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

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 11 月 ,2024 尚無留言

BREACH OF CONTRACT – FORCE MAJEURE – FORCE MAJEURE UNPACKED: WHEN ‘REASONABLE ENDEAVOURS’ DON’T BEND CONTRACT TERMS

The UK Supreme Court clarified the limits of force majeure clauses, ruling that “reasonable endeavours” do not require a party to accept alternative performance outside the agreed contract terms. This decision emphasizes that force majeure clauses are meant to uphold, not alter, original obligations – even in unexpected circumstances. The case serves as a reminder for businesses to define alternative options explicitly within their contracts if flexibility is desired.

Read More »
17 11 月 ,2024 尚無留言

NEGLIGENCE – MEDICAL NEGLIGENCE – HOSPITAL ACCOUNTABILITY REINFORCED: COURT UPHOLDS NON-DELEGABLE DUTY IN MEDICAL NEGLIGENCE

In a landmark ruling, the court reinforced the hospital’s non-delegable duty of care, holding that even when services are outsourced to independent contractors, the hospital remains accountable for patient welfare. This decision emphasizes that vulnerable patients, reliant on medical institutions, must be safeguarded against harm caused by third-party providers. The ruling ultimately rejected the hospital’s defense of independence for contracted consultants, underscoring a high standard of duty owed to patients.

Read More »
17 11 月 ,2024 尚無留言

CONTRACTS – CONTRACT FOR THE SALE OF GOODS FOB – REMOTENESS OF DAMAGES IN BACK-TO-BACK CONTRACTS – COURT DEFINES LIMITS ON LIABILITY

In a complex dispute involving back-to-back contracts, the court clarified the boundaries for assessing damages, emphasizing that a chain of contracts does not automatically ensure liability passes through. Although substantial losses resulted from delays and disruption, the court highlighted the importance of the remoteness of damages, noting that each contract’s unique terms ultimately limited liability. This decision emphasise the need for parties in chain contracts to carefully define indemnity and liability provisions, as damages are assessed based on foreseeability rather than simply the structure of linked agreements.

Read More »
17 11 月 ,2024 尚無留言

TORT – BREAKING CONFIDENTIALITY – COURT CRACKS DOWN ON INSIDER LEAKS AND CORPORATE CONSPIRACY

In a recent ruling on corporate confidentiality, the court held two former employees liable for disclosing sensitive business information to a competitor, deeming it a breach of both employment contracts and fiduciary duties. This case highlights the serious consequences of unauthorized sharing of proprietary data and reinforces that such disclosures can lead to substantial legal and financial repercussions, even for the receiving parties if they knowingly benefit from confidential information.

Read More »
17 11 月 ,2024 尚無留言
zh_TWZH
en_USEN ms_MYMY zh_TWZH
× 联系我们