The phantom of the Bills of Lading Act, 1855, lives on: Enforcing ownership and contractual rights under Bills of Lading in Nigeria

Journal of African Law

Volumn 48, Issue 1, 2004, Pages 82-103

  Olawoyin, Adewale A ^a  

^a UNIVERSITY OF LAGOS   (Nigeria)

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EID: 85022761023     PISSN: 00218553     EISSN: 14643731     Source Type: Journal    
DOI: 10.1017/S0021855304481054     Document Type: Article

References (133)

1. See The Law Commission, Consultation Paper No. 121, Privity of Contract: Contracts for the Benefit of Third Parties (London: HMSO, 1991) para 1.2, 2 (Hereinafter referred to as “Law Commission Paper No. 121”).
2. Per Lord Diplock in Swain v. Law Society [1983] 1 A.C. 598, 611.
3. Indeed, it is now considered trite in Nigerian legal jurisprudence that a finding of lack of standing necessarily connotes that there is no jurisdiction to be exercised by the court. See Owners of M/V Baco Liner 3 v. Emmanuel Adeniji [1993] 2 N.W.L.R. (pt. 274) 195.
4. L.A. Stein, “The theoretical basis of locus standi”, in L.A. Stein (ed.), Locus Standi, 1979, 3.
5. See also Black's Law Dictionary with Pronunciations, 6th ed., where locus standi is defined as a right of appearance in a court of justice, or before a legislative body on a given question. This term will be used interchangeably with the following phrases such as “standing to sue”, “right of suit” and “title to sue”.
6. Stein, id.
7. Id., at 4.
8. Scott, “Standing in the Supreme Court–a functional analysis”, (1973) 86 Haw. L. Rev. 645.
9. Cap. 224, Laws of the Federation of Nigeria 1990.
10. See T.I. Ogowewo, “Wrecking the law: how Article III of the Constitution of the United States led to the discovery of a law of standing to sue in Nigeria”, [2000] 26 Brook. 7. Infl L. 527, 533.
11. Ogowewo, id.
12. For a review of the developments in the Commonwealth, see S. Girvin, “Carriage by sea: The Sea Transport Documents Act, 2000, in historical and comparative perspective”, [2002] S.A.L.J. 317.
13. See Brawal Shipping Ltd v. Onwadike [2000] 11 N.W.L.R. (pt. 678) 387
14. On the persuasive influence of foreign statutes with identical provisions generally, see Nafiu Rabiu v. The State (1980) 8–11 S.C. 130, 151.
15. See Report of The Review of Pre-1900 English Statutes in Force in. Nigeria, (1987) Vol. 1, 52.
16. Law Commission No. 121, 1.
17. See also Tweddle v. Atkinson (1861) 1 B & S 393
18. Dunlop v. Selfridge [1915] A.C. 847. This problem of English law has largely been dealt with by The Contracts (Rights of Third Parties) Act, 1999, which partially abolished the privity rule.
19. See Thompson v. Dominy (1845) 14 M & W 403, 407, 408
20. But see N. Curwen, “Problems of transferring carriage rights”, [1992] J.B.L. 245, where the point is made that there is no explanation for the prohibition in the above case.
21. See further, D.G. Powles, “The basis of the carrier's liability to the shipper or consignee (sea)”, [1989] J.B.L. 157, 158.
22. See the numerous articles and cases on the Act referred to in Rights of Suit in Respect of Carnage of Goods by Sea, Law Commission Working Paper No. 196, London, HMSO 1991.
23. On these different situations, see generally, A.G. Guest (gen. ed.), Benjamin's Sale of Goods, London: Sweet & Maxwell, 4th edn., 1992, Ch. 5.
24. (1884) 10 A.G. 74, 105.
25. Bell, “The Bills of Lading Act, 1855, today”, [1985] J.B.L. 124, 125.
26. See Todd, Bills of Lading and Bankers' Documentary Credit, London: Lloyds of London Press, 2nd edn., 1993, 7 n. 19.
27. See Lord Brandon in Leigh and Sillwan v. Aliakmon Shipping Co. (The Aliakmon) [1986] A.G. 785
28. [1986] 2 Lloyds Rep. 1, 4
29. on c.i.f contracts and s. 1 of the BLA 1855.
30. In Sewell v. Burdiek, above n. 23, the House of Lords held that an endorsee of a bill of lading who is a mere pledgee, such as a bank, does not obtain full and general property in the goods so as to be able to impose liability on the shipowner in an action for freight.
31. Contra, the necessary effect of the decision of the Supreme Court of Nigeria in Savannah Bank of Nigeria Ltd v. Pan Atlantic Shipping & Transport Agencies Ltd (1987–1990) 3 N.S.C. 1., wherein the bank was held to be a party to the contract and therefore had right of suit in contract.
32. See Scrutton on Charterparties, A.A. Mocatta, M.J. Mustill and S.C. Boyd (eds.), London: Sweet & Maxwell, 19th edn., 1984, 27 (“Scrutton”).
33. See Carver Carriage by Sea, Rauol Colinvaux (ed.), London: Stevens, 13th edn., 1982, para. 98 (“Carver”).
34. See Scrutton, above, n. 28.
35. See Carver, above, n. 29 para. 98.
36. This view was favoured or tentatively accepted in some cases. See Pacific Molasses Co. & Anor v. Entre Rios Compama. Naviera S.A. (The San. Nicholas) [1976] 1 Lloyds Rep. 8
37. Karlshamns Olje Fabriker v. Eastport. Navigation Corporation [1981] 2 Lloyds Rep. 679
38. K/S A/S Seateam & Co. v. Iraq National Oil Co. & Ors [1983] 2 Lloyds Rep. 640.
39. Also referred to as “an amplification of the narrow view”. See G.H. Treitel, “Passing of property under c.i.f contracts and the Bill of Lading Act, 1855”, [1990] L.M.C.L.Q. 1.
40. [1990] 1 Lloyds Rep. 252.
41. Law Commission No. 196, above, n. 20 at 6.
42. Per purchas, L.J., above, n. 34 at 261.
43. Per mustill, L.J., Law Commission No. 196, at 274.
44. See also G.H. Treitel, “Bills of Lading and third parties”, [1986] L.M.C.L.Q. 294, 296–297.
45. See also Hispania de Petrolens S.A. & Anor v. Oceania Navigation S.A. (The Kahetan Markos N.L). [1987] 2 Lloyds Rep. 321 (which was decided before The Delfini) where the fact that the appellants became owners by virtue of the contract of sale, which event was before and not by virtue of the transfer of the bill of lading, was fatal to their right of suit under s. 1 of the BLA 1855.
46. See B. Reynolds, “Some further thoughts on the Carriage of Goods by Sea Act, 1992 (UK)”, (1994) 25 J.M.L.C. 143, 145.
47. The Delfini, above, n. 34 at 275.
48. F.M.B. Reynolds, “The Carriage of Goods by Sea Act, 1992”, [1993] L.M.C.L.Q. 436, 438.
49. Reynolds, above, n. 39 at 144.
50. The decision of the House of Lords in The Albazero [1977] A.G. 774 has cast great doubt on the utility of the rule
51. Dunlop v. Lambert 7 E.R. 824 in this context. This rule was developed as an exception to the Common law doctrine of jus quaesitum tertio. The gist of the rule is that, while it is the general rule that where there is a contract by a carrier to deliver goods to a consignee, the latter is the proper person to bring an action against the carrier, yet if the consignor makes a special contract with the carrier, such contract supersedes the necessity of showing ownership in the goods and the consignor may maintain an action though the goods may be the property of the consignee. In such a situation the successful plaintiff (consignor) holds the proceeds of the action on resulting trust for the true owner (consignee).
52. Per Lord Brandon in The Aliakmon, above, n. 26, 4.
53. See The Future Express [1993] 2 Lloyd's Rep. 542, CA.
54. See A.A. Olawoyin, “The Bill of Lading as security for credit advances: deconstructing a misapplication of common law principles in Nigeria”, [2003] J.I.B.L.R. 61, 63.
55. J.I.B.L.R.
56. J.I.B.L.R.
57. J.I.B.L.R.
58. [1980–1986] 2 N.S.C. 236.
59. N.S.C., at 246 (emphasis added). It is interesting to observe that when the section is cited in the judgment, all the words are italicized except the abstruse phrase in the section “upon or by reason of such consignment or endorsement”.
60. See Oriental Trading and Technical Agencies Ltd v. Boothia Maritime S.A. Inc., Unreported Suit No. FHC/L/CS/138/91
61. Exquisite Industries (Mg.) Ltd v. Owners of M.V. Bacoliners 1, 2, 3, Unreported Suit No. FHG/L/GS/167/92.
62. Contra K.R. Line International Ltd & Wilson Oporo (doing business as Sunrise Transcontinental Agencies) v. K. Line [1980–1986] 2 N.S.G. 477.
63. See Savannah Bank of. Nigeria Ltd v. Pan Atlantic Shipping & Transport Agencies Ltd [1987] 1 N.W.L.R. (pt. 49) 212.
64. On the principles of negotiability and the definition of a negotiable instrument, see Hals-burfs Laws of England (4th edn.) Vol. 4(1), paras. 302–303.
65. Perhaps the most valuable judicial statement on the matter can be seen in the judgment of Blackburn, J., in Crouch v. The Credit FoncierCo. (1873) L.R. 8 Q.B. 374, 381.
66. See also Lloyd, L.J., in The Future Express [1993] 2 Lloyds Rep. 542, 547.
67. Contra A.O. Falase-Aluko, “The legal effect of the transfer of Bills of Lading to clearing agents”, [1994] Lawyer's Bi-annual 38, 43, where the commentator noted that the chief virtue of the bill of lading is its status as a negotiable instrument.
68. Cf The Supreme Court of Nigeria in Fasasi Adesanya v. Leigh Hoegh & Co. A/S [1907–1979] 1 N.S.C. 128
69. See also Pacers Multi-Dynamic Limited v. M.V. “Dancing Sister” & Anor [2000] 3 N.W.L.R. (pt. 648) 241.
70. But see now Brawal Shipping (.Nigeria) Limited v. Onwadike [2000] 11 N.W.L.R. (pt. 768) 387.
71. See J. Hare, Shipping Law & Admiralty Jurisdiction in South Africa, 1999, 542.
72. [1907–1979] 1 N.S.C. 128.
73. N.S.C., at 133: “Our view is that endorsement in blank is not a possibility here.” This statement must have been warranted by the fact that the bill of lading had ceased to be a negotiable document of title as a result of the special endorsement to Intercotra Ltd by the bank.
74. His Lordship, id. at 132, in response to counsel's submission on Sewell v. Burdick and two other cases said: “They are in no way like the present situation where it is sought to bring an action on the bill of lading itself by a person who was not, in our view, as we will show, the consignee or endorsee.”
75. Similarly in Worldwide Engineering and Manufacturing Company (Overseas) Ltd v.Nigeria. National Supply Co. Ltd [1987–1990] 3 N.S.C. 382, it was held by Ukeje, J., that, having regard to the fact that the defendant was a mere notify party, without there being an endorsement of the order bill of lading by the shipper, it was difficult to return a finding that the defendant was the consignee or endorsee of the bill of lading to be able to sue or be sued on it, even though the defendant was the holder of the bill of lading. In that case it was argued on behalf of the plaintiff that a consignee was defined on the reverse side of the bill to include a holder of the bill. This argument was rejected presumably, even though not clear from the judgment, on the ground that there was no evidence of endorsement on the bill of lading from the shipper.
76. See further on the right of suit of notify parties, Into Beverages Ltd v. Class W. Brons & Ors, Unreported Suit No. FHG/L/CS/92/86 of 30 May, 1991
77. B.L. Chanrai & Co. (Mg.) Ltd v. Gold Star Line & anor, Unreported Suit No. FHC/L/CS/90/79 of 4 February, 1991.
78. Contra, the interpretation of Akpata, J.G.A., (as he then was) of the statement in Seatrade (Owners of M/V “Joint Frost”) v. Fiogret Ltd [1987–1990] 3 N.S.C. 453, 463, where his Lordship appeared to be suggesting that the question of property is not relevant to the acquisition of contractual rights in bills of lading generally.
79. N.S.C.
80. See also K.R. International v. K. Line Inc. [1980–1986] 2 N.S.G. 444, where the learned trial judge noted, in upholding the plaintiff's right of suit in contract, that a bill of lading can pass from hand to hand by endorsement. The judge was, however, not impressed by the defendant's contention (at 446), which in our view is a tenable one, that the bill of lading was re-endorsed to the plaintiff after it was discovered by the party to whom the plaintiffs had earlier sold the goods and endorsed the bill of lading, that there was no cargo for collection.
81. It is clear that at the point of re-endorsement of the bill of lading there were no goods in which property could be said to have passed upon or by reason of the endorsement of the bill of lading to clothe the plaintiff with right of suit under the bill of lading, a situation very much akin to one of the cargo owners in The Aramis [1989] 1 Lloyd's Rep. 213.
82. [1987] 2 Lloyd's Rep. 392. At p. 400, Hobhouse, J., said: “Neither plaintiff was the endorsee of the bill of lading nor was it the party to whom property in the goods passed upon or by reason of any such endorsement. There is no evidence that there was ever any endorsement of these bills of lading. The plaintiffs alleged that they were holders of the bill of lading. They never proved this to my satisfaction and in any event merely being the holders of the bill of lading does not in English Law give title to sue in contract.”
83. This point is quite evident from the earlier part of the statement by Hobhouse, J., which was apparently not appreciated by Akpata, J.C.A., in Seatrade.
84. [1992] 2 Lloyd's Rep. 79,88.
85. [1977] 3 F.H.C.L.R. 233
86. [1907–1979] 1 N.S.C. 346.
87. Id., at 353.
88. Id., at 354.
89. [1978] 4 F.H.C.L.R. 270.
90. [1984] F.H.C.L.R. 87.
91. [1980–1986] 2 N.S.C. 325.
92. See Lickbarrow v. Mason (1794) 5 T.R 683
93. See also Lord Blackburn in Sewell v. Burdick, above, n. 23 at 93.
94. Cf Earl of Selborne, L.G., at 83.
95. See also Todd, above, n. 25 at 192, where the learned commentator noted that “a buyer who had obtained general property by virtue of holding a blank–indorsed bill of lading could presumably pass liabilities to freight and demurrage from hand to hand by mere delivery of the bill.”
96. See Devlin, J., in Heskel v. Continental Express Ltd [1950] 1 All E.R. 1033, 1042B
97. R.M. Goode, Proprietary Rights and Insolvency in Sales Transactions, London: Sweet & Maxwell, 2nd edn., 1989, 63
98. Debbattista, Sale of Goods Carried by Sea, 1990, 44.
99. Some bills of lading, on the reverse side, define the consignee as including the holder of the bill of lading. In the case of a shippers' order bill that is endorsed in blank, it is possible to contend that the holder of the bill of lading is the consignee by the terms of the bill itself. On this kind of bill of lading, see Worldwide Engineering & Manufacturing v. NNSC, n. 63. However, the courts have generally not considered the fact that a party who was not named in the shippers' order bill of lading or who was simply named as a notify party, can arguably be regarded as a consignee by the terms of the bill of lading. Without doubt the holder of the bill will be regarded as an endorsee of the bill of lading having regard to the endorsement in blank. Accordingly, the fact that such party was initially a notify party becomes irrelevant to right of suit.
100. The approach of the courts as evinced by the Court of Appeal in Seatrade (Owners of M/V “Joint Frost”) v. Fiogret Ltd, n. 65 at 85
101. has been in over view, to wrongly rely on the Supreme Court's decision in Adesanya v. Leigh Hoegh, n. 60. Adesanya's case, as we have shown, dealt with the rights of a notify party under a straight bill of lading and not an order bill of lading. In the latter case different considerations on the status of the parties apply.
102. [1994] 4 N.W.L.R. (pt. 341) 733.
103. Similar contentions have been made in other cases. See, for example, Seatrade (Owners of Mj V “Joint Frost”) v. Fiorgret Ltd, above, n. 65 at 85: “Notification to the person notified does not give him title to the merchandise or a right to sue until the bill of lading is endorsed to him. Where he on his part endorsees it [the bill of lading] to another, he automatically divests himself of title to the goods and the right to sue.” (Emphasis added)
104. Above, n. 81 at 743. (Emphasis added) This decision can be compared with the case of K.R. International Ltd & Anor v. K. Line Inc. & Anor, above, n. 66, where the trial court also refused to recognize the right of suit of clearing agents. The learned trial judge in attempting to account for the result, bearing in mind that the simplistic approach does not proceed beyond the first limb of the three stage process, said at p. 483: “In my view the re-indorsement of the bill of lading to the 2nd plaintiff [the clearing agent] is not an absolute one but for the purpose of collecting the 1st plaintiff's goods.” (Emphasis added) It is submitted that in the context of the MSA 1990 (BLA 1855) regime, there is either an endorsement or there is none. All the court had to do was to proceed to the second stage of the process, and by so doing there would have been clear justification for not recognizing the clearing agent's right of suit rather than engaging in a tenuous analysis tending to suggest a distinction between a mere endorsement and an absolute endorsement. This should now be doubtful in the light of the Mgerbrass decision.
105. Nigerbrass, id., 744.
106. [2000] 7 N.W.L.R. (pt. 666) 587, 601.
107. N.W.L.R. This statement is bound to create problems because it clearly loses sight of the fact that transfer of property in the context of sale of goods is not solely dependent on value or consideration being given but on the intention of the parties.
108. See s. 17 of the Sale of Goods Act, 1893. Accordingly property in goods may pass without concurrent payment of consideration if that is the intention of the parties to the contract of sale.
109. [2000] 11 N.W.L.R. (pt. 768) 387.
110. N.W.L.R., at 410.
111. N.W.L.R., at 411.
112. (Cap. 62) Laws of the Federation of Nigeria 1990.
113. See T.I. Ogowewo, “The problem with standing to sue in Nigeria”, [1995] 39 J.A.L. 1.
114. [1981] 1 A11 N.L.R. 1.
115. N.L.R., 39.
116. Ogowewo, above, n. 95 at 3.
117. See Ekpan v. Uyo [1986] 3 N.W.L.R. (pt. 26) 63 (a case involving public nuisance).
118. See Elufioye v. Halilu [1993] 7 S.C.N.J. 347 at 367
119. where it was stated that the rule in Foss v. Harbottle (1843) 2 Hare 461, will not be permitted to stand in the way of a person whose “civil rights” are in issue for determination.
120. [1991] 9 N.W.L.R. (pt. 214) 155 at 180.
121. [1993] 5 N.W.L.R. (pt. 292) 159.
122. N.W.L.R., at 176 (emphasis added)
123. See The Aramis [1989] 1 Lloyd's Rep. 213.
124. For a profound and detailed analysis of this state of affairs, see Ogowewo, above, n. 95.
125. [1989] 4 N.W.L.R. (pt. 114) 172 at 211.
126. [1998] 7 N.W.L.R. (pt. 559) 598.
127. N.W.L.R., at 612 (emphasis added). It must be noted that this is a decision of the Court of Appeal. Having regard to the doctrine of stare decisis and the fact that the thrust of the statement essentially contradicts the Supreme Court's decision and/or reasoning in Adesanya's case, it is arguable that the comments of Ayoola, J.C.A., (as he then was) were made per incurmm.
128. (2000) 6 S.C. (pt. III) 60.
129. S.C., at 78.
130. Id. at 82–83.
131. See Ogowewo, above, n. 9 at 586–589.
132. C. 50. This Act, among other things, dispensed with the nexus between the transfer of property and the acquisition of right of suit in contract. S. 2 of the Act provides that a person who becomes a lawful holder of a bill of lading shall by virtue of becoming the holder of the bill have transferred to and vested in him all rights of suit under the contract of carriage as if he/she had been a party to the contract. For a comprehensive review of the main features of the Act and developments in the Commonwealth, see S. Girvin, above, n. 11.
133. Act 65 of 2000. The substance of the reform is also to dispense with the nexus that had been the bane, amongst others, of the 1855 Act. See also the Hong Kong Bills of Lading and Analogous Shipping Documents Ordinance 1993.