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Bailment or conversion? Misdelivery claims against non-contractual carriers

Lloyd's Maritime and Commercial Law Quarterly

Bailment or conversion? Misdelivery claims against non-contractual carriers

Simon Baughen *

A fundamental obligation of the contract contained in, or evidenced by, the bill of lading is that the carrier must deliver the goods only to a party presenting an original bill of lading. If the receiver at the port of discharge cannot produce an original bill of lading, the carrier is entitled, and obliged, to refuse delivery. In practice, such an impasse at the port of discharge is almost always avoided by delivery against an indemnity from the receiver or its bank in respect of the carrier’s potential liability for any misdelivery, in both contract and conversion. In contract, the carrier’s obligation is to deliver the cargo to the party who surrenders the bill of lading on discharge and to deliver to no other party.1 The absolute nature of the obligation was confirmed in the Motis case,2 the carrier remaining liable notwithstanding that it had delivered against production of a document that appeared to be an original bill of lading but was in fact a skilful forgery.
Claims arising out of misdeliveries are sometimes made in contract, sometimes in conversion, and sometimes pleaded on both grounds.3 In most cases, the contractual liability under the bill of lading will be duplicated by a liability under the tort of conversion, although the claimant will not be able to escape from the exceptions and limitations contained in the contract by electing to base its claim exclusively in
* Reader in Law, University of Bristol.
1. In MB Pyramid Sound NV v. Briese Schiffahrts GmbH and Co KG MS Sina and Latvian Shipping Association Ltd (The Ines) [1995] 2 Lloyd’s Rep 144, Clarke J held that even a delivery to the party entitled to possession would amount to a breach of contract if that party did not obtain delivery by surrendering the bill of lading, although damages would be nominal as no loss would have been sustained.
2. Motis Exports Ltd v. Dampskibsselskabet AF 1912 A/S (No 1) [1999] 1 Lloyd’s Rep 837 (QB); affd [2000] 1 Lloyd’s Rep 211 (CA). The issue before the Court of Appeal related solely to the construction of exceptions clauses in the bill of lading, which were held not to cover the misdelivery.


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