Bills of Ladings Guidance

THE NAUTICAL INSTITUTENORTH EAST BRANCH

THE MARINER AND THEMARITIME LAW

Seminar 1. Signing Bills of LadingSpeakers' Papers

SIGNING BILLS OF LADING

C O N T E N T S

NATURE AND FUNCTION OF THE BILL OF LADINGAND MATES' RECEIPTSR. Rayfield ... ... ... ... ...

MEASUREMENT OF BULK CARGOES

MASTERS' ROLE IN SIGNING BILLS OF LADINGT. Llewellyn ... ......... ..

BILL OF LADING DISPUTESD. Davies ... ...

Page

1 -

13

62

74

12

61

73

86

© 1990 The Nautical Institute202 Lambeth Road,London SE1 7LQ.Tel: 071-928 1351.

named in the bill of lading, he is usually known as the holder orendorsee of the bill of lading.

What are its functions?6. The bill of lading performs three basic functions. Firstly, it contains or

evidences the contract of carriage and it is usually the best evidence asto the terms on which the contract is to be performed. Secondly, itoperates as a receipt for the goods and thirdly it constitutes a documentof title - that is, it is evidence, sometimes conclusive, that the personholding the bill of lading is the owner of the goods described in the bill.Before going on to examine these three functions in more detail it mightbe helpful to see the bill in its commercial context.

Where does it fit in?7. The starting point is the contract by which the cargo is to be sold and

bought. As with all contract for the sale of goods, it should describe thegoods in sufficient detail, make provision for delivery, payment, thepassing of risk, the passing of ownership and usually a whole host ofother provisions to cater for things which may or may not happen suchas, for example, it becoming illegal to trade with Iraq and Kuwait.

8. International sales which are the sort that we are dealing with hereinvolve parties who are separated geographically, the buyer and sellermay not know each other and undoubtedly there will be legal, culturaland even political differences which can make international trade a highrisk activity. Put simply, the seller will be unwilling to part with his goodsbefore he is paid but the opposite is also true in that the buyer does notwant to part with his money until delivery of the goods to him.

9. Now enter the letter of credit. The letter of credit serves the function ofreconciling what would otherwise be the irreconcilable preferences of theseller and the buyer. The contract of sale will require the buyer toestablish an irrevocable letter of credit to enable the seller to be paid inhis own country. There are various types of these documentary creditsbut most will contain the following information :-

(1) the type of credit (revocable or irrevocable);(2) the name and address of the seller (exporter);(3) the name and address of the buyer (importer);(4) the amount of the credit, in sterling or in a foreign currency;(5) the name of the party on whom the bill of exchange is to be drawn

and whether it requires immediate payment - i.e., 'at sight' orpayment a specified time after the date of the bill (this latter wouldbe know as a tenor bill);

(6) the terms of the contract and shipment (i.e. whether 'ex-works','FOB', 'GIF, etc);

(7) precise instructions as to the documents against which payment isto be made;

(8) a brief description of the goods covered by the credit;(9) shipping details, including whether transshipments are allowed; also

recorded will be the latest date for shipment and the names of theports of shipment and discharge (sometimes flexibility is introducedhereby providing for a range of ports);

2

(10) whether the credit is available for one or several shipments; and(11) the expiry date.

10. In referring to the bill of lading a letter of credit may require a 'set' or a'full set'. These are imprecise terms but the conventional 'set' containsthree original bills of lading although I understand from P & OContainers Limited that its practice is to issue two originals (comprisingthe set) and three non-negotiable copies. A writer in 1686 wrote:-

"Of the Bills of Lading there is commonly Three Bills of one tenor.One of them is enclosed in the letters written by the same Ship:another Bill is sent overland to the Factor or Party to whom thegoods are consigned; the third remaineth with the Merchant, for histestimony against the Master, if there were any occasion of loosedealing."

11. As stated above, now the practice is for the complete set to be presentedto the accepting (paying) bank. The master is justified in delivering thegoods to the first person who presents to him an original bill of lading inrespect of the goods provided that he has no notice that the claim topossession of the goods by the holder is in some way legally improper.

12. The bill of lading is relevant to item 7 of the details listed above includedin a letter of credit. The bill of lading and the information contained in itmust agree with the irrevocable credit, particularly with items 7, 8 and 9.Common discrepancies which will or may lead to no payment or delayedpayment include :-

(a) that the bill of lading is not presented in a full set as required;(b) that alterations are not authenticated by an official of the shipping

company or its agent;(c) that it is not clean - i.e. it carries remarks that the condition and/or

the packaging of the merchandise is defective;(d) it is not marked 'on board' when so required;(e) 'on board' notation is not signed or initialled by the carrier or its

agent;(f) 'on board' notation is not dated;(g) it is not indorsed by the exporter when drawn 'to order';(h) it is not marked 'freight paid' as stipulated in the credit in respect of

C & F and GIF contracts;(i) is made out 'to order' when the credit stipulated 'direct to consignee'

(importer) and vice versa;(j) it is dated later than the latest shipping date specified in the credit;(k) it is not presented within the period specified after the date of

shipment or such other time as specified in the credit;(1) it includes details of merchandise other than that specified in the

credit;(m) the rate at which the freight is calculated and the total amount are

not shown when the credit requires these details.

In addition, the following are normally only acceptable if expresslyallowed in the credit;

3

The Bill of Lading as a receipt20. On the face of it the bill of lading as a receipt should be straightforward

but it in fact operates as a receipt in six respects:

(a)(b)(0(d)(e)(f)

receipt as to quantityreceipt as to conditionreceipt as to leading marksreceipt as to qualityreceipt as to date of shipment andreceipt for the freight.

I am not going to go into detail about these different ways in which thebill operates as a receipt for fear of duplicating what Tim Llewellyn mightsay this afternoon.

21. Contractually the status of information contained in a bill of lading asevidence would take some time to explain under common law, the Bills ofLading Act and under the Carriage of Goods by Sea Act 1971 but theimportant thing from the point of view of the ship's master is that the billof lading should tell the truth. In The NOGAR MARIN [1987] 1 Lloyd'sRep. 456, the facts were that the vessel was time chartered for a voyagefrom France to Florida. The charterers manufactured and supplied thecargo of steel wire rods and coils and they were loaded at Caen andcarried to Tampa. After the cargo had been unloaded the receiversclaimed that the wire rods were rusty, they arrested the ship andsecurity was provided in the sum of US$500,000. Eventually the claimwas settled for around US$100,000.

22. The owners of the ship then set about trying to claim from the charterersan indemnity so that they could recover the loss they had suffered at thehands of the receivers. The claim was referred to arbitration and thearbitrators found that the damage to the steel wire rods existed beforeshipment. In such a case, where the charterers themselves had preparedclean bills of lading for signing, the owner would normally have a goodclaim for an indemnity but it was also found by the arbitrators that themaster had failed to record on the mate's receipts that the cargo wasrusty at the time of shipment. Had the mate's receipts properly recordedthe condition of the cargo the ship's agent would not have signed cleanbills. Therefore, the reasoning went, the master's negligence broke thechain of causation between the charterers' fault in preparing clean billsfor cargo which they must have known was rusty and the signing ofthose clean bills by the duly authorised ship's agent which would havebeen prevented but for the failure of the master to clause the mate'sreceipts.

23. Another example, where the bill of lading is a receipt for the freight, isthe practice of P & O Containers. Their bills are produced by computer-operated printers but frequently the transaction between seller andbuyer of the goods requires the bill of lading to be marked 'freight paid'.P & O stamp that on manually but before releasing it they generallyrequire the shipper to provide a guarantee countersigned by its bankersto ensure payment of the freight if for any reason it is impractical forpayment to be made prior to issue of the bill.

6

24. But the master's position remains clear. In Glyn, Mills & Co -v - East andWest India Dock Company (1882) 7 AC 591, the House of Lords held thatall that the master and therefore the shipowner had to do was to deliverthe goods to the first person to present an original bill of lading. He neednot ask for the full set and provided he is not put on notice of possiblefraud, for example, he is not obliged to enquire whether the personpresenting the original bill of lading is in fact the proper consignee.

The Mate's receipt25. Before moving on to other things, I should just mention the mate's

receipt. I have not said much about it because there is not much to say.It is usually a handwritten document which acknowledges on behalf ofthe ship the receipt of the goods. It is prima facie evidence that the goodsspecified in it have been delivered to and received by the ship. Therefore,if the goods are lost after the mate's receipt has been given, the owner ofthe goods may sue the shipowner even though no bill of lading is eversigned. Qualifying words may be inserted to describe the condition of thegoods at the time of shipment and it is a common requirement that billsof lading should be issued in accordance with mate's receipts - see TheNOGAR MARIN, above.

Documentary fraud26. Having looked at the bill of lading and its functions in the context of a

commercial transaction I thought it might be interesting to look at one ortwo examples of where things have gone radically wrong. Because theunderlying transaction relies on the validity of documents, it has notbeen difficult for unscrupulous operators to prey on the unwary whohave trusted the veracity of the conventional documents.

27. As long ago as 1950 a notorious fraudster acted as broker to supply45.0OO drums of lubricants to the Chinese government on a GIF price ofUS$1.23million. The shipment was allegedly made in January 1951 on aSwedish vessel. The documents showed the shippers to be based inMarseilles. Payment was made in Switzerland against bills of lading,Lloyd's survey certificate, export licence, analysis report and otherdocuments. It later transpired that neither the vessel nor the Frenchshipper nor the cargo actually existed and all the documents presentedto the bank were entirely false. In addition, at that time export of oil toChina was unlawful thus giving the Chinese little recourse because ofthe illegality of the transaction.

28. More recently, in 1981 an Egyptian buyer agreed to purchase a numberof secondhand vehicles from a Belgian exporter he had known for sometime. The Belgian exporter travelled to Cairo with a German associate.When he arrived at the offices of the Egyptian importer, he explainedthat he was unable to provide the secondhand vehicles himself but hiscolleague from Germany could supply the goods that were required.

29. A pro-forma invoice was duly produced and it was only then that thebuyer knew he was dealing with a company registered in Liechtenstein.The buyer thought he was getting an extremely good bargain and agreedto proceed with the transaction. The following day he went to his bank

7

and arranged for a letter of credit for DM350,000 to be opened in favourof the Liechtenstein company which had an account at a Swiss bank.Only two documents were called for under the letter of credit, a clean billof lading and the beneficiary's invoice.

30. Once the German exporter had confirmation that the letter of credit hadbeen opened in favour of the Liechtenstein company, he obtained a bill oflading on which a company called Red Medlines appeared as carrier.This company in fact had already gone into liquidation some ninemonths previously. The bill of lading was completed showing that aselection of vehicles had been shipped on a vessel called the "HELGAWEHR" at Hamburg. This was entirely false because on the date of thebill the "HELGA WEHR" was discharging a cargo in Lisbon. This was notknown at the time and when the bill of lading together with an invoicewere presented to the Swiss bank in Zurich, payment was made to thebeneficiary.

31. The buyer in Egypt only became suspicious later when neither the shipnor his vehicles arrived. The "seller" proved untraceable and the Belgiansaid that he had acted only as an introducer of the business and nothingmore.

32. In this particular case it appears it was not possible to bring anycriminal charges. Although a criminal offence had taken place in Zurichwhen the bill of lading was forged in order to obtain the purchase price,the Swiss bank refused to become involved in any criminal complaint asit had suffered no loss, having been reimbursed from Cairo. Enquiries ofthe Liechtenstein company were fruitless.

33. The third case is really a classic of its type and it is one in which my ownfirm was very heavily involved. The details of it are now public knowledgeand so it will not breach any confidences if I explain them to you now.The fraud was perpetrated by a Mr Costas Kamateros a person whomBarbara Conway in her book Maritime Fraud described as havingbrought the practice of charter-party and combined documentary frauddown to a fine art. In 1976 Kamateros contracted for the sale toMaduako, a Nigerian company, of 100,000 tons of cement, delivery atLagos. There then followed a complicated series of transactions involvinga number of different ships and numerous forged bills of lading.

34. Initially, the contract was performed to the extent of about 70.00O tons.Having thus established his credentials, Kamateros produced shippingdocuments for a further 25,000 tons loaded into three vessels for deliveryto Lagos. All the shipping documents were fraudulent including the billsof lading which were marked freight pre-paid, and when they werepresented to the paying bank in London, they realised US$1.7million. Ittranspired that at the time when the fraudulent bills of lading indicatedthat the vessels had loaded the cement, they were all in fact laid up inGreece.

35. The buyer in Nigeria became concerned about the delay in delivery of thecement. Kamateros excused the delay by saying that owing to a changein circumstances it had been necessary to load 18,000 of the 25,000

8

tons on to one larger ship, the "CINDY". My firm acted for the owner ofthe "CINDY" and her P & I Association.

36. The buyer in Nigeria was placated for a while long enough for Kamaterosto offer the same cargo for sale to another Nigerian company, Ekimpex.Another forged set of documents was produced by Kamateros showingthat the "CINDY" had loaded the 18.0OO tons of cement at what was thenthe East German port of Rostock. Again, the buyer failed to check on thewhereabouts of the ship. At the date of the bill of lading the "CINDY" wasin fact at Lisbon on a voyage quite unrelated to the voyage to Nigeria.

37. Having duped Ekimpex into paying for the cargo, Kamateros purchasedthe required quantity of cement and chartered the "CINDY" which thenloaded it and sailed for Nigeria.

38. When the ship arrived, agents for two receivers presented apparentlygenuine bills of lading for the purpose of taking delivery of the cargo.They were the original buyer, Maduako and also the second buyer,Ekimpex. Barbara Conway's account of the episode ends there with thecomment that the two victim companies were left to sort out the mess forthemselves. That was in 1977. In fact, I can tell you that the third victimwas the "CINDY" and her owners. Sorting it out meant that the innocentshipowner, his solicitors and P & I Association became embroiled in a tenyear struggle with the receivers. Inevitably, the ship was delayed for along time. The Kamateros chartering company, Kos International hadlong since stopped paying hire, freight or anything else. The ship wasarrested. The master was arrested. Interminable court actions followed inLagos, Port Harcourt and elsewhere. The vessel's P & I Associationprovided security. The parties in Nigeria would not accept a club letter. Adeposit was made in cash. Totally outside the control of the P & IAssociation, the money was not placed on deposit for the benefit of theparties. It was converted into naira. At the time, the naira was worthmore than a dollar. By the end of the story, the very large amount ofsecurity which had originally been asked for was worth little.

The future39. Moving on from that somewhat depressing subject, what of the future? If

we believe what we are told, the future is Electronic Data Interchange, orEdi for short, which is the interchange of trade data effected byelectronic transmission. The Comite Maritime International has alreadyprepared a set of draft rules on the electronic transfer of rights to goodsin transit. The idea is not to affect property rights between buyer andseller under the contract of sale or to affect rights under the contract ofcarriage. Those rights will be ascertained by the terms of those contracts.Edi is concerned with the transfer of the right to possession of the goods.In other words, it is concerned with the right to delivery.

40. Conventionally, as we have seen, as between the carrier and the cargointerests the right to delivery is decided by possession of one original billof lading in respect of that cargo and the surrender of that bill inexchange for delivery. Edi is an attempt to dispense with the need forpaper. One effect, it is hoped, will be to reduce the risk of documentaryfraud. To work, its operation will have to be governed by a common set of

9

rules and it will be a matter for agreement between parties to atransaction - seller/shipper, carrier, buyer/receiver - whether the"documentary" side of the transaction is to be operated by electronic datatransfer or not. My understanding of the way it will work is this.

(a) The parties to the transaction will have to give each other theirelectronic addresses.

(b) When the goods are shipped the carrier will send a message to theshipper confirming receipt of the goods and giving details of theplace of shipment, date of shipment, the quantity and nature of thegoods shipped and all the other essential information which isnormally contained in a paper bill of lading. In addition, the carrieris likely to make reference to the contractual terms upon which thecarriage is to be performed.

(c) This message is intended to be the equivalent of the shipownerIssuing and releasing to the shipper a paper bill of lading.

41. In the electronic context there has to be introduced a feature which,when the goods might have been sold on one or more times to the finalreceiver, will enable the carrier to be sure that the person seekingdelivery by electronic means is entitled to delivery. The CMI draft rulescall it the "private key" composed of a unique alpha/numericcombination which the carrier will give to the shipper for the purpose ofestablishing the authenticity and integrity of a transmission. The personin possession of this private key is in fact the equivalent of the holder ofa paper bill of lading. He is the person who can claim delivery of thegoods, nominate the consignee, transfer the right of control over thegoods to another party, and instruct the carrier on any matterconcerning the goods in accordance with the contract of carriage.

d) When the time comes for the shipper to transfer rights to anotherparty, the procedure is a little different from the conventionaldocumentary one. The shipper contacts the carrier electronicallyand gives details of the party to whom the rights are to betransferred. Included in the message would be the private keyoriginally agreed upon.

(e) After acknowledging the message the carrier would then send anelectronic message to the transferee nominated by the shipper.Provided the transferee agrees to accept the rights, the carrier willissue the transferee with a new private key and will cancel theprivate key given to the shipper. In a simple transaction, thistransferee will, of course, be the final receiver.

(f) If there are subsequent transfers, they will be effected in the sameway through the carrier.

(g) When the time comes for delivery, by electronic message the carrierwill inform the current holder (i.e. the person in possession of thecurrent private key) of the time and place for delivery and deliverywill be undertaken in accordance with the holder's instructions inthe same way as it would be in accordance with the instructions ofa holder of a paper bill of lading. On delivery, the carrier will cancelthe private key.

10

42. Changes to the bill of lading system are likely to be slow in coming if onlybecause of the enormous investment in computers which will be requiredto achieve it. The computing hardware and software will have to becompatible. I suspect it will come in initially in the more sophisticatedliner trades although I can also imagine that large grain traders will alsowish to adopt it and that will be an incentive for shipowners who aim todo business with first class charterers to do likewise.

43. When the changes do start to come in, there will be a number of knock-on effects. The master's role in signing bills of lading will disappear for astart and so this afternoon's paper on the subject may well beredundant. But it will have to be catered for in the underlying contractsof sale, in letters of credit, in cargo insurance policies, in P & I club rulesand in charter-parties. Probably legislation will be necessary to cover itin the same way as it now covers paper bills of lading in the form of theBills of Lading Act 1855. Edi is a glimpse of the possible future but Isuspect the past and present in the form of paper bills of lading will bewith us for some time to come.

Thank you.

Newcastle upon TyneSeptember 1990

11

MEASUREMENT OF BULK CARGOESBy Captain Keith Parker, Master Mariner. MNI

Maritime Consultant, Murray Fenton & Associates

Introduction1 I am asked to talk about measurement of bulk cargoes with

particular reference to signing Bills of Lading.

2 In other words, what can you do to establish or confirm the quantityof bulk cargo loaded and discharged, and what can you do in theevent of a dispute to protect your Owners/Charterers interests?

3 Let me first of all say that it is not within the scope of this paper, ormy intention to try to tell you how to do your job in this respect,rather to show what the problems are and to look at what you can doto avoid problems.

4 I have attached examples of the way we calculate and present ourreports for draft surveys and oil outturn surveys. However, that is allthey are, examples; if you have a tried and proven layout and methodwhich you always use and you can properly quantify cargo on board,regardless of how the Charter Party requires it to be measured, thenyou are doing your Job correctly.

5 Regrettably the age old practice of "blame the ship" if things go wrongstill very much applies. However, keeping good records of facts andfigures goes a very long way towards helping someone like me to comealong to unravel the conflicting information and to try to establishwhat caused the dispute on quantity discharged as against that saidto have been loaded under the Bill of Lading.

6 As you all know measurement of bulk cargo is anything but an exactscience. Sometimes, quite frankly, it is at best a guesstimate.

13

Section One

1 Liquid Bulk Cargoes1.1 This section has been prepared by my colleague Roger Woodcock,

who is an ex Tanker Master, Tanker Senior Marine Superintendentand is now the resident tanker expert in my company.

1.2 As I mentioned in my introduction, the paper is written from the pointof view of a surveyor by a man who over the last couple of years hason average done two outturn surveys per month.

1.3 Accurate measurement is the primary and essential requirement forthe sale, purchase and transit handling of liquid cargoes. The variousprocedures described in this paper refer primarily to themeasurement of crude oils and clean petroleum products on boardtankers but the same basic principles can be applied to liquid cargoesgenerally both within shore terminals and on board ship.

1.4 Before any cargo measurement operations commence on board shipthe surveyor should make himself known to the Master of the ship fortwo main reasons; the first, as a common courtesy and secondly, asthe Master will normally hold the official cargo documents to whichthe surveyor will require access to ascertain the information requiredto combine with the actual measurements obtained to calculate thetotal cargo volume on board. At this time enquiries should be madewhether any Letters of Protest were lodged at the loading port andparticularly whether any reference was made to discrepanciesbetween Bill of Lading figures and the ship's calculated figures.

1.5 It is not normal to clause tanker Bills of Lading. 'Clean' Bills arerequired for commercial trading purposes and any discrepancies arecovered in the wording of the Letter of Protest. Some Owners requirethe Master to specify the difference in figures while others may not,merely that there is a difference in figures.

1.6 Currently some difficulties are being experienced with the accuracy ofBill of Lading figures issued by at least one oil exporting country dueto the data used to calculate the quantity said to have been loadedbeing both inaccurate and out of line with generally agreed industrystandards.

1.7 Having examined documents obtained from the Master the surveyorshould meet with the ship's Chief Officer, normally the ship's CargoOfficer, and any other surveyors who will be representing interestedparties, eg. shippers, charterers, owners, receivers and terminaloperators. Often surveyors will represent more than one party but itcan be that each party appoints their own individual surveyor.

1.8 At the time of boarding it is useful to make a quick visual check of thedrafts forward, midships and aft. Often of course fore and aft draftsare difficult or impossible to check but the amidships draft will bevisible from the jetty and provides an immediate cross reference when

14

the same information is requested verbally from the Cargo Officer.Once on board tell tale signs including the way water is lying in thescuppers, or how water is running from steam leaks and even the'feel' of the deck will give an indication of trim and list if any.

1.9 During or following the meeting with other surveyors and the CargoOfficer it will be useful to examine the relevant basic ship's planscovering tank and pipeline layout, hatch and gauging point locations,tank dimensions, calibration tables, tank reference heights andwhether pipeline quantities are included in or excluded from tankcalibration quantities. If fitted, automatic ullage read-outs should benoted for comparison against the manual gauging readings to betaken subsequently, and automatic draft gauge readings if availableshould be checked against the draft stated.

1.10 The various loading port cargo documents obtained from the Masteror Chief Officer should be examined to ascertain the quantity said tohave been loaded and to identify the appropriate data used forcalculation of the volume loaded and to be subsequently discharged.These include the Bill of Lading quantity, given in US Barrels at 60°For cubic metres at 15°C, that is the volume, and weight in long tonsand metric tonnes, the certificate of quality and quantity showing thesame figures and in addition a figure for BSW or Bottom Sedimentsand Water (expressed as a percentage of the total gross volume) andthe API gravity at 60°F or occasionally the Relative Density (60/6O°F)or (15/4°C), the OBQ or On Board Quantity certificate from theloading port showing the amount of sediments, free oil and free water,if any, on board prior to loading and finally the ship's documentsindicating the VEF or Vessel Experience Factor, the ratio between thesum of relevant Bill of Lading totals to the sum of the correspondingquantities independently determined from shipboard measurements.This latter information gives an indication of the accuracy of thecalibration of the ship's cargo compartments.

1.11 Upon completion of checking the preliminary data physical gauging ofthe ship's tanks can commence having ascertained whether the shipis to be gauged "open" or "closed". Older tonnage will need to have theInert Gas System depressurised or at least reduced to a very slightpositive pressure before opening ullage hatches whilst on moremodern vessels all gauging and sampling is carried out via the vapourlock system which allows the inert gas pressure to be maintained wellpositive throughout the operation.

1.12 The gauging of the tanks consists of ullaging, that is measuring thedistance between the tank height reference point and the surface ofthe liquid to the nearest 5mm, sounding the bottom of the tank toascertain whether water or traces of water are present and checkingthe temperature at three levels, upper, middle and lower, of the oilvolume.

1.13 The ullage and water dips (soundings) are sometimes taken with asteel tape, using water finding paste on the brass "bob" to detectwater at the tank bottom or water finding paste over a greater length

15

of the tape if it is known that an amount of water may be present, forexample in a slop tank.

1.14 However, it is becoming increasingly common for electronic gaugingtapes to be used to measure ullage, temperature and to detect waterin one operation using the differences in conductivity of air, oil andwater to indicate the appropriate readings on a digital read-outincorporated within the instrument itself.

1.15 It is also important to check the reference height, that is the distancefrom the tank ullage reference point at the ullage hatch to the tankbottom to compare with the tabulated height in the tank calibrationtables. All relevant data will be recorded on a tank by tank basis.

1.16 At this time it is also important to check any empty cargo tanks forleakage and also that permanent or segregated ballast tanks are freeof oil.

1.17 Samples of cargo are drawn from each tank for laboratory analysis toprovide a check that the cargo to be discharged is in fact the cargostated on the certificate of quality. This analysis is outwith thecapability of the ship but is necessary for comparison of the finalship's outturn to the quantity actually received ashore at the end ofthe discharge.

1.18 It will be appreciated that in order to maintain consistency ofreadings the ship must remain as far as possible at rest duringgauging operations and operations such as bunkering and shippingor transferring ballast must not be permitted during this time. Forvessels discharging at sea berths or engaging in transshipmentoperations these conditions are impossible to meet if only due tomovement in a seaway. In this situation considerable care must beexercised to get the best possible accuracy and averaging of ullagereadings.

1.19 Generally speaking approximately one to one and a half hours will beoccupied gauging tanks on a VLCC, more or less depending uponcircumstances - more in driving rain at 0300 hours on a Marchmorning in Europoort and less on a sunny summer afternoon at Fos-sur-Mer!

1.20 Having collected all the required data it is now necessary to calculatethe total volume of cargo on board for comparison with the stated Billof Lading and ship's loaded figures.

1.21 This is carried out in conjunction with the ship's calibration tables,trim tables if necessary, average temperature, API or SG and volumecorrection tables - using a work sheet something along the lines ofthat shown in the papers.

1.22 At this point it is useful to remember that having overcome, to thebest of his ability the difficulty of obtaining accurate data, thesurveyor calculating the quantity on board has to choose between one

16

of the two systems currently in use. First the traditional method ofmeasurement in barrels and long tons using the API gravity correctedto 60°F or the perhaps more logical metric system expressing mea-surement in cubic metres and metric tonnes at 15°C using thedensity of the liquid. Furthermore it is not possible to directly convertbetween the two systems as their respective standard temperaturesdo not correlate, and finally as the volume of a liquid changes withtemperature and as the change is not linear, correction tables havebeen developed in the industry showing the correction to apply tobring the observed volume at the observed temperature to theappropriate standard temperature.

1.23 Unless the surveyor has an overriding preference for a particularsystem his decision is usually influenced in practice by the ship'scalibration data. In the example shown barrels was the chosenvolumetric measurement. A work sheet along the lines of that shownis used and the basic data of drafts, trim, ullage and temperature areentered in the appropriate columns. In this example the trimhappened to be 0.5m by the head therefore unless the gauging pointis at the geometric centre of the tank it is necessary to apply theappropriate trim correction, as indicated in the trim table, to theobserved ullage to obtain the corrected or true ullage.

1.24 The calibration tables are entered with the true ullage and thecorresponding volume in barrels entered in the appropriate column.Similarly a volume corresponding to the water dip is calculated andsubtracted from the tank total volume. This then provides the grossobserved volume of oil in that particular tank.

1.25 The appropriate VCF or volume correction factor is now obtained fromthe ASTM (American Society for Testing and Materials) Crude OilTable, 6A in this case as API at 60°F is being used in conjunctionwith the average tank temperature in °F, and applied to the grossobserved volume to obtain a GSV (Gross Standard Volume at 60°F).This procedure is repeated for each tank and a total GSV for the shipcalculated. The GSV in barrels is then multiplied by the factors fromthe appropriate ASTM Tables 4, 11 and 13 to obtain cubic metres at15°C; long tons and metric tonnes respectively. The tables mostregularly used are published in handy A3 paper size by thecommercial bulk liquid surveying companies. The tables are theresult of co-operation between the American Petroleum Institute (API),the American Society for Testing and Materials (ASTM) and theInstitute of Petroleum, London (IP) to provide uniform andauthoritative publications based upon the most accurate informationavailable. Thus the various tables provide a basis for standardisatianof calculations of the measured quantities of petroleum liquidsregardless of origin, destination or units of measurement.

1.26 The figures thus obtained are then compared to a similar calculationcarried out at the completion of loading and an in-transit gain or lossestablished. A figure within 0.3% of the loaded figure is considered tobe within the limits of measurement error and acceptable in the oiltransportation industry.

17

1.27 Upon completion of discharge all cargo tanks are sounded and dips ofsediments and oil, if any, recorded. For various reasons it may not bepossible to discharge all free oil in a compartment but for accurateaccounting this must be taken into consideration. It is possible tomeasure the depth of material in the tank bottom but, after takinginto account the trim of the ship, it may not be possible to enter thecalibration tables to determine the volume if the corrected dip is smallor negative. The 'Wedge Formula' has been developed to enable smallvolumes of ROB (Remaining on Board) to be determined from dipmeasurements. For best accuracy the dipping point should be asclose to the after end of the tank as possible. (Details ofmeasurements required and the formula to be used are at end of thispaper.) Again using the calibration tables for sediments and WedgeFormula for liquids not covered in the tables, the total ROB quantityis calculated and subtracted from the arrival total to give the ship'stotal cargo discharged. This quantity is compared with the shorereceived cargo figure and the Bill of Lading figure. Obviously, in anideal world, all three should be approximately the same.

1.28 Unfortunately this is rarely the case, certainly with crude oil. Bulkliquid cargo measurement is not an exact science although everythingpossible is done to identify discrepancies and ascertain their cause. Ifit can be shown that the ship has discharged all cargo on board onarrival then any shortage must be attributable to physical loss withinthe receiving terminal or alternatively a paper loss due to calculationshaving been based on incorrect data either accidentally ordeliberately. Unfortunately time does not permit us to examine thisinteresting aspect of cargo measurement but I hope the foregoing hasgiven everyone a brief insight into the basic aspects of what canbecome a complex subject.

Roger Woodcock3rd November 1990

18

Section Two

2 Dry Bulk Cargoes2.1 In the majority of cases the ship has no control over how the cargo is

to be quantified, and if it is to be by shore measurement no way ofchecking how it is done or verifying the results.

2.2 Mostly nowadays shore measurement is used, and the Charter Partyshould state how and by which method.

2.3 When shore measurement is used, realistically all the ship can do isto ensure that everything loaded is discharged (in the same condition)and to check the quantity by draft survey and knowledge of own shipand/or measurement of space remaining and using the stowagefactor.

2.4 There are then two ways of measuring a bulk cargo:

2.4.1 Measurement of weight ashore.

2.4.2 Measurement of weight on board ship.

2.5 In the first case there are a number of methods of weightmeasurement used with varying degrees of declared accuracy, andalways with the possibility of questionable reliability.

2.6 The accuracy of a mechanical weighing machine will always dependupon its age, servicing and maintenance and the regularity ofinspection by the authorities (often Customs and Excise).

2.7 The methods used can be grouped into the following three types:

2.7.1 Weighbridge,

2.7.2 Conveyor-belt weighing systems, and

2.7.3 Automatic weighing through weight bins/silos.

2.8 Weighbridges2.8.1 Weighbridges can in themselves be fairly accurate to something like +

or - 0.2%, but of course accuracy depends upon the correct tareweight for the lorries used, and we have all heard of the classicdischarge situation when the odd lorry leaves by a different dock gatewithout crossing the weighbridge.

2.9 Conveyor-belt weighing systems2.9.1 Probably the least accurate and is dependent upon flow rate on the

conveyor. At best with optimum rated flow, which often either cannotbe achieved or is not required by shore or ship, the accuracy is about+ or - 0.5%.

19

2.10 Automatic weighing by bins/silos2.10.1 This is the system most frequently used, especially in the grain trade,

and the generally claimed accuracy is + or - 0.1%, although somemanufacturers are more realistic and suggest that this equipment iscapable of accuracy in that range but that operational accuracy ismore like + or - 0.3%.

2.10.2 It can therefore be said that the best that can be expected by shoregauge/scale is an accuracy of + or - 0.2%. That is a claimed averagefigure and I believe somewhere between 0.3 and 0.5% to be morerealistic.

2.10.3 One of the criteria in measuring weight is to compare like with like interms of load weight and discharge weight, so that it can be seen if adifferent method of shore weighing is used for loading than fordischarge, different percentage accuracy can apply. Even if themachines are in top class condition, one reads minus the other plus,a difference of 0.5% can easily apply which in a 50,000 ton cargocould mean a claimed shortlanding of 250 tons.

2.10.4 It may be just that I have been involved mostly with grain disputes,but it seems to me that most shortage claims are in the grain trade.Perhaps its because grain, being the least dense of normal bulkcargoes, is more difficult to weigh. I have known a case where anallowance was made against a grain shortlanding claim for 0.1% fordust which had blown away through discharging in windy conditions.

2.10.5 So what can the ship do if the cargo weight is to be quantified byshore weight? It may be said not a great deal. However, questions tothe agent, the terminal operators and the shipper if he is available todemonstrate interest does have a salutary effect and could prevent atry on. You might even get to see the weight dockets or records; notthat they would necessarily mean very much.

2.10.6 We are therefore left with checking the weight on board and despitethe well known shortcomings of this, in my opinion it is still wellworthwhile, and even if not particularly accurate can still be used asa check on shore figures and can help to support Owners in adispute.

2.10.7 Unfortunately there are no weighbridges for ships and in any eventthe calculation of the ships tare weight would be somewhat difficult.We are left with either establishing weight by space measurement andstowage factor or the much maligned draft survey.

2.11 Space Measurement2.11.1 By no stretch of the imagination can this produce anything more than

a rough estimate of weight.

2.11.2 First it is extremely difficult to measure the space remaining afterloading with any accuracy. The idea being to measure the spaceremaining and deduct it from total cubic to get space occupied bycargo and divide by the stowage factor. The declared stowage factor

20

may be given based on experience or the nature of the trade or at bestby laboratory analysis, but whatever, it may not stow to that in yourparticular ship for many reasons which we do not need to go into.Thus an approximate stowage factor divided into an estimated spaceused, can only produce an approximate weight of cargo.

2.12 Draft Survey2.12.1 I have used the expression "much maligned" draft survey. I believe it

can still be a very valuable and reasonably accurate method ofcalculating weight of cargo, provided that it is done correctly,regularly, is always done the same way and its limitations areunderstood.

2.12.2 It used to be the only way of measuring the weight of bulk cargo andin some trades it still is, and is regularly used.

2.12.3 In my company we carry out regular draft surveys, on small scraploading ships where the Bill of Lading figure is produced from oursurvey, and for medium size grain ships where it is used as a checkon the shore gauge figures.

2.12.4 We probably carry out 5-6 scrap loading ship surveys per month and2 grain ship surveys per month during the season. To illustrate myopinions and our methods I have attached 2 examples of our actualsurveys to this paper, which I will refer to as we discuss the methodin general terms. I have also attached a series of computer print-outs,again based an actual surveys we have done, to demonstrate the verysignificant differences which can occur if a draft survey is not donecorrectly.

2.12.5 To properly plan and complete your loading it is necessary to do adeadweight calculation especially if there are draft restrictions. Itfollows that a draft survey at the same time produces all the facts andfigures to check against the Bill of Lading.

2.13 Draft or Deadweight Surveys2.13.1 The two are often referred to as the same, which is not correct. A

deadweight survey does not have the same value as a draft survey,because it relies upon a Constant which can only be an estimatedfigure, whereas in a draft survey the constant is a calculated figure.

2.13.2 A deadweight survey is nevertheless still a useful tool because it canbe used at any time to establish the weights on board. That isproviding a careful record has been kept of all previous constants anda figure can be used in which you are reasonably confident representsthe unknown weights on board.

2.13.3 Simply, if you know the weights of all the measurable items on board(usually termed known weights) such as bunkers, fresh water andballast water, added to the ships light displacement plus the constantand deduct the figure from the current displacement, the result is theweight of cargo. Thus without an accurate constant the deadweightsurvey produces only an estimated cargo figure.

2 1

2.14 Draft Survey2.14.1 A draft survey depends upon the accuracy of the calculations, but no

matter how good they are, if you haven't read the draft correctly ormeasured the dock water density as accurately as possible, theresults may be worthless.

2.14.2 It is often referred to as a "before and after" survey, the principlebeing to establish the ships displacement empty and loaded or theother way round at discharge port.

2.14.3 The start point is of course reading the draft, which as I've said mustbe done as accurately as possible.

2.14.4 It should be easy, and I think most of us would like to think in goodconditions we can read a draft to an accuracy of + or - 1cm, which ona small ship may not be significant, but on my last ship was equal to73 tonnes.

2.14.5 If I might digress here, I was taught to read the draft on my first ship,a 10,000 ton NE Coast Tramp. The cadets had to keep their own draftbook, which the Master compared regularly with the Carpentersmorning and evening drafts and the 3rd Mates arrival and sailingdrafts. The draft was always read and recorded twice per day as wereactual soundings of all tanks; either working tanks or full or emptytanks - a full record. I have always tried to work the same way.Unfortunately often nowadays draft books are not kept. You mightfind arrival and departure drafts entered in the log book, andsoundings are frequently limited to working tanks only and may notbe recorded.

2.14.6 It is of prime importance that proper records are kept and in terms ofour particular subject today, without them cargo cannot be properlymeasured.

2.14.7 Incidentally, my first ship in 1954 was also my first bulk cargo. Weloaded 10,000 tons of grain at Port Lincoln, north of Adelaide, bybleeding the bags. I seem to remember it took about 10 days. Themain thing I learnt was how to trim. I think the Mate got an envelopefor providing our services and we got the promise of a half day offnext voyage. I cannot remember if we ever got it. I remember weloaded L.E.F.O. (Lands End for Orders) and discharged at acontinental port, after which I learned the next important job withbulk grain, how to clean the bilges.

2.14.8 My last ship was a "proper" bulker of 80,000 deadweight which I leftat the end of 1980. I remember thinking when I joined her that cargowork and measurement would be easy with a loadicator and draftgauges. The draft gauges never worked correctly, the loadicatorwasn't as reliable as the Ralston we had had on my first ship andwhen the Mate told me he measured ballast in the two ballast holdsby counting the rungs on the hold ladders, I thought "so much forprogress". On that last voyage we loaded about 60,000 tonnes in less

22

than 24 hours, including a long stop because we had to arrive withheavy ballast of about 30,000 tons to achieve the air draft, and at2.000 tons per hour we could not de-ballast fast enough to keep upwith the loading rate.

2.15 Draft Reading2.15.1 To get back to reading the draft, to achieve the best results, there are

a few points to consider.

i) Obviously the ship should not be working cargo, or ballasting orbunkering.

ii) Have the ship upright. The stability information is calculated onthis basis and any list will produce errors.

iii) Read the drafts from a boat if possible. Looking down at an anglewill produce errors.

iv) Read all six drafts and mean them.

v) It may be more accurate when reading the midships draft tomeasure the freeboard from waterline to the top of the deck line.(To convert freeboard to draft add deepest summer draft tosummer freeboard and subtract the measured freeboard.)

2.16 Density2.16.1 The old bucket over the side and drop in the hydrometer just isn't

good enough.

i) Use a good quality instrument and treat it with care.

ii) Take the density at the same time or as soon as possible afterreading the draft.

iii) Try to read draft and density at slack water. The drafts can beaffected by squat if there is a strong tide and the density will bechanging.

iv) Try to obtain a composite sample of water, i.e. from threepositions on the offshore side, each one from a depth equal tothe draft rising to the surface.

2.17 Corrections to Draft2.17.1 Once the 6 drafts have been accurately read it is necessary to make a

series of corrections in order to produce a true mean draft and anactual displacement.

i) Correction to the PerpendicularsThis is necessary because the draft marks are not usually cut atthe fore and aft perpendiculars and therefore have to becorrected to them. This is found by:-

23

Formula for Correction to Perpendiculars(shown on page 1 of our draft survey print-outs under trimcorrection.)

Forward Correction

Aft Correction

FWD x Apparent TrimDistance Between Marks

AFT x Apparent TrimDistance Between Marks

Where:FWD = Distance of fwd marks from fwd perpendicular (FWD = +)AFT = Distance of aft marks from aft perpendicular (AFT = -)Apparent Trim = Difference of fore and aft marks as readDistance Between Marks = LBP + FWD - AFT

ii)

iii)

Note that:

Apparent Trim True TrimL.B.P.Distance Between Marks

Thus is produced :-

Corrected Forward DraftCorrected After DraftTrue Trim

Correction for Hull DeformationThe midships draft is only the same as the mean of the fore andaft drafts when the ship is neither hogged or sagged. Thiscorrection may be obtained for a bluff shaped ship like a bulkeror tanker by taking the mean of mean drafts.

Forward Draft + After Draft + (6 x Midships Draft)8

Trim CorrectionWhen the ship is trimmed the calculated mean draft is not thesame as the true mean draft measured at the L.C.F., and whentrimmed the L.C.F. moves from its tabulated position.

First Trim Correction (Layer Correction) is calculated by:-

Correction = Dist. C/F FWD of Midships x True TrimLBP

This correction is in metres. In the old method it was multipliedby the T.P.C. to give the correction in tonnes.

This produces draft at C.F. From it the displacement from thescale is obtained.

24

Second Trim Correction (Form Correction) is calculated by:-

Correction (Tonnes) = 50 x Trim x Trim x dMLBP dZ

Where:

Trim = True TrimdM = Difference in MCTIC between drafts 50cmdZ above and 50cm below the mean draft

The correction must be added to the displacement. Thisproduces an actual displacement.

iv) Density CorrectionThe actual displacement must be corrected for density.

True displacement = Scale Displacement x Density of dock waterDensity used for scale

v) Heel CorrectionThe ship should be upright during the survey. If not, then a HeelCorrection should be applied.

Correction in Tonnes = 6 x (T, - T2) x (D, - D2)

Where:Tj = TPC for deepest draft midships (D,)T2 = TPC for shallowest draft midships (D2)

(always addition)

2.18 True (or Actual) Displacement2.18.1 Once this figure has been calculated in the unladen condition, the

known weights are deducted from it, the difference being theconstant.

2.18.2 It is essential that very careful and accurate tank soundings aretaken to quantify all the liquids on board. ALL tanks must besounded.

2.19 Constant2.19.1 This figure includes stores and equipment and other items for which

individual accurate figures cannot be obtained. The ship's stabilitybook will normally give a figure for the original constant.

2.19.2 Over the years it will increase because of added weights, such asincreased stores and equipment and extra layers of paint.

2.19.3 If the constant calculated is markedly different from the norm(original + expected increase) then the calculations may be incorrector there is some other factor which must be investigated.

25

2.19.4 One factor may be a build-up of mud in the ballast tanks if the shiphas been regularly ballasted in muddy rivers. Remembering thatadditional weight results in loss of cargo lifting, this sort of problemhas to be dealt with.

2.19.5 There are patent chemicals which are used to put mud intosuspension in ballast water, so that it can be pumped out. In myexperience they only have limited success. One bulk carrier where wetried this in the double bottoms had virtually no effect. On inspectionI found that the mud had a crust on the top of it, produced by amixture of the mud itself, rust scale and residues of the anodes. Onlyif the crust was destroyed could the chemical work. The only solutionin this case was to cut holes in the bottom at drydock and shovel thestuff out. An estimated 600 tons was removed.

2.19.6 The before loading draft survey is to establish the known weights onboard and the constant. Then the after loading draft survey, preparedand corrected in exactly the same manner, produces a loadeddisplacement.

2.19.7 By applying the amended known weights and the constant to theloaded displacement the TOTAL WEIGHT OF CARGO IS FOUND.

2.20 It will be seen from the attachments to this paper that our draftsurveys are done on a computer, and although I am not computerliterate I am told it is easy to do and set up, and any ships particularscan be plugged into a set programme. I believe there are pocketcalculator type computers on the market for draft and deadweightcalculations for own ship.

2.21 The print-outs show the weight of cargo with all corrections made,and then the effects not using the proper corrections can have.

2.22 In the case of the 44,000 deadweight bulker the difference can be asmuch as:-

True Figure 22,363.78 MTUncorrected 22.719.45 MTDifference 353.67 MT

98.4%

and even on the small scrap ships :-

True Figure 2,084.40 MTUncorrected 2.149.33 MTDifference 64.93 MT

97%

2.23 Clearly such large differences could lead to large and expensiveclaims, and no Master would be popular signing a Bill of Lading for355.67 tonnes/64.93 tons more than was actually on board.

26

2.24 Also, such differences being greater in terms of percentage than thenormally accepted allowances of 0.5% when quantifying cargo weightby shore scale it can be seen that to use a draft survey as a check ifit's not done correctly would be worthless.

2.25 Bill of Lading2.25.1 Your cargo may be quantified by draft survey or by shore gauge.

Whichever is used, if you don't do your own draft survey you aresigning the Bill of Lading blind.

2.25.2 A draft survey before and after loading and before and afterdischarge, correctly done, has got to be worthwhile and is your bestprotection, along with making sure everything loaded is discharged inthe same condition, if a dispute occurs.

2.26 Conclusion2.26.1 I almost signed the end of my paper "Report is without prejudice"

would a survey report.as I

2.26.2 As I said at the beginning, I have not attempted to teach youanything, even if I was qualified to do so; what I have tried to do isshow and remind you what seamen can do to avoid claims, or at leastbe well prepared to fight claims in Bill of Lading disputes, particularlyon quantities.

2.26.3 For more comprehensive information on calculating draft surveys, Iwould recommend a paper entitled "Improving the Accuracy of DraftSurveys" by J.L. Strange, which appeared in the May 1980 edition of"Seaways".

2.26.4 Incidentally, I notice that it was followed by an article on Hydrometersby Edward Stokoe, who had a letter on a similar topic in the mostrecent (October) copy of "Seaways".

Keith Parker3rd November 1990

27

BUIK LIQUID CARGOES

1) Details of 'Wedge Formula'

2) Examples of "Cargo Outturn

Survey" Report Work Sheets

28

WEDGE FORMULA CALCULATION

29

M.V./S.S.:

PORT:

BERTH:

DISCHARGING:

DATE:

Survey No.

CARGO OUTTURN SURVEY

*************************************************************************

Certificate of Total Quantity on board after Loading

Certificate of Total Quantity on board prior to Discharge

Statement of apparent In-transit gain/loss

Tank Dry Certificate

Certificate of Residues Remaining on Board

Certificate of Total Quantity discharge

*****************************************************************************

For and on behalf of

MURRAY FENTON & ASSOCIATES LIMITED.

DRY BULK CARGOES

Medium Size Bulkier Loading Grain

Laden Cargo Weight used by Owners/Charterers

as check on Shore Gauge Quantity

1) Example of Draft Survey

2) Computer Print-outs

37

39

Sea Conditions

At the time of our initial survey, the wind was SouthWesterly force 3 to 4 with a slight sea and low swell running inthe dock. At the time of the final survey, the wind was NorthWest force 5 to 6 with a rough choppy sea and low swell.

RESULTS AND CONCLUSIONS

From our measurements and observations, we consider thatthe total cargo loaded was 22,487.37 metric tons. This compareswith the shore figure (and Bill of Lading quantity) as follows:

By MFA Draft Survey: 22,487.37 metric tons

By Bill of Lading: 22,500.00 metric tons

Difference: 12.63 metric tons

(Percent of s/dwt): 0.052 2

Report is without prejudice.

For and on behalf ofMURRAY FENTON AND ASSOCIATES LTD.

1st 1990Ends: Draft Survey calculation sheet

DRAFT SURVEY No

SHIP:BERTH: NO

- SN - 90

CARGO:LBP:

Barley172.00

TIMEDATE

WINDSEA CONDITIONS

DENSITY:

DRAFTS:Fwd Port:Fwd Starboard:Fwd Mean:

Mid Port:Hid Starboard:Mid Mean:

Aft Port:Aft Starboard:Aft Mean:

APPARENT TRIM:

TRIM CORRECTION:Dist fwd mark fm F.P. (Fwd = +!Dist aft mark fm A.P. (Fwd = +;

Fwd Correction:Aft Correction:

CORRECTED FWD DRAFT:CORRECTED AFT DRAFT:

TRUE TRIM:

HULL DEFLECTION (hog = +):

MEAN OF MEANS C(F+A+6M)/8]:

UNLADEN

120023/02/90

SW 3/4SLIGHT

1.015

5.035.025.025

5.895.915.9

7.037.037.03

2.005

-6.677.59

-.084781.0964749

4.9402197.126475

2.186256

.1333470

5.933337

LADEN

163001/03/90

NW 5/6Moderate

1.0195

10.1310.22

10.175

9.9610.3010.13

10.0110.1510.08

-.095

-6.677.59

.0040171-.004571

10.1790210.07543

-.103588

-.002777

10.12931

40

ipf

Survey No - SN - 89

Page 2

MEAN OF MEANS [(F+A+6M)/8D:

Dist of CF fwd of Midships:1st Trim Corrn:

Draft at CF:

Draft displacement 1:Draft:Displacement 2:

Draft:MCTlC 1:Draft:MCTlC 2:

DISPL FOR DRAFT AT F:2nd Trim Corrn:Density Corrn:

ACTUAL DISPLACEMENT:

DEDUCTIONS:

Lightship:Fuel OiI.-Diesel Oil:Lube Oil:Freshwater:Ballast:

TOTAL KNOWN WEIGHTS:

CONSTANT:

LADEN CARGO WEIGHT:

5.933337

-3.1-.039403

5.972740

MTRS TONNES

5.956.00

MTRS

5.506.50

1790218065

T-M

320.80332.54

TONNES

10.12931

-1.08.0006504

10.12866

MTRS TONNES

10.1010.15

MTRS

9.8010.30

3186032035

T-M

388.21401.35

TONNES

41

17976.13 31960.2916.31 .08-175.54 -171.49

17816.91 31788.88

7755.00 7755.00673.00 667.0044.70 43.6030.00 30.00

254.00 209.008811.30 348.00

17568.00 9052.60

248.91 248.91

22487.37

42

SHIP: 44,000 dwt CARGO:CONDITION': No 1 - K&te condition with all correctionsBERTH: LEF: 172.00

UNLADEN LADEN

DENSITY: 1.015 1.015

DRAFTS:Fwd Fort: 4.01 10.13Fwd Starboard: 3.99 10.22Fwd Mean: 4 10.175

Mid Port: 5.83 9.96Mid Starboard: 5.90 10.3Mid Mean: 5.89 10.13

Aft Fort: 7.99 10.01Aft Starboard: 7.99 10.15Aft Mean: 7.9? 10.08

APPARENT TRIM: 3,99 -.095

TRIM CORRECTION:Dist fwd mark fm P.P. (Fwd = +): -6.67 -6.67Dist aft mark fm A.P. (Fwd = +): 7.59 7.59

Fwd Correction: -.168716 .0040171Aft Correction: .1919874 -.004571

CORRECTED FWD DRAFT: 3.831284 10.17902CORRECTED AFT DRAFT: 8.181987 10.07543

TRUE TRIM: 4.350704 -.103583

HULL DEFLECTION (hog => +): .1166356 -.002777

MEAN OF MEANS C(F+A+6M)/8:! 5.919159 10.12931

Survey No 0 - SN - 69

Faoe 2

MEAN OF MEANS C(F+A+6M>/83: 5.919159 10.12931

Dist of CF fwd of Midships: -3.1 -1.031st Trim Corrn: .0784138 -.000650

Draft at CF: 5.997573 10.12866

MTRS TONNES MTRS TONNES

Draft displacement 1: 5.95 17902 10.10 31860Draft:Displacement 2: 6.00 18065 10.1532035.00

MTRS T-11 MTRS T-M

Draft:MCTlC 1: 5.50 320.80 9.30 383.21Draft.-MCTIC 2: 6.50 332.54 10.30 401.35

TONNES TONNES

DISPL FOR DRAFT AT F: 18057.09 31960.292nd Trim Corrn: 64.60 .03Density Corrn: -176.80 -311.81

ACTUAL DISPLACEMENT: 17944.89 31648.57

DEDUCTIONS:

Lightship: 7755.00 7755.00Fuel Oil: 673.00 667.00Diesel Oil: 44.70 43.60Lube Oil: 30.00 30.00

Freshwater: 254.00 209.00Ballast: 8956.00 348.00

TOTAL KNOWN WEIGHTS: 17712.70 9052.60

CONSTANT: 232.19 232.19

LADEN CARGO WEIGHT: 22363.73

bull-': ti.wj owt LHPJUU:CONDITION: No 2 - As 1 but without stem/stern correctionsBERTH: LBP: 172.00

UNLADEN LADEN

DENSITY: 1.015 1.015

DRAFTS:Fwd Port: 4.01 10.13Fwd Starboard: 3.99 10.22Fwd Mean: 4 10.175


Aft Port: 7.99 10.01Aft Starboard: 7.99 10.15Aft Mean: 7.99 10.08

APPARENT TRIM: 3.99 -.095

TRIM CORRECTION:Dist fwd mark fa P.P. (Fwd » +): 0 0Dist aft mark fia A.P. (Fwd = +): 0 0

Fwd Correction: 0 0Aft Correction: 0 0

CORRECTED FWD DRAFT: 4 10.175CORRECTED AFT DRAFT: 7.99 10.08

TRUE TRIM: 3.99 -.095

HULL DEFLECTION (hog = +>: .105 -.0025

MEAN OF MEANS C(F+A+6M)/8]: 5.91625 10.12938


Page 2

MEAN OF MEANS C(F+A+6MJ/8J: 5.91625 10.12938

Dist of CF fwd of Midships: -3.1 -1.081st Trim Corrn: .0719129 -.000597

Draft at CF: 5.988163 10.12373


Draft:Displacement 1: 5.95 17902 10.10 31860Draft:Displacement 2: 6.00 18065 10.1532035.00

MTRS T-M MTRS T-M

Draft:MCTlC 1: 5.50 320.BO 9.80 383.21Draft.-MCTIC 2: 6.50 332.54 10.30 401.35

TONNES TONNES



DEDUCTIONS:

Lightship: 7755.00 7755.00Fuel Oil: 673.00 667.00Diesel Oil: 44.70 43.60Lube Oil: 30.00 30.00Freshwater: 254.00 209.00Ballast: 8956.00 348.00

TOTAL KNOWN WEIGHTS: 17712.70 ' 9052.60

CONSTANT: 191.65 191.65


43

SHIP: 44.0iX> dwt CttHbO:CONDITION: No 3 - As No 2 but without 2nd trim correcxtionBERTH: LBP: 172.00

UNLADEN LADEN

DENSITY: 1.015 1.015


Mid Fort: 5.88 9.96Mid Starboard: 5.90 10.3Mid Mean: 5.89 10.13

Aft Port: 7.99 10.01Mt Starboard: 7.99 10.15Aft Mean: 7.99 10.08


TRIM CORRECTION:Dist fwd mark -fm F.P. (Fwd = +): 0 0Dist aft mark fm A.P. (Fwd = +): 0 0

Fwd Correction: 0 0AH Correction: 0 0


TRUE TRIM: 3.99 -.095

HULL DEFLECTION (hog = +): .105 -.0025

MEAN OF MEANS C(F+A+6M)/8]; 5.91625 10.12938


Page 2

MEAN OF MEANS [(F+A+6M)/Bl: 5.91625 10.12938

Dist oi CF fwd oi Midships: -3.1 -1.081st Trim Corrn: .0719128 -.000597

Draft at CF: 5.938163 10.12878


Draft:Displacement 1: 5.95 17902 10.10 31860Draft:Displacement 2: 6.00 18065 10.15 32035.00

MTRS T-M MTRS T-M

Draft:MCTlC 1: 5.50 .00 9.80 .00DraftiMCTIC 2: 6.50 .00 10.30 .00

TONNES TONNES

DISPL FOR DRAFT AT F: 18026.41 31960.722nd Trim Corrn: .00 .00Density Corrn: -175.87 -311.81


DEDUCTIONS:




CONSTANT: 137.84 137.84

LADEN CARGO WEIGHT: 2245B.47

44

SHIP: 44.000 dwt CARGO:CONDITION: No 4 - As No 3 but without 1st trim correcxtionBERTH: LBP: 172.00

UNLADEN LADEN

DENSITY: 1.015 1.015

DRAFTS:Pud Port: 4.01 10.13Pud Starboard: 3.99 10.22Pud Mean: 4 10.175




TRIM CORRECTION:Dist fwd mark fm P.P. (Fwd = +): 0 0Dist aft mark fm A.P. (Fwd = +): 0 0



TRUE TRIM: 3.99 -.095


MEAN OF MEANS [(F+A+6M)/83: 5.91625 10.12938


Page 2

MEAN OF MEANS C(F+A+6M)/83: 5.91625 10.12938

Dist of CF fwd of Midships: 0 01st Trim Corrn: 0 0

Draft at CF: 5.91625 10.12938


Draft displacement 1: 5.95 17902 10.10 31860Draft:Displacement 2: 6.00 18065 10.15 32035.00

MTRS T-M MTRS T-M

Draft:MCTlC 1: 5.50 .00 9.80 .00Draft:MCTlC 2: fc.50 .00 10.30 .00

TONNES TONNES



DEDUCTIONS:


Freshwater: 254.00 209.0.0Ballast: 8956.00 348.00


CONSTANT: -94.31 -94.31

LADEN CARGO WEIGHT: 2̂2692.69

45

SHIP: 44.000 dwt CARGO:CONDITION: No 5 - fls No 4 but ignoring offshore dra-ftBERTH: LBP: 172.00

UNLADEN LADEN

DENSITY: 1.015 1.015

DRAFTS:Fwd Port: 4.01 10. 13Fwd Starboard: 3.99 10.22Fwd Mean: 4 10.175

Mid Port: 5.88 9.96Mid Starboard: 5.88 10.3Mid Mean: 5.88 10. 13

Aft Port: 7.99 10.01AH Starboard: 7.99 10.15AH Mean: 7.99 10.08


TRIM CORRECTION:Dist -fwd mark fm F.P. (Fwd = +): 0 0Dist a4t mark fm A.P. (Fwd = +): 0 0

Fwd Correction: 0 0An Correction: 0 0


TRUE TRIM: 3.99 -.095



Survey No 0 - SN •- 89

Page 2

MEftN OF MEANS t(F+A+6M>/83: 5.90875 10.12938

Dist o-f CF fwd of Midships: 0 01st Trim Corrn: 0 0

Draft at CF: 5.90875 10.12938


Draft:Displacement 1: 5.95 17902 10.10 31860Draft:Displacement 2: 6.00 18065 10.1532035.00

MTRS T-M MTRS T-M

Draft:MCTlC 1: 5.50 .00 9.80 .00Draft:MCTlC 2: 6.50 .00 10.30 .00

TONNES TONNES



DEDUCTIONS:




CONSTANT: -118.52 -118.52


46

SHIP: 44,000 dwt CARGO:CONDITION: No 6 - as 5 but with list correctionBERTH: LBP: 172.00

U N L A D E N LADEN

D E N S I T Y : 1 . 0 1 5 1 . 0 1 5





TRIM CORRECTION:Dist fwd mark fm F.P. (Fwd = +): o 0Dist aft mark fm A.P. (Fwd « +): 0 0



TRUE TRIM: 3.99 -.095

HULL DEFLECTION (hoq = -f ): .115 -.0025

MEAN OF MEANS C(F+A+6K)/B 3: 5.90875 10.12938

Pace 2

MEAN OF MEANS [<F + A + 6M)/8J : 5.90875 10.12938


Draft at CF: 5.90875 10.12938


Draft.'Displacement 1: 5.95 17902 10.10 31860Draft:Displacement 2: 6.00 18065 10.15 32035

MTRS T-M MTRS T-M


TONNES TONNES

DISPL FOR DRAFT AT F: 17767.53 31962.812nd Trim Corrn: .00 .00Density Corrn: -173.34 -311.83List Correction: 0 2.55


DEDUCTIONS:




CONSTANT: -118.52 -118.52


47

SHIP: 44.000 dwt CARGO:CONDITION: As 6 but iqnorinq density of ballast (1.0251BERTH: LBP: 172.00

U N L A D E N L A D E N

D E N S I T Y : 1 .015 1 . 0 1 5

DRAFTS:Fwd Port: 4.01 10.13Fwi Starboard: 3.99 10.22Fwd Mean: 4 10.175

Hid Port: 5.86 9.96Mid Starboard: 5.88 10.3Mid Mean: 5.68 10.13



TRIM CORRECTION:Dist fwd nark f» F.P. (Fwd = »): 0 0Dist aft nark fn A.P. (Fwd = +): 0 0



TRUE TRIM: 3.99 -.095

HULL DEFLECTION (hoq = t): .115 -.0025

MEAN OF MEANS C(F*A+6M)/8J: 5.90875 10.12938

Survey NoERROS - SN - 89

Paqe 2

MEAN OF MEANS f I F*JU6M >/8 J: 5.90875 10.12958

Dis t of CF fwd of M i d s h i p s : 0 01st Tr i i Cor rn : 0 0

D r a f t a t CF: 5.90875 1 0 . 1 2 9 3 6

MTRS T O N N E S M T R S T O N N E S

D r a f t : D i s p U c e m e n t 1: 5 .95 1 7 9 0 2 10.10 31B60D r a f t : D i s p l a c e n e n t 2 : 6 . 0 0 18065 1 0 . 1 5 32035

MTRS T-M MTRS T-M

D r a f t : M C T l C 1 : 5.50 .00 9 .80 .00D r a f t : M C T l C 2 : 6 .50 .00 10.30 .00

TONNES TONNES

OISPL FOR DRAFT AT F: 17767.53 31962.812nd Trin Corrn: .00 .00Density Conn: -113.34 -311.83List Correction: 0 2.55


DEDUCTIONS:

Liqhtship: 7755.00 7755.00Fuel Oil: 673.00 667.00Diesel Oil: 44.70 43.60Lube Oil: 30.00 30.00



CONSTANT: 99.92 99.92


48

SHIP: 44.000 dwt CARGO:CONDITION: No 8 - As 7 but without seawater density correctionBERTH: LBP: 172.00

U N L A D E N LADEN

D E N S I T Y : 1 . 0 2 5 1 . 0 2 5

DRAFTS:Fwd Port: 4.01 10.13Fwd Starboard: 3.99 10.22Fwd Hear.: 4 10.175

Hid Port: 5.88 9.96Hid Starboard: 5.88 10.3Hid Hean: 5.88 10.13

Aft Port: 7.99 10.01Aft Starboard: 7.99 10.15Aft Hean: 7.99 10.08


TRIH CORRECTION:Dist fwd »ark fi F.P. (Fwd = <I: 0 0Dist aft mark f» A.P. (Fwd = *): 0 0

Fwd Correction: o 0Aft Correction: o 0


TRUE TRIH: 3.99 -.095

HULL DEFLECTION I ho<J = t): .115 -.0025

HEAN OF MEANS t(F+A-t6H)/81: 5.90875 10.12938

Pane 2

H E A N OF H E A N S [ I F * A * 6 M 1 /8 ) : 5 .90875 10.12938

Dis t of CF fwd of H f d s h i p s : 0 01st Tr i i Cor rn : 0 0

D r a f t a t CF: 5 .90875 1 0 . 1 2 9 3 8

HTRS TONNES HTRS TONNES

Dra f f . D i s p l a c e m e n t 1: 5 .95 17902 10 .10 31860D r a f t : D i s p l a c e n e n t 2 : 6 .00 18065 1 0 . 1 5 32035

MTRS T-H Mm r-M

D r a f t : H C T l C 1: 5.50 .00 9.80 .00Draf t :HCTlC 2: 6.50 .00 10.30 .00

TONNES TONNES

DISPL FOR DRAFT AT F: 17767.53 31962.812nd Tri» Corrn: .00 .00Density Corrn: .00 .00List Correction: 0 2.55


DEDUCTIONS:




CONSTANT: 273.26 273.26


49

DRY BULK CARGOES

Small Ship Loading Scrap Metal

Laden Cargo Weight used as

Bill of Lading Figure

1) Example of Draft Survey

2) Computer Print-outs

50

survey No -SN-90M.V. - Draft SurveyPage No 2

CARGO QUANTITY LOADED

From our measurements and observations, wethe total cargo loaded was 2639.68 metric tons. Thethis figure is shown in the attached calculation

Report is without prejudice.

consider thatderivation of

sheet.

For and on behalf ofMURRAY FENTON AND ASSOCIATES LTD.

Encls: Draft Survey calculation sheet18th of 1990

52

DRAFT SURVEY CALCULATION Survey No: -SN-90

SHIP: H.V. Berth:

UNLADEN LADEN

TIME 2030 1145DATE 15/09/90 18/09/90

WIND Lt Airs SW 3/4SEA CONDITIONS Rippled Rippled

UNITS: Metres Metres

Observed Forward Draft: 2.38 4.44Fwd Draft Correction: .00 .00Corrected Fwd Draft: 2.38 4.44

Observed Aft draft: 3.23 4.40Aft Draft Correction: -.01 .00Corrected Aft Draft: 3.22 4.40

Midship Mean Draft: 2.74 4.415

Mean of Means (F+6M+AJ/8: 2.754858 4.416315

1st Trim Correction: -.016891 .0000488

DRAbT AT "F": 2.737968 4.416364

UNITS: Tonnes Tonnes

Dipsplacement for Draft at "F": 2296.27 3833.362nd Trim Coorection: 1.92 .01SW Displacement: 2298.19 3833.37

Density: 1.02 1.021ACTUAL DISPLACEMENT: 2286.98 3818.41

Lightship: 1089 1089Fuel oil: 0 0Diesel Oil: 59.35 58.6Lube oils: 5.3 5.3Freshwater 11.5 9-5Ballast: 1116.5 ^U

Total Known Weights: 2281.65 1173.4

Constant: 5.33 5.33


s

53

SHIP: SMALL SHIP CARGO:CONDITION: No 1 - Base condition with all corrections&ERTH: LBP: S5.30

UNLADEN LADEN

DENSITY: 1.015 1.015

DRAFTS:Fwd Port: 1.92 4.38Fwd Starboard: 1.92 4.33Fwd Mean: 1.92 4.38



APPARENT TRIM: 2.29 .52

TRIM CORRECTION:Disjt fud mark fin P.P. (Fwd = +>: -1 0Cist.,4ft mark fa A.P. (Fwd - -f): 2.5 2.5

Fwd Correction: -.027995 0Aft Correction: .0699878 .0157005


TRUE TRIM: 2.387983 .5357005

HULL DEFLECTION (hog - +): .0534963 .0703502


========sse====tt====s=====«:==K==3==== = s=====s=s====*z=====s==:========— = =


Page 2

MEAN OF MEANS C(F+A+fcM)/83: 3.045874 4.595088

Dist of CF fwd of Midships: 1.35 -1.851st Trin Corrn: -.037793 .0116184

Draft at CF: 3.008081 4.606706


Draft:Displacement 1: 3.00 2411 4.58 3191.58Draft:Displacement 2: 3.02 2428 4.60 3207.50

MTRS T-M MTRS T-M

Draft:MCTlC 1: 2.50 32.38 4.10 41.75Draft:MCTlC 2: 3.50 37.57 5.10 46.60

TONNES TONNES



DEDUCTIONS:

Lightship: 983.00 983.00Fuel Oil: .00 .00Diesel Oil: 54.40 54.10Lube Oil: 5.70 5.70Freshwater: 9.00 8.00Ballast: 1317.00 5.00


CONSTANT: 42.36 42.34


54

SHIP: SMALL SHIP CfiRGO:CONDITION: No 2 - As No 1 but without stem/stern correctionsBERTH: LBP: 85.3-0

UNLADEN LADEN

DENSITY: 1.015 1.015

DRAFTS:Fwd Port: 1.92 4.38Fwd Starboard: 1.92 4.38Fwd Mean: 1.92 4J33



APPARENT TRIM: 2.2? .52

TRIM CORRECTIONSDist fwd mark fra P.P. (FHd = +)i 0 0Dist aft mark fa A.P. (Fwd » +): 0 0

Fwd Correction: 0 0Mt Correction: 0 0


TRUE TRIM: 2.29 .52

HULL DEFLECTION (hog » +): , .0325 .0623

MEAN OF MEANS C(F+A+6M)/83i 3.040625 4.593125


Pace 2

MEAN OF MEANS t(F+A+6M)/83: 3.040625 4.593125

Dist of CF fwd of Midships: 1.35 -1.85ist Trio Corrn: -.036243 .0112773

Draft at CF: 3.004382 4.604403



MTRS T-M MTRS T-M

Draft:MCTlC 1: 2.50 32.33 4.1C 41.75Draft:MCTlC 2: 3.50 37.57 5.10 46.60

TONNES TONNES



DEDUCTIONS:

Lightship: 983.00 983.00Fuel Oil: .00 .00Diesel Oil: 54.40 54.10Lube Oil: 5.70 5.70Freshwater: 9.00 8.00

Ballast: 1317.00 5.00


CONSTANT: 37.86 37.86


55

SHIP: SMALL SHIP CARGO:CONDITION: No 3 - As No 2 but without 2nd trim correctionBERTH: LBF: S5.SO

UNLADEN LADEN

DENSITY: 1.015 1.015

DRAFTS:Fwd Port: 1.92 4.38Fwd Starboard-. 1.92 4.33Fwd Mean: 1.92 4.38




TRIM CORRECTION:Dist fwd mark fm P.P. (Fwd =• +): 0 0Dist aft mark fra A.P. (Fwd = +): 0 0



TRUE TRIM: 2.29 .52

HULL DEFLECTION (hog - +): .0325 .0625

MEAN OF MEANS t(F+A+6M)783: 3.040625 4.593125

Ka=a==a====s ====ss=======e===3=s: !========s=======»==========s============2:^3

Survey No 0 - SN- - 89

Page 2


Dist of CF fwd of Midships: 1.35 -1.851st Trim Corrn: -.036243 .0112778

Draft at CF: 3.004382 4.604403


Draft.-Displacement 1: 3.00 2411 4.58 3191.53Draft: Displacement 2: 3.02 2428 4.60 3207.50

MTRS T-M MTRS T-M

Draft.-MCTlC 1: 2.50 .00 4.10 .00DraftrMCTIC 2: 3.50 .00 5.10 .00

TONNES TONNES

DIStt. FOR DRAFT AT F: 2414.72 3211.002nd Trim Corrn: .00 .00Density Corrn: -23.56 -31.33


DEDUCTIONS:

Lightship: 983.00 983.00Fuel Oil: .00 .00Diesel Oil: • 54.40 54.10Lube Oil: 5.70 5.70



CONSTANT: 22.07 22.07

LADEN CAfiGO WEIGHT: 2101.81

56

SHIP: SMALL SHIP CARGO:CONDITION: No 4 - As 3 but without 1st trim correctionBERTH: L6P: 65.30

UNLADEN LADEN

DENSITY: 1.015 1.015





TRIM CORRECTION:Dist fwd mark fa F.P. (Fwd = +): 0 0Dist aft mark fm A.P. (Fwd = +>: 0 0



TRUE TRIM: 2.29 .52

HULL DEFLECTION (hog = +): .0325 .0625



Page 2

MEAN OF MEANS HF+A+6M)/83: 3.040625 4.593125


Draft at CF: 3.040625 4.593125



MTRS T-M MTRS T-M

Draft:MCTIC 1: 2.50 .00 4.10 .00Dr»ft:MCTlC 2: 3.50 .00 5.10 .00

TONNES TONNES



DEDUCTIONS:

Lightship: 983.00 983.00Fuel Oil: -00 .00Diesel Oil: 54.40 54.10Lube Oil: 5.70 5.70



CONSTANT: 52.57 52.57

LADEN CARGO WEIGHT: ' 2062.42

57

SHIP: SMALL SHIP CARGO:CONDITION: No 5 - As 4 but ignoring offshore draftBERTH: LBP: 85.30

UNLADEN LADEN

DENSITY: 1.015 1.015


f.id Port: 2.895 4.7Mid Starboard: 2.895 4.455Mid Mean: 2.895 4.5775

A-ft Port: 4.21 4.9Aft Starboard: 4.21 4.9Aft Mean: 4.21 4.9


TRIM CORRECTION:Dist fwd nark fn P.P. (Fwd = +): 0 0Dist aft mark f« A.P. (Fwd = +): 0 0



TRUE TRIM: 2.29 .52



===3s==ss===================:=================:=======:£:=========:====sis:====:


Page 2

MEAN OF MEANS [<F+A+6M)/B3: 2.9375 4.593125

Dist of CF fwd of Midships: 0 01st Trio Corrn: 0 0

Draft at CF: 2.9375 4.593125


Draft displacement 1: 3.00 2411 4.58 3191.58Draft:Displacement 2: 3.02 2428 4.60 3207.50

MTRS T-M MTRS T-M


TONNES TONNES

DISPL FOR DRAFT AT Fs 2357.88 3202.032nd Trim Corrn: .00 .00Density Corrn: -23.00 -31.24


DEDUCTIONS:

Lightship: 983.00 983.00Fuel Oil: .00 .00Diesel Oil: 54.40 54.10Lube Oil: 5.70 5.70Freshwater: 9.00 8.00Ballast: 1317.00 5.00


CONSTANT: -34.23 -34.23


58

SHIP: SHALL SHIP CARGO:CONDITION: No 6 - as 5 but with list correctionBERTH: LBP: 85.30

UNLADEN LADEN

DENSITY: 1.015 1.015


Mid Port: 2.895 4.7Mid Starboard: 2.895 4.455Hid Mean: 2.895 4.5775



TRIM CORRECTION:Dist fwd mark fm F.P. (Fwd = +): 0 0Dist aft mark fm A.P. (Fwd =- +): 0 o



TRUE TRIM: 2.29 .52


MEAN OF MEANS C ( F +A + 6M)/83 : 2.9375 4.593125

Survey NoERROR - SN - 89

Page 2


Dist of CF fwd of Midships: 0 01st Tr im Corrn: 0 0

Draft at CF: 2.9375 4.593125



MTRS T-M MTRS T-M


TONNES TONNES

DISPL FOR DRAFT AT F: 2357.88 3202.032nd Trim Corrn: .00 .00Density Corrn: -23.00 -31.24List Correction: 0 .11


DEDUCTIONS:

Lightship: 983.00 983.00Fuel Oil: .00 .00Diesel Oil: 54.40 54.10Lube Oil: 5. 70 5.70



CONSTANT: -34.23 -34.23

LADEH CARGO WEIGHT: 2149.33

59

SHIP: SHALL SHIP CAPGO:CONDITION: No 1 - As 6 but ionorina density of ballast (1.025)BERTH: LBP: 85.30

UNLADEN LADEN

DENSITY: 1.015 1.015

DRAFTS:Fwd Port: 1.92 4.38Fwd Starboard: 1.92 t. 38Fwd Mean: 1.92 4.3B




TRIM CORRECTION:Dist fwd nark (» F.P. I Fwd = -t): 0 0Dist aft Bark f« A.P. (Fwd = *): 0 0


CORRECTED FWD DRAFT: 1.92 ..38CORRECTED AFT DRAFT: 4.21 4.9

TRUE TRIM: 2.29 .52

HULL DEFLECTION (hoq * 4): .17 .0625

MEAH OF MEANS I(F+A*6M)/8): 2.9375 4.593125

Paqe 2

MEAN OF MEANS (( F + A-f 6M 1/81: 2.9375 4.593125

Dist of CF fwd of Midships: 0 01st Tri» Corrn: 0 0

Draft at CF: 2.9375 4.593125


Draft:Displace»ent 1: 3.00 2411 4.58 1191.58Draft:Displace»ent 2: 3.02 24" 4.60 3207.5

MTRS T-M MTRS T-M

Draft:MCT!C 1: 2.50 .00 4.10 .00Draft:MCTlC 2: 3.50 .00 5.10 .00

TONNES TONNES

DISPL FOR DRAFT AT F: 2357.88 3202.032nd Tri» Corrn: .00 .00Density Corrn: -23.00 -31.24List Correction: 0 . 1 1


DEDUCTIONS:

Liohtship: 983.00 983.00Fuel Oil: .00 .00Diesel Oil: 54.40 54.10Lube Oil: 5.70 5.70Freshwater: 9.00 8.00Ballast: 1284.88 4.88


CONSTANT: -2.11 -2.11


60

61

SHIP: SHALL SHIP CARGO:CONDITION: No 8 - As 1 but without seauater density correctionBERTH: LBP: 85.30

UNLADEN LADEN

DENSITY: 1.02S 1.025


Hid Port: 2.895 4.1Hid Starboard: 2.895 4.455Mid Mean: 2.895 4.5775

Aft Port: 4.21 4.9Alt Starboard: 4.21 4.9Aft Hean: 4.21 4.9

APPARENT TRIH: 2.29 .52

TRIM CORRECTION:Dist fwd nark f» F.P. (Fwd = t): 0 0Dist aft nark (• A.P. IFwd = t): 0 0



TRUE TRIM: 2.29 .52

HULL DEFLECTION (hoq = t): .17 .0625

HEAN OF HEANS ( (F-t A*6M )/8 J: 2.9375 4.593125

Paae 2

MEAN OF HEANS t (F-tAt6M1/8): 2.9375 4.593125

Dist of CF fwd of Midships: 0 01st Tri« Corrn: 0 0

Draft at CF: 2.9375 4.593125

HTRS TONNES MTRS TONNES

Draft:Displace»ent 1: 3.00 2411 4.58 3191.58Draft:Displace»ent 2: 3.02 2428 4.60 3207.5

HTRS T-H MTRS T-M

D r a f t : H C T l C 1 : 2 . 5 0 .00 4 . 1 0 .00D r a f t : M C T l C 2: 3 .50 .00 5.10 .00

TONNES TONNES

DISPL FOR JRAFT AT F: 2357.88 3202.032nd Trim Corrn: .00 .00Density Corrn: .00 .00List Correction: 0 . 1 1


DEDUCTIONS:

Liahtship: 983.00 983.00Fuel Oil: .00 .00Diesel Oil: 54.40 54.10Lube Oil: 5.70 5.70



CONSTANT: 20.90 20.90


THE MASTER'S ROLE IN SIGNING BILLS OP LADINGBy T.J. Llewellyn LL.B; Extra Master. Solicitor

Constant and Constant

It has been explained by an earlier speaker today that the bill of ladingperforms three functions. It evidences the contract of carriage; it is adocument of title; and it acts as a receipt. The significance of the master'ssignature is that in most circumstances it binds the shipowner who becomesa party to that bill of lading.

Thus, it is the bill of lading as signed by the master which sets out therights and duties of the shipowner and the cargo owner and under which onemay sue the other. Accordingly the terms to which he signs are of greatimportance.

Again, it is that document, signed by the master, which, when presentedby the consignee, entitles him to be given the cargo.

Lastly, it is the signature of the master which acknowledges receipt of thegoods. It is this role of the master which is crucial in any subsequent disputeabout shortage or damage to the cargo. This is the area in which the master'srole is most significant, and this will be considered first.

A. THE BILL OF LADING AS A RECEIPT

1. Signing of the BillIn many circumstances a Ship's Master will be called upon to sign the Bills ofLading but as is well known the signing of these is for reasons of businessefficacy often delegated to the "Agent" who may sign on behalf of the Master.

In these circumstances what is the authority of the Agent and what is theMaster's role, if any, in monitoring the action of the Agent? There are threecommon situations:-

(a) Vessel in Liner TradeThe Agent is appointed by the Shipowner, is the Owner's servant andwould usually have express authority to sign the Bills. Even if he doesnot have such authority the fact that he is "held out" as the Owners'Agent would be sufficient for a Shipper to rely upon the signature ofthe Agent as being made on behalf of the Master as this would be anormal and customary function of the Agent.

If the Bills are to be endorsed "freight pre-paid" then the Agent willusually be instructed by the Owners to provide the signed Bills ofLading to the Shippers only against payment of the freight. TheMaster should always be aware of what the Agent is doing in his nameand in particular should ensure that the Bills of Lading are signed inaccordance with the Mates' receipts. Therefore close liaison with theAgent is necessary and a Master should not be put off by an Agentwho appears less than willing to co-operate.

(b) Vessel on Voyage CharterMost Voyage Charters provide that the Owners shall appoint the

62

Agents at the Ports of Loading and Discharge. Thus Bills of Ladingsigned by the Agent are usually "for and on behalf of the Master".Even if this is not so expressed, the Agents' signature will bind theOwners and so the Master has a role to play in co-ordinating matterswith the Agent in order to protect the Shipowners' interests.

In both the Liner Trade and where a vessel is Voyage Chartered asensible precaution where the Agent is to sign the Bills of Lading is forthe Owner or the Master to write a letter to the Agent instructing himto sign Bills of Lading in accordance with Mates' receipts and toensure that the Bills give a proper description of the cargo loaded.

(c) Vessel on Time CharterThe Time Charterers will appoint the Agent and his duty will be to hisprincipals. The Time Charter will probably contain a clause to theeffect that the Master is under the orders and directions of theCharterer as regards employment and agency. This is generallyenough to give the Charterer or his Agent authority to sign the Bills ofLading for the Master. This in turn will normally cause the Shipownerto be the carrier under the Bill of Lading and hence liable to the CargoOwner for any loss and damage arising by virtue of a breach of theBill of Lading Contract. This may not be the case if the Charterers usetheir own form of Bill of Lading and if this is expressed to be signed bythe Agent on their behalf. However it is always safer to assume thateven where a Ship is Time Chartered the Owners will probably be thecarrier under the Bill of Lading. Therefore, although it is tempting todo so the Master should not leave everything regarding the loading ofthe cargo and signing of the Bills to the Charterers or their Agents.

Thus as with the Liner Trade and Voyage Charter situations careshould be taken to check cargo being loaded (or to supervise thosewho are engaged in this task) and to ensure that Mates' receipts areproperly prepared. Also the Agent should be informed of the need forthe Bills to be claused in accordance with those receipts inappropriate cases. This is particularly so bearing in mind that theAgent's primary duty will be to the Time Charterer and not to theShipowner or Master.

We shall now turn to other areas in which the Master has animportant role to play in ascertaining that the description of the goodson the Bill of Lading conforms to the goods actually shipped. We shalllook at the situation at Common Law and also where internationallyagreed legislation and Rules apply either by incorporation of this intothe Bill or because national legislation renders its applicationcompulsory. Most Bills of Lading issued these days are subject tosuch Rules.

2. Quantity of Cargo

(a) Common lawAt common law, that is in a situation where neither the Hague nor theHague-Visby Rules apply, the rule is that the bill of lading is primafacie evidence that the quantity of goods alleged to have been shipped

63

has in fact been shipped. The figures are not absolutely conclusiveand the master cannot for example bind the shipowner by signing forgoods which were not in fact even placed on board. Thus in Grant - v -Norway (1851) 20LJC P93 a bill of lading was signed by the master forbales of silk which had not in fact been loaded. It was held that themaster had no authority to sign for goods which had not been shippedand that the holders of the bill of lading therefore had no claimagainst the shipowner for non-delivery.

However, the effect of the presumption is that it is up to theshipowner to prove that some other quantity was loaded, and this willvery rarely be possible. Thus, if the discharge figure is less than thebill of lading figure, a shipowner defending a shortage claim is facedwith an uphill task.

Bills of lading often contain statements to the effect "weight andquantity unknown". In such a case there is no presumption of thequantity loaded and to succeed in a shortage claim the shipper mustshow that goods of that quantity were in fact shipped. It does notmatter that a figure is stated on the bill of lading.

However, a recent case demonstrates that the master should bewareof signing the bill of lading except in the usual place. In The Herroeand Askoe [1986] 2 Lloyd's Reports 281, a bill of lading stated thecargo to be a quantity of 43,430 bags of potatoes. It also included "aweight and quantity unknown" provision as part of the printed sectionof the bill of lading. In addition to signing in the usual place, themaster signed next to the figures and placed a stamp there. In thesubsequent shortage claim the judge held that the master's actionmeant that the "weight unknown" provision was invalid, and thatthere was a presumption that the quantity stated had been loaded.

(b) The Hague and Hague-Visby RulesWhere these rules apply, a shipper can demand that a bill of lading beissued showing "either the number of packages or pieces, or thequantity, or weight ... as furnished in writing by the shipper". Thisplaces the burden of proof on the shipowner who wishes to disputethe figures. Any provision to the effect that the weight and quantityare unknown will be ineffective.

Where the Hague-Visby Rules apply, and a claim is made by anendorsee of the bill of lading, the shipowner is absolutely bound bythe figures and cannot dispute them.

However, it should be noted that the requirements of the rules arealternatives - either the number, or the quantity, or the weight. If a billof lading states the number of packages and the weight, but it isendorsed "weight unknown" then it is evidence only of the number ofpackages.

(c) The Bills of Lading Act 1855 Section 3One point which used to be of more relevance to masters in the dayswhen the master was also often the shipowner, is that in proceedings

64

brought by a consignee or endorsee of a bill of lading the statementsin the bill of lading are conclusive evidence as against the master if hesigns it or it is signed on his behalf.

It should be emphasized that this does not give the holder of the bill oflading a right to sue the master. But where the holder already hassuch a right (for example where the master can be sued innegligence), he can rely on the bill of lading as conclusive evidence.For example in one old case Smith - v - Tregarthen (1887) 56 LJQB 437the master of the "CARBIS BAY" signed the bill of lading butsubsequently had 235 bales of cotton discharged before sailingbecause of insufficient space on board. The cargo discharged wasloaded on the "WYLO" which arrived at the port of discharge threedays after the "CARBIS BAY". Both cargoes were delivered to theholder of the bill of lading. He sued the master for non-delivery of the235 bales. It was held that the master was bound by his signature onthe bill of lading. The sum of damages awarded was the market valueof the goods when they should have arrived. (The damages havingbeen reduced to take into account the value of the 235 bales whenthey did arrive, the market price having dropped meantime.)

3. Condition of the Cargo

(a) Common lawIf there are no statements as to order and condition in the bill oflading then the bill is not even prima facie evidence of the condition ofthe goods on shipment.

However, bills usually state that the cargo was "shipped in good orderand condition" or "shipped in apparent good order and condition". Insuch a case the shipowner cannot claim that the goods were not inapparent good order and condition as against the holder of the bill oflading. The only exception to this is where the holder clearly knewthat the statement was untrue or he did not rely upon the statement.

The master or the ship's officers on his behalf should carry out suchinspection of the cargo as is reasonable. If a much more detailedinspection would have been necessary to discover a defect, then theshipowner is not bound by the master signing a bill of lading statingthat the cargo was "shipped in good order and condition".

However, when the master signs a bill of lading relating to perishablegoods, the words "good order and condition" mean more than thatthey show a basically satisfactory external appearance. They alsomean that they have an apparent ability to withstand thecontemplated voyage.

An example is provided by Dent - v - Glen Line Ltd (1940) 67 Lloyd'sReports 72 which concerned a cargo of bagged ground nuts. The bagsappeared dry on external inspection but loose nuts scattered aroundin the vicinity of the bags were in a green and moist condition and themate's receipts were claused accordingly. Pressure was put on theship's agents by the shipper and bills of lading were issued stating

65

that the cargo was loaded in "apparent good order and condition". Thesubsequent holders of the bills of lading sued the shipowners. It washeld that the statement on the bill of lading was false because thewords "good order and condition" as applied to perishable goods mustmean more than that their external appearance seemed to besatisfactory; it must also have reference to their apparent conditionfrom the point of view of safe carriage. Since the plaintiffs had reliedon this false representation to their detriment, they were entitled torecover from the shipowners.

The addition of the words "condition unknown" does not nullify theeffect of "in apparent good order and condition". (In this respect itdiffers from "weight and quantity unknown" statements.)

(b) Hague and Hague-Visbv RulesWhere the Hague or Hague-Visby Rules apply, the carrier is bound ondemand of the shipper to issue a bill of lading showing "the apparentorder and condition of the goods". Such a bill of lading is prima facieevidence of the receipt by the carrier of the goods "as thereindescribed". Where the Hague-Visby Rules apply, once the bill hasbeen transferred to a third party acting in good faith the statement isconclusive evidence of receipt of the goods in that condition. Theshipowner cannot submit evidence to prove the contrary. Thisemphasises the need to clause bills in appropriate cases.

4. Quality of the CargoWhere a master signs a bill of lading indicating the quality of the cargo, thatstatement does not bind the shipowners if the goods are in fact of a poorerquality. This is demonstrated by an old case where a cargo of Jute wasshipped with marks indicating its quality. The bill of lading stated thatdifferent marks, indicating a better quality, appeared on the jute. The holdersof the bill of lading sued the shipowners for the difference between the actualvalue of the jute and the value of the jute with the higher quality marks. Itwas held that it was not the duty of the master to investigate and insertquality marks. If these were not correct, the shipowner was not preventedfrom proving that goods of that quality were not put on board.

The situation regarding quality should not be confused with the insertionof marks which relate to description of the type of goods carried.

5. Leading Marks

(a) Common lawThe fact that a master signs a bill showing wrong leading marks doesnot bind the shipowner unless the marks are themselves material tothe description of the goods.

(b) Hague or Hague-Visby RulesWhere the rules apply, a shipper can insist on the bill of ladingshowing "the leading marks necessary for the identification of thegoods". However, the master has the power to refuse to show theleading marks in the bill of lading if the goods or their coverings arenot clearly marked "in such a manner as should ordinarily remain

66

legible until the end of the voyage". Furthermore, he can also refuse toenter the leading marks in the bill of lading if he has reasonablegrounds for suspecting that the information is inaccurate or he hashad no reasonable means of checking it.

If the leading marks are inserted, the bill of lading is prima facieevidence of the receipt by the shipowner of the goods as thereindescribed. Under the Hague-Visby Rules the shipowner cannot provethe contrary once the bill of lading has been transferred to a thirdparty acting in good faith. However, the shipowner may have recourseto the shipper if the marks and other details provided by him areinaccurate.

6. Date of bill of ladingIt is important that the Master checks that the correct date appears on thebill of lading; a wrong date can expose the shipowner to liability. An exampleis provided by The Saudi Crown [1986] 1 Lloyd's Law Reports 261. That caseconcerned a cargo of 4,500 tons of ricebran extractions. The contract of saleprovided for the period of shipment to be "as per bills of lading dated or to bedated 20 June - 15 July 1982 without extension the bills of lading to be datedwhen the goods are actually on board. Date of bills of lading shall be acceptedas proof of date of shipment".

The cargo was loaded in July 1982. The bills of lading were all dated 15July, that is, the last date in the prescribed loading period. In fact the loadingwas not completed until 26 July. The bills of lading were sent by the vendorsto the purchasers who authorised payment. The purchasers later realisedthat the cargo would not arrive in time for them to meet their commitmentsand they had to purchase a substitute quantity of ricebran elsewhere.

The purchasers sued the shipowners for damage suffered because of thefalse claim that the cargo had been loaded by 15 July. The bills of lading hadbeen signed by the shipowners' agents on behalf of the master.

Mr Justice Sheen held that the signing of the false bills of lading had beendone by the agents in the course of their employment and that therefore theshipowner was liable for the losses caused because of the false dating to theholders of the bills of lading.

A Master should always decline to sign a bill bearing a false date andparticular care should be taken to ensure that ante-dated bills presented bythe Shippers are rejected.

7. Clausing in generalWe have already noted the importance of clauses concerning condition orquantity in the context of claims by the eventual holder of the bill of lading inrespect of damaged cargo or cargo shortages. The general rule is always thatin a case of doubt the bill of lading should be claused accordingly.

In many cases the clauses will affect not only the rights of the holder of thebill of lading against the shipowner but also the rights of the seller of thegoods under any letter of credit. Banks will normally only make paymentsagainst clean bills of lading. However, not every clausing of a bill of lading

67

prevents it being a clean bill for letter of credit purposes. The general rule islaid down In the Uniform Customs and Practice for Documentary Credits.This states that:

"A clean shipping document is one which bears no superimposed clause ornotation that expressly declares a defective condition of the goods and/orthe packaging. Banks will refuse shipping documents bearing suchclauses or notations unless the credit expressly states clauses or notationswhich may be accepted."

It is important to note that a clean bill of lading is "one in which there isnothing to qualify the admission that the goods were in apparent good orderand condition at the time of shipment" (The Galatia [1980] 1 All ER 501 at505). It follows that a bill which is claused in respect of damage occurringafter the goods have been shipped is still a clean bill. In The Galatia a firebroke out on the vessel while a cargo of sugar was being loaded. The cargowas damaged by the fire and by water and was discharged. Two separate billsof lading were prepared, one of these being for the cargo which had beendischarged. This carried on it the notation "cargo covered by this bill of ladinghas been discharged Kandla view damaged by fire and/or water used toextinguish fire for which general average declared". The buyers rejected thisbill claiming that it was not a "clean" bill of lading. The Court of Appeal heldthat they were wrong to do so because the clause did not affect the correctstatement that the goods were shipped in apparent good order and condition.

It does not follow from this, however, that the provisions of the Hague orHague-Visby Rules only apply in respect of liabilities incurred after loading. Inthe case of Pyrene - v - Scindia, [1954] 2 All ER 158 a fire tender was beinglifted on board the vessel by the ship's tackle when it was dropped anddamaged. The tender had not crossed the ship's rail. The judge neverthelessheld that the shipowner was entitled to limit his liability in accordance withthe Hague Rules. It could not be said that the contract covered by the bill oflading only became operative when the tender passed the ship's rail becausethe loading which was undertaken by the shipowner extended to the wholeoperation including that part of the operation taking place on the shore sideof the ship's rail.

8. Letters of IndemnityBefore passing on to other areas where the master's role in dealing with billsof lading is of importance, there is an aspect of the bill as evidence ofshipment of the goods that is of some importance, This relates to theresponse of the master to a request from the shipper or charterer that heshould sign a clean bill of lading against provision of a letter of indemnityoffered by the shipper or charterer in circumstances where the master wouldnormally wish to endorse the bill in respect of damage, shortage or otherdefect. Such a request arises because a clean bill is customarily required bythe shipper for presentation to the buyer's bank for transfer of the purchaseprice of the goods.

If the master permits the issue of a clean bill for goods which he knows tobe defective then this amounts to a misrepresentation to any indorsee of thebill. It also opens up the risk of allegations of fraud against the owners andthe master. Furthermore, it is unlikely that the letter of indemnity will be

68

worth the paper it is written on. This was the case in Brown Jenkinson - v -Percy Dalton 11957] 2 QLB 621 where the court held that in English law aletter of indemnity given in such circumstances is legally unenforceable.

B. THE BILL OF LADING AS A DOCUMENT OF TITLE

As we have already noted, the bill of lading is a document of title. Theconsequence of this is that the cargo must be delivered up to the presenter ofthe bill of lading at the discharge port. If the cargo is delivered withoutpresentation of the bill of lading, the shipowner will be liable in damages tothe holder of the bill of lading if different to the person to whom the goodshave been delivered. Nevertheless, the commercial reality is that in practicethe cargo is often demanded without presentation of the bill of lading. Thiscan arise for a number of reasons: the bill of lading may have been lost ordelayed by reason of the number of hands it has to pass through to reach theeventual consignee. In the case of a short voyage there may simply not havebeen time to transfer the bill of lading. The dangers of handing over the cargowithout presentation of the bill of lading are made even more acute by thefact that P&I cover will not extend to such mis-delivery.

It may be that in the future electronic document exchange may deal withthis problem. At present, however, the best solution, and the one usuallyadopted, is the taking of a letter of indemnity. The wording of such a letter ofindemnity should be agreed with the owners' and their P&I Club. In particularit should be entered into not only by the charterer or consignee but also by abank on their behalf. In these circumstances, and in contrast with theprovision of a letter of indemnity in return for signing clean bills of lading onshipment, there is no fraud or misrepresentation. Such a letter of indemnityis therefore valid and enforceable.

Another way in which the problem of non-production of the original Bill ofLading at the Port of Discharge can be dealt with, especially in cases wherevoyages are short or where it is known that it will take time for the Bill ofLading to pass through the various commercial stages before it reaches thehands of the consignee, is that of the set of three original bills one original billis retained by the Master on board the vessel. This bill is handed to theconsignee who then returns it to the Agent or Master and the cargo isdelivered against that bill.

The risks associated with this practice are obvious and should the Bill ofLading be handed over by the Master to the wrong person then substantialclaim for mis-delivery could arise.

Whilst being concerned about this procedure at least one well known P&IClub condones it as being commercially necessary but only if the Bills ofLading are claused by the Master along the following lines:-

"One original Bill of Lading retained on board against which bill delivery ofcargo may properly be made on written instructions received fromShippers/Charterers".

In the event of the cargo falling into the wrong hands it will be open to theShipowner to sue those giving the instructions. However there is always the

69

possibility that the Shipper or the Charterer may be without reputation orassets and thus recourse to them would be futile. In circumstances wherethis practice is to be adopted it is suggested that this should only be wherethe company giving the instructions as to the delivery of the bill is one ofsound reputation and is accessible as a Defendant if legal proceedings shouldprove necessary.

C. THE BILL OF LADING AS A CONTRACT

The bill of lading is evidence of the contract between the shipper and theshipowner. Where the vessel is chartered, the master has no authority bysigning bills of lading (the terms of which differ from the charterparty terms)to vary the contract the owner has made with the charterer.

(a) Bills to be signed "as presented"Time and Voyage Charterparties frequently provide that bills of ladingare to be signed "as presented". This does not mean that the mastershould sign any bill of lading whatsoever which is presented by thecharterers. The position is as follows.

The master must sign bills of lading which are in an ordinary andcustomary form. In the 1980 case of The Anwar Al Sabar [1980] 2Lloyd's Law Reports 261. a voyage charter included the usualprovision that the master was to sign bills of lading as presentedwithout prejudice to the charterparty. The quantity of cargo shippedwas substantially less than the amount stipulated in the charterparty.Draft bills of lading stating the quantity actually shipped werepresented incorporating the terms of the charterparty. The ownerswanted the master to add a clause to the bill of lading stating:

"Demurrage and deadfreight are claimed by carriers who mayexercise their right to lien the cargo under clause 8 of thecharterparty."

The charterers objected that the clause would seriously affect thenegotiability of the documents under the relevant letter of credit. MrJustice Mustill held that the bill of lading conformed in every respectwith the charterparty and that the incorporation clause was effectiveto carry the charterparty liens into the bill of lading. It was for thecharterers to decide on the form of bill of lading provided that the billof lading did not encroach on the rights conferred on the owners bythe charterparty. Accordingly the master was obliged to sign the billas presented.

The Anwar Al Sabar was a voyage charter case. It is clear that timecharterers have even wider powers to decide on the contents of thebills of lading. Lord Wilberforce pointed out in The Nanjh [1979] 1Lloyd's Reports 201 that:

The issue of bills of lading in a particular form may be vital forthe charterers' trade".

70

In that case (because the Charterers had deducted monies from aninstalment of hire) the master refused to sign "freight prepaid" bills oflading when the charterers presented them. In the relevant trade, theGreat Lakes grain trade, it was usual for bills to be so marked withoutreference to the terms of any time charter. The House of Lords heldthat the charterers could require the master to sign freight prepaidbills without any mention of the terms of the time charters. It is well-established that under a time charter the owner has an impliedindemnity for liability incurred through signing the bill of ladingwhich does not conform with the charterparty. In many cases therewill also be an express indemnity.

It would appear to be the case that where the vessel is subject to avoyage charter and the master signs bills of lading which are not inconformity with the charterparty then the presentation of such billsby the charterers constitutes a breach of contract. Thus in Kruger - v -Moel Tryvan [1907] AC 272 the owners of the vessel entered into avoyage charterparty. It included a clause exempting them fromliability for the master's negligence. The master was required "to signclean bills of lading ... without prejudice to this charter". The bills oflading presented by the charterers did not effectively incorporate thenegligence clause. The master signed the bills of lading and the vesselwas subsequently lost owing to the master's negligence. The bill oflading holders successfully sued the owners and it was held by theHouse of Lords that the owners were entitled to recover from thecharterers the damages payable to the bill of lading holders.

In certain cases the master need not sign the bill of lading:

(i) The master is not bound to sign "as presented" bills of ladingwhich incorrectly state the quantity or condition of cargo. In TheBoukadowa (1989 ILR 393) the bills of lading presented stated aquantity of oil which the master argued was in fact greater thanthe quantity shipped. (This turned out subsequently to be thecase.) Accordingly, the master proposed to clause the bill, but thecharterers refused to allow him to. Delay was caused while thecargo was re-measured. The judge held that the master wasentitled to refuse to sign an unqualified bill.

The consequences of the master signing a bill of lading in suchcircumstances are demonstrated by the case of The Nogar Maria[1988] 1 Lloyd's Reports 412. A cargo of iron rods in coils wasloaded. Some of the coils were rusty. The master had inspectedthe cargo but nonetheless he negligently failed to giveinstructions for the mate's receipt to be claused. Accordingly,clean bills of lading were issued by the ship's agents. The ownersincurred liability to the receivers of the cargo. They claimed anindemnity from the charterers but it was held that the chartererswere not in breach of any implied term and in any event themaster had been negligent in failing to clause the mate's receiptand to require the bills of lading to be claused.

71

Similarly, the master must not sign a bill of lading which statesthat the cargo has been loaded underdeck in a case where it hasin fact been loaded on deck.

(ii) A master should not sign a bill of lading which bears the wrongdate. In The Almak [1985] 1 Lloyd's Reports 557 Mr JusticeMustill stated that if a master did sign a bill of lading in suchcircumstances the shipowner might lose his right of indemnityagainst the charterers.

(iii) The master should also refuse to sign a bill of lading whichnames a port of discharge outside the trading limits stated in thecharterparty.

(iv) Some charterparties contain provisions requiring that specificclauses must be included in the bills of lading. For example theNYPE charterparty sets out in clause 24 the wording of a USAClause Paramount and a Both to Blame Collision Clause whichare to be included in all bills of lading issued under thecharterparty. The master can refuse to sign a bill of ladingpresented to him which fails to include clauses which areexpressly required to be incorporated in this way.

(v) Where the charterparty provides that the master shall sign billsof lading in the form set out at the end of the charterparty, themaster is not bound to sign bills of lading which are not in thatform.

(vi) The master does not have to sign a bill of lading which is"manifestly inconsistent" with the charterparty or containsstipulations of an "extraordinary character". There is littleauthority on the meaning of these phrases. However, it has beenheld that a "demise clause" stating that the bill of lading is anowners' bill is not an extraordinary clause; it has also been heldin one case that a bill is not "manifestly inconsistent" with thecharterparty where the charterparty provided for disputes to bereferred to arbitration in Oslo in accordance with Norwegian lawand the bills of lading were subject to English law andJurisdiction.

The fact that a charterparty provides that bills of lading are to besigned as presented "without prejudice to the charterparty" does notaffect the master's obligation to sign the bills as presented. It simplymeans that the contract between the owners and the chartererscontained in the charterparty is not affected by the inclusion in thebill of lading of different terms.

Time charters also usually provide that the master is to sign bills oflading as presented and that the master is to be under the orders anddirections of the charterers as regards employment and agency. Aspreviously mentioned it is implied from these terms that the chartereror his agents may sign bills of lading on behalf of the master. Such asignature usually binds the shipowner. This clearly raises the

72

possibility of the charterers signing a clean bill of lading where itshould have been claused. If the master is aware of this, he should, ofcourse, immediately lodge a protest and notify the owners.

SUMMARY

We have considered a number of aspects of the Master's role in monitoringand signing Bills of Lading. There are many variables to be considered and aShip's Master has to find his way carefully through the obstacles which maybe placed in his way. How best can the basic principles be summarised?

In general terms the Master should before signing the Bill of Ladingensure that:-

1. The goods are actually on board and the Bill of Lading is correctly dated.

2. The Bill of Lading is in the correct form if this is specified in theCharterparty.

3. The description of the goods complies with the Mates' receipts failingwhich the BUI of Lading should be claused accordingly.

4. If an Agent is signing the Bills of Lading then regardless of whether thevessel is on Charter the bills should be claused in accordance with theprovisions of the Mates' receipts. Particular care should be taken incircumstances where the Agent is signing on behalf of the Master.

The Master should not:-

1. Sign a Bill of Lading which is in any respect inaccurate on its face.

2. Be persuaded to sign clean Bills of Lading against the offer of a Letter ofIndemnity.

The Master may accept a Letter of Indemnity at the Discharge Port if theOwners and the Club agree and give their prior approval.

Lastly Masters should not forget the advantages that can be obtained byvirtue of the vessels' entry in a P&I Association. Most ports will have acorrespondent appointed by the Club who can be called upon in urgentmatters to give advice particularly on local customs and procedure.Consultation with the Club correspondent should always be in conjunctionwith communication with Owners or Managers who in turn will be able todiscuss any difficulties with the P&I Club Head Office in London or elsewhere.

In this way and with the advantage of modem communications mostproblems associated with the signing of the Bill of Lading can be resolvedquickly providing the Master imposes upon the situation a degree of logic andcommonsense in conjunction with an appreciation of commercial reality.

September 1990

73

BILL OP LADING DISPUTESBy Mr Donald Davies RD RNR

Barrister, Blaster Mariner, PICS FCIA FNI

IntroductionA very large number of bill of lading disputes are litigated/arbitrated everyyear in London, more by way of arbitration than litigation. Further, a muchlarger number of claims against sea carriers by cargo owners are settledbetween the parties in London through P & I Clubs and cargo underwriters onthe basis of previous court decisions and how the parties view the likelyoutcome of an arbitration. London maritime arbitrators have to apply Englishlaw (as built up by way of judicial precedent over the years) to disputes whichcome before them although it is true to say that many cases turn on theirown individual facts of which arbitrators are the final arbiters; there is alimited right of appeal to the courts on a point of law.

Using my 20 years of experience as a maritime arbitrator I intend to speakabout the legal principles which come up frequently in London maritimearbitration and in so doing will automatically advert to the types of disputewhich do arise in practice. Before so doing I make some general points aboutarbitration and maritime arbitration in the City of London.

1. London is still the most prolific maritime arbitration centre in the world; itis said that it does more maritime arbitrations than the rest of the worldput together (Moscow, Peking, Paris, Hamburg, New York, etc). Hundredsof arbitrations take place every year ranging from those on documentsalone to those which may have oral hearings lasting many weeks.

2. Some of the advantages of arbitration over court proceedings are privacy,speed and cheapness. Some persons now question some of these so-calledadvantages. Arbitrations are still private and there is no doubt that ahearing can take less time before an arbitrator rather than before a judge;this is because arbitrators have the expertise which allows the arbitrationto move at a faster speed than before a Judge. Regarding the arbitrationbeing cheaper, this is still usually the position in respect of maritimematters albeit that the Judge comes free while the arbitrators do not. Sincearbitrators tend to get through a case in much less time than a judge theoverall cost tends to be less than if a case is fought in the courts. InLondon, there is a wide divergence of expertise and qualificationsregarding the arbitrators that are members of the London MaritimeArbitrators Association. This gives the parties involved in arbitrationsconsiderable scope to appoint arbitrators who have the appropriateexpertise to deal with the disputes in question.

3. Many maritime arbitrations involve pure nautical elements so thatarbitrators with nautical experience have much to contribute in the siftingof the evidence and the decision making.

Contractual TermsContracts for the carriage of goods by sea are governed by charterpartiesand/or bills of lading; in practice, there will usually be no difference betweenthe contractual terms in respect of loss of/damage to cargo because theHague Rules will invariably be applicable to both forms of contracts (by way of

74

statute in respect of bills of lading, eg Carriage of Goods by Sea Acts 1924and 1971 and by way of incorporation using a so-called Clause Paramount inrespect of charterparties). The Hague Rules spell out the rights andresponsibilities of the carrier and the shipper but this paper will be concernedmainly with the rights and responsibilities of the carrier as related to theproblems which arise in practice and which give rise to claims by shippers inlitigation or arbitration. The parts of the Hague Rules which are particularlyrelevant to the problems to be discussed are :-

"The carrier shall be bound, before and at the beginning of the voyage, toexercise due diligence to -

(a) Make the ship seaworthy

(b) Properly man, equip, and supply the ship

(c) Make the holds, refrigerating and cool chambers, and all other partsof the ship in which goods are carried, fit and safe for their receptioncarriage and preservation.

the carrier shall properly and carefully load, handle, stow, carry, keep,care for and discharge the goods carried.

After receiving the goods into his charge the carrier or the master or agentof the carrier shall, on demand of the shipper, issue to the shipper a bill oflading showing among other things -

(b) Either the number of packages or pieces, or the quantity, or weight,as the case may be, as furnished in writing by the shipper;

(c) The apparent order and condition of the goods.

Provided that no carrier or the master or agent of the carrier shall bebound or show in the bill of lading any marks, number, quantity, or weightwhich he has reasonable ground for suspecting not accurately to representthe goods actually received, or which he has had no reasonable means ofchecking.

Neither the carrier nor the ship shall be responsible for loss or damagearising or resulting from -

(a) Act, neglect, or default of the master, mariner, pilot, or the servants ofthe carrier in the navigation or in the management of the ship.

75

(c) Perils, dangers and accidents of the sea or other navigable waters.

(m) Wastage in bulk or weight or any other loss or damage arising frominherent defect, quality, or vice of the goods.

(p) Latent defects not discoverable by due diligence.

Before going further the writer emphasises that the exception available tothe carrier of negligence in the navigation or in the management of theship is of huge benefit to carriers when so many cargoes are damaged/lostby negligent navigation or management: for example, the exception coversnearly all collisions/groundings on the basis of negligence by those on thevessel so that cargoes lost/damaged by these factors do not usually formthe subject of a claim by cargo owners. However, sometimes the casualtyis effectively caused by unseaworthiness, albeit that the most proximatecause in time is the failure of those on the vessel, in which case the carrierwill be liable for the loss/damage unless he can show that he exerciseddue diligence to make the vessel seaworthy, eg vessel goes aground with atotal loss of cargo through the negligence of those on the vessel but theeffective cause of the casualty was the failure of the shipowners to properlysupply the ships with charts of the area where the vessel grounded andthis was causative of the grounding (a recent arbitration where the writerwas sole arbitrator).

Exercising due diligence to make the ship seaworthyMany cargoes are damaged by unseaworthiness, eg sea water entering thevessel's cargo spaces, unclean cargo spaces prior to the loading of cargowhich contaminates cargo etc and many disputes occur in this area. It is notthat difficult for cargo owners, in appropriate circumstances, to show that thevessel was unseaworthy when she sailed and that this caused the damage tothe cargo; it is then open to the carrier to show that he exercised duediligence to make the vessel seaworthy and if he does so he will escapeliability under the Hague Rules. There have been two House of Lordsdecisions of importance regarding the carrier's obligation of exercising duediligence one of which was also concerned with the exception available to thecarrier of "latent defect not discoverable by due diligence". These importantcases are Riverstone Meat Co v Lancashire Shipping Co (The "MuncasterCastle") [1961] AC 807, [1961] 1 Lloyd's Rep 57 and Union of India v NVRederg Amsterdam ("The Amstelslot") [19631 2 Lloyd's Rep 223.

The "Muncaster Castle"The Muncaster Castle was placed in the hands of reputable ship repairers forspecial survey and repairs. An experienced and competent marinesuperintendent attended on behalf of the shipowners and instructed therepairers to open up all storm valves for inspection; this involved opening up

76

the inspection covers and after the inspection by a Lloyd's Surveyor a fitteremployed by the repairers replaced and closed the covers. To do this, it wasnecessary for the covers to be placed over the studs in the top of theinspection chamber and for the nuts to be tightened on either side; once thenuts had been tightened no visual inspection could have detected anyunevenness in the positioning of the cover or any insufficiency in tighteningup. No cargo was damaged on the outward voyage to Australia and beforeloading in Australia the No 5 hold was inspected by the Chief Officer and nosign of any leakage of seawater was found. On arrival in the UK it wasdiscovered that cargo in No 5 hold had been damaged by seawater. The Courtfound that the presence of the water found in the hold on the unloading wasdue to the negligence of the fitter who failed to secure the nuts sufficientlywith the result that they were loosened by the working of the ship in roughweather; there was no negligence on the part of anyone but the fitter.

The House of Lords, reversing decisions of the High Court and the Court ofAppeal, held that the carrier had not discharged the burden of proving thathe had exercised due diligence to make the ship seaworthy since a shipownerwas not safeguarded by the fact that the negligence in repairing the ship wasthat of an independent contractor, and the obligation imposed on theshipowner in the work of repair was one of due diligence by whomsoever itmight be done (underlining by the writer) even when the work delegated to theindependent contractor called for technical and special knowledge orexperience, and the negligence was not apparent to the shipowner.

The decision by the House of Lords shocked/surprised the shipowningcommunity but one of the points which influenced the House of Lords inreaching their decision was that on any other construction, shipowners wouldescape all responsibility for the seaworthiness of their ships by merelyemploying independent contractors of good repute. It follows from thedecision that the shipowner's duty, under the Hague Rules, is a personalinescapable obligation to exercise due diligence to make the ship seaworthy.

The "Amstelslot"The Amstelslot loaded a cargo of wheat in Oregon for carriage to Bombay andsustained engine failure during the voyage due to a fracture of a tyre in thereduction gearing as a result of which she was towed to Honolulu. AtHonolulu it was discovered that the damage was extensive and that necessaryreplacements would take about 9 months; accordingly it was agreed betweenthe interested parties that the ship should be towed to Japan and that thecargo should be on-carried to Bombay by another ship. Cargo-ownersdisputed liability for any general average and for expenses incurred in on-carrying the cargo; they contended that there was fault on the part of theshipowner in that he had failed to exercise due diligence to make the shipseaworthy.

Evidence was called by the shipowner of the actual examination made ofthe gear when in Rotterdam a year before under Lloyd's Register continuoussurvey, by both the local Lloyd's surveyor and the shipowner's engineersuperintendent. This examination consisted of a visual examination of thevarious helices through inspection openings in the cover of the gear drumwhilst the gear drum was being slowly turned.

77

It was alleged against the shipowner that a magnaflux test should havebeen made or at least that for the purposes of a visual inspection the covershould have been removed altogether, oil should have been wiped from theteeth of the gear wheels and one helix should have been examined at a time.

It was held that the ship was unseaworthy at the time of the beginning ofthe voyage from Oregon and that the unseaworthiness caused the breakdown,that the cause of the fatigue crack was unknown and not detectable by avisual examination in 1956 and that when the ship was taken over by theshipowner in 1956 there was nothing in its previous history to suggest anytrouble in the reduction gearing and that the examination which was carriedout was a proper examination carefully carried out in accordance with thestandard required by Lloyd's Register. Therefore, in all the circumstances, theshipowner had exercised due diligence, not because he had employed skilledand competent persons but because those skilled and competent persons hadcarried out all the necessary examinations in a careful and competentmanner. Lord Devlin put his finger on the core of the matter when he said inhis judgement:-

There is here no lack of care and no lack of skilled knowledge. Thesurveyors were quite familiar with the various methods of examinationwhich it is said that they should have adopted; they could easily havefollowed them if they had chosen to do so. What is said against them isthat by deciding in effect that these methods were not appropriate to thesort of examination they were conducting, they made an error ofjudgement which a competent surveyor ought not to have made. Lack ofdue diligence is negligence (underlining by the writer); and what is in issuein this case is whether there was an error of Judgement that amounted toprofessional negligence and I cannot find anything in the evidence thatgoes that far".

The shipowners were entitled to take the benefit of the exception "latentdefect not discoverable by due diligence".

Muncaster Castle and AmstelslotWhile the Muncaster Castle makes the point that it may be very difficult onoccasions for the shipowner to prove that he has exercised due diligence tomake the ship seaworthy the Amstelslot illustrates that it is by no meansimpossible to do this and that the shipowner will not be liable for loss ordamage to goods caused by unseaworthiness in cases where there has notbeen negligence on the part of anyone used by him in attending to his shipand that he will not be liable merely because precautions were not takenwhich subsequent experience showed might have detected or avoided theunseaworthiness. Of course, whether or not there has been negligence will bea question of fact to be decided by the tribunal before which a claim falls andthis question has to be decided upon the circumstances which prevail at thetime of the incident in question. What was not negligence in 1957 may well benegligence 30 years later because of the changes in modern technology,modes of inspections, etc.

The two House of Lords decisions are the guidelines for judges andarbitrators who frequently apply them to many differing sets offacts/circumstances. Causation is a factor which is all-important since the

78

owners will only be liable if they failed to exercise due diligence to make theship seaworthy and this was causative of the casualty. Sometimes there canbe competing causes for a casualty and lengthy oral hearings take place inorder to establish the effective cause of the cargo loss/damage; whether, forexample, it was unseaworthiness and the failure by the carrier to exercise duediligence to make the vessel seaworthy alternatively whether it was an eventwhich was an excepted peril such as "negligence in the navigation ormanagement of the ship", "perils of the sea".

The writer was involved in a four week arbitration recently where thevessel sank with all hands and the cargo owners claimed for the loss of theircargo on the grounds that the vessel was unseaworthy when she sailed andthat the shipowners had not exercised due diligence to make the vesselseaworthy in respect of the Butterworth covers (quick release plates in thiscase) and this was causative of the entry of seawater, during heavy weatherconditions, into some of the empty forward tanks (the vessel was a tankercarrying molasses with some tanks empty) which led to the sinking of thevessel's forward part and subsequently the vessel. In response the shipownerspleaded that the cause of the casualty was the negligence of their ownemployees on the vessel in that they were cleaning empty tanks forward anddid not properly secure them before the vessel entered the heavy weather sothat they, the shipowners, could take the benefit of the Hague rules exception"negligence in the navigation/management of the ship".

It was a difficult case to decide on the facts because, on the evidence, therewas so little between the two competing causes: however, at the end of theday, the tribunal decided that the cause of the casualty was the negligence ofthose on board the vessel herself so that the shipowners took the benefit ofthe exception. The difficulty in deciding the case was exacerbated by thepaucity of evidence which was available to the tribunal and the need to relyupon the expert witnesses of the parties, at the arbitration; expert witnessescan vary and a tribunal can only go on the evidence put before it.

Seaworthiness/Perils of the SeaThe writer was also involved in the arbitration cited in The Master's Role inCollecting Evidence" (pages 21/22) where the tribunal had to decide whetherthe ingress of sea water, in heavy weather, through the vessel's MacGregorhatches (which damaged the grain cargo) was caused by the failure of theshipowners to exercise due diligence to make the vessel seaworthy or whetherthe cause was "perils of the sea" (an exception available to the carrier underthe Hague Rules). In the event the tribunal decided that the shipowners hadexercised due diligence to make the ship seaworthy before thecommencement of the voyage (she had been in drydock one month prior tothe voyage and had undergone repairs including repairs to the hatchcoamings all of which appeared to have been carried out competently) andthat the prolonged periods of very heavy weather (which caused some damageto the vessel) allowed the sea carriers to take the benefit of the exception"perils of the sea". It is emphasised that the evidence in the arbitration wassupportive of the shipowners' case in that :-

1. The master came over well as a witness. His evidence was realistic and notembellished.

79

2. The ship's documentation (including the logbooks) were well kept andauthentic.

3. The video tape, taken by the master, was helpful in illustrating thecondition of the vessel at the commencement of the voyage as well as thestate of the seas in heavy weather.

While on the topic of perils of the sea and hatch covers some persons areunder the erroneous view that ships' officers always fabricate the weather inthe log books so as to make the weather worse than that actuallyexperienced. In fact, many officers exaggerate the weather for logbookpurposes when the weather is not that severe; for example, when winds areonly force 5/6/7 the tendency is for ships' officers to add a force or two so asto build up the weather conditions; this is not for any nefarious purpose butsimply the way that they have been brought up, under various masters, toensure that some bad weather gets into the log book for so-called insurancepurposes. At the other end of the scale ships' officers, in my opinion, under-rate the weather when making log book entries; in weather conditions of windforces 11/12 the tendency is for officers to only log forces 9/10; this has beenborne out by US Navy research which shows, beyond a doubt, that ships'officers definitely underestimate the weather when making logbook entries inwind forces of an extremely high nature.

Dry Bulk Cargo DisputesApart from the type of disputes previously considered which have relevance todry bulk cargoes it is not uncommon for there to be arbitrations concerningthe carrier's obligation to properly and carefully care for the goods carried inthe context of ventilation. Some crews are not very efficient regarding theventilation or non-ventilation of bulk cargoes and sometimes the cargo isshown to have become damaged because of non-ventilation; of course,carriers may be able to plead 'perils of the sea' if heavy weather conditionshave made it impossible to utilise the ventilators. Further, vessels sometimestransit so rapidly from one climate to another that, no matter how well thevessel ventilates, there is still sweat damage; in these circumstances therewill be no liability on the carriers since their duty is only one of actingreasonably.

Inherent vice is one of the exceptions which comes up fairly frequently indry bulk cargo shortage arbitrations. I have been involved in a good manyarbitrations where shipowners have contended that the damage to the cargowas due to the inherent inability of the cargo to withstand the incidents of thevoyage. Or to put it another way, the cargo is the author of its ownmisfortune. Over the years, many big cases have been fought in the courtsregarding inherent vice relating to bulk cargoes such as grain and cocoa;much expert evidence is led in these big cases as it is also in arbitrations.

I well remember a particular arbitration, of a few years ago, where the caseturned on the expert witnesses involved in the case. The arbitrationconcerned a claim against the shipowners for damage to maize on a voyagefrom the USA to China. The maize was loaded in the USA in coldtemperatures. Temperatures rose during the sea transit but dropped as thevessel got closer to China. When the vessel arrived at China the top cargo, inall the holds, was wetted by sweat to a great extent, blackened, mildewed,

80

and had a bad smell. The all important question for the tribunal was, "Whendid the top layer of cargo become wetted?" it being common ground that itwas condensation, at some stage of the voyage, which activated the damagewhich was manifested upon the opening up of the hatches on the vessel'sarrival. The receivers contended for condensation in the very early part of thevoyage when according to them very warm air would be passing over thesurface of bulk cargo thus leaving the condensation on the cargo itself. Theshipowners argued that the large condensation occurred during the closingstages of the passage and while the vessel was at anchor; they asserted that,during this time, the vessel's structure would have cooled rapidly so as tohave given rise to the condensation of warm moist air, rising from the cargo,on the vessel's deckheads, and the subsequent falling back of thecondensation on the top layer of the cargo. The shipowners plumped for"ship's sweat" while the receivers contended for "cargo sweat". Theshipowners also argued that the heating of the upper layer of the cargo, as aresult of the normal transfer of heat, as the vessel travelled through warm airand sea, with further heating due to micro-biological activity, contributed tothe sweat damage.

The most crucial factor in the case was the rate of mould growth; whetherthis occurred between a certain period. On this aspect, the shipowners' expertwitness was much more convincing than the receivers' expert witness and thetribunal went against the receivers' expert. The tribunal decided thatintensive mould growth could take place in a relatively short time and alsothat ventilation by those on the vessel would not have had any significanteffect in reducing the amount of ship's sweat in the circumstances albeit thatthose on the vessel had not ventilated in accordance with basic principles.The tribunal concluded that the wetting damage arose from the combinationof moisture content of the maize, rising of warm moist air from the cargosurface and the cooling of the ship's structure. Therefore, since there was nofailure by those on the vessel the Owners were entitled to the benefit of theexception "inherent vice"; with an average moisture content at loading of15.3% the maize did not have the inherent ability to withstand the ordinaryincidents of a voyage from the USA to China, at the time of the year inquestion, on the type of vessel which was utilised.

There have been many arbitrations over the years relating to the moisturecontent of grain or grain type cargoes. It is well known that grain cargoes witha moisture content over a certain percentage can give rise to problemswithout any failure by those on the vessel. If the moisture content is reducedthen the problem can be eliminated or greatly reduced but this can be acostly exercise for shippers. If shippers do not reduce the moisture content toensure that the cargo has the inherent ability to withstand the normalincidents of the voyage then they usually have no recourse against carrierswho can take the benefit of the exception "inherent vice".

There is no customary percentage for such losses; each cargo has to beconsidered in its own circumstances. Some bulk cargoes contain moremoisture than others so that the loss in weight, because of evaporationduring a transit, can vary immensely. Sometimes expert evidence is putbefore arbitrators as to the allowance which should be made to the carrier; onthe other hand, there is often a paucity of evidence regarding this aspect sothat a carrier's best approach, in order to avoid liability for a weight shortage

is simply to show that the cargo in question is not one which lends itself totheft by stevedores or crew and to show that no cargo was left on board thevessel after the completion of discharge.

So long as the difference between the bill of lading weight and thatdelivered is within a reasonable limit a tribunal will often conclude that thecarrier discharged the cargo which was loaded and surmise that anydeficiency was due to a loss in transit due to the nature of the cargo and/orthe method of loading/discharging of the cargo. For example, in places suchas Alexandria it has been accepted that loss occurs during the discharge ofgrain cargoes by way of portable vacuvators and Egyptian courts themselveshave made an allowance of 1% of the weight of the cargo for this factor inaddition to an allowance for up to 1% of the weight of the cargo for naturalshrinkage of the grain during a sea voyage.

Bagged Cargo DisputesWith bagged cargoes there are many disputes regarding whether or not thebill of lading quantity of bags have been delivered by the carrier particularlyin relation to large shipments of bagged rice, bagged potatoes, etc. Theproblems arise mainly because of discrepancies in tallying also the lateness,in some cases, of the tallying at the discharge port with the result that thereare often paper shortages for which the carrier may be liable. From thecarrier's point of view it is important to have tallies at both loading anddischarging ports as the cargo comes in/goes out over the ship's side. If thebill of lading is prima facie evidence of the number of bags loaded then theonus of proof is on the carrier to explain away any apparent shortage at theport of discharge and an accurate discharge tally is the best way of showingthat the bill of lading quantity of bags has been discharged.

Liquid Bulk Cargo DisputesThe majority of disputes concern oil cargo shortages where the onus of proofcan be of considerable importance. As is well-known a bill of lading is usuallyprima facie evidence of the quantity of bulk cargo loaded into a vessel.Therefore, if the receivers show a difference between the quantity of cargodelivered and that evidenced in the bill of lading they get their case off theground regarding a short delivery; the evidential burden then shifts to thecarrier to show that there has been a proper delivery of the cargo loaded intothe vessel. If the Hague-Visby Rules apply the bill of lading may be conclusiveevidence of the quantity of cargo shipped if the bill has been transferred to athird party acting in good faith.

From the carrier's point of view, the best practical way of proving that thevessel has discharged her obligation is to ensure that proper measurementsof cargo are taken at both loading and discharging ports; if thesemeasurements match up, after making allowances for temperature, etc, andthe ship discharges all her cargo (evidenced by obtaining a dry certificate)then the carrier has gone a considerable way to avoiding a shortage claim. Inpractice, as we all know, things don't always work out that easily; forexample, there may be differences as to the quantity loaded on the vesselbetween the figures produced by the vessel and those produced from theshore side and further, there can be arguments as to quantities remaining onboard the vessel after discharge also as to whether or not a dry certificate wasmerited.

82

In cargo oil shortage arbitrations shipowners have been used, for manyyears, to disclosing relevant documents such as log books (includingpumproom), cargo transfer books, statements of facts, ullages, etc. What hasbeen missing in the past to a large extent has been proper discovery fromthose claiming against the vessel but this has been much improved in recentyears. While the shore has means of checking the ship (because of thedocuments disclosed by or on behalf of the vessel and the fact that shorerepresentatives board the vessel at loading/discharging ports) the ship haslittle chance of checking the shore. There is no doubt that, on occasions,cargo pumped from a vessel appears to go missing on the shore side and thevessel is found liable for this cargo.

What shipowners should do is to call for disclosure of all relevantdocuments appertaining to the shore side. The amount of data maintained bya refinery may be very large but, frequently, not all relevant data is producedat an arbitration. In a five week arbitration in which I was involved a fewyears ago my eyes were opened wide by the extent of the documentationextracted from the refinery in question. It led to the exposure of anomaliesregarding the measurement of oil in shore tanks. For example, it was shownthat measurements of some tanks were taken before proper settlement of theoil; the oil in a tank can, possibly, settle by up to 20 centimetres aftercompletion of discharge from a vessel; at 64 tons a centimetre (the tanks inquestion in the arbitration) there was a large difference in the measured oil inthe tank as between immediately after completion of discharge from the vesseland some 24 hours later.

It was usual, for many years prior to the mid-seventies, to allow ownersthe benefit of the so-called 0.5% allowance. This allowance was to cover in-transit losses as well as cargo remaining on board which was unpumpable.Under English law there is no question of the allowance being a custom or ofsimilar effect. It seems sensible that there be no fixed allowance to owners inrespect of in-transit and other losses which arise from no failure on theirpart. Every case must turn on its facts and it has to be borne in mind that,with modern techniques such as crude oil washing, there are a great manyinstances when the allowance made to owners is considerably less than thepreviously accepted 0.5% It may be that the allowance should only bebetween 0.2% or 0.4% depending upon the kind of cargo which is carried, thevessel's equipment, etc. Oil cargoes themselves vary regarding their waxcontent and other ingredients which result in it being impossible to pump outall the cargo. In recent arbitrations some tribunals have reduced allowancesto as low as 0.1% in cases of vessels fitted with crude oil washing. Whilecrude oil washing may, in some instances, lead to a shortage as low as 0.1%,there have been arbitrations where owners were allowed over 0.5% incircumstances where the cargoes were not straightforward and where largeresidues of cargo could not be removed by crude oil washing.

Problems often arise in the assessment of oil cargo shortage claimsbecause of the paucity of reliable evidence in respect of important areas suchas measurement and temperature, shore pipelines, and vapour losses.

83

MeasurementThe determination of shipped and delivered quantities is dependent uponmeasurements and analyses which are unfortunately often wrongly carriedout. These errors are accordingly reflected in the calculations but to a muchlesser degree when the calculation is on a volume basis. It is impossible toeliminate errors in measurement but, by adjusting on a volume basis, theeffect can be minimised.

Density measurements can be wrong bearing in mind the sample methodsand kind of sampling which takes place to obtain densities. Sampling canoften be erroneous because of the practice to take top, middle and bottom. Inpractice, there are large gaps between these particular points and, in anyevent, the bottom sample may not be taken right at the bottom of the tank.The position can be much improved by the use of in-line automatic samplers.

Ships calibrations of tanks can be out so that the result is a greaterquantity than that which is actually loaded. The over-measurement may beup to about 1% and is due mainly to the fact that the calibrations do not takeproper account of the internal features of the tanks or of solid residues ofearlier cargoes.

Temperature merits particular mention. While error in observed gravitymeasurement affects the validity of the quantity loaded or discharged, by farthe greater culprit is the measurement of observed temperature where errorshave a far larger effect than those attributed to density errors. At least, withthe latter, some form of confirmation can be obtained by testing retainedsamples. Temperatures can vary greatly in individual tanks. Sometimes therecan be a 10 degree difference in a large 20,000 ton tank on a vessel; this canproduce a mean error regarding the weight loaded of 100 tons.

The crux of the problem lies in the quality of measurement from samplestaken of the cargo supplied to the vessel at the loading port and from thevessel at the discharge port.

PipelinesPipelines should be full before loading and discharge operations are carriedout. This is important because a pipeline can have a total capacity in theregion of 6,000 tons. However, pipelines are sometimes only partly full. In factit is possible for fraud to be perpetrated by a pipeline deliberately being keptempty and there have been actual instances of this. One should be wary ofthe entry, in a statement of facts, "shore lines said to be full". What isrequired is evidence to back up whether or not the shore lines are full. To beproperly filled, the shore lines should be bled in respect of air in the upperareas of the line. Unfortunately, inspection of pipelines is not usually coveredby supervision of loading and discharging. Those who carry out thesupervision should, therefore, be asked to certify that pipelines are full.

In a letter published in the February, 1987 edition of Seaways, CaptainF.V Bridges of Southampton said that, back in the seventies, the marketingdepartment in the company in which he was then serving became concernedat the so-called "loss of outturn" and conducted a series of experimentsregarding "slack lines"; the technique consisted of pumping a measuredamount of inert gas into the shore system and noting the rise in pressure; the

84

results showed conclusively that not a single shore line involved was fullypressed up despite the fact that normal tests consisting of checking for a fullflow at the manifold had been carried out. This evidence supports thepossibility that, on a good number of occasions, shorelines will be slack butthe problem is, as already mentioned, for the carrier to be able to prove this.

Vapour lossesThere has been considerable controversy in recent times regarding the extentof vapour losses during an ocean voyage. It appears that the loss can varyfrom 0.1% to 0.4% and that crude oil washing can be an exacerbating factor.In a fairly recent arbitration the tribunal was asked to look at various factorsrelating to in-transit vapour losses including the figures produced by therefinery regarding the experience of receiving Sirri crude oil; in relying uponthis evidence the Charterers' expert put the vapour losses at 0.15% for winterand 0.2% for summer regarding a route for which he, himself, hadconsiderable experience in respect of Sirri crude oil; the expert did not makeany allowance for losses during crude oil washing and the Tribunal, in fact,allowed the Owners 0.2% based upon 0.15% for the winter voyage in questionplus an additional percentage for crude oil washing so as to bring up the totalallowance, for vapour losses, to 0.2%.

Care in signing Bills of LadingRecent cases have illustrated the duties incumbent on the master of a vesselwhen signing bills of lading and other documents regarding the quantity ofcargo loaded and its apparent order and condition.

In The "Nogar Marin" [1988] 1 Lloyd's Rep 412 the arbitrators found thatrust damage to a cargo of wire rods in coils had occurred before shipment andthat the master of the vessel was negligent in failing to record on the mate'sreceipts that the cargo was damaged before shipment to ensure that theship's agents did not issue clean bills of lading. The owners were claimingagainst charterers on the basis of an implied right of indemnity againstliability under the bills of lading which had been signed at the request of theCharterers. The arbitrators decided that the owners' claim failed because theintervening negligence of the master broke the chain of causation between thecharterers' act of presenting inaccurate shipping documents and thesubsequent claim by cargo interests. This decision was upheld in the HighCourt and the Court of Appeal; in the latter judgement it was held (interalia):-

1. Although the master did not sign the bill it was his mistake concerning thereceipt which permitted the ship's agents to sign the bills withoutqualification and if his act was not strictly intervening it could justly beregarded as predominant on the arbitrators' findings over whatever breachthe charterers might have committed by presenting for signature bills oflading which conformed with the receipt which the master had previouslysigned.

2. The implication of an obligation to indemnify was not automatic; itdepended on the facts of the individual case and on the terms of theunderlying contractual relationship; it was well known in the shippingtrade that a master need not sign a clean bill just because one wastendered; it was the master's task to verify the condition of the goods

before he signed and to then sign it with whatever appropriatequalification he thought fit.

In The "Boukadoura" [19891 1 Lloyd's Rep 393 the court was concernedwith the quantity of a cargo of fuel oil loaded in Saudi Arabia. When hoseswere disconnected there was a dispute regarding the quantity which had beenloaded, the shippers calculated 542,479 barrels and the vessel 537,401barrels.

A bill of lading recording shipment of "a cargo said to be and described as... 542,479 barrels" was presented to the master for signature. He refused tosign it in that form but said that he would do so if he could endorse it withthe ship's figures. A further survey was carried out by Caleb Brett, appointedby the owner's P & I Club. The ship's figure was recalculated as 536,825barrels, effectively the same as before.

As a result of the above events, the vessel sailed from the loading portsome 24 hours later than she might have done if the master had signed thebill of lading as presented when loading was complete and the owners claimeddamages for the period of delay. The decision went in favour of the owners,part of the judgement stating that the sensible course for the master to adoptin the circumstances was to clause the bill of lading either generally("quantity and weight unknown") or by recording the ship's figure alongsidethe shipper's; the master acted reasonably in the circumstances.

The above two cases illustrate the importance of the master in ensuringthat a bill of lading represents the quantity and apparent order/condition ofthe goods which have been shipped so that innocent transferees of the bill oflading have proper notice of these details.

ConclusionsThe large number of arbitrations and court cases which occur concerningbills of lading and those serving on vessels obviously makes the evidenceemanating from vessels to be of considerable importance; often the evidenceis crucial and decides whether or not the carrier wins the case. Therefore, it isincumbent on seagoing personnel to ensure that important documentation iskept in a proper fashion so that tribunals are put in as good a position aspossible to make the right decisions; in addition the oral evidence which isgiven by shipboard witnesses should be credible and not moulded to thatwhich the witness thinks it should be for the odds are that under cross-examination a fabricated story will be exposed for what it is. A good manycases have been lost because a ship's witness has not come up to proof andthat witness's evidence has been crucial, as it is frequently, to the resolutionof the dispute.

86

Documents

Bills of Ladings Guidance