ASG Law

Tag: Misdelivery

  • Extraordinary Diligence: Carrier Liability for Misdelivered Goods

    In a pivotal ruling, the Supreme Court affirmed that common carriers bear the responsibility of extraordinary diligence in delivering goods to the correct consignee. Failure to deliver to the authorized recipient results in liability for the loss. This decision underscores the importance of ensuring proper delivery protocols and accurate recipient verification, reinforcing the high standard of care expected from common carriers under Philippine law. This standard remains until the goods are delivered to the correct recipient.

    Lost in Transit: Who Bears the Cost of Negligent Delivery?

    This case revolves around a shipment of Citibank checks sent via Federal Express Corporation (FedEx) by Luwalhati R. Antonino and Eliza Bettina Ricasa Antonino to Veronica Z. Sison in New York. The checks were intended for payment of monthly common charges and real estate taxes on a condominium unit owned by Eliza. However, the package was never received by Sison, leading to non-payment of obligations and eventual foreclosure of the property. The Antoninos sued FedEx for damages, alleging negligence in the delivery. FedEx countered that the Antoninos failed to file a timely written claim and that the shipment contained prohibited items (checks declared as “documents”). The central legal question is whether FedEx can be held liable for damages due to the misdelivery, considering the terms of its Air Waybill and the nature of its obligations as a common carrier.

    The Regional Trial Court and the Court of Appeals both ruled in favor of the Antoninos. The Supreme Court, in affirming these decisions, emphasized the high standard of care required of common carriers. Article 1733 of the Civil Code explicitly states:

    Article 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case.

    This **extraordinary diligence** requires common carriers to exercise extreme care and caution in securing and preserving goods entrusted to them. This responsibility extends from the moment the goods are unconditionally placed in their possession until they are delivered to the consignee or the authorized recipient. Moreover, Article 1735 establishes a presumption of fault or negligence against common carriers in cases of loss or damage, unless they can prove otherwise.

    Building on this principle, the Court addressed FedEx’s argument regarding the Antoninos’ alleged failure to comply with the 45-day written claim requirement. While the Air Waybill stipulated this condition, the Court found that the Antoninos had substantially complied. The Court considered the efforts made by the Antoninos and consignee Sison to trace the package, as well as FedEx’s ambiguous and evasive responses. This echoes the principle in Philippine Airlines, Inc. v. Court of Appeals, where the Supreme Court ruled that zealous efforts to follow up a claim, coupled with the carrier’s delaying tactics, could constitute substantial compliance.

    Furthermore, the Court cited Article 1186 of the Civil Code, which states that a condition is deemed fulfilled when the obligor (in this case, FedEx) voluntarily prevents its fulfillment. By hindering the Antoninos’ ability to file a formal claim within the prescribed period, FedEx was deemed to have waived its right to insist on strict compliance. This approach contrasts with a rigid interpretation of contractual terms, emphasizing fairness and equity in the application of the law.

    The Court then tackled the issue of whether FedEx exercised extraordinary diligence in delivering the package. FedEx claimed that the package was delivered to a neighbor of the consignee, identified only as “LGAA 385507.” However, the Court found this insufficient to prove proper delivery. It emphasized that common carriers must ensure that shipments are received by the designated recipient. Failing to do so amounts to a failure to deliver, resulting in liability for the loss.

    Moreover, the Court dismissed FedEx’s argument that the Antoninos violated the Air Waybill by shipping checks, which were allegedly prohibited items. The Air Waybill stated that FedEx does not accept “transportation of money (including but not limited to coins or negotiable instruments equivalent to cash such as endorsed stocks and bonds).” The Court interpreted this clause narrowly, stating that the prohibition primarily targeted “money.” While the clause included “negotiable instruments equivalent to cash,” the checks in question were payable to specific payees and not considered legal tender. It is settled in jurisprudence that checks, being only negotiable instruments, are only substitutes for money and are not legal tender; more so when the check has a named payee and is not payable to bearer. In Philippine Airlines, Inc. v. Court of Appeals, this Court ruled that the payment of a check to the sheriff did not satisfy the judgment debt as checks are not considered legal tender.

    Moreover, the Court highlighted that the Air Waybill was a **contract of adhesion**, meaning it was prepared solely by FedEx and presented to the Antoninos on a take-it-or-leave-it basis. Under established legal principles, ambiguities in contracts of adhesion are construed strictly against the party that prepared the contract. Therefore, the prohibition against transporting money was interpreted narrowly in favor of the Antoninos.

    FAQs

    What was the key issue in this case? The key issue was whether FedEx could be held liable for failing to deliver a package containing checks to the correct consignee, despite claiming non-compliance with claim filing deadlines and asserting that checks were prohibited items.
    What is a common carrier’s standard of care? Common carriers must observe extraordinary diligence in the vigilance over the goods they transport, according to Article 1733 of the Civil Code. This high standard requires them to take extreme care in securing and preserving the goods.
    What happens if a common carrier fails to deliver goods properly? If a common carrier fails to deliver goods to the consignee or authorized recipient, it is considered a failure to deliver, resulting in liability for the loss, unless the carrier can prove it exercised extraordinary diligence.
    What is a contract of adhesion? A contract of adhesion is one where one party (usually a company) sets the terms, and the other party can only accept or reject the contract without negotiation. Ambiguities in these contracts are interpreted against the drafting party.
    Are checks considered legal tender in the Philippines? No, checks are not legal tender in the Philippines. They are considered negotiable instruments and substitutes for money, but not legal tender for payment of debts.
    What does substantial compliance mean in this case? Substantial compliance means that the Antoninos, despite not strictly adhering to the 45-day claim filing deadline, demonstrated sufficient effort in pursuing their claim, and FedEx’s actions hindered their ability to comply fully.
    What is the significance of Article 1186 of the Civil Code in this case? Article 1186 states that a condition is deemed fulfilled when the obligor (FedEx) voluntarily prevents its fulfillment. FedEx’s actions hindered the Antoninos from filing a timely claim, thus waiving strict compliance.
    Why was FedEx’s argument about shipping prohibited items rejected? The Court interpreted the prohibition against transporting money narrowly, stating that checks were not considered money or negotiable instruments equivalent to cash, especially since they were payable to specific payees.
    What kind of documents should be attached when making claims to avoid non-delivery or loss? All relevant information about the claim should be filed to the common carrier, like proof of value of the goods, contract of carriage, pictures, etc.

    This case serves as a reminder of the stringent obligations imposed on common carriers in the Philippines. It underscores the importance of clear communication, diligent delivery practices, and fair interpretation of contractual terms. Strict compliance to claim deadlines and providing pieces of evidence is a must.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: FEDERAL EXPRESS CORPORATION vs. LUWALHATI R. ANTONINO, G.R. No. 199455, June 27, 2018

  • Responsibility at Sea: Carrier Liability for Misdelivered Goods Under Philippine Law

    The Supreme Court held that a common carrier remains liable for misdelivered goods if it fails to prove extraordinary diligence, even after the goods are discharged to a port authority. This decision underscores the high standard of care expected of common carriers under Philippine law, emphasizing that their responsibility extends until actual or constructive delivery to the consignee or authorized recipient. The ruling serves as a crucial reminder of the obligations of carriers to protect goods under their custody, especially in international transport where goods may pass through multiple jurisdictions and handlers.

    From Manila to Panama: Who Bears the Risk of Forged Documents in International Shipping?

    This case revolves around a shipment of garments transported from Manila to Colon, Panama, by Nedlloyd Lijnen B.V. Rotterdam and its local agent, East Asiatic Co., Ltd. (collectively referred to as “petitioners”). Glow Laks Enterprises, Ltd. (“respondent”), the shipper, filed a claim when the goods, valued at US$53,640.00, were released to unauthorized individuals in Panama using forged bills of lading. The central legal question is whether the common carrier’s responsibility ceased when the goods were turned over to the Panamanian port authority, or whether their liability extended until proper delivery to the consignee.

    The petitioners argued that under Panamanian law, their responsibility ended upon transferring the goods to the National Ports Authority of Panama, where government collection of dues and taxes becomes effective. They claimed that the unauthorized withdrawal based on falsified documents should not be attributed to their negligence. However, the respondent contended that the failure to deliver the shipments to the consignee or a designated party constituted misdelivery, presuming fault or negligence on the part of the common carrier.

    The Regional Trial Court (RTC) initially ruled in favor of the petitioners, citing the purported applicability of Panamanian law. However, the Court of Appeals reversed this decision, emphasizing that the foreign laws were not properly proven according to Philippine rules of evidence. The appellate court invoked the doctrine of processual presumption, which presumes foreign laws to be identical to Philippine law in the absence of sufficient proof. According to the New Civil Code of the Philippines, a common carrier’s extraordinary responsibility lasts until actual or constructive delivery to the consignee.

    The Supreme Court affirmed the Court of Appeals’ decision, firmly stating that foreign laws must be properly pleaded and proven as facts in Philippine courts. In the absence of such proof, Philippine law applies. This principle is critical because it determines which set of regulations and standards will govern the obligations and liabilities of parties involved in international transactions within the Philippine legal system.

    SEC. 24. Proof of official record. — The record of public documents referred to in paragraph (a) of Section 19, when admissible for any purpose, may be evidenced by an official publication thereof or by a copy attested by the officer having the legal custody of the record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the custody. If the office in which the record is kept is in a foreign country, the certificate may be made by a secretary of the embassy or legation, consul general, consul, vice- consul, or consular agent or by any officer in the foreign service of the Philippines stationed in the foreign country in which the record is kept, and authenticated by the seal of his office.

    The petitioners failed to comply with Sections 24 and 25 of Rule 132 of the Revised Rules of Court, which outline the requirements for proving foreign official records. The photocopy of the Gaceta Official of the Republica de Panama, which contained the foreign statute they relied upon, was not accompanied by the required attestation and certification. The Court emphasized that compliance with these requirements is not a mere technicality but is crucial for ensuring the genuineness of foreign documents.

    Moreover, the Supreme Court highlighted the extraordinary diligence required of common carriers under Article 1733 of the New Civil Code. Extraordinary diligence is defined as “that extreme care and caution which persons of unusual prudence and circumspection use for securing or preserving their own property or rights.” This high standard of care aims to protect shippers who are particularly vulnerable once their goods are entrusted to the carrier. As a result, common carriers are presumed to be at fault or negligent in cases of loss or damage to goods in transit.

    Article 1736. The extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them, without prejudice to the provisions of article 1738.

    The Court clarified that the extraordinary responsibility of the common carrier continues until the goods are actually or constructively delivered to the consignee or authorized recipient. The petitioners’ argument that their responsibility ceased upon delivery to the Panamanian port authority was rejected. The Supreme Court emphasized that the contract of carriage remains in full force and effect until delivery to the consignee or their agent. In this case, the goods fell into the hands of unauthorized persons using falsified documents, leading to a presumption of negligence against the carrier.

    When the goods shipped are either lost or arrived in damaged condition, a presumption arises against the carrier of its failure to observe that diligence, and there need not be an express finding of negligence to hold it liable. To overcome the presumption of negligence, the common carrier must establish by adequate proof that it exercised extraordinary diligence over the goods.

    The petitioners failed to provide sufficient evidence of their extraordinary diligence in preventing the unauthorized withdrawal of the shipments. The Court noted that neither the consignee nor the notify party was informed of the goods’ arrival at the Port of Cristobal, which indicated a failure to exercise the required care. The Court also cited Article 353 of the Code of Commerce, which stipulates that the bill of lading serves as legal evidence of the contract between the shipper and the carrier. The return of the bill of lading to the carrier signifies the cancellation of obligations upon fulfillment of the contract. In this case, the original bills of lading remained with the consignee, further supporting the conclusion that the contract of carriage was not fully executed.

    The ruling underscores the importance of carriers implementing stringent verification procedures to ensure that goods are released only to authorized parties. This includes verifying the authenticity of documents presented for claiming goods and promptly notifying consignees upon arrival of shipments. The Supreme Court’s decision serves as a critical precedent for holding common carriers accountable for misdelivery and reinforces the need for them to exercise the highest degree of care in protecting the goods entrusted to them.

    FAQs

    What was the key issue in this case? The key issue was whether the common carrier’s responsibility for the goods ceased upon their discharge to the Panama Ports Authority, or if it continued until actual delivery to the consignee.
    What is the doctrine of processual presumption? The doctrine of processual presumption states that if a foreign law is not properly proven in a local court, it is presumed to be identical to the domestic law.
    What level of diligence is required of common carriers under Philippine law? Common carriers are required to exercise extraordinary diligence in the vigilance over goods, which is the extreme care and caution that persons of unusual prudence use for securing their own property.
    What happens when goods are lost or damaged while in the custody of a common carrier? The common carrier is presumed to have been negligent and is liable for the loss or damage, unless it can prove that it exercised extraordinary diligence.
    What is the significance of the bill of lading in this case? The bill of lading serves as legal evidence of the contract between the shipper and the carrier. Its surrender to the carrier signifies the fulfillment of the contract and cancellation of obligations.
    How did the Court rule regarding the applicability of Panamanian law? The Court ruled that Panamanian law could not be applied because it was not properly proven in accordance with Philippine rules of evidence.
    What must a common carrier do to be released from liability? A common carrier must deliver the goods to the consignee or to the person who has a right to receive them, and must exercise extraordinary diligence until such delivery is made.
    Can a common carrier be excused from liability by delivering the goods to a port authority? No, delivering the goods to a port authority does not automatically excuse the common carrier from liability. Their responsibility continues until the goods are properly delivered to the consignee or authorized recipient.

    In conclusion, this case underscores the stringent responsibilities placed upon common carriers under Philippine law. By requiring a high standard of care and emphasizing the need for proper delivery to the consignee, the Supreme Court has reinforced the importance of protecting the interests of shippers in international trade. This ruling will likely influence future cases involving loss or misdelivery of goods and highlights the need for carriers to implement robust procedures to prevent unauthorized release of shipments.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Nedlloyd Lijnen B.V. Rotterdam vs. Glow Laks Enterprises, Ltd., G.R. No. 156330, November 19, 2014

  • Misdelivery and Bills of Lading: Understanding Carrier Liability in Philippine Shipping Law

    Shipper’s Instructions Trump Bill of Lading: Key Takeaways on Misdelivery

    TLDR: In Philippine shipping law, a carrier may be absolved from liability for misdelivery if they can prove they followed specific instructions from the shipper, even if those instructions deviate from the bill of lading’s consignee details. This case highlights the importance of clear communication and documentation in shipping transactions, especially concerning perishable goods and payment arrangements.

    [ G.R. No. 125524, August 25, 1999 ]

    Introduction

    Imagine your business relies on timely delivery of perishable goods across international borders. A slight misstep in the shipping process can lead to significant financial losses, spoilage, and strained business relationships. The case of Benito Macam v. Court of Appeals delves into such a scenario, exploring the complex interplay between bills of lading, shipper instructions, and carrier liability when goods are delivered to a party not explicitly named as the consignee in the official shipping documents. This case unravels the nuances of misdelivery claims in the Philippines, providing crucial lessons for shippers and carriers alike on navigating the often-turbulent waters of international trade.

    At the heart of this dispute is a shipment of watermelons and mangoes from the Philippines to Hong Kong. Benito Macam, the shipper, sued the shipping company for delivering the goods to Great Prospect Company (GPC), the ‘notify party,’ instead of the consignee listed on the bill of lading, National Bank of Pakistan (PAKISTAN BANK). Macam argued this was misdelivery, entitling him to compensation. The central legal question became: Can a carrier be held liable for misdelivery when they deliver goods based on the shipper’s explicit instructions, even if it deviates from the bill of lading?

    Legal Framework: Carrier Responsibility and the Bill of Lading

    Philippine law, specifically Article 1736 of the Civil Code, establishes the “extraordinary responsibility” of common carriers. This responsibility commences the moment goods are unconditionally placed in the carrier’s possession for transportation and extends until they are delivered, actually or constructively, to the consignee or someone with the right to receive them. Article 1736 states:

    “Art. 1736. The extraordinary responsibility of the common carriers lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them, without prejudice to the provisions of article 1738.”

    This provision underscores the high standard of care expected from carriers. A crucial document in shipping is the bill of lading. This document serves multiple vital functions:

    • Receipt: It acknowledges the carrier’s receipt of the goods for shipment.
    • Contract of Carriage: It embodies the terms and conditions of the agreement for transporting the goods.
    • Document of Title: It represents ownership of the goods, especially in international trade, and is often required for payment and release of cargo.

    Typically, carriers are obligated to deliver goods only upon presentation of an original bill of lading. This safeguard ensures that goods are delivered to the rightful owner or their designated representative, often the consignee named in the bill of lading. However, commercial realities sometimes necessitate deviations from strict adherence to the bill of lading, particularly with perishable goods where timely delivery is paramount.

    Prior Supreme Court jurisprudence, such as Eastern Shipping Lines, Inc. v. Court of Appeals and Samar Mining Company, Inc. v. Nordeutscher Lloyd, reinforces the carrier’s duty to deliver to the consignee or a person with the right to receive the goods. These cases generally uphold the bill of lading as the primary document governing delivery. However, the Macam case introduces a significant nuance: what happens when the shipper themselves instructs the carrier to deviate from the bill of lading’s delivery instructions?

    Case Narrative: Telex Instructions and Trade Practices

    Benito Macam, doing business as Ben-Mac Enterprises, shipped watermelons and mangoes to Hong Kong via China Ocean Shipping Co., represented by their agent Wallem Philippines Shipping, Inc. (WALLEM). The bills of lading named PAKISTAN BANK as the consignee and Great Prospect Company (GPC) as the ‘notify party.’ Macam received advance payment from his bank, Consolidated Banking Corporation (SOLIDBANK), based on these bills of lading.

    Upon arrival in Hong Kong, WALLEM delivered the shipment directly to GPC without requiring presentation of the original bills of lading. Subsequently, GPC failed to pay PAKISTAN BANK, who in turn refused to pay SOLIDBANK. SOLIDBANK, having already prepaid Macam, sought reimbursement from WALLEM, but WALLEM refused. Macam then repaid SOLIDBANK and filed a collection suit against WALLEM, alleging misdelivery.

    WALLEM’s defense hinged on a crucial piece of evidence: a telex dated April 5, 1989. This telex allegedly contained instructions from the shipper (Macam) to deliver the shipment to the “respective consignees” without presentation of the original bills of lading or bank guarantee. The telex stated: “AS PER SHPR’S REQUEST KINDLY ARRANGE DELIVERY OF A/M SHIPT TO RESPECTIVE CNEES WITHOUT PRESENTATION OF OB/L and bank guarantee since for prepaid shipt ofrt charges already fully paid our end x x x x”. WALLEM argued that delivering to GPC was in accordance with Macam’s request and standard practice for perishable goods.

    The Regional Trial Court (RTC) initially ruled in favor of Macam, finding that WALLEM breached the bill of lading by releasing the shipment to GPC without the bills of lading and bank guarantee. The RTC emphasized that GPC was merely the ‘notify party’ and not the consignee. However, the Court of Appeals (CA) reversed the RTC decision. The CA highlighted the established business practice between Macam and WALLEM, where previous shipments to GPC were often delivered without bill of lading presentation. The CA also noted that the telex instruction superseded the bill of lading and that GPC, as the buyer/importer, was the intended recipient. Crucially, the CA pointed out inconsistencies in Macam’s claims, including the lack of evidence that he actually reimbursed SOLIDBANK.

    The Supreme Court (SC) affirmed the Court of Appeals’ decision, siding with WALLEM. The SC meticulously examined Macam’s own testimony, noting his admissions about routinely requesting immediate release of perishable goods via phone calls, dispensing with bank guarantees for prepaid shipments, and prior dealings with GPC without bill of lading presentation. The Court stated:

    “Against petitioner’s claim of ‘not remembering’ having made a request for delivery of subject cargoes to GPC without presentation of the bills of lading and bank guarantee as reflected in the telex of 5 April 1989 are damaging disclosures in his testimony. He declared that it was his practice to ask the shipping lines to immediately release shipment of perishable goods through telephone calls by himself or his ‘people.’ He no longer required presentation of a bill of lading nor of a bank guarantee as a condition to releasing the goods in case he was already fully paid.”

    The SC agreed with the CA’s interpretation of the telex instruction, concluding that “respective consignees” in the telex, in the context of the established practice and perishable nature of the goods, referred to GPC as the buyer/importer, not PAKISTAN BANK. The Court further reasoned:

    “To construe otherwise will render meaningless the telex instruction. After all, the cargoes consist of perishable fresh fruits and immediate delivery thereof to the buyer/importer is essentially a factor to reckon with. Besides, GPC is listed as one among the several consignees in the telex (Exhibit 5-B) and the instruction in the telex was to arrange delivery of A/M shipment (not any party) to respective consignees without presentation of OB/L and bank guarantee x x x x”

    Ultimately, the Supreme Court ruled that WALLEM was not liable for misdelivery because they acted upon the shipper’s (Macam’s) own instructions, as evidenced by the telex and his established business practices.

    Practical Implications: Shipper Responsibility and Clear Instructions

    The Benito Macam case provides critical insights into the responsibilities of shippers and carriers, particularly in transactions involving bills of lading and delivery instructions. This ruling underscores that while bills of lading are crucial documents, a shipper’s direct and documented instructions to the carrier can override the consignee designation in the bill of lading, especially when supported by established trade practices and the nature of the goods.

    For businesses involved in shipping, especially perishable goods, the implications are significant:

    • Clear Communication is Key: Shippers must ensure their instructions to carriers are clear, unambiguous, and documented, preferably in writing like telexes or emails. Verbal instructions, while sometimes practical for perishable goods, can be difficult to prove in case of disputes.
    • Document Everything: Maintain records of all communications with carriers, including requests for delivery modifications, especially when deviating from standard bill of lading procedures. This documentation serves as crucial evidence in case of disagreements.
    • Understand Trade Practices: Be aware of established trade practices in specific industries and regions. In the perishable goods sector, immediate delivery is often prioritized, and carriers may rely on shipper instructions for quicker release, even without strict bill of lading presentation.
    • Review Bills of Lading Carefully: While shipper instructions can be controlling, ensure the bill of lading accurately reflects the intended transaction and consignee, unless a deliberate deviation is intended and clearly communicated.
    • Due Diligence on Payment: Secure payment arrangements independently of delivery instructions. In this case, the payment failure by GPC, not the delivery itself, was the root cause of Macam’s loss. Consider using robust payment mechanisms like confirmed letters of credit to mitigate payment risks.

    Key Lessons

    • Shipper Instructions Matter: Documented instructions from the shipper can supersede the bill of lading’s consignee designation under certain circumstances.
    • Context is Crucial: The perishable nature of goods and established trade practices are vital factors in interpreting delivery instructions.
    • Evidence is King: Clear and convincing evidence, like the telex in this case, is essential to prove shipper instructions and deviate from standard bill of lading procedures.

    Frequently Asked Questions (FAQs)

    Q: What is a Bill of Lading (B/L)?

    A: A Bill of Lading is a document issued by a carrier to a shipper, acknowledging receipt of goods for transport. It serves as a receipt, a contract of carriage, and a document of title, representing ownership of the goods.

    Q: What does ‘Consignee’ and ‘Notify Party’ mean in a Bill of Lading?

    A: The ‘Consignee’ is the party to whom the goods are to be delivered, typically the buyer or a bank in letter of credit transactions. The ‘Notify Party’ is a party to be notified upon arrival of the goods, often the actual buyer or importer, even if they are not the consignee for payment purposes.

    Q: What is ‘Misdelivery’ in shipping law?

    A: Misdelivery occurs when a carrier delivers goods to the wrong party, i.e., someone not authorized to receive them under the terms of the bill of lading or shipper instructions. This can lead to carrier liability for the value of the goods.

    Q: When is a carrier liable for misdelivery?

    A: Generally, carriers are liable for misdelivery if they fail to deliver goods to the consignee named in the bill of lading or someone authorized to receive them. However, liability can be mitigated by valid defenses, such as following shipper’s instructions or established trade practices.

    Q: How can shippers protect themselves from misdelivery issues?

    A: Shippers should issue clear, written delivery instructions to carriers, document all communications, understand trade practices, and secure robust payment arrangements independent of delivery. Using letters of credit and cargo insurance can further mitigate risks.

    Q: What is the significance of the telex in this case?

    A: The telex served as crucial evidence of the shipper’s (Macam’s) instructions to deliver the goods without presentation of the bill of lading. This evidence was pivotal in absolving the carrier from liability for delivering to GPC instead of PAKISTAN BANK.

    Q: Can shipper’s instructions always override the bill of lading?

    A: While shipper’s instructions can be influential, they are not absolute. Courts will consider the totality of circumstances, including the bill of lading terms, established trade practices, the nature of goods, and the clarity and evidence of shipper’s instructions. It is best practice to align instructions with the bill of lading whenever possible to avoid disputes.

    ASG Law specializes in Transportation and Shipping Law. Contact us or email hello@asglawpartners.com to schedule a consultation.