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RETLA CLAUSE IN BILL OF LADING

Lloyd's Maritime and Commercial Law Quarterly

RETLA CLAUSE IN BILL OF LADING

Liang Zhao*

The Saga Explorer
In Breffka & Hehnke GmbH & Co KG and others v Navire Shipping Co Ltd and others (The Saga Explorer), 1 cargo interests brought a claim under the bills of lading for the damage to a cargo of steel pipes. The pipes were in fact heavily rusted on shipment to the knowledge of the shipowners, but the bills of lading contained a Retla clause (named after the US case, Tokio Marine & Fire Insurance Co v Retla Steam Ship Co), 2 by which the shipowners disclaimed the statement as to the condition of the cargo on the bills. It is the first time that the English courts have considered the Retla clause, which has been popularly added to the face of bills of lading where the carriage involves iron, steel, metal products or timber. Simon J in The Saga Explorer disagreed with the decision of no representation in Tokio Marine and held that the statement with the Retla clause made on the bills as to the cargo’s apparent condition was a fraudulent misrepresentation.
A representation by the shipowner as to the condition of the goods shipped is a traditional type of statement included in a bill of lading. A bill of lading may contain an unqualified statement that the goods were shipped “in apparent good order and condition”, namely a clean bill of lading. Also, a shipowner can qualify his representation by listing the observed damage in the form of a marginal indorsement on the bill. A difficult question arises if those indorsements do not specify the precise damage but redefine the statement as to the condition of the goods. The controversial issue is whether the statement with such indorsements on the bill of lading means no representation or misrepresentation.
CASE AND COMMENT

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