The Straight Bill of Landing: Development of Presentation Rule in Mainland China and Hong Kong

• Author: Liang Zhao
• Pages: 132-147

132 TSINGHUA CHINA LAW REVIEW Vol. 3:131

THE STRAIGHT BILL OF LADING:

DEVELOPMENT OF PRESENTATION RULE IN MAINLAND

CHINA AND HONG KONG

Liang Zhao*

Abstract

The presentation rule of the straight bill of lading developed in

different approaches in the jurisdictions of Mainland China and

Hong Kong. In the Mainland, the carrier shall not be liable for the

delivery of goods without the presentation of the straight bill if he

does so according to the shipper’s instruction and the consignee has

no cause of action against the carrier for such delivery.

Conversely, Hong Kong followed the strict presentation rule

confirmed by the precedents of Singapore and UK in which the

straight bill of lading is required to be presented for the delivery of

goods. These developments indicate the disharmony of the

presentation rule of the straight bill of lading. The recently adopted

Rotterdam Rules may play an important role for the unification of

the presentation rule.

I. INTRODUCTION

In Mainland China, after the adoption and the promulgation of the

Maritime Code of the People’s Republic of China (“the Maritime

Code”), which became effective as of July 1, 1993, the straight bill

of lading, although it is non-negotiable, is considered a document of

title. On the other hand, Article 308 of the Contract Law of the

People’s Republic of China (“the Contract Law”) which took effect

as of the 1st of October 1999 confers on the shipper the right of

control so as to vary the delivery of goods. In “Supreme People’s

Court Rules on the Law Application in the Trial of Cases of Delivery

of Goods without Original Bill of Lading” (the No.1 Judicial

Interpretation of 2009),1the Supreme Peoples’ Court of the People’s

* PhD candidate in maritime law and trad e law, Faculty of Law, The University of Hong Kong.

2010 STRAIGHT BILL OF LADING 133

Republic of China (“the Supreme Court”) interpreted that the carrier

is not liable for the delivery of goods without the presentation of

straight bills of lading subject to the right of control exercised by the

shipper.

Contrary to China’s approach, the Court of Final Appeal of Hong

Kong upheld the decision in Carewins Development (China) Ltd. v.

Bright Fortune Shipping Ltd. (Carewins v Bright Fortune)2 in 2009

that goods must be delivered to the consignee only against the

presentation of straight bills of lading. This decision kept the Hong

Kong law in accord with that of other common law jurisdictions, e.g.

England and Singapore.

The right of control in the Contract Law is a typical legal right in

civil law, while such right does not exist in common law. This

different development may be polarised into two opposite

approaches for the presentation rule of the straight bill of lading in

Mainland China and Hong Kong jurisdictions. The United Nations

Convention on Contracts for the International Carriage of Goods

Wholly or Partly by Sea (A/RES/63/122), namely “the Rotterdam

Rules”, aims to harmonize the common and civil law approaches to

the presentation rule of the straight bill of lading.

II. THE PRESENTATION RULE IN CHINA

A. Judicial position before and after the Maritime Code

The leading case concerning the straight bill of lading in respect

of the presentation rule and the carrier’s liability is the decision in

Guangdong Electronics Ltd. v. China Merchants Godown, Wharf &

Transport Co., Ltd. and others (Guangdong Ltd. v. China

Merchants).3 In this case, all the parties to the contract of carriage

and the contract of sale of goods involved in the dispute of the

delivery of goods under the straight bill of lading. The Supreme

Court finally confirmed the presentation rule and held that the carrier

was liable for the breach of the presentation rule.

1 Zuigao Renmin Fayuan Guanyu Shenli Wuzhengben Tid an Jiaofu Huowu Anjian Shiyong Falü

Ruogan Wenti de Guiding (ᴰ儈Ӫ≁⌅䲒ޣҾᇑ⨶ᰐ↓ᵜᨀঅӔԈ䍗⢙ṸԦ䘲⭘⌅ᖻ㤕ᒢ䰞仈Ⲵ

㿴ᇊ) [Supreme People’s Court Rules on the Law Applica tion in the Trial of Cases of Delivery of

Goods without Original Bill of Ladin g] (promulgated by Sup. People’s Ct., Feb. 26, 2009, effec tive

Mar. 5, 2009) 2009 SUP.PEOPLE’SCT.GAZ. 23 (China).

2 Carewins Development (China) Ltd.. v Bright Fortune Shipping Ltd.., [2009] 3 H.K.L.R. D. 409

(C.F.A.) (H.K.).

3 Yuehai Gongsi Yu Cangma Gongsi, Tefa Gongsi deng Haishang Huowu Yunshu Wudan

Fanghuo Tihuo Daili Fanghuo Jiufen Zaishen An (㋔⎧ޜਨоԃ⸱ޜਨǃ⢩ਁޜਨㅹ⎧к䍗⢙䘀䗃

ᰐঅ᭮䍗ǃᨀ䍗ǃԓ⨶᭮䍗㓐㓧޽ᇑṸ)[Guangdong Electronics Ltd.. v. China Merchant s Godown,

Wharf & Transport Co., Ltd. . and others], 1997 SUP.PEOPLE’SCT.GAZ. 32, 32-35 (Sup. People’s Ct.

1996).