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The Berge Sisar (Borealis A.B.V. Stargas Ltd 1998, 2 Lloyd’s Rep 475) provides a test of the Carriage of Goods by Sea Act 1992, which replaces the Bills of Lading Act 1855 in transferring rights and liabilities with bills of lading, and certain other documents.

The position of the 1992 Act as regards bills of lading is to transfer rights, under bills of lading, to all "lawful holders" (s.2); but to make them liable only if they seek delivery of any of the goods (s.3).
The acts which trigger off liability are laid down by s.3(1)(a)(b) as taking or demanding delivery of any of the goods, or making a claim in respect of any of them under the contract of carriage (s.3(i) (a) and (b)).
The Berge Sisar was decided on the basis that when the ship arrived at the (C& G) discharge port in Sweden the eventual buyer and bill of lading holder, Borealis requested delivery from the carrier. The cargo did not come up to the contract quality because of corrosive content. The buyers then resold the cargo to another buyer in Belgium to whom it was carried, supposedly, under the original bill of lading. In the proceedings it was conceded that Borealis had demanded delivery but had not, in fact, taken it. It was then assumed that the end buyer who had, in fact, bought the distressed cargo was liable to the carrier for the damage done by the goods.
One of the questions in issue was whether Borealis, by demanding delivery of the goods was liable on the bill of lading contract even though it had arranged for forward transmission of the cargo and even though the final holder of the bills might have been potentially liable.
Under the 1855 Act Borealis would not have been liable in such a situation. Although the 1855 Act transferred rights with the bill of lading, the wording as to liability gave no indication that the liability was transferred away once it had alighted on a transferee; but in 1862 (Smurthwaite -v- Wilkins 1862 II C.B. (N.S.) 842) it was held that in the context of an ordinary intermediate buyer who resold, it could not have been the intention of the Act that a mere intermediate holder remained liable after transferring away rights; such a result would be "monstrous" and "manifestly unjust".
The 1992 Act gives no indication that the buyer could get rid of its liability by transferring the bill of lading. Accordingly in the Berge Sisar one of the Lord Justices decided that Borealis could not get rid of its liability. This was consistent, as he pointed out with a preliminary view expressed in the Aegean Sea (1998 2 Lloyd’s Rep 39).
However, the remaining two Lord Justices approached the matter from the viewpoint that the scheme of the 1992 Act was basically the same as that of the 1855 Act, and decided that the meaning of the 1862 case must be deployed in the Berge Sisar to secure the result that when the buyer transferred its rights to a new lawful holder, it also freed itself of the liabilities.
On the face of it, the end result may seem fair, though it is obviously rather undignified that the carefully drafted modern 1992 Act should require to be salvaged by a case of 1862 on an Act of 1855. It remains to be seen whether this case will become an authority on the 1992 Act.
 
 

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