Shipped On Board (SOB) date – Freight Forwarders Perspective

Freight Forwarders often receive requests from customers to issue backdated Shipped on Board (SOB) House Bills of Lading to comply with conditions specified in Letters of Credits.

Legally, no carrier shall issue backdated Bills of Lading (including Freight Forwarders House Bills of Lading) which is illegal in Toto. 

Freight Forwarders should release the Bills of Lading only after date of Shipped on Board date confirmed by the shipping lines and not immediately upon receipt of cargo. 

Any document that is issued against receipt of cargo and before sailing / shipped on board would be considered as Received For Shipment (RFS), which is not a Carriage Document, which has to be explicitly mentioned in the face of the document.

Even though there are pre-printed terms in face of the BLs regarding receipt of cargo, it is safe to mention the SOB date or RFS declaration to avoid ambiguity and wrong usage of the released Bills of Lading. 

Below are the few legal provisions that define/mandates the process of declaring Shipped on Board date in a Bill of Lading: 

UCP Rules 600, Article 20 (ii) reads as “The date of issuance of the bill of lading will be deemed to be the date of shipment unless the bill of lading contains an on board notation indicating the date of shipment, in which case the date stated in the onboard notation will be deemed to be the date of shipment”. 

As per the Bills of Lading Act 1856, Section.3, Every bill of lading in the hands of a consignee or endorsee for valuable consideration, representing goods to have been shipped on board a vessel, shall be conclusive evidence of such shipment as against the master or other person signing the same. 

As per the Hague Visby Rules, Article III (7), After the goods are loaded the bill of lading to be issued by the carrier, master, or agent of the carrier, to the shipper shall, if the shipper so demands be a 'shipped' bill of lading, provided that if the shipper shall have previously taken up any document of title to such goods, he shall surrender the same as against the issue of the 'shipped' bill of lading, but at the option of the carrier such document of title may be noted at the port of shipment by the carrier, master, or agent with the name or names of the ship or ships upon which the goods have been shipped and the date or dates of shipment, and when so noted, if it shows the particulars of Bill of Lading as per relevant provision, shall for this article be deemed to constitute a 'shipped' bill of lading.  

Hence it is clarified through above legal provisions that date of issuance of BL would be considered as Shipped on Board date unless there is specific different SOB date is mentioned.  

Under the Indian Bills of Lading Act, there is a statutory presumption that the goods have been loaded onboard regardless of actual loading of the goods on board. The only exception to the rule is that the consignee also knew that the goods were not loaded on board though the BL was issued. Hence, for all legal and practical purposes, unless the goods are loaded onboard the vessel, a bill of lading should not be issued.  

In Carver in Carriage by Sea, Book I, Vol. II, page 71, para 80, the position is thus stated, the person signing the bill will be estopped by Section. 3 of the Bills of Lading Act, 1856, from proving that goods with those were not shipped under the bill. 

 Similarly in the foot-note on page 70 Art. XX in Sir Thomas Edward Scrutton, Charterparties and Bills of Lading, 16th Edn.: The bill of lading generally in prima facie evidence against the ship-owner of shipment on board of the goods acknowledged under the bill of lading to have been shipped. The evidence to displace the bill of lading must not merely that the goods may not have been shipped, but that they were not; Smith v. Bedouin Steam Navigation Co., 1896 AC 70, but this may be shown by conclusive evidence that after receipt by the ship-owner none of the goods were lost or stolen and that he has delivered all that he received. The statement in the bill of lading is not to be displaced merely by a consideration of the balance of probabilities. 

 These two views of has been upheld by the Madras High Court in The Madras Port Trust vs. K.P.A.T. Annamalai Nadar and Ors. (16.02.1965 - MADHC) : MANU/TN/0152/1968, wherein the Court has held that based on the views of the authors, there is a statutory presumption that once a BL is issued, there is an admission of loading of the goods.  

 As per the judgment of the Madras High Court in Home Insurance Co. Ltd., New York and Ors. vs. Ramnath and Co., Madras (10.12.1954 - MADHC) : MANU/TN/0240/1955, it is categorically held that the bill of lading is sufficient evidence to establish the fact that the goods were put on board and were received by the Master of the ship. Further, the Madras HC has held that once a BL is issued, it cannot be said that the shipping Company has discharged its duty under Section 151, Indian Contract Act, and if the goods have disappeared when they were in the custody of the shipping company, without the shipping company being able to account for the loss in any satisfactory manner which would absolve them from liability, it stands to reason that the shipping company must be made responsible for the loss of the goods to the consignor.  

 Given the same, there is a statutory presumption that the goods are on board the vessel when the BL is issued. The clauses in the Bill of Lading issued by Freight Forwarders, which is contrary to the aforementioned provision of the Bills of Lading Act, is not enforceable nor can it in any manner protect Freight Forwarders. It is mandated by law that only when the goods are shipped on board, can the Bill of Lading be issued.