The plaintiffs sued the defendant carrier, seeking recovery of their goods detained by the defendant, as well as damages for detinue, interest, and costs. The plaintiffs' claim was that the first plaintiff contracted with the defendant to handle the transportation and clearance of an assorted consignment of items from London, UK, to Kampala, Uganda. When the consignment arrived at Mombasa, Kenya, it could not be cleared by Customs for onward transportation to Kampala, Uganda, due to discrepancies in the shipping documents, which the plaintiffs attributed to the defendant. The defendant was only able to correct these discrepancies 4 months later, but withheld the goods in its custody claiming further payment from the plaintiffs for demurrage and storage charges. The plaintiffs disputed that claim.

Held: Judgment for the plaintiffs.

Under the Hague-Visby Rules, the carrier is obliged to record accurately the quantity and condition of the cargo on loading in the bill of lading. Exactly what needs to be recorded in the bill of lading is set out in art 3.3 of the Rules. What is clear from the Rules is that the figures inserted in the bill of lading are the shipper's figures. However, in this case the defendant carrier inserted the following words in the bill of lading: 'Container said to contain 3 LOTS'. That fact was not reflected in the packing list provided to the defendant by the first plaintiff's agent. There is no direct or circumstantial evidence to show that the specification of the number of lots inserted in the bill of lading came from the first plaintiff, as alleged by the defendant.

The obligation of the carrier to insert figures is not absolute. Article 3.3 of the Rules goes on to state that 'no carrier, master or agent of the carrier shall be bound to state or show in the bill of lading any marks, number, quantity, or weight which he has reasonable ground for suspecting not accurately to represent the goods actually received or which he has had no reasonable means of checking'. As a result the carrier should: (i) only enter the shipper's figures if it reasonably believes that they are accurate; and (ii) mark the bill of lading as 'weight, measure, quantity unknown' if it cannot verify the accuracy of the statement. Here, whatever the source of information that led to the defendant's specification of the number of lots inserted in the bill of lading, the defendant had no reasonable grounds for suspecting that the shipper's specification did not accurately represent the goods actually received. Commercial documents must not be considered in a vacuum, divorced from the context in which they are intended to be used. Since the nature and value of the goods inside the container was specifically declared in the packing list, it was for the carrier to verify the extent of its liability. There is no evidence to show that the defendant had no reasonable means of checking the cargo.

Before a carrier issues bills of lading, it has to take a reasonable, non-expert view of the cargo that is about to be loaded, as it sees it. It must decide whether the cargo to be loaded is accurately described in the bills of lading. The Court does not require the carrier to exercise a skill equivalent to that of an expert surveyor, or have any greater knowledge or experience of the cargo than any other reasonably careful carrier. All that has to be done is to make an independent check using the best means available. Where the carrier has no reasonable means of checking the marks, number, quantity, or weight of the goods being shipped in a container, or where there may be some reason for doubt or uncertainty as to the contents of the container, it would be prudent for the bill of lading to be claused 'weight, number and quantity unknown'. This shifts to the shipper the burden of proving by extrinsic evidence the carriage of any goods which it claims are lost or damaged, both for the purpose of the claim and for the calculation of the limit of liability. However, it was explained in The David Agshamenebeli: Owners of the Cargo v Owners of the Ship [2003] 1 Lloyd’s Rep 92 (CMI752) that:

The general effect of the authorities is that the [carrier] should make up his own mind whether, in all the circumstances, the cargo appears to satisfy the description of its apparent order and condition in the bills of lading tendered for signature. He is unlikely to be criticised for failing to ask for expert advice, and the law does not require him to be an expert surveyor or have any greater knowledge or experience of the cargo in question than any other reasonably careful [carrier]. If he honestly takes the view that the goods are not in apparent good order and condition, and that is a view that could properly be held by a reasonably observant [carrier], he is entitled to clause the bill of lading - even if not all [carriers] would necessarily agree with him. ... There was no basis on which to suggest a duty of care in tort. It is the shipper or the shipper’s agent who tenders the bill to the carrier or the carrier’s agent (usually the [carrier]) for signature. The shipper can therefore be taken to know the actual apparent condition of his own cargo. The real purpose of the requirement is to enable the shipper to transmit that information to subsequent holders of the bill, so that they can use it as a document of title to the goods and as a mode of assignment of the contract of carriage. Subsequent holders can rely on the statement to reflect the reasonable judgment of a reasonably competent and observant [carrier] in all the circumstances. This is an internationally recognised regime and there is no reason to add on to it any further obligation of a duty of care.

Although a carrier under a bill of lading may be liable at common law for damages arising from false statements in the bill of lading about the goods (see Standard Chartered Bank v National Shipping Corp of Pakistan [2003] 1 Lloyd’s Rep 227), the duty not to make any false representations in the bill of lading is generally considered to be a duty towards the transferees of bills of lading. In such cases, the carrier will be liable to those who have been induced into accepting the bill of lading and thereby suffered a loss. In the shipper's hands, the bill will constitute only prima facie evidence of the quantity and quality of goods shipped, throwing the burden of rebutting that presumption onto the carrier, who must adduce either direct or indirect evidence to the contrary. Furthermore, in order to be even prima facie evidence, the bill must purport to be a receipt. Where the bill records in one part that the goods were received in apparent good order and condition and in another that their 'quality and condition' are unknown, it will not amount to even prima facie evidence (see New Chinese Antimony Co v Ocean Steamship Co [1917] 2 KB 664).

Here, the defendant did not insert any information in the bill of lading concerning the quality of the goods shipped, but as regards quantity stated that; 'Container said to contain 3 LOTS'. The word 'lot' seems to have a specialised or technical meaning, in the manner of a term of art. According to a witness, a 'lot' is a package or collection of a similar tax category of items. Otherwise, the plain ordinary meaning of a 'lot' connotes a bundle of things packed, whether in a box or other receptacle, or merely compactly tied up in customary freight units. Where a container, pallet, or similar article of transport is used to consolidate goods, the number of packages or units enumerated in the bill of lading as packed in such article of transport may be deemed the number of 'LOTS' as far as those packages or units are concerned. Being a term of art, the shipper's characterisation of the items packaged is immaterial: an article will not become a 'lot' merely because the shipper has chosen to call it one. Where 'LOTS' are to be counted in relation to parcels of cargo loaded into containers, it is the parcels and not the containers which constitute the relevant LOTS. Whereas art 3.3 of the Hague Visby Rules requires a carrier to insert figures in the bill of lading as to the packages or pieces, or the quantity, or weight, of the cargo shipped as the case may be, 'as furnished in writing by the shipper', the defendant did not adduce any evidence in writing to show that the statement was attributable to the first plaintiff or its agent.

The carrier has a duty to use words or expressions which have a range of meaning which reflect reasonably closely the apparent quantity, order, and condition of the cargo. Although there is no contractual guarantee of absolute accuracy as to the order and condition of the cargo or its apparent order and condition, the carrier has the duty to issue a bill of lading which records the apparent order and condition of the goods according to the reasonable assessment of the carrier. There was no reasonable basis to believe that a huge container stuffed with as many items as are listed in both the packing list and the bill of lading would contain only three LOTS or packages. To have transmitted that error onto the cargo manifest was an act of negligence. Furthermore, the carrier is the custodian of the cargo until it is accepted for release by Customs. The charge to attend to all documentation matters on behalf of the principal (the shipper) rests with the carrier, and includes the issuance of bills of lading, delivery orders, and the preparation and lodging of cargo manifests. Sound shipping practice requires that the carrier issues a correct bill of lading indicating the correct cargo quantities and circumstances of the shipment, including the actual date of loading. Therefore every shipping line, agent, broker, freight forwarder, and common carrier operating in a country must adhere to the rules and regulations of that country. Every carrier handling imported cargo has a responsibility to Customs to ensure that none of the goods are released to the customer without getting the authorised release from Customs. The bill of lading is the key document used by the carrier to declare the nature of the cargo that is carried under its contract of carriage. The carrier therefore has the duty to check and verify that the cargo description and other information shown on the import declaration to Customs is the same as that shown on the bill of lading and the cargo manifest. Carriers, though their agents, are obligated to manifest the quantity of packages in their smallest external packaging units; ie, the manifest description should be the equivalent of that on any pertinent bills of lading or packing lists.

The sheer number of items listed in both the packing list and the bill of lading and its variety was sufficient to put the defendant on notice that it could not be described as constituting only three packages or LOTS. Since the defendant has failed to adduce evidence to show that its insertion of 'Container said to contain 3 LOTS' in the bill of lading and the cargo manifest was based on information 'as furnished in writing by the shipper', the Court finds that the defendant is responsible for misdescription of the cargo in the bill of lading and cargo manifest.

Article 3.5 of the Hague-Visby Rules (cp art 17 Hamburg rules) states: 'The shipper shall be deemed to have guaranteed to the carrier the accuracy at the time of the shipment of the marks, number, quantity and weight, as furnished by him and the shipper shall indemnify the carrier against all loss, damages and expenses arising, or resulting from, inaccuracies in such particulars.' Had the plaintiffs breached this duty, they would have been liable for the demurrage charges and storage costs claimed by the defendant. However, having found that these charges are attributable to the defendant's fault occasioned by its misdescription of the cargo in the bill of lading and the cargo manifest, and the slow pace by which it went about the rectification of the error, the plaintiffs cannot be required to meet them.