Friday, February 27, 2009

Syam’s Maritime Case Notes: Can an endorsement on the Bill of lading be an evidence binding the carrier regarding advance receipt of freight ?

(By Adv. V.M. Syam Kumar ) (Lecturer for Maritime Law, National University for Advanced Legal Studies, Kochi.)
‘Freight Prepaid’ is an endorsement commonly incorporated by the Carriers in to Bills of lading issued by them or on their behalf. The legal implication thereof was considered by the Subordinate Judge’s Court, Cochin in a recent case. In line with the principle laid down by the English decisions like Andrews v. Moorhouse, the learned Subordinate Judge has held that such an endorsement evidences that the freight has been received by the Carrier and that the same is an acknowledgment in the said regard binding the carrier.
The said finding of the Hon’ble Court is line with the decisions of the English Courts that the carrier or his agent after endorsing on the bill of lading that the freight with respect to the contract of affreightment evidenced by the relevant bill of lading has been received, cannot later on turn around and contend without any reliable basis that the freight was actually outstanding. If the carrier contends that such an endorsement was included as suggested by the shipper only to permit easy clearance of the goods at the destination, he ought to produce sufficient evidence in the said regard or shall prove that there exists a custom to the said respect in the concerned port. Unless such evidence is produced the logical conclusion that would follow is that the freight has been pre paid and has been received by the carrier.
English decisions like Allison V. Bristol Marine Ins. Co. [(1876)1App. Cas.209] are comparable decisions wherein the Court has held that in the absence of anything in the contract to indicate a contrary result, a payment of advance freight is a payment on account of the whole sum which would otherwise be payable on the cargo delivered at the destination.