CLAIMANT’S TITLE TO SUE (MARITIME CARGO CLAIMS IN CAMEROON)

Who Cares About Title to Sue?

This may give the impression that it is always the claimant who is more interested in establishing its title to sue: without title to sue, the claimant lacks legitimacy commonly called locus standi against the carrier and the claim is thrown out.

It is necessary to point out immediately, however, that the carrier too is concerned about the claimant’s title to sue and not always or only for the obvious reason that demolishing the claimant’s locus standi is the quickest escape route from the claim for the carrier.

The claimant may have more than one route through which to claim against the carrier. The most obvious is through a contract of carriage, either made or acquired by the claimant. The claimant may, however, have other arrows in its quiver. In certain circumstances, the claimant may bring an action against the carrier in one of two relevant torts recognised by English law, i.e. conversion or negligence.

If the carrier fails to deliver goods to which the claimant can prove that it has certain rights, then the carrier is liable to the claimant in conversion. Again, if the carrier short- delivers or damages goods to which the claimant can prove it has certain rights, then the carrier is liable to the claimant in the tort of negligence.

Moreover, if the circumstances are such that the carrier is the cargo interest’s bailee, holding physical possession of goods to which the cargo interest has a right to possession (commonly called constructive possession) then another possible route bailment opens itself up to the cargo interest, outside any contract of carriage that may exist between the parties to the claim. These different routes, tort and bailment, have two things in common.

First, they are not special to the law of carriage of goods by sea. They are simply carriage equivalents of more general grounds of liability which arise.

Second, both routes are alternative to contract in two senses, i.e.

(a) That either route may be available even if there is no contract of carriage; and

(b) That either route may be available in addition to the claimant’s contractual route of recovery where there is a contract of carriage between the claimant and the carrier.

It is in this latter instance that the carrier may, far and away from denying the claimant’s title to sue in contract, become somewhat perversely the party interested in establishing it. Where a carrier is threatened by a claim outside the contract of carriage either because there appears to be no contract of carriage or because there is one, but the requirements for recovery in tort or bailment also are satisfied then the carrier is actually assisted if it can establish the cargo interest’s locus standi in contract.

Where There Is No Doubt About Title To Sue

It is important, however, to state that there are two instances where there is no mileage at all in disputing the claimant’s locus standi.

Charterers: The first is where the cargo claimant is a charterer or a sub- charterer of a chartered ship. There is no doubt here that the claimant has title to sue the party from whom it has chartered the ship, which may be the shipowner or another charterer, under the terms of the charterparty concluded between the claimant and the respondent carrier. The charterer may be the shipper of the goods (in which case it will, if the goods are the subject of a sale contract, be, for example, a c.i.f. seller) or it may be the receiver of the goods (in which case, again if the goods are the subject of a sale contract, the receiver- charterer will likely be an f.o.b. buyer). In either event, the point is that if the claimant is a charterer, its locus standi is unassailable: once a charterer, as it were, always a charterer.
Shippers: The second case where there is no problem with the claimant’s locus standi, at any rate until the moment when the bill of lading issued by the carrier is transferred by the shipper to the receiver, is where the claim is brought by the shipper who has concluded the contract of carriage. This is true whether the goods are carried on a chartered ship (the situation we have just examined) or not. However, a shipper’s locus standi is greatly dependent on the bill of lading.

Where Problems With Title To Sue Arises

Privity Problem

The problem of the cargo claimant’s title to sue the carrier has been closely associated with English law and other systems in the common law tradition because of the common law’s strictures regarding privity of contract. If only those who are parties to a contract can sue on it, then a cargo interest who had not actually itself concluded the contract of carriage cannot sue the carrier on it despite the fact that the loss caused by the carrier’s breach of contract was actually incurred by the third party rather than by the cargo interest who concluded the contract with the carrier.

2. Carriage Of Goods By Sea Act

Under this law there are three types of cargo interest with rights of suit against the carrier: (a) lawful holders of transferable bills of lading; (b) parties for the time being named as consignees on sea waybills and straight bills; and (c) parties to whom the carrier undertakes to deliver the goods under a ship’s delivery order.

Lawful holders of bills of lading: The first type of cargo interest with title to sue the carrier is the lawful holder of a “bill of lading”, it includes only transferable bills of lading, that is to say, bills of lading which are either made out to bearer, or simply to order, or to the shipper’s or to a named consignee’s order. Moreover, for the claimant to have rights of suit under the law, it must be a “lawful holder” of the bill of lading, a term defined as a person with possession of the bill and, unless the bill is made out to bearer, either (a) named as consignee on the bill, or (b) to whom the bill is endorsed either in full or in blank. It is clear that the way the bill of lading is “made out” or endorsed is crucial to the transfer of rights of suit under the law.

Bearer bills: Where the bill simply names the “bearer” as the consignee, it is the mere holding of the bill without any need of endorsement by any cargo interest which endows the holder with rights of suit against the carrier. That holder may be anyone of a number of persons, e.g., a buyer of the goods, a bank extending a line of credit to the buyer or indeed a person who simply comes across the bill. This flexibility provides at once the greatest strength and the greatest weakness of bearer bills.
On the one hand, bearer bills facilitate the transfer of rights of suit down a string of buyers or through a chain of banks through simple physical transfer of the bills with no requirement of endorsement in one form or another.

On the one hand, bearer bills facilitate the transfer of rights of suit down a string of buyers or through a chain of banks through simple physical transfer of the bills with no requirement of endorsement in one form or another.
On the other hand, bearer bills carry with them the risk that they may end up in the wrong pair of hands, those of a holder who simply comes across the bill and presents it under the law: although the law does somewhat piously, require the holder to be a “lawful” holder, it is difficult to see how a carrier can in practice be expected to assess such a holder’s good faith when the bill is presented for delivery of the goods.

Shipper’s order bills: Before we come to bills made out to the order of the buyer, however, we need to look at bills of lading made out to the order of the shipper itself. The consignee box in such bills may be completed in one of the following ways: “To Order”, “To Shipper’s Order” or “(To the Shipper’s name) or Order”. In these cases, the carrier has agreed to carry the goods and to deliver them to any person to whom the shipper orders the carrier to deliver the goods.
Bills of lading made out to the order of a named consignee who is not the shipper: This brings us to somewhat safer but rather less flexible transferable bills made out to the order of a named person, normally (but not always) the buyer of the goods.
Sea waybills and straight bills of lading: Bearer bills, bills made out to the order of the shipper and bills of lading made out to the order of a named consignee all share one feature: by issuing the bill of lading in any of these three forms, the carrier has agreed to deliver the goods to a person who is not necessarily identified on the bill at the time the bill is issued. Even in the third case, where the bill is made out to the name of an identified consignee, typically the buyer, the carrier has agreed to deliver the goods to the named buyer or to an endorsee from that buyer and such endorsees are not identified in the bill at that time.
Ship’s delivery orders: Apart from lawful holders of bills of lading and consignees named on sea waybills and straight bills of lading, the third type of cargo interest to whom the Carriage of Goods by Sea law transfers rights of suit against the carrier is any person to whom the carrier acknowledges (or “attorns”) a right to delivery under a ship’s delivery order. Such documents are used where a cargo shipped in bulk needs to be split.