The Tai Prize

Article III r.3(c) of the Hague and Hague-Visby Rules provides that “the carrier, or the master or agent of the carrier shall, on demand of the shipper, issue to the shipper a bill of lading showing … the apparent order and condition of the goods” loaded. The recent decision of the Court of Appeal in Noble Chartering Inc v Priminds Shipping Hong Kong Co Ltd (The Tai Prize) 1 arose from a draft bill of lading that was tendered by the shippers on behalf of the charterers, and which stated that the cargo was “in apparent good order and condition”. A bill containing such a representation was subsequently issued by the master. A novel argument arose about whether the shipper could be liable for a representation as to “apparent order and condition” made in a draft bill of lading where the condition of the goods was able to be discerned by the shipper but not the master who issued the bill.

Consistent with orthodoxy, the Court of Appeal confirmed that a determination of “apparent good order and condition” requires nothing more than a reasonable examination of the external condition of the goods; damage which is not visible to the master will not be relevant when making such a determination. In addition, the court held that a draft bill of lading containing a statement as to the order and condition of the cargo is merely an invitation to the master to make a representation of fact in accordance with their own assessment of the cargo’s condition. This note argues that both points provide welcome clarification of the law, although the second holding leaves room for further argument in a situation where the master cannot ascertain the condition of the goods and the shipper or charterer has actual knowledge of their true condition.