Carriage of goods by sea act 1992 (COGSA 92)

Carriage of goods by sea act 1992 (COGSA 92)

Carriage of Goods by Sea Act 1992 (COGSA 92) repeats the Bill of Lading Act 1855 and makes major changes to the law regarding who has the right to sue the carrier and who the carrier can sue for freight, demurrage, etc. Because of uncertainties and anomalies about the wording of the Bill of Lading Act 1855, much legal time and expense had been incurred before the passing of COGSA 92 over the question of who had the right to sue under a bill of lading.

It applies to any bill of lading, sea waybill and ships’ delivery order. And contains powers to enable regulations to be made for the application of the Act to electronic documents.

Section 3 of COGSA 92 lays down guidelines establishing when liabilities under a bill of lading, sea waybill or ship’s delivery order will be transferred to a party who is not an original party to the contract of carriage (i.e. an endorsee or transferee). The party who takes or demands delivery of the goods to which a bill of lading, sea waybill or ship’s delivery order relate becomes subject to the same liabilities as the original shipper.

If delivery is demanded before the bill of lading is transferred (e.g. under a Letter of Indemnity), then once the bill of lading is transferred the holder will become subject to the same liabilities (i.e. the obligation to pay freight, port charges, demurrage. etc.) as the previous holder.

Liabilities are not imposed on third parties who take up shipping documents with no intention of demanding delivery or making a claim under the contract of carriage, e.g. banks taking up the documents as security.

The case of Grant v. Norway (1851) involved a master who had signed a bill of lading for 12 bales of wool which were not in fact shipped. It was held that the carrier was not liable to the receivers since the master did not have authority to sign the bill of lading for goods which had not actually been shipped. Section 4 of COGSA 92 overturns that decision. A bill of lading which represents that goods have been shipped on board or received for shipment will be conclusive evidence of such shipment against the carrier in the hands of a lawful holder of the bill of lading, provided that the bill of lading was signed by the master or a person with the authority of the master. This rule will not apply, however, if the bill of lading has not been transferred (e.g. where cargo is delivered against a Letter of Indemnity where a bill of lading has not arrived).

Section 4 (Representations in bills of lading) provides that a properly signed bill of lading representing goods to have been shipped or received for shipment will, in favour of a person who has become the lawful holder (i.e. a transferee), be conclusive evidence against the carrier of the shipment of the goods or, as the case may be, of their receipt for shipment.

The chief consequences of the Act for carriers are that:

• the number of claims made in tort is likely to be substantially reduced since it is much clearer as to who has the right to claim under the bill of lading; and

• the carrier’s rights of claim or counter-claim against cargo receivers, in addition to the original shippers, are now free from uncertainty.

Read more on :Carriage of Goods by Sea Act 1971 (COGSA 71)

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Carriage of goods by sea act 1992 (COGSA 92)

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