WHAT TO DO WHEN THE ORIGINAL BILL OF LADING IS LOST?

Shipping documents do get lost in transit to a consignee or the bank or elsewhere.

So is it the end of the world for the shipper or consignee if this document which is one of the most important document in international trade and shipping is lost..??

What should be done when the OBL is lost..??

If a negotiable bill of lading is lost, stolen, or destroyed, a few measures can be taken

1. Place an advertisement in the local press about the “loss” or “nullification” of the original bill
2. A court order may be secured, which advises the carrier (shipping line) to deliver the goods to the holder of the title of the goods, based on a surety bond given by the entity claiming the goods, for an amount approved by the court.
3. The carrier also should receive a Letter of Indemnity indemnifying the carrier or any person injured by delivery, against liability under the outstanding original bill. The court also may order payment of reasonable costs and attorney’s fees to the carrier.
4. Certain lines accept a Letter of Indemnity if it is signed by a bank who would then take joint liability to return the original bills of lading (if found)..

However, a few precautions also needs to be taken such as:

1. An advertisement about the loss is never a complete defense as regards liability for wrongful delivery.
2. It is merely an evidence that the loss occurred and that the original title holder had the intention of cancelling the original bill of lading issued.
3. Carrier should understand who holds the title to the cargo and issue a duplicate set only to that entity as there have been cases where the entity that doesn’t hold the title to the goods has advertised about the loss and has convinced the carrier to issue the second set of originals whereas the first set is still in the hands of its legal owner and was not actually lost..

A Letter of Indemnity issued in lieu of loss of Original Bill of lading generally has wording as below. Please note that this is a “generic” format and most lines have their own requirement.

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“To the Owners and/or Charterers and/or operators and/or carrier and/or Agents and Masters of M.V.

In consideration of your issuing at my/our request a duplicate set of Bills of Lading for the goods mentioned below, viz.:

Goods: …………………………………………

No. of pkg.: …………………………………………

Description: …………………………………………

Marks: …………………………………………

Bill of lading or other contracts of carriage: …………………..

due to the fact that the original set has been lost I/we hereby agree and undertake to indemnify you and each of you from all consequences of so doing, and I/we undertake to hold you and each of you harmless and indemnified against any claims, liability, losses, costs, charges, fine damages and expenses (including any kind of legal expense) arising from in consequence of or in any way connected to anybody claiming delivery of the goods as owner or assignee or as the holder of any Bill of Lading originally issued for these goods.

1. In this connection I/we especially undertake to hold you and each of you harmless and indemnified against any loss on account of differences in rate of exchange or depreciation of currency and/or depreciation of value and/or loss caused by currency restrictions or exchange restrictions issued by any authority.Furthermore, I/we undertake to produce and deliver to you or each of you not only the duplicate set of Bills of Lading but also all Bills of Lading which were originally issued if these should later on be found.

2. In the event of any proceedings being commenced against you or any of your servants or agents in connection with the delivery of the goods as aforesaid to provide you or them from time to time with sufficient funds to defend the same.

3. If the vessel or any other vessel or property belonging to you should be arrested or detained or if the arrest or detention thereof goods as aforesaid to provide you or them from time to time with sufficient funds to defend the same.

ISSUANCE OF DUPLICATE BILL OF LADING IN CASE ORIGINAL IS LOST

4. As soon as all original Bills of Lading for the above goods shall have arrived and/or come into our possession, to produce and deliver the same to you whereupon our liability hereunder shall cease.

5. The liability of each and every person under this indemnity shall be joint and several and shall not be conditional upon your proceeding first against any person, whether or not such person is party to or liable under this indemnity.

6. This indemnity shall be construed in accordance with English law and each and every person liable under this indemnity shall at you request submit to the jurisdiction of the High Court of Justice of England. (This clause may be amended to show another jurisdiction where appropriate).

7. Where this indemnity has been joined in and countersigned by a bank, the issuer and the bank shall be jointly and severally liable hereunder.

Signature …………….

We hereby join in the foregoing undertaking:

Signature of the bank …………………”

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