Ik Wei Chong, Clyde + Co, Shanghai
A “weight and quantity unknown clause” in the Bill of Lading for container cargo is rather common in the marine industry but its effectiveness under Chinese law is always a highly arguable issue. Previous practice shows that such a clause may be regarded as being invalid in China on the basis that it is a “standard term” which was printed in advance and was not agreed to specifically by the shipper at the time the contract was entered into. However, a recent Court decision issued by the Shanghai Maritime Court in 2018 (Global Speed Di Guccini Bruno & C. S.A.S. v. Pacific Star International Logistics (China) Co Ltd) shows the current view of the Chinese Courts on this issue.
The Claimant bought a shipment of copper wire from the seller in January 2016. On 8 and 10 January respectively, the cargo was shipped into containers (with blue colour seals) and representatives of the Claimant witnessed the loading of cargo. The containers were thereafter moved to the container yard designated by the carrier. The cargo was then shipped on board the MV “CMA CGM VASCO DE GAMA” from Tianjin, China to Genoa, Italy. The Bill of Lading provides for “CY-CY” and also provides for a weight and quantity unknown clause with the wording “weight, quantity, number, contents, condition and quality unknown”.
After arrival at the port of discharge, the containers were destuffed and inspected. It was found that the containers were full of stone and sand. It was also noticed that the seals of the containers were yellow in colour.
The Claimant lodged a claim against the carrier for loss of the cargo. As expected, the carrier relied on the weight and quantity unknown clause and argued that the carrier could not have checked the contents of the containers and the seals of the containers remained intact at the port of discharge.
The container yard (as witness) provided photographs showing that when the containers first arrived at the container yard at the port of loading, the container seals were yellow in colour (instead of blue) and the seal numbers were identical to those found at the port of discharge.
- The carrier’s period of responsibility should start from the container yard at the port of loading since the cargo was shipped on “CY-CY” basis. For “CY-CY” shipments, the fact that container seals were intact is important evidence showing that the container in question was not opened or tampered with during ocean transit (although it cannot be excluded that the container might have already been opened before it was moved to the container yard at the port of loading).
- At the time when the cargo was stuffed into the container, blue container seals were used but evidence shows that yellow container seals were used when the cargo entered the container yard at the port of loading. This implies that the cargo might have been replaced before commencement of the carrier’s period of responsibility at the container yard.
- Article 75 of the Chinese Maritime Code states that the carrier may make a note in the Bill of Lading specifying inaccuracies, the grounds for suspicion or the lack of reasonable means of checking.
- In the present claim, the cargo was shipped into containers by the shipper and then declared to the carrier. It was unreasonable and impractical for the carrier to check the actual circumstances of the cargo inside the containers. Therefore it was reasonable for the carrier to remark on the front side of the Bill of Lading that the cargo details were unknown to the carrier.
The carrier was eventually held to be not liable for the cargo loss. No appeal to the Higher Court was made by parties.
- The effectiveness of a “weight and quantity unknown clause” shall be determined on a case-by-case basis. Its effectiveness cannot be denied just because it is a “standard term” printed in advance, and neither can such clause be conveniently relied on to excuse the carrier from its liability.
- It is necessary to consider whether the carrier has in fact known about details of the cargo inside the container, and if so, the carrier cannot rely on the weight and quantity unknown clause and should be liable for any cargo damage / loss.
- It is also necessary to determine whether it is commercially reasonable and practical for the carrier to check the cargo details, e.g. if the carrier’s representative was present at the time when the cargo was loaded into containers, the carrier should be obliged to check the cargo details before issuing the Bill of Lading.