the goods, a fault of the shipper and contribution to
General Average. In the eighteenth century the clause "Che dice essere" (said to be)
was found, whereby the master turned dawn every responsibility with regard to the
content of the parcels he carried. One of the oldest exoneration clause which was
inserted in the bill of lading was: "The dangers of the sea excepted".

Due to the technical revolution of industry and shipping In the middle of the
nineteenth century, the responsibility of the Owner increased continually. Vessels
became larger, they carried an increasing variety of goods, which sometimes were
destined for hundreds of receivers, the cargo handling was entrusted to outside
enterprises on which the master had little or no control, etc. Because of his ever
increasing responsibility, the carrier sought to obtain legal protection from the
authorities, but in vain. Their only way out was to include a number of exoneration
clauses in the bill of lading.

Due to the close competition in the maritime transport around the middle of the
nineteenth century, shipping tumbled in a deep period of crisis, which made freights
drop disastrously. In the second half of the nineteenth century, the freight
conferences were created. When the conference was sure of its monopolization, it
went further than imposing high freight rates and a great number of exoneration
clauses were enforced. All these situations lead to the fact that the responsibility of
the carrier became nearly inexistent. At a certain moment there were so many
exoneration clauses in the bill of lading that one could rightly say that the master
could carry anything, where and how he wanted it and in the state that best suited
him, without any responsibility whatsoever on his behalf.

In a way, one could say that the only responsibility that the owner had was to collect
his freight. In fact, the bill of lading had no practical value anymore and gave the third
holder no recourse at all against the owner.

Very quickly, not only the shippers, but all who were directly or indirectly concerned
with the transport of the goods such as the merchants, the producers, the consumers
but mainly the bankers and the insurance companies were very hostile towards these
exoneration clauses so that the need for a international legislation was more than
necessary.

The United States have always been ahead regarding maritime legislation and in
1893 they introduced the "Harter Act". With this law, they aimed at putting an end to
the far-reaching exoneration clauses introduced by the sea carrier by imposing a
minimum of requirements regarding their liability for the cargoes that were put in their
care. This legislation served as an example for many other countries.

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In 1921, in the Hague (The Netherlands), the "International Law Association" drew up
the Hague Rules. Their aim was to regulate the liability and the obligations of the
carrier of goods by sea and to protect the third holder of the bill of lading. After some
amendments they were accepted by a large number of countries and introduced at
the "International Brussels Convention" of 25 August 1924 and known as the
International Convention for the Unification of certain Rules regarding the bill of
lading.

Thanks to the Hague Rules, the bill of lading was now more than a contract of
carriage; it was also a deed on which banks could give credits. Bankers, who were
not involved in the initial contract and who consequently had no say regarding the
conditions, now showed an interest in them. It was also important that there was
uniformity in the different countries concerning the interpretation of the many clauses
appearing in the bills of lading.

In England, the rights and obligations of the sea carriers were laid down in the
Carriage of Goods by Sea Act 1924. The Hague Rules were incorporated in this law.

In the United States of America, the U.S. Carriage of Goods by Sea Act 1936 were
adopted which were based on the Hague Rules. Because of this, the Harter Act
1893 lost considerably in value, although the 1936 law explicitly stipulated that some
rules of the Harter Act remained in force.

Due to the evolution of industry and shipping (e.g. containerization, roll on/roll off,
and the like) together with the currency erosion, the Hague Rules 1924 had to be
adapted.

At the 1963 Conference at Stockholm, the International Maritime Comity drafted a
new bill that was accepted as the Visby Rules.

On the 23
rd
of February 1968, at the Diplomatic Conference of Brussels, the Protocol
to amend the International Convention for the Unification of Certain Rules of Law
relating to Bills of Lading; signed at Brussels on 25
th
August 1924 was adopted. This
Protocol is known as the Visby Amendment.

The Hague Rules plus the Visby Amendment of 1968 are referred to as the Hague-
Visby Rules (HVR).

At the Diplomatic Conference of Brussels, held on the 21
st
of December 1979, the
Protocol to amend the International Convention for the Unification of Certain Rules of
Law relating to Bills of Lading; signed at Brussels on 25
th
August 1924, as amended
by the Visby Amendment of the 23
rd
February 1968 was adopted. It is more
commonly known as the Protocol of 79.

In England, the Visby Amendment of 68 was incorporated in the Carriage of Goods
by Sea Act 1971 (COGSA 71).

On the 30
th
of March 1978, the United Nations Convention on the Carriage
of Goods by Sea, and better known as The Hamburg Rules, 1978 were introduced.