Lloyd's Maritime and Commercial Law Quarterly
MANAGING THE RISKS OF SWITCH BILLS OF LADING
Miriam Goldby *
This article examines the legal and commercial ramifications of issuing switch bills of lading, explores the legal risks involved in this practice, and explores how these risks may best be managed and mitigated. It analyses the circumstances in which the issue of a switch bill of lading may constitute a novation or a variation of the original contract of carriage and discusses who is entitled to request a switch and who must authorise or consent to it. It also explores title to sue and liability questions, as well as the mandatory applicability of international transport Conventions to switch bills of lading. It highlights the various commercial and legal risks of consenting to the issue of switch bills of lading and proposes ways in which these risks could be minimised, including through the adoption of electronic alternatives to bills of lading.
A. INTRODUCTION
The practice of issuing switch bills of lading, while quite prevalent internationally, has not received much attention in the legal literature. Although in many cases switch bills are issued for legitimate reasons and serve to facilitate trade, issuance is often effected without a proper understanding of the risks involved.1 Indeed, the legal nature and character of switching has not to date been analysed in depth, and a number of open questions remain regarding the legal nature, effect and consequences of the practice. The purpose of this paper is to analyse a number of cases decided in the common law courts so as to attempt to answer the questions: what happens in legal terms when a switch bill of lading is issued? what are the legal risks involved? and how may these risks best be managed and mitigated?
B. WHAT IS SWITCHING AND WHY IS IT DONE?
As the name suggests, a switch bill of lading is one which is issued in substitution for the original bill of lading issued to the shipper at the time of receipt of the goods or of
* Reader in Shipping, Insurance and Commercial Law, Centre for Commercial Law Studies, Queen Mary University of London. I would like to thank Prof. Sir Richard Aikens, Prof. Paul Myburgh and the anonymous reviewer for their invaluable comments on an earlier draft of the paper. All errors remain my own.
1. M Jagannath, “Switch Bills of Lading—Revisited”, NAU Newsletter, 10 August 2014, available electronically at nau.com.sg/switch-bills-of-lading-revisited/.
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