Meaning
A maritime document of title represents the contract of carriage and the receipt of cargo by a carrier. In Chinese shipping transactions, bills of lading are issued by the carrier to acknowledge receipt of goods and to bind the parties to the terms of transport. The document operates to transfer ownership of the goods during transit through endorsement and delivery.
It is governed by the Chinese Maritime Code, which defines the carrier’s liabilities and the limits of liability for loss of cargo during ocean voyages.
Cargo Control
Security over the physical cargo is maintained by holding the original copy of the document. Parties who hold these bills of lading can demand delivery from the carrier at the destination port. This prevents the unauthorized release of goods to the consignee before payment is secured.
Transfer Instrument
Negotiation of these paper documents is completed by endorsement under the provisions of Chinese civil law. When bills of lading are endorsed, they transfer the right to receive the goods to the endorsee. This allows the buyer to sell the goods while they are still in transit on the ocean.
Statutory Liability
Legal recourse for cargo damage or misdelivery rests on the holder of the document against the carrier. The carrier faces claims under Chinese maritime courts if they deliver the cargo without receiving the original bills of lading. This protects the seller’s financial interest during international trade transactions.
