Chapter 14

Tenth Edition (2017)

Bill of Lading of any Goods for Damage

Any claim by the owner or consignee or assignee of any bill of lading of any goods carried into any port in India in any ship for damage done to the goods or any part thereof by the negligence or misconduct of, or for any breach of duty or breach of contract on the part of, the owner, master or crew of the ship, unless it is shown to the satisfaction of the court that at the time of the institution of the action any owner or part-owner of the ship is domiciled in India.

This section has been construed liberally by the Indian High Courts which have held that, in order to attract the jurisdiction, it is not necessary that the goods should be imported into India or that their carriage should be for delivery in India. It is sufficient if the goods are carried into an Indian port and there is a breach of duty or contract on the part of the master or owner of the ship. An unpaid vendor exercising his right of stoppage in transit can call upon the master of the ship to deliver the goods and refusal on the part of the latter would constitute a breach of duty so as to attract the jurisdiction.

The section has been held to apply not only to cases of damage, actual or constructive, done to the goods in the strict sense but also to cases of non-delivery or delay in delivery. Unless damage, actual or constructive, is done to the goods or in other words, unless the goods carried or to be carried are affected in some manner, the section can have no application. A cause of action based on false statements or misstatements made in a bill of lading is not a cause of action founded on a breach of contract of carriage or breach of duty in relation to carriage within the meaning of the section. "Carriage of goods", in the context of the section, means carriage of goods actually shipped and not hypothetical goods which ought to have been shipped but were never shipped. There can be no breach of contract of carriage or breach of duty in relation to carriage within the meaning of the section before the goods are delivered to the carrier.

The object of this section is not to provide a remedy for something done which is not connected with carriage or delivery of actual goods; a claim for issuing an antedated bill of lading or a false bill of lading, or a bill of lading in contravention of the Hague Rules is a claim arising out of a bill of lading but is not a claim within the scope of the section because, without anything more, such a claim is not in respect of damage done to the goods nor does it relate to the goods carried by the ship; a claim based on the wrongful exercise of lien on cargo by a ship owner is an Admiralty cause within this section.

If it is apparent to a master that cargo is damaged or in a condition that does not truly reflect its description on the bill of lading, the master may insert qualifying words noting that the cargo is in some way damaged or defective or deficient. In these circumstances, the bill of lading is described as a "claused", "foul" or "dirty" bill of lading. Legally, a master is justified in refusing to sign the bill of lading in circumstances where the shipper/charterer has presented the master with a bill of lading that does not accurately describe the cargo, even where the charter party requires the master to sign bills of lading "as presented". Sometimes, however, charterers or shippers attempt to negotiate the wording that the master wishes to insert on the bill of lading, so as to cast less doubt on the integrity of the cargo, or even to remove the qualifying words altogether. As long as the final wording accurately describes the cargo, this is an acceptable practice.
BCAS: 7103-1001