Home Maritime law Mate receipt v. bill of lading : a contemporary practice

Maritime law

Mate receipt v. bill of lading : a contemporary practice

March 5, 2021

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This article is written by Bhumika Dandona from the School of Law, Sushant University, Gurgaon. In this article, she describes the concept of mate receipt and bill of lading exhaustively.

Table of Contents

Introduction

It was several thousand years ago when people started using water as a means of transporting goods. Why trade by sea became a common practice may attribute to the fact that it was much cheaper than trading by land. Also, wagons were often attacked by robbers, making it dangerous to travel by land.

The Romans, Arabs, and Europeans began to form several sea trade routes over the 7th-13th centuries. Companies specializing in trade came up. With advances in technology over the next few years, this activity became much popular. It was, however, the development of container shipping that transformed the shipping industry into what it is today. It is also what gave rise to the concept of the bill of lading and mate receipt.

A brief background

The history of the bill of lading has an important connection with Maritime law and merchant customs. Because merchants often went along with the ships carrying goods, there was no need for writing down information about the goods. But over time, commercial trade began to increase significantly, necessitating documentation.

Writing became a means to transfer the authority of transportation. Statutes like Ordinamenta et Consuetudo Maris of Trani (Ordinances and Custom of the Sea), 1063 incorporated provisions regarding records of goods. The captain of the ship had a duty to maintain a register of the items on board. There were similar provisions in several other statutes and manuscripts. The Marine Ordinances introduced by Louis XIV in the 1800s mandated specification of the condition of goods.

The present-day bill of ladings came into existence much later, in Europe. It was widely in use during the 16th century. Apart from that, it also has a mention in the Hague-Visby Rules (The Hague Convention), Rotterdam Rules, Hamburg Rules, US-COGSA, etc. And one cannot describe the development of the bill of lading without talking about digitization.

Talking about the history of mate receipt, it is unknown how it came into existence. People speculate though, that it is an outcome of the bill of lading itself. The similarity between the two is that they contain a description of the goods.

Mate receipt

A mate receipt refers to a paper slip that describes the state of the goods loaded on the ship. Information about their state in the receipt has to be of face value. It is the officer or mate in charge of the vessel who furnishes the receipt.

The receipt first needs to be passed on to the respective port authorities by the officer in charge. After settling all of its port dues, the supplying company has to collect the same from the authorities.

Types of mate receipts

Mentioned below are the two types of mate receipts:

Clean mate receipt

A clean mate receipt refers to the paper slip that the officer in charge gives, on being convinced by the state of goods and that there is no viewable damage.

Qualified mate receipt

A qualified mate receipt refers to the paper slip that the officer in charge gives, not being convinced by the state of goods on account of some viewable damage. For example, if there is a leakage in an oil tanker, the officer in charge will furnish a qualified mate receipt. Other examples can be loose fittings, missing parts, defective packaging, etc.

Significance of mate receipt

A mate receipt is merely a confirmation that goods are in an acceptable state. It is not the title of goods.
There are no restrictions or conditions on its transfer.
It enables the supplying company to clear port dues to the Port Trust Authorities.

The subject of mate receipt

The subject of mate receipt is as follows:

Vessel name;
Shipment date;
Remarks on the state of goods;
Remarks on the packaging;
Quantity of goods;
Details of supplying company;
Details of the carrier;
Details of the shipping port;
Details of receiving port;
Name and trademark of the shipping line;
Signatures of the authorities;
Signature of the officer in charge;
Other essential information.

Exchange for BOL

The exchange of mate receipt for the bill of lading is essential because the latter is prepared based on the former.

Bill of lading

Bill of lading is paperwork that has been granted status under the law. It registers all the information about the goods that are to be transported. Given by the transporting company to the supplying company, it ensures a hassle-free shipment process.

For example, you own a company called Surma Co. in India. You want to buy cotton t-shirts from a supplying company named Blaze Clothes Co. in Zimbabwe. Blaze Clothes Co. delivers the goods to the transporter you have chosen. After that, they will receive a receipt (bill of lading) for the goods. The goods are now ready to be delivered. When the supplying company has received the payment for the goods, they will give you the receipt. Then, you will possess ownership of those goods.

Title for goods

Title for goods relates to their ownership. Once the bill of lading is transferred by the supplier to the buyer, ownership of goods rests with the buyer.

Receipt for shipment

It implies that goods are loaded on the ship and are ready for delivery at the appointed station.

Legal document

Since the bill of lading is an agreement enforceable by law, parties are bound to fulfill obligations on their part. If either of them fails to do so, the aggrieved party may claim legal remedy for the same.

The subject of a bill of lading

The subject of the bill of lading is as follows:

Details of supplying company;
Details of the buyer;
Date of picking up of goods;
General description of goods;
Clarity on delivery of hazardous goods if involved;
Signature of respective parties;
Other essential instructions.

Types of bills of lading

Mentioned below are the 11 primary types of bills of lading:

Clean bill of lading

If the goods are in a satisfactory state, the bill furnished is known as the clean bill of lading.

Claused bill of lading

When the goods are impaired, the bill furnished is called the claused bill of lading. For example, when there is leakage in oil tankers.

Received before the shipment bill of lading

When the goods are not yet delivered, that is although received but not loaded in the vessel, received before the shipment bill of lading is furnished.

Bearer bill of lading

As per this type of bill, delivery of the goods will be direct to the bill bearer. A bearer bill is negotiable by physical delivery.

Container bill of lading

Bill furnished when the goods are delivered, stored in containers, is called the container bill of lading.

Multi-modal Transport/Combined Transport bill of lading

This type of bill is furnished when the delivery involves two or more kinds of transportation modes.

Through bill of lading

It allows the transporting company to deliver the goods through the mode of delivery so specified. There is a division of this bill into the following:

Ocean bill of lading

Bill furnished to deliver goods across the country, is known as the ocean bill of lading.

Inland bill of lading

Bill furnished to deliver goods within the country, is known as the inland bill of lading.

House bill of lading

This bill operates between the buyer and the supplying company, even though furnished by the freight forwarder (ships goods on supplier’s behalf).

Master bill of lading

This bill operates between the carrier and the supplying company. However the latter will receive it only if they are working or connected with the freight forwarder.

Order bill of lading

It is a negotiable bill of lading since it confers upon the buyer the right to give up the goods to any other person. There is a division of this bill into the following:

To order Blank Endorsement

To order blank endorsement means that the supplying company has not mentioned the buyer of the goods. If the supplying company does not have a buyer at the time of delivery, they can signify ‘to order’ in the buyer section.

To order Bank

This type of order bill of lading usually involves the bank as a guardian of the goods. It furnishes a document called Letter of credit, which specifies instructions that the supplying company must follow. After that, the bank signs the bill of lading and makes payment to the bank representing the supplying company.

Straight bill of lading

When the buyer pays for the goods in advance, the bill furnished is called the straight bill of lading. The buyer then becomes entitled to receive the goods directly. However, they cannot give up the goods to any other person. It is, for this reason, this bill is also called the non-negotiable bill of lading.

Other types of bills of lading include:

Switch bill of lading

It is a copy of the bill issued earlier for the goods in question. Furnished on the buyer’s request, it ensures that the new buyer does not know about the supplier of those goods.

Surrender bill of lading

As per this bill, the supplying company surrenders the ownership of goods and confers it upon the buyer.

Charter party bill of lading

This bill involves the hiring of a vessel by a supplying company to ship the goods. It means that the use of the same will be made only by that particular company.

Short-form/Blank back bill of lading

These bills do not specify the terms and conditions of the shipment process.

Stale bill of lading

Bill furnished after three weeks from the date of shipment for negotiation is called the stale bill of lading.

Electronic bill of lading

This bill performs functions similar to that of a conventional bill of lading, but it uses the electronic medium rather than paper.

Sea waybill vs bill of lading

Also called the Express release bill of lading, a Sea waybill is the same as a bill of lading. The only difference between the two is the title of goods. While the latter functions as the title of goods, the former does not.

Thus, a sea waybill is non-negotiable, and in situations where the title of goods holds little or no importance, it may replace the original bill of lading. The subject of a sea waybill is the same as the subject of a bill of lading.

One of the benefits of a sea waybill over an original bill of lading is its flexibility and easy utilisation. Buyers can clear the goods from the customs without presenting at least one original copy of the receipt.

Difference between Mate receipt and Bill of lading

The following table points out some of the differences between the mate receipt and the bill of lading:

Mate receipt	Bill of lading
Issuance of mate receipt takes place for inspection of goods.	Bill of lading is made based on mate receipt.
Issuance of mate receipt takes place through the officer in charge.	Issuance of the bill of lading takes place through the owner of the vessel or his agent.
Mate receipt is not negotiable.	Bill of lading is negotiable unless provided otherwise.
Mate receipt is temporary.	Bill of lading is permanent.
Mate receipt does not confer ownership rights.	Bill of lading confers upon the bearer ownership rights.
Mate receipt is not legally binding.	Bill of lading is legally binding.
Mate receipt provides comprehensive detail of the goods.	Bill of lading provides an overview of all the goods.
Mate receipt is inferior to the bill of lading.	Bill of lading is superior to mate receipt because it holds legal validity.
Mate receipt is not admissible as evidence in the court of law.	Bill of lading is admissible as evidence in the court of law.
Mate receipt is just a procedure.	Bill of lading is a legal obligation as per The Hague-Visby rules and US-COGSA.

Conclusion

Today, the use of mate receipt and bill of lading is very much prevalent. However, there has been a shift from the traditional paper form to the digitization of the same. Electronic mate receipts and bills of lading have made the shipment process easy to execute and track. The medium may change with changing times, but these concepts will stay as long as sea trade is in existence.

References

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