WHERE A BILL OF LADING IS ENDORSED BY AN AGENT OF THE ACTUAL SHIPPER

QUESTION
L/C required: B/L made out to order endorsed blank. B/L xuat trinh: o muc Shipper la A company on behalf of C company.

Truong hop nay the nao la endorse hop le a? A hay C? hay ca 2 deu duoc a?

Thank you very much in advance!
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ANSWER

Hi,

Theo ICC R491, trong trường hợp này ai ký hậu BL cũng được chấp nhận. Nếu A Company ký thì nên ghi “A Company As Agent for C Company”. Nếu C Company ký thì chỉ cần ghi C Company.

Đọc thêm bài đính kèm dưới đây để hiểu thêm về trường hợp tương tự nhé.

Best regards,
Mr. Old Man

Attachment:

Can an endorsement in a B/L be made by an agent of shipper?
by Vlad Cioarec (International Trade Consultant, Romania)

I have been required to give an opinion over the practice of carriers to issue B/Ls naming forwarder as shipper’s agent on the basis that the carrier makes the contract of carriage with forwarder rather than exporter. Such B/Ls state in shipper’s box:
"ABC Logistics on behalf of (name of exporter)" instead of name and address of exporter.
The question was if B/L indicates in shipper’s box the name of forwarder as agent of actual shipper, who should endorse the B/L: the actual shipper or forwarder?
The point is that the forwarder is only authorised to arrange the shipping of goods and eventually prepare the shipping documents for presentation to the bank for payment. Exporter’s shipping instructions forms do not include any authorization for freight forwarder to endorse B/L on behalf of exporter.

Following the provisions of negotiable instruments law it would be only the actual shipper entitled to endorse the B/L since he is the lawful holder not the forwarder.
Whilst there is nothing wrong in B/L showing that forwarder has shipped the cargo on behalf of exporter, an endorsement by forwarder on behalf of exporter may be deemed invalid without a copy of power of attorney/or a letter of authorization attached to the Bill of Lading.
The ICC Banking Commission issued an Official Opinion on this matter whereby B/Ls indicating in shipper's box a third party as shipper's agent may be endorsed either by shipper or by the third party indicated as shipper's agent in shipper's box. Since it is not practicable for shippers to issue power of attorney to freight forwarders and amending standard forms of shipping instructions takes time, the ICC Banking Commission should have specified under what conditions an endorsement of B/L by shipper’s agent would be acceptable

How banks deal with this matter
The fact that B/L indicates in shipper’s box the name of forwarder as agent of actual shipper is acceptable under UCP600 Art.14 (k) which provides that:
"The shipper or consignor of the goods indicated on any document need not be the beneficiary of the credit."

It is also acceptable in banking practice to have the B/L blank endorsed with only a signature provided that it matches the signature made on the commercial invoice.
The rules applicable to B/Ls in respect of endorsement follow the provisions of negotiable instruments law which provides that the signature of endorser is sufficient to constitute an endorsement in blank. This practice has recently been recognized by an Australian Court in Hilditch Pty Ltd v. Dorval Kaiun KK (No 2) [2007] FCA 2014 (14 December 2007). For more on this matter see TT Talk No.105.
Generally, the banks will not check if the person signing on behalf of shipper is shipper’s authorised signatory. However, it is desirable that shipper’s endorsement in blank be more specific to enable the banks check the authenticity and legality of endorsement, e.g.
"Deliver to order For and on behalf of (name of endorser on behalf of which B/L is endorsed).
(Signature) (Stamp)"

It would also be desirable that exporters ask their buyers to include a special clause in L/C such as the following:

"It shall be acceptable that B/L indicate freight forwarder/logistics firm in shipper’s box as agent of beneficiary to evidence that in arranging the contract of carriage freight forwarder/logistics firm acted as agent on behalf of beneficiary.

However, in the event that the B/L is to be blank endorsed by said freight forwarder/ logistics firm, a copy of power of attorney/or a letter of authorization must to be attached to the Bill of Lading to evidence the authority of freight forwarder/ logistics firm to endorse B/L on behalf of beneficiary.
Any endorsement whether made by beneficiary as shipper or by its agent under power of attorney/or letter of authorization shall have to be stamped.

The practice of indicating in B/Ls that a third party has shipped the cargo on behalf of actual shipper can also be met in oil trade. Here is an example of L/C wording I found covering this matter:
"Full set (3/3) of original plus 3 non-negotiable copies of Tanker Bill of Lading made out to order and blank endorsed by XYZ Terminal evidencing as shipper:
XYZ Terminal for account of (name of L/C beneficiary)"
The endorsement of Bill of Lading by oil terminal it is perhaps made to underline the terminal’s responsibility for the cargo quantity and quality stated in Bill of Lading and protect the actual shipper in the event of quantity shortage claims made by any third party holder of Bill of Lading.
The indication in Bill of Lading shipper’s box of the loading terminal as shipper’s agent is made to protect the actual shipper in case of disputes with Master/ or shipowner concerning the discrepancy between quantity determined by shore terminal and quantity determined by Vessel after loading.