Authority to sign B/Ls-General. The bill of lading (B/L) is signed by only one party representing the carrier. The person signing could be the shipowner if the owner is the carrier, but it is more likely that other persons will sign on his behalf, as the shipowner’s agents.
If the B/L is signed by an agent of the shipowner, the owner becomes the “principal”. If the signing is within the authority given or implied to be given to the agent, for example, for cargo actually received to be shipped, the carrier will be bound by the contract evidenced in the bill of lading. If the goods are not actually received nor actually shipped on board, the agent may not have the authority to sign and issue a receipt. In this case there may be a limit on whether the principal is bound. In the old, though leading case of Grant v. Norway, 1851, the master signed a bill of lading for cargo that was not shipped. He had no authority from the shipowner to do so and therefore the owner was not bound. (Changes in the legislation related to B/Ls and the Hague-Visby Rules did change this.)
The authority may be exercised by a direct agent of the shipowner, for example, the master of the vessel but in certain situations, for example, in a time charter, the charterparty may require the master to sign or to delegate authority to the charterer or the charterer’s agent to sign on behalf of the master. In this situation the bill of lading is still signed on behalf, eventually, of the shipowner, even if the form of B/L that is used is the charterer’s own form. It may contain a “demise clause” which relieves the Charterer of any liability for loss of or damage to the goods because he neither owns the vessel nor is he the demise Charterer (and therefore the “disponent owner”) of the vessel.
The shipowner is still bound by the term’s of the bill of lading and therefore he should not give authority to sign and issue B/Ls too easily. One example where the owner can be bound is where he authorises (through the master, perhaps) the port agent to sign and issue the B/L but the port agent also represents the shipper and/or the Charterer. The conflict of interest may lead, the shipowner into legal liability. The leading case is that of The Nea Tyhi, 1982, in which B/Ls were issued by the charterer’s agent and claused “shipped under deck”. The cargo of plywood was actually shipped on deck and damaged by rainwater. It was held by the court that the charterer’s agents did bind the shipowner. The agents were said to have “ostensible authority” to sign all bills of lading although they had no actual (express or implied) authority to sign B/Ls for cargo shipped under deck when the cargo was in fact carried on deck. The question of ostensible authority arises in the law and practice of agency whereby the. shipowner-principal may permit agents to sign and issue B/Ls without presenting them to the master. It is modern practice for agents to sign the bill of lading “For the Master . . .”. The owner is considered to have “held out” the Charterer and agents to make contracts evidenced by bills of lading on behalf of the owner.
A more recent case was The Saudi Crown, 1986, where the judge found that the bills of lading for the cargo were not signed and issued by the port agents until all the cargo was shipped. The B/Ls were then back-dated or ante-dated. (See Fraud.)
The reason the B/L.s were ante-dated was because the contract of sale between the shippers and the buyers required B/Ls not later than the date inserted on the bills. If the B/Ls were dated when the cargo was actually shipped, the contract of sale may have been breached. The owners were held to be liable to the buyers because of the misrepresentation by the port agents, who represented the owners.
