Yew Huoi, How & Associates | Leading Malaysia Law Firm

Menu

BILLS OF LADING – FREQUENTLY ASKED QUESTION

This legal update sets out the frequently asked questions on matters relating to  Bills of Lading (“BLs”).

What are bills of lading (“BLs”) and its legal function?

  • BLs serve 3 important functions:
  • Document of title of the cargo laden on board of the vessel;
  • Contract of carriage; and
  • Receipt of goods carried on vessel.

What are the laws the governed BLs in Malaysia?

  • States other than Malacca, Penang, Sabah & Sarawak – The United Kingdom Bills of Lading Act 1855
  • Malacca, Penang, Sabah & Sarawak – The United Kingdom Carriage of Goods by Sea Act 1992

Why UK statutes apply?

  • This is due to the application of Section 5 of the Civil Law Act 1956.

What is a NVOCC BL?

  • NVOCC is the abbrievation for “Non-Vessel Operating Common Carrier”.
  • NVOCC is a carrier that does not own the ship that carries the goods laden on board.
  • The use of NVOCC BL was developed by industry players as part of the move to simplify procedures and requirements to speed up shipping processes.
  • Original BL issued by the shipowner will usualy bear the name of the forwarding agent or booking parties as the shipper and consignee. Instead of having to get shipowners to re-issue a new BL in the name of the actual cargo owners (which will take time), forwarding agent or booking parties will issue an NVOCC BL in their name as Non-Vessel Operating Common Carrier.

Is NVOCC BLs valid in law?

  • NVOCC has the same function as an ordinary BL issued by the shipowner. The forwarding agent or whoever signs as the carrier assumes the role of a carrier. As carrier, they are legally required to only release cargo on production of original BL.

To whom the BL is to be given to?

  • Carrier would have to issue the BL to the person who has shipped the goods. If the carrier refuses to issue BL, the shipper may demand his goods back.

Can goods be delivered without production of BL?

  • No. Carrier is under a legal duty to deliver goods against the production of the original BL.
  • Carrier is not allowed to release goods against a switch BL.
  • Legally, carrier has no right to alter the BL after the goods have been put on board of the ship.

What are the consequences of so doing?

  • Carrier will be liable for breach of contract of carriage, bailment and/or conversion.

What is a telex release?

  • The practice of producing original physical copy of the BL at the port of discharge might not be feasible in modern shipping context. This is because original BL may not be mailed to the destination quick enough for cargo release. This failure may result in cargo owners incurring detention and demurrage charges at the port of destination.

What is a letter of Indemnity (“LOI”)?

  • A LOI is a private agreement to indeminify carrier if there is a claim for loss due to its release of cargo without production of BL.
  • LOI is only valid between contracting parties to the contract of indemnity.
  • A LOI does not absolve shipowner or carrier from its legal liabilities under the BL.
Back to Latest Legal Updates

Recent Post

STRATA MANAGEMENT – MANAGEMENT FEE SHOWDOWN – RESIDENTIAL VS. COMMERCIAL – WHO’S PAYING FOR THE EXTRAS?

In a landmark decision in Aikbee Timbers Sdn Bhd & Anor v Yii Sing Chiu & Anor and another appeal [2024] 1 MLJ 94 , the Court of Appeal clarified the rules on maintenance charges and sinking fund contributions in mixed strata developments. Developers and management corporations can impose different rates based on the distinct purposes of residential and commercial parcels. The judgment emphasizes fairness, ensuring residential owners bear the costs of exclusive facilities like pools and gyms, while commercial owners aren’t subsidizing amenities they don’t use. This ruling highlights the importance of transparency in budgeting and equitable cost-sharing in mixed-use properties.

Read More »
16 December ,2024 No Comments

ILLEGALITY OF UNREGISTERED ESTATE AGENTS’ CLAIM – FINDER’S FEES AND ILLEGALITY: COURT DRAWS THE LINE ON UNREGISTERED ESTATE AGENTS

In a pivotal ruling, the Court of Appeal clarified that finder’s fee agreements are not automatically void under the Valuers, Appraisers, Estate Agents and Property Managers Act 1981. The Court emphasized that illegality must be specifically pleaded and supported by evidence, and isolated transactions do not trigger the Act’s prohibition. This decision highlights the importance of precise pleadings and a clear understanding of the law’s scope.

Read More »
16 December ,2024 No Comments

COMPANIES ACT – OPPRESSION – DRAWING THE LINE: FEDERAL COURT DEFINES OPPRESSION VS. CORPORATE HARMS

In a decisive ruling, the Federal Court clarified the boundaries between personal shareholder oppression and corporate harm, overturning the Court of Appeal’s findings. The Court held that claims tied to the wrongful transfer of trademarks belonged to the company, not the individual shareholder, reaffirming that corporate harm must be addressed through a derivative action rather than an oppression claim.

Read More »
16 December ,2024 No Comments

COMPANIES LAW – WHEN DIRECTORS BETRAY: COURT CONDEMNS BREACH OF TRUST AND CORPORATE MISCONDUCT

In a stark reminder of the consequences of corporate betrayal, the court found that the directors had systematically dismantled their own company to benefit a competing entity they controlled. By breaching their fiduciary duties, conspiring to harm the business, and unjustly enriching themselves, the defendants were held accountable through significant compensatory and exemplary damages, reaffirming the critical importance of trust and integrity in corporate governance.

Read More »
16 December ,2024 No Comments

JURISDICTION – CHOOSING THE RIGHT COURT: THE SEA JUSTICE CASE HIGHLIGHTS WHERE MARITIME DISPUTES SHOULD BE HEARD

In The Sea Justice cases [2024] 2 Lloyd’s Rep 383 and [2024] 2 Lloyd’s Rep 429, the Singapore courts tackled a key question: which country should handle a maritime dispute when incidents span international waters? After examining the location of the collision, existing limitation funds in China, and witness availability, the courts concluded that China was the more appropriate forum. This ruling highlights that courts will often defer to the jurisdiction with the closest ties to the incident, ensuring efficient and fair handling of cross-border maritime disputes. This approach is also relevant in Malaysia, where similar principles apply.

Read More »
17 November ,2024 No Comments
en_USEN
zh_TWZH ms_MYMY en_USEN
× Contact Us