WHETHER IT IS A NON-NEGOTIABLE BILL OF LADING

Non-Negotiable B/L
QUERY FROM Albert B – United States

Need your opinion on the following
B/L presented on its face are perfect (marked "Original"), however, at the back of the B/L indicates in bolt letters (first line on top of the conditions)"Non-Negotiable Bill of Lading". Is this B/L acceptable?

—————–

COMMENT FROM JSMITH – United Kingdom

Albert,

I am not sure I can give a definite answer, part of the reason being not being able to see the document in question.

I can see two possible approaches:

1. It is not isbp for banks to concern themselves with the contents of the reverse of BLs, except to extent of verifying any required endorsement has been made, and furthermore the statement you describe is part of the terms of conditions of carriage anyway and thus is covered by 20(a)(v). Therefore, there are no grounds for refusal.
2. It is widely understood by bankers, involved in doc. credit operations, that the purpose of an endorsement is to enable the BL to be transferable to another party (the transferee) by delivery so that the transferee may further transfer the bill or take delivery of the goods. Therefore, if there is a statement on the BL which a banker cannot fail to see that appears to suggest that the BL is not transferable by endorsement and delivery, and therefore any endorsement is of no effect, a banker must refuse the BL on the basis that an implied term of the credit has been breached, that implied term being that the credit required a ‘negotiable’ BL.

At the moment I favour 2. but, to be honest, in ten minutes time I will probably favour 1. and then change my mind again 10 minutes later.

Regards, Jeremy

—————-

COMMENT FROM Jim Barnes – United States

I think the quoted bold language is "data in a (stipulated) document". I think it conflicts with the credit and perhaps also with other data in the same document.

I think one cannot rely on the "will not examine" rule in 20(a)(v) (assuming that the quoted language qualifies as "terms and conditions of carriage"). ICC BC Opinion 644rev concluded that the "no conflict" rule of 14(d) overrode the "disregard NDCs" rule of 14(h). On the other hand, Opinion 683rev concluded that 14(h) did not override the "will not examine" rule in 22(b).

I had numerous objections to the changes in the no conflict rule as it emerged in UCP600. I did not object to the possibility that the no conflict rule would override the no disregard rule, because that result was not foretold (and I didn't foresee it). Moreover, I have a hard time seeing that these topics are matters of standard practice rather than interpretation of contract type language. So, I think ICC BC opinions on these topics will not be determinative, and perhaps not even be persuasive, if they are cited to limit the claims of a beneficiary or applicant.

Regards, Jim

—————

COMMENT FROM N.H. Duc – Viet Nam

I agree that banks are not responsible to check the terms and conditions on the reverse of the bill of lading except the endorsement if any. However, I think prudent banks will not accept the endorsement on the bill of lading which expressly states (though on the reverse) that it is a non-negotiable bill of lading.

Regards,
N.H. Duc …