The Presentation Rule

The presentation rule obligates a party(s) to hand over the Bill Of Lading or any equivalent document at the discharging port for one to be granted access to their cargo. Bill Of Lading is a legally accepted and universally used document particularly in the transaction of international trade and the trade of commodities by sea. Basically, this document that the presentation rule requires to be availed before access to ones cargo is a legally binding contract between the individual shipping the commodities, the carrier of the commodity and the receiver of the cargo at the destination.1

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A bill of landing is also a document of title upon its presentation the carrier is conventionally bound to deliver goods to the receiver. The bill of landing defines the categorical relationship between the holder of a bill of landing and the prospective carrier with regards to their rights and obligations. The presentation rule serves to protect the carrier from being defrauded by persons impersonating the true owner of the goods. It bestows the necessary protection to the buyer of commodities by ensuring that the hauler will only deliver the commodities to the legitimate holder of a document of title. The rule obligates the carrier to ascertain, verify and only present the goods to the genuine possessor of the Bill Of Lading.2

Demand for production of the bill of landing serves an imperative purpose to the cargo-claimant to ascertain whether all the goods as described were correctly loaded onto the ship, if the carrier mishandled the goods the claimant can use the bill to invoke the sections of the contract that governed cases of damaged goods and if goods are lost the document will offer the solution based on the pre-signed contract as it is in the bill of landing. The rule also offers the bill exclusive legitimacy to possession of cargo in transit that holding a bill of landing is tantamount a constructive ownership of the commodities.

The bill of landing because it has been entrenched in the maritime code rules and regulations and has gained legal veracity as evidence of a contract of carriage of commodities by sea. The presentation rule therefore serves to the salient purpose of making the handing over of the document a requisite condition for the release of cargo by the carrier.3

Apart from the bill of landing a negotiable bill of landing is another document subject to the presentation rule. This document serves as a receipt for the commodities conveyed to the ship for carriage, a document of tittle to the commodities with regards to the fact that only the holder of the master Bill Of Lading has the authority to claim delivery of the goods at the particular destination and is tantamount to evidence of the contract of carriage of commodities. In the international trade arena, a negotiable Bill Of Lading is offered to the order of a recognized party or normally to order. Additionally, the document is transferrable from one individual to another, enabled through endorsement by the holder of the original bill of landing, during the voyage. Generally, the negotiable bill of landing is issued by the carrier or his representatives to a shipper in return for conveyance of consignment to the ship or into the haulers maintenance for loading onto a ship afterwards.

To what practical difficulties, if any, does the presentation rule give rise?

The presentation rule informs us that can entrusted to a shipper can only be discharged upon presentation of the bill of landing. However, not in every maritime transaction will this be practical. There are a number of factors that curtail the practical fulfilment of the presentation rule. Non-compliance to the presentation rule has with it some dire consequences. Often, when the rule is not complied with then a letter of indemnity is used to effect the delivery of goods to the claimant. Many scholars are in agreement that the presentation rule is sound theoretically but quite a herculean task to implement it practically. First, there are significant occurrences where commodities arrive at their destined port before the Bill Of Lading. This makes it impossible to accomplish the rule without one or more parties sustaining a relative amount of loss attributed to the delay of arrival of the Bill Of Lading.3

There are myriads of factors that can lead to the delay of the bill of landing. The transportation time from the state of shipment to the country of destination maybe shorter than the time needed for the document of title to be delivered to the legitimate owner thus creating a scenario where the rule of presentation cannot be realized. Another plausible scenario that could hinder the practical fulfilment of the rule could be that the bill of landing was to be disseminated along with other documents which might take long to process. This other documents could take long to process because they might be processed by third parties such as custom offices, financial institutions or government institutions verifying quantity, quality or veracity of goods on transit.4

These lengthy processes could be completed when the commodities have already arrived the port of destination and thus practically difficult to fulfill the presentation rule without incurring of loss by one or more parties. Delays in bill of landing can also be attributed to circumstances where the transaction are to be pre-financed by financial institutions and payments for the commodities are made via bank either by letter of credit or through cash. Thus the receipts and documents will have to pass through the financial institutions channels of verification. This verification, particularly if the payment is on credit, takes a number of days and thus consequently cause delay in delivery of the Bill Of Lading hindering the application of the presentation rule.1

A delay in the arrival of the Bill Of Lading will inevitably lead to logistical and commercial consequences. The delay could affect the commercial interest of the shipping company or the profit realized from the trade. Carriers often add provisions in their contract to shield them from any losses that might be caused by any kind of delay at the destined port as a result of late arrival of the bill of landing. Unprecedented delay at the port of discharge can cause serious logistical difficulties such as congestion at the port of destination.it might affect the berth distribution protocol employed by the port of destination thus the ship in question might be forced to go at the back of the queue and wait for the Bill Of Lading to arrive. This will instead cause further delays. Additionally, a delivery of goods in disregard of the presentation rule might expose the carrier to fraudulent persons.

What provision do the Rotterdam Rules make with regard to a 'presentation rule'?

The United Nations Convention On Contracts For The International Carriage Of Goods Wholly Or Partly By Sea famously known as the Rotterdam rule was adopted by the General assembly in 2008.Due to the many practicality difficulties encumbering the fulfillment of the presentation rule the convention aimed to provide for a uniform and modern legal statutes controlling the obligations and regulations of carriers, sellers and buyers under legally bidding documents of international trade .the rules appreciate the advancement in technology and how it can promote the conduction of internal trade more efficiently and saving time. Many commercial development have been acknowledged by the rules and particularly the developments of electronic transport documents which will profoundly aid in curtail delays in bill of landing reception at the destination to the legitimate holders.3

How does this provision in the Rotterdam Rules differ, if at all, from any current South African statutory provision relating to a presentation rule?

South Africa legal system is stilled hinged on the old methods of conducting international trade and are not in any hurry to ratify the Rotterdam rules. The statutory laws still honor the presentation of the bill of landing prior to delivery of goods by carrier and on very rare occasion are electronic documentation respected. This laid back practices are hurting the development of the trade with traders incurring losses that could have been prevented if the Rotterdam rules were entrenched in their statutory laws regarding the presentation rule.2

References

Collier, J. (1982). Conflict of Laws Carriage of Goods by SeaaHague-Visby RulesaContracting Out. Cam. Law. J., 41(02), 253. doi:10.1017/s0008197300108669

Common Carriers. Shipping Contract. Waiver. (1914). Virginia Law Review, 2(1), 76. doi:10.2307/1064226

Forbes, A. (2014). International maritime security law. Australian Journal Of Maritime & Ocean Affairs, 7(2), 160-162. doi:10.1080/18366503.2014.961690

McDorman, T. (2008). Book Review: Maritime Counterproliferation Operations and the Rule of Law. International Journal Of Maritime History, 20(2), 479-480. doi:10.1177/084387140802000294

Stevens, F. (2009). Carriage under Bills of Lading: The Applicable Law. European Journal Of Commercial Contract Law, 1(3), 126-133. doi:10.7590/ejccl_2009_03_02

e1ifeOe,. (2011). A Comparative Legal Study on Unknown Wording of a Bill of Lading in Carriage of Goods by Sea. Seoul Law Review, 19(2), 279-317. doi:10.15821/slr.2011.19.2.008