Ayo Olorunfemi June 4, 2025

Bills of Lading as Negotiable Instruments: Recent Developments

Executive Summary

The bill of lading represents a critical instrument in international trade, serving three fundamental functions: a receipt for goods, evidence of the contract of carriage, and a document of title. This summary explores recent legal developments affecting the negotiability of bills of lading, focusing on judicial interpretations and legislative reforms across common law jurisdictions, particularly in Nigeria, England, and Singapore.

I. Historical and Theoretical Foundations

Historical Development

The negotiable character of bills of lading originated in mercantile custom, receiving formal judicial recognition in landmark cases such as:

• Lickbarrow v. Mason (1794): Established bills of lading as “transferable in their nature”
• Sanders v. Maclean (1883): Characterized bills of lading as “symbols of property traveling on the sea”

In Nigerian jurisprudence, the Supreme Court’s decision in Niger Benue Transport Co. Ltd v. Narumal & Sons Ltd (1986) affirmed that a properly endorsed bill of lading transfers constructive possession of goods and delivery rights.

Statutory Framework

Key legislative developments include:

• England: Carriage of Goods by Sea Act 1992 modernized transfer of rights under bills of lading
• Nigeria: Merchant Shipping Act 2007 governs bills of lading aspects
• International: Rotterdam Rules (2008) provided comprehensive provisions on negotiable transport documents

II. Significant Judicial Developments

A. Identification and Originality

Recent court decisions have critically examined what constitutes an “original” bill of lading:

• Glencore International AG v. MSC Mediterranean Shipping Co SA (2017): Emphasized carriers’ risks in delivering goods without original bills
• Brawal Shipping v. F.I.O. Enterprises Ltd (2015): Confirmed that only original bills constitute prima facie evidence of goods receipt

B. Transfer of Rights and Title

Courts have refined the mechanisms of rights transfer:

• The Erin Schulte (2014): Clarified that endorsement transfers contractual rights from the moment of lawful holding
• Pacers Multi-Dynamics Ltd v. MV Dancing Brave (2012): Confirmed rights vest in the endorsee upon valid endorsement
• The Yue You 902 (2019): Recognized potential for electronic transfer of bills of lading

C. Emerging Challenges

• Straight Bills of Lading: Courts have clarified their status, maintaining they require presentation for delivery
• Competing Claims: Judicial decisions have provided guidance on resolving disputes over title and possession

III. Legislative Innovations and Technological Adaptation

Electronic Bills of Lading

Landmark developments include:

• UK’s Electronic Trade Documents Act 2023: Recognized electronic trade documents as legally equivalent to paper documents
• Singapore’s Electronic Transactions (Amendment) Act 2021: Explicitly recognized electronic bills of lading
• Nigeria: Gradual adaptation through Electronic Transactions Act and Merchant Shipping Act amendments

International Harmonization Efforts

• International Chamber of Commerce’s UCP 600: Incorporated electronic presentation provisions
• UNCITRAL’s Model Law on Electronic Transferable Records: Provided a template for national legislation

IV. Practical Implications

Banking and Commercial Transactions

Court decisions have reinforced the importance of bills of lading in:

• Securing bank financing
• Establishing security interests
• Resolving complex commercial disputes

Emerging Technologies

Initial judicial considerations of blockchain and distributed ledger technologies:

• DHL Project & Chartering Ltd v. Gemini Ocean Shipping Co Ltd (2022): Cautious openness to blockchain-based documentation
• Central Bank of Nigeria v. Cryptic Technologies (2021): Acknowledged potential validity of blockchain-based commercial documents

V. Critical Analysis and Future Directions

Key Challenges

1. Maintaining legal certainty while embracing technological innovation
2. Addressing potential conflict-of-laws issues in international trade
3. Ensuring functional equivalence between traditional and electronic documents

Judicial Perspective

As Lord Hoffmann noted in Sempra Metals Ltd v. Inland Revenue Commissioners (2007), the law must be “developed to meet the economic needs of modern commerce.”

Conclusion

The negotiable bill of lading stands at a critical juncture—preserving its core commercial functionality while gradually adapting to digital transformation. Courts and legislatures are carefully balancing traditional principles with modern commercial realities, ensuring that this vital document remains robust and relevant in an increasingly digital global trade environment.

The ongoing evolution demonstrates a nuanced approach: maintaining the essential characteristics of bills of lading while cautiously incorporating technological efficiencies. The challenge lies in preserving legal certainty and commercial utility in an era of rapid technological change.