Insights · Commentary
The Presentation Rule for Straight Bills of Lading
Compares how England, Hong Kong, China and Korea treat whether the original straight bill of lading must be presented to take delivery of cargo.
Definition of a Straight Bill of Lading and the Presentation Rule
Where the consignee box of a bill of lading does not contain the words “To Order” and a specific consignee is named, the document is called a straight bill of lading (Straight Bills of Lading).
The question arises whether, even in the case of a straight bill of lading, the original straight bill of lading must be presented to the carrier in order to take delivery of the cargo. In legal terms, this is referred to as the question of the “presentation rule for straight bills of lading”.
Different countries take different positions on the presentation rule for straight bills of lading.
England: Presentation Rule Not Recognised
The Rafaela S [2005] 1 Lloyd’s Rep 347
In this House of Lords decision, it was held that a straight bill of lading is also a Bill of Lading or Similar document of title under COGSA 1971 and is therefore subject to COGSA 1971.
Some of the judges in that decision accepted the presentation rule. However, since the presentation rule was not in issue, those views do not form the binding part of the decision (the ratio of the decision) and are merely obiter dicta.
As a result, there is currently no binding English authority on the presentation rule for straight bills of lading.
Meanwhile, the same decision stated that where a straight bill of lading itself provides for the presentation rule, such wording is valid. In that case, the bill will therefore be subject to the presentation rule.
However, under COGSA 1992, a straight bill of lading is not a bill of lading but merely a Sea Way Bill. For that reason, the prevailing view is that the presentation rule should not apply (Bills of Lading in Export Trade 2.37).
Hong Kong: Presentation Rule Recognised
In its 2009 decision in Carewins v Bright Fortune Shipping, The Court of Final Appeal (Hong Kong’s highest court) held that the presentation rule applies to straight bills of lading as well.
China: Presentation Rule Recognised
Guangdong Ltd v. China Merchant: the Supreme Court held that the presentation rule applies to straight bills of lading as well.
Orient Overseas Container Line v. Qingdao Haishen Food Co., Ltd.: where even the party named as consignee in a straight bill of lading does not hold the original straight bill of lading, the carrier may not deliver the cargo to it, and the carrier is liable in damages to the Shipper holding the original.
Korea
The Supreme Court has held that a straight bill of lading is, by operation of law, an order instrument.
Supreme Court Decision 99Da17890, 27 March 2001
“Even where a bill of lading is issued as a straight (named) bill, it is by operation of law an order instrument and may be transferred by endorsement. However, where it bears a statement prohibiting endorsement, it cannot be transferred by endorsement (Articles 820 and 130 of the Korean Commercial Act), and in such a case it may be transferred only by the method for assigning an ordinary nominative claim.”
There is no precedent that squarely addresses whether a straight bill of lading is subject to the presentation rule. However, given that an order instrument is inherently subject to the presentation rule, it is arguable that the presentation rule should also be recognised for straight bills of lading.