Who Can Sue in a Bill of Lading Contract

1.      BRAWAL SHIPPING (NIGERIA) LIMITED

                                         V

1.      F.I ONWADIKE CO. LIMITED

2.     METROPOLITAN GENERAL INS. CO.LTD

Facts:

The appellant was the 1st defendant against whom along with the 2nd respondent herein, a claim of #2,160, 820.00 is made in this suit which was instituted in the Federal high Court, Port Harcourt. The statement of claim shows that in 1991, the plaintiff (now 1st respondent) purchased some quantities of Icelandic fish heads from its customers in Iceland. Upon two bills of lading made in Iceland [No. C.116 of 24 April, 1991 and No. C416 of 29 May, 1991] the appellant undertook the shipment of the said fish heads clear on board on board on behalf of the 1st respondent to the port of delivery in Port Harcourt. The fish heads were covered by the insurance Policy of the 2nd respondent aginst all risks, losses or damage. The fish heads were examined before shipment and a certificate of clearance in accordance with import requirement of the Federal Government of Nigeria was issued.

When eventually the two shipps carrying the fishheads landed at the port in Port Harcourt on 8 June, 1991 and 2 July, 1991 respectively, the fish heads were placed under Bad Order List at the Port. The reason was that some of them were found to be wet, some rotten and some missing through pilferage as some of the containers landed without their seals. The losses and damages occurred while the goods were in the appellant’s custody. All these facts are as pleaded in the statement of claim filed on 15 October, 1992.

The appellant did not file a defence but on January, 1993 made an application for an order to dismiss the or strike out the suit as against it on the grounds that:

“The plaintiffs not having been named as either the consignee or endorsee of the relevant Bills of Lading on which their claim herein is based, and/or if so named, having endorsed the same to another party, has no locus standi to institute and /maintain this action as presently constituted”. It went further to attach copies of the two Bill of Lading pleaded by the plaintiff to the motion on notice as exhibits FA1 and FA2.  

Section 375(1) Merchant Shipping Act, Cap 224 Laws of the Federation 1990 which is relevant to this suit and was constructed by the Supreme Court states as follows:

375(10 Every consignee of goods in a bill of Lading and every endorsee of a bill to whom the property in the goods therein mentioned shall pass upon or by reason of such consignment or endorsement shall have transferred to and vested in him all right of suit and subject to the same liabilities in respect of such goods as if the contract contained in the Bill of Lading had been made with himself.

Judgment

1.     There are two known ways of endorsing a bill of lading viz:

a)     An indorsement is effected either by the shipper or consignee writing his name on the back of the bill of lading; this is called and “indorsement in blank”; or

b)    by the shipper or consignee writing on the bill “Deliver to I (or order) F” this is known as “indorsement in full”.

A bill of lading which does not contain some such words as ‘to order, or ‘to order or assigns’, or which is endorsed in full, but without such words, is a negotiable instrument.

2.     The primary meaning of ‘to endorse’ in relation to bill of lading is ‘to write at the back’

3.     The indorsement of a bill of lading without consideration, does not transfer any property in the goods; and therefore the mere indorsement of a bill of lading by the consignee to an agent, to authorize him to stop the goods in transit on account of his principal, will not enable such agent to maintain assumpsit or trover for the goods in his own name. hence the property passes not by the mere assignment and delivery of the bill of lading but by the contract between the assignor and the assignee, or otherwise between the consignor and the consignee, or indorser and indorsee by which it is intended that the property should pass.

4.     A person who is not a party to a contract of carriage of goods evidenced by a bill of lading cannot sue in reliance on that bill.

5.     The proper interpretation of section 375(1) of the Merchant Shipping Act CAP 224. Laws of the federation, 1990 is that it is not every endorsee who by reason of that section is vested with the right of action in respect of the goods mentioned as if the contract contained in the Bill of lading had been made with himself. It is only an endorsee to whom the property in the goods passed or by reason of the endorsement.

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