What if the foreign trade bill of lading is lost? How to solve and deal with it?

A bill of lading is a document that proves that the contract of carriage of goods by sea and the goods have been received or loaded by the carrier, as well as the carrier’s proof to deliver the goods. Since goods can only be extracted by bill of lading, bill of lading is of great significance in international trade, especially under FOB and CFR conditions, and is considered as the representative and symbol of goods.

However, because only one set of bills of lading can be issued for one bill of lading, and the bills of lading are negotiable documents at the same time, the loss of the bills of lading will have a great impact on the development of foreign trade business, which may lead to the seller unable to settle the foreign exchange and the buyer unable to take delivery of the goods. With the continuous growth of China’s import and export trade, this kind of loss has occurred frequently in foreign trade companies recently.

How should we deal with the loss of the bill of lading?

There are the following situations when a bill of lading is lost:

1. Lost under exporter’s control.

2. After the exporter sends the documents to the issuing bank, they are lost in the issuing bank.

3. The documents submitted by the issuing bank are lost after they are delivered to the express company.

4. The express delivery company is lost upon delivery to the negotiation bank.

5. Lost after negotiation bank delivers to consignee.

In cases 1 and 5, the exporter and importer shall be responsible respectively; In cases 2 and 4, the issuing bank or negotiating bank shall be responsible; The problem is that losses often occur in the third case. According to the current effective postal laws and regulations, the postal department only bears very limited responsibilities.

According to Incoterms 2000, under CIF, CFR and FOB terms, the seller must provide the buyer with transport documents without delay at his own expense. According to this deduction, the risk of document loss should generally be borne by the seller.

In order to ensure their own rights and interests, the carrier requires the consignee to guarantee the delivery of the goods without the original bill of lading, and requires the bank to provide the guarantee.

The loss of the bill of lading under different circumstances will have different responsibilities in various aspects, but this is a later remark. After the bill of lading is lost, the following measures should be taken to solve the problem and reduce the possibility of risks.

1. Notify relevant shipping companies and their agents in a timely manner. In this case, the shipping company and its freight forwarder have the obligation to handle the matter carefully. They can no longer release the goods just because the holder of the bill of lading holds the original bill of lading, but should require the consignee to provide sufficient evidence to prove that he obtained the bill of lading in good faith. For example, is the endorsement continuous? Does it meet the requirements? Has reasonable consideration been paid? The carrier may also place the goods under the bill of lading in escrow through legal procedures, thus relieving the carrier of its responsibility for the goods.

2, timely apply to the court for public notice. First, it can ensure the rights and interests under the bill of lading are not infringed. Second, it can solve the problem of long-term stagnation of margin. Because once the court decides to accept the public notice, the act of transferring the bill rights during this period is invalid. The legal cost of the public summons procedure is relatively low and the legal fee is also relatively low. Upon expiration of the summons period (usually 60 days), the court can be applied to make an ex-gratia judgment.

3. Generally speaking, the loss of documents should not affect the port of embarkation, because the consignee is obligated to receive the goods and cannot refuse to unload the goods accordingly. Similarly, the carrier cannot refuse to unload the goods on the ground that the consignee does not have the original bill of lading, although it has the right to refuse to release the goods.

4. What kind of responsibility should the postal express company bear? The current regulations give it almost exemption treatment. Whether the losses can be passed on by taking out postal express risk insurance, it seems that if the insurance company does not take out such insurance at present.

5. As long as the wording of the letter of guarantee issued by the bank is specific and comprehensive, there is generally no risk. If large amount of bank guarantee is involved, it is better to ask legal counsel to check it, because there are indeed many precedents of invalid bank guarantee in practice.

6. Application for Delivery of Goods Without Bill of Lading If the bill of lading is lost after the shipper settles the foreign exchange, the ownership of the goods has been transferred to the holder of the bill of lading in good faith, so it is generally not necessary to reissue the bill of lading, and the carrier’s obligation is to deliver the goods to the holder of the bill of lading in good faith. According to different situations should also be treated differently:
Under a straight bill of lading, the carrier may deliver the goods to the consignee of the straight bill of lading after receiving the consignee’s company guarantee and the consignor’s written guarantee that the goods will be delivered to the consignee.

Under the instruction bill of lading: if the port of discharge agent receives the consignee’s request that the bill of lading cannot be used to take delivery of the goods due to the loss of the bill of lading, it shall require the consignee to show the original/duplicate copy of the bill of lading, commercial invoice, commercial contract and packing list and other documents issued by the original carrier to check whether the consignee is the consignee. At the same time, the unloading port agent shall require the consignee to provide a formal guarantee issued by a first-class bank that meets certain standards. At the same time, the unloading port agent shall request the loading port agent to contact the consignor on the bill of lading and obtain a written guarantee from the consignor that the goods will be delivered to the consignee under such circumstances.

Under the bearer bill of lading: refer to the instruction bill of lading for details. If the consignee returns the full set of original bills of lading, the guarantee can be returned to the consignee. If the consignee cannot return the full set of original bills of lading, the letter of guarantee will be retained indefinitely in principle. If the consignee requests for return, the agent at the port of discharge shall keep a minimum period according to the laws of the host country. The domestic port proposal needs to be retained for 6 years. After the bill of lading is lost, the shipping company must be contacted immediately to control the goods under any circumstances. Only in this way can the losses be reduced and the rights and interests of the consignee and consignor will not be harmed.

Shipping documents are lost in express delivery, which often results in the consignee being unable to pick up the goods at the port of destination with the original bill of lading. In practice, the consignee usually picks up the goods with the duplicate bill of lading. Or the carrier will sign a new set of bills of lading for the supplier to take delivery of the goods and settle the foreign exchange, or the exporter will authorize the carrier to electrify. However, in the above three cases, the carrier usually requires the cargo side to provide reliable insurance.

At present, shipping companies often require exporters to provide guarantees jointly with their bank of deposit, with guarantee periods ranging from one year, three years to six years. The guarantee issued by the bank generally requires the exporter to pay a deposit. If the amount is huge, the huge amount of money will be held back for three to six years, which will exert great pressure on the exporter. If the bill of lading is obtained in good faith by a third party, the exporter will face the end of money and goods being sold out.

In the following case, the courier company was awarded 3.16 million yuan for the loss of the bill of lading.

Incident In December 2009, Guohua Company (consignor) sent goods to Greece according to the sales contract with Greece VA Company (consignee).

In January 2010, Guohua Company entrusted Jimo ICBC to handle the collection of payment for goods from Greece VA Company. Guohua Company designated the collection to be handled in accordance with the Uniform Rules for Collection. The collection amount was US$ 381,888.51, and the collection items also included the documents attached to the collection.

In January 2010, ICBC Qingdao Branch filled in the freight bill and sealed the document. DHL Shandong Company was responsible for sending a document under collection, including the ocean bill of lading. The addressee and address indicated in the freight bill were the name and address specified by Guohua Company. The column “Detailed Description of Delivered Goods” in the freight bill was filled in as “Document”.

The rights and obligations of the sender and the carrier, the liability for breach of contract and the liability of the carrier in this express delivery business are determined by the corresponding clauses in the “Sinotrans-DHL Transportation Service Contract” and “DHL Transportation Terms and Conditions” signed by ICBC Qingdao Branch and DHL Shandong Company on January 1, 2010. Jimo ICBC paid 148.48 yuan for this express delivery service.

Accident According to the inquiry records provided by DHL Shandong Company, the express arrived in Athens, Greece, on February 2, 2010. On the same day, DHL was unable to obtain the sign-in result when it was delivered to a third party.

On February 3, the express was delivered and signed for.

On April 1, 2010, the Beijing branch of sinotrans-DHL international air express co., ltd. gave a written feedback to the Qingdao branch of ICBC on the delivery of the express, stating that the express was delivered to sinotrans-DHL on January 29, 2010 Beijing time for transportation and sent from China to Greece.
According to feedback from DHL, MR.GREMOTSIS, the actual addressee of the express, called DHL to change the delivery address. Upon receiving the customer’s request, the DHL delivery agent in Greece delivered the express to the new address on February 3 according to the customer’s request. The local investigation in Greece revealed that the delivery address was changed. The new address provided by the actual addressee MR.GREMOTSIS is a store address (the name of the store is TheWorldofCarpet&Moquette). The delivery agent will deliver the express directly to the store, but the store has closed down, the addressee is missing, and the express cannot be retrieved.
At the end of 2010, Guohua Company took Jimo Industrial and Commercial Bank of China as the defendant and Dunhao Shandong Company as the third person to sue to Qingdao Intermediate People’s Court.

According to this, the final judgment of the case decided that Jimo Industrial and Commercial Bank of China will compensate Guohua Company for 2607,496 yuan and interest. During the execution of the case, presided over by the court, Jimo Industrial and Commercial Bank of China reached an execution settlement with Guohua Company, and Jimo Industrial and Commercial Bank of China actually paid 3153708.63 yuan to Guohua Company.

Judge of first instance Qingdao Intermediate People’s Court held in the first instance that according to the above-mentioned agreement in the contract, the express consignments carried by DHL Shandong Company in this case should be delivered to the address stated on the surface of the express consignment note. It is reported that the behavior of DHL Shandong’s Greek agent conforms to the industry’s usual operating practices, and its change of delivery address does not constitute a breach of contract.

DHL Shandong also failed to prove that its agent in Greece took reasonable and cautious measures to verify the identity of MR.GREMOTSIS after receiving the call. At the same time, its Greek agent did not verify whether there was an authorized relationship between the address and the actual recipient of the express and the recipient specified in the express waybill when it arrived at the actual delivery address.

The delivery behavior conforms to the industry practice. Even if such delivery practice does exist in the express delivery industry, such practice should not be recognized and protected by law because it violates the mandatory requirement that the parties to the contract should perform their contractual obligations reasonably, prudently and in good faith and may cause heavy losses to the sender.

To sum up, DHL Shandong Company’s mistake in the express delivery process has constituted a breach of contract, and it should bear the corresponding liability for breach of contract to Jimo ICBC in accordance with the law and the agreement in the contract.

Regarding the second focus issue, according to Article 113 of China’s “Contract Law”, if one party to the contract breaches the contract and causes losses to the other party, namely ICBC Qingdao Branch, the entrusted agent of ICBC, did not inform DHL Shandong of the nature of the express delivery during the period when the express delivery was wrongly delivered. The defendant DHL Shandong Company has no obligation to review the content and value of the express delivery documents. In practice, DHL Shandong Company also has no opportunity to know the content and value of the documents, and the goods delivered are only expressed as “documents”.

If the bank thinks that the delivered documents or goods are of high value or very important, it should and will have the opportunity to make a good-faith notification or prompt to the express carrier. If ICBC and its trustee ICBC Qingdao Branch fail to fulfill the notification obligation, this is the fault of ICBC in the process of fulfilling the transportation service contract.

According to the agreement in the transportation service contract of this case, the “transportation service” in this case refers to the express delivery service provided by DHL Shandong company for ICBC Qingdao branch. therefore, the delivery process of express should also be included in the transportation process, and the amount of liability for breach of contract caused by wrong delivery of express should also be handled according to the agreement in the contract.

First Instance Judgement: DHL Not Responsible for Major Responsibilities:

I. Shandong Branch of Sinotrans-DHL International Air Express Co., Ltd. reimbursed Jimo Branch of Industrial and Commercial Bank of China Limited 148.48 yuan for express freight.

2. Sinotrans-DHL International Air Express Co., Ltd. Shandong Branch compensated the plaintiff, Jimo Sub-branch of Industrial and Commercial Bank of China Limited, for the loss of US$ 100.
Judge of the second instance: DHL compensated 3.16 million for the goods!

ICBC refused to accept the first-instance judgment and appealed: after accepting the entrustment of the parties, the appellee, as a professional express delivery enterprise, should deliver the express to the addressee in a safe and timely manner according to the stated address in strict accordance with the contract agreement and the code of conduct of the express delivery industry. However, the appellee violated the basic norms of the express delivery industry and the contract agreement and directly handed over the express with the above documents to the consignee, thus causing the goods involved to be taken away by the consignee and causing the consignor to lose all the payment.

According to Article 53 of China’s “Contract Law” and Article 47 (3) of the “Postal Law”, the wrong vote belongs to intentional or gross negligence and does not enjoy the right of exemption and limitation of liability. In January 2009, DHL’s Weihai branch finally compensated Shirong Company for all the loss of payment for goods due to its mistake in submitting the collection documents of the Bank of China’s Weihai branch.

“Do not follow the agreement”, at most constitute a breach of contract, rather than necessarily “intentional breach of contract”. In this case, although the appellee did not check the identity of the addressee during the delivery of the express mail and constituted a certain fault, the fault obviously did not constitute “intent”.

However, in this case, the appellant not only failed to disclose the value of the documents sent, but also did not have any insured price or behavior, so the appellee had no possibility to foresee the amount of loss claimed by the appellant. Therefore, it is completely correct that the original judgment obviously exceeded the appellee’s reasonable expectation of the amount of compensation claimed by the appellee.

The second instance of Shandong High Court held that:
DHL Shandong said that DHL Greece changed the address of the express delivery according to a telephone notification request from MR.GREMOTSIS, but did not provide relevant evidence of the call and its contents.

When DHL Greece delivered the express to the consignee Greece VA Company, it not only knew the contents and values of various documents in the express, but also could foresee the possible losses caused by delivering bills of lading and bank collection documents to Greece VA Company other than the collecting bank.

Therefore, the original court found that DHL Shandong Company had no knowledge of the goods and value of the express in the process of delivery, which was contrary to common sense. With the loss that DHL Shandong Company could not foresee due to the default of the wrong express delivery, it cited the relevant provisions of the highest limitation of liability and ordered the appellee to bear improper limitation of liability, which should be corrected.

The second instance judgment of Shandong High Court:

I. Revoke Item 1 of Civil Judgement No.59 of Qingmin Sichu (2013) of Qingdao Intermediate People’s Court in Shandong Province; II. The second item of the civil judgment of Qingdao Intermediate People’s Court (2013) Qing Min Si Chu Zi No.59 was changed to: the appellee Sinotrans-DHL International Air Express Co., Ltd. Shandong Branch compensated the appellee Industrial and Commercial Bank of China Co., Ltd. Jimo Sub-branch RMB 3164027.63 and interest.