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No Bill of Lading! No Cargo Claims

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Posted on 24 Aug 15

Cargo owner has no right to claim for conversion where a shipper squared cargo into storage due to cargo owner’s failure to present a bill of lading

The shipment of iron ore from Iran to china by the Defendant Shipper was a matter of dispute. The bill of lading had been released to order with no beneficiary named. The haulers were desired that to release the cargo to agents of the bill of lading holders, who would discharge it against the arrival of the bill of lading.

Bill of lading was not delivered at the port due to the clash between the bill of lading holders and the cargo customers. So, as a result, the haulers demand for the release of cargo storage in China. The charges of storage were more than the worth of the cargo and the store owners were denied to release the cargo without the payment of charges. The bill of lading holder believed that the hauler had been enabled to release the cargo from storage. However, it brought an illegal act for the conversion of the cargo on the basis that

1- A claim for storage charges was formed in regard of the store operator without the bill of lading holder’s authority and Statements had been prepared by the store operator and the bill of lading holder’s agent which amount to rejecting the bill of lading holder’s approach to the cargo, regardless of whether it issued the bill of lading.

2-The shippers rejected the conversion of the cargo and claimed for the incurred charges. The claim from the bill of lading holders was rejected and the hauler’s counterclaim was continued.

3- principally, goods may be altered where a claim is planned without the permission of the goods holder. However, there was no change in this case.

The Transporter had been eligible to store the cargo, and it was not difficult for it to have agreed a term in the storage agreement which conferred a claim on the store operator for its charges. Sure, the design of the claim was a practical and predictable event of the storage agreement, because the bill of lading combined with charter party terms which cooperatively allowed the release and storing of the cargo.

The bill of lading holder had never been deprived of the use and control of the cargo.  It had always been offered the presentation of the bill of lading and payment of the increased charges, but the bill was never delivered and the charges never paid back.

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