Home Uncategorized CONSIGNEE IN BL

CONSIGNEE IN BL

11 min read
5
0
4,246

QUERY FROM shahriar
Post subject: consignee in bill of lading

Hello friends,

can any one tell me what are the possible advantages issuing bank may have if the bill of lading is issued "to order" and blank endorsed instead of a "to the order of issuing bank"

regds

shahriar

——————————————-
COMMENT FROM MR. OLD MAN

Dear Shahriar,

If the b/l is issued “to order blank endorsed” instead of “to the order of the issuing bank”, the issuing bank may have the following advantages:

• Not liable to take any action in connection with the goods to which the b/l relates.
• Not liable to any party (carrier, agent, port authorities…) for any liabilities (unpaid freight, demurrage, quay rent …) in respect of the goods to which the b/l relates.
• No endorsement is made either to the applicant to enable him to take delivery of the goods or to the shipper in case the documents are discrepant and rejected.

In despite of such above mentioned advantages, for the purpose of being able to control the goods until the applicant has fulfilled his obligations under the contract for opening LC, the issuing bank would like the b/l to be made out to its order rather than the one to order blank endorsed.

Best regards,
Nguyen Huu Duc

——————————
Shahriar Post subject: Re: consignee in bill of lading

dear duc,

that was really helpful. but i request a bit more from you.

you said,
"No endorsement is made either to the applicant to enable him to take delivery of the goods or to the shipper in case the documents are discrepant and rejected."

few days back i heard an amazing case where the BL was to the order of issuing bank. the presentation was discrepant and the issuing bank returned the document without any endorsement on the BL saying that it must return the document as it has received. whats your opinion.

one more issue, does this blank endorsement and to the order of issuing bank has anything to do with the title of the goods. i think there is.

some experts say, the reason for an LC to demand a bill of lading made out "To order and blank endorsed" instead of directly consigned to the same issuing bank is to put the issuing bank, in an endorsee position, in order to enjoy a better title than the shipper/beneficiary or a straight consignee.

though such statement makes me confused. a Bill of lading is not a pure negotiable instrument. then how come the endorsee gets better title over the shipper?

looking for your comments

regd

shahriar

—————————
COMMENT FROM Mr. Old Man

Hi Shahriar,

You’ve made a good comment. Truly appreciated.

If the discrepant documents, including the b/l made out to the order of the issuing bank, are to be returned to the presenter, the issuing bank may, but is not obligated to, endorse the b/l back to the shipper or to the party that has endorsed the b/l to the issuing bank.

The b/l consigned to a named consignee is a straight b/l which is not transferable. Only the consignee named in the straight b/l can take delivery of the goods. Therefore, if the b/l is consigned straight to the issuing bank instead of to its order, only the issuing bank can take delivery of the goods and it can not transfer the title of the goods to the applicant by making an endorsement on the reverse side of the b/l. In this case the issuing bank must give the applicant a separate letter of authorization to take delivery of the goods.

In addition, under the b/l indicates a straight consignee as the issuing bank, the issuing bank may encounter some other disadvantages. e.g., be liable to related parties such as carrier, port authorities … for unpaid freight, quay rent, demurrage and other liabilities.

It is because of such disadvantages that a wise issuing bank never requires b/l to be issued straight to its name.

I agree with you that the b/l made out to order blank endorsed and the b/l made out to the order of the issuing bank have relation with the title of the goods.

B/l is a document of title. If the b/l is made out to order blank endorsed, the party that is the holder in due course of such a b/l will become the lawful owner of the goods. Suppose that 1/3 of the “to order bank endorsed” b/l is forwarded to the applicant, the applicant can present the b/l to the carrier to take delivery of the goods. He may make use of this gap to delay his obligation towards the issuing bank

To avoid this possible risk and for the purpose of being able to control the title of the goods until the applicant has fulfilled his obligation under the contract for opening L/C, the issuing bank would like the b/l to be issued to its order rather than the one issued to order blank endorsed. Once the applicant has fulfilled his obligation towards the issuing bank, the issuing bank will transfer the title of the goods to the applicant by endorsement of the b/l. In case, for some reason, the b/l is required to be issued to order blank endorsed, the issuing bank would insist that a full set of the b/l be presented to its counter.

Regarding the statement “the reason for an LC to demand a bill of lading made out "To order and blank endorsed" instead of directly consigned to the same issuing bank is to put the issuing bank, in an endorsee position, in order to enjoy a better title than the shipper/beneficiary or a straight consignee”, to tell the truth, the statement has also made me confused like you.

The endorsee in the above statement may be understood as the issuing bank – the holder in due course of the “to order blank endorsed” b/l the full set of which is presented to the issuing bank’s counter. Yet, I do not understand how the endorsee can enjoy a better title than the shipper. Maybe, only the expert that gave such a statement can tell us what he meant by saying so.

Best regards,
Nguyen Huu Duc …

Load More Related Articles
Load More By Mr Old Man
Load More In Uncategorized

5 Comments

  1. anonymous

    March 21, 2011 at 11:03 am

    HM writes:What is the different between the following 3:1.B/L made out to order of and blanks endorsement2.B/L made out to order of issuing Bank3.B/L made out to order of applicantsAs beneficiary, which one is best to us?

    Reply

  2. mroldmanvcb

    March 22, 2011 at 10:03 pm

    1. For B/L issued to order blank endorsed, the bearer or the hloder in due course will be entitled to the goods.2. For B/L issued to the order of the issuing bank, when the applicant has fulfilled his obligantion under the contract for opening L/C, for example, deposit funds or sign promissory note to enable the issuing bank to honour the L/C, the issuing bank will endorse the B/L to enable the applicant to take delivery of the goods.3. For B/L issued to the order of the applicant, the applicant is entitled to the goods. The applcant can take delivery of the goods if he has the original B/L and presents the duly endorsed B/L to the carrier.A wise beneficiary would require the B/L to be issued to the order of the issuing bank.Regards/Mr. Old Man

    Reply

  3. anonymous

    August 24, 2011 at 4:08 pm

    Vee writes:Hi Mr Old Man.Need your utmost help. What is a Collection Consignee on BL means?Thanks in advance for your help.Regards,Vee

    Reply

  4. mroldmanvcb

    August 25, 2011 at 11:08 pm

    To be frank, I do not know what collection consignee means. I guess it the bill of lading holder or the party who is entitled to collect the goods, i.e., take delivery of the goods.

    Reply

  5. Naima

    December 21, 2016 at 3:07 pm

    Hi,,

    Please i have one l/C where the B/L is to be endorsed TO THE ORDER OF THE SAUDI INVESTMENT BANK.

    The Issuing Bank in the Swift message ( l/C ) is
    SAUDI INVESTMENT BANK,THE RIYADH SA

    Now i understand that the consignee in the B/L is the THE ORDER OF THE SAUDI INVESTMENT BANK.

    For the other Documents ( Commercial Invoice , Packing List and Certificate of Origin) , the Consignee must be shown so is it the same Consignee of the B/L :
    THE SAUDI INVESTMENT BANK. or is it the Issuing Bank SAUDI INVESTMENT BANK,THE RIYADH SA
    Sometimes the Consignee in the L/C for the B/L : TO THE ORDER OF is not specific , ( Head office or Branch ).
    So when in the L/C it is TO THE ORDER OF A BANK ( is it the Issuing Bank , its branch , head office ).

    How can we write the Consignee in the Documents from the Swift Message of the L/C
    Issuing Bank? or from to the order of Bill of Lading
    Sometimes i cannot identify the Consignee of the goods as the information provided in Bill Of Lading to the Order is not complete ( Only name of the bank , no informations about the city )

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

Check Also

INVOICE NOT CERTIFYING WHAT HAS NOT BEEN SHIPPED

QUESTION Dear Sir, LC allows both AIR and SEA shipment. Amount: USD 100,000 Shipment by AI…