Lloyd's Maritime and Commercial Law Quarterly
RIGHTS OF SUIT IN RESPECT OF CARRIAGE OF GOODS BY SEA
J. Beatson* & J.J. Cooper †
The problems relating to title to sue in respect of goods carried by sea are well known.1 The Law Commissions have now published their Report on Rights of Suit in Respect of Carriage of Goods by Sea,2 to which is appended a draft Carriage of Goods by Sea Bill. This article analyses the Report and Bill. First, we examine why reform was necessary. Secondly, we explain the main principles on which the reform was based. Thirdly, we summarize the main recommendations of the Report. Fourthly, we examine the Carriage of Goods by Sea Bill.
A. The need for reform
The Law Commission became interested in this project as a result of an approach by the Grain and Feed Trade Association (GAFTA), which requested an examination of the law relating to the rights of buyers of goods at sea which form part of a larger bulk. This approach was prompted by The Gosforth,3 a case decided according to English law by the Commercial Court in Rotterdam, which, though it merely stated the uncontroversial proposition that the holder of a merchant’s delivery order does not have a right of delivery against a sea carrier but only against the person who issued it, nevertheless caused concern among commodity traders because it once again exposed the precarious position of the buyer of part of a bulk.
In 1989, the Law Commission published Working Paper No. 112, and the Scottish Law Commission published Discussion Paper No. 83, in which two main problems were identified.4 The first stemmed from s. 16 of the Sale of Goods Act 1979, which provides that, where there is a contract for the sale of unascertained goods, no property in the goods is transferred unless and until the goods are ascertained. This means that, where the seller becomes insolvent before property has passed, a buyer who has paid for goods will merely have the rights of a general creditor even
* Law Commissioner.
† Common Law team, Law Commission.
1. See Bingham, L.J., in The Aramis
[1989] 1 Lloyd’s Rep. 213; Mustill, L.J., in The Delfini
[1990] 1 Lloyd’s Rep. 252; Davenport, “Problems in the Bills of Lading Act” (1989) 105 L.Q.R. 174; Treitel, “Bills of Lading and Implied Contracts” [1989] LMCLQ 162; Reynolds, “Reform of the Bills of Lading Act” (1990) 106 L.Q.R. 1; Treitel, “Passing of Property under c.i.f. Contracts and the Bills of Lading Act 1855” [1990] LMCLO 1.
2. Law Com. No. 196; Scot. Law. Com. No. 130 (1991).
3. S. en S. 1985 Nr. 91. See Davenport, “Ownership of Bulk Cargoes” [1986] LMCLQ 4.
4. Law Com. W.P. No. 112: Rights to Goods in Bulk; Scot. Law Com. D.P. No. 83: Section 16 of the Sale of Goods Act 1979 and Section I of the Bills of Lading Act 1855. See A. H. Hudson, “Sales from bulk” [1989] LMCLQ 420.
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