Содержание
A CIF grain contract, shipment period: July. The vessel is brought alongside on 30 July, loading runs all night, and the final tonnes drop on board at 01:30 on 1 August. The master signs the bill of lading and dates it “31 July”. Formally everything looks clean: the B/L is dated the last day of the shipment period. But the loading was actually finished in August.
The question is simple and uncomfortable at the same time: what exactly counts as the moment of shipment — the bill of lading date or the date when loading was actually completed? The answer determines whether the buyer may reject the goods, terminate the contract and claim damages under the default clause — or whether the seller’s obligation is performed on time and there is nothing to argue about.
In this article I work through this narrow but very expensive question on the ground of English law and the practice of GAFTA and FOSFA arbitrations.
Why the question even arises
In commodity trading the shipment period is a hard condition of the contract (a condition, not a mere warranty). Under the classic authority Bowes v Shand (1877) 2 App Cas 455, HL, timely shipment is an essential term of a CIF contract: if goods are shipped outside the period, the buyer is entitled to reject regardless of whether the quality of the goods is impaired, and regardless of the buyer’s motives.
The facts: a contract for 8,200 bags of Madras rice with shipment “March and/or April” 1874. In reality, 8,150 bags were loaded and covered by bills of lading dated February — that is, before the contractual period began; only 50 bags made it on board in March. The House of Lords upheld the buyer’s right to refuse acceptance of the goods: the stipulation as to the shipment period is an essential term of the contract, and since the bulk of the cargo had been shipped outside the period, the consignment did not legally answer the contractual description, regardless of quality. The fact that a small portion fell within the period did not save the deal. The ruling in Bowes v Shand remains good law and is applied, in particular, by GAFTA and FOSFA arbitrators.
Hence the practical pain point: the trader needs to know precisely when shipment “took place”. If it was the evening of 31 July — everything is fine. If it was the morning of 1 August — the contract is broken and the buyer acquires expensive rights. The difference between these two outcomes can be measured in tens of percent of the contract value (market-to-contract difference) plus default damages under the relevant default clause.
What shipment means under English law
English law understands shipment under a CIF contract as the actual loading of the goods on board the vessel. It is not delivering the goods at the port to the carrier’s agent, not the start of loading, not berthing, and not the signing of the bill of lading. A simple practical consequence follows from this: shipment is deemed completed when loading is fully finished.
If 50,000 tonnes are being loaded under a single contract and cargo operations finish after midnight on 1 August, shipment “took place” on 1 August — even if the operation extended through the three preceding days of July. Partial loading within the period does not save the seller: what matters is the completion of loading.
The logic of Incoterms points in the same direction. Rule CIF A2 (Delivery) in the Incoterms 2010 and 2020 editions requires the seller to “deliver the goods by placing them on board the vessel” — that is, actually to place the goods on board the vessel at the port of shipment during the agreed period. This does not literally equate to “completion of loading”, but it is consistent in substance with English common law: until the goods are on board, shipment has not taken place.
What date the bill of lading must bear: The Wilomi Tanana
If shipment means completion of loading, the follow-up question is: what exact date should the master put on the bill of lading? This is answered by Mendala III Transport v Total Transport Corp (The Wilomi Tanana) [1993] 2 Lloyd’s Rep 41. The court laid down a general rule: a “shipped” bill of lading should bear the last day on which the goods covered by that bill were loaded, not the date the bill was physically signed.
This rule matters for two reasons. First, the master sometimes signs the B/L significantly later than the end of loading — particularly in string trading, where the final wording of the document is agreed between several counterparties along the chain. Second, several B/Ls can be issued in respect of a single voyage — covering different parcels, different holds, different consignees. Each B/L must reflect the date when loading of the specific parcel covered by it was completed — which may be an earlier date than the overall end of loading of the vessel. Accordingly, the proposition “shipment is complete when all loading is finished” holds true only where a single B/L covers the entire consignment; with parcel bills the question must be analysed separately for each bill.
What the GAFTA and FOSFA proformas say
The logic of The Wilomi Tanana is compatible with the text of the standard CIF proformas of GAFTA and FOSFA — but with an important nuance: it is expressly embedded only in GAFTA.
GAFTA. Take GAFTA Contract No. 48 (CIF/CIFFO/C&F/C&FFO Tale Quale, applicable to many grains and pulses) — Clause 6 PERIOD OF SHIPMENT:
“As per bill(s) of lading dated or to be dated… The bill(s) of lading to be dated when the goods are actually on board. Date of the bill(s) of lading shall be accepted as proof of date of shipment in the absence of evidence to the contrary.”
Identical wording appears in GAFTA 100, GAFTA 24, GAFTA 25, GAFTA 38 and in other CIF/CFR proformas of GAFTA.
FOSFA. An equivalent provision is found in FOSFA CIF proformas. In FOSFA Contract No. 54 (vegetable and marine oil in bulk CIF, in the 1 April 2021 edition) it appears in Clause 7 DECLARATION OF SHIPMENT:
“The date of the ‘on board’ Bill/s of Lading shall be considered proof of the date of the shipment in the absence of conclusive evidence to the contrary.”
The key difference lies in the standard of proof. GAFTA requires simply “evidence to the contrary”; FOSFA requires “conclusive evidence” — meaning compelling, decisive evidence, not literally “irrebuttable” proof. This is a higher threshold. A buyer under a FOSFA contract who challenges the B/L date will need a weightier evidential basis than a GAFTA buyer, all else being equal. In close, borderline cases this difference can be outcome-determinative.
Both clauses express the same idea. The B/L date is accepted as a presumption of the date of shipment, but that presumption is rebuttable — under both GAFTA and FOSFA. If the other side produces (under GAFTA — just evidence; under FOSFA — conclusive evidence) that loading was actually completed on a different date, the presumption falls away. GAFTA goes one step further and expressly places on the seller/carrier the duty to date the B/L to the moment loading is finished (“to be dated when the goods are actually on board”); the FOSFA wording does not spell this duty out explicitly, but it flows from the general logic of common law and from the very phrase “on board” B/L.
How the buyer can rebut the bill of lading date
The B/L date under English law is prima facie evidence — an ordinary rebuttable presumption. It can be rebutted with the standard documents generated during loading:
- Statement of Facts (SOF) — the chronology of cargo operations, signed by the agent, the master, and the stevedores.
- Notice of Readiness (NOR) — the master’s formal notice that the vessel is ready.
- Ship’s log / deck log — records the start and end times of loading.
- Surveyor’s report — the report of the inspector (draft survey, tally) present during operations.
- Port records — records of the port control service and AIS data on the vessel’s movements.
- Tally sheets — tally records with time stamps.
If the combination of these documents shows that loading was completed on 1 August, the presumption under GAFTA Clause 6 (or FOSFA 54 Clause 7) is rebutted, and a B/L dated “31 July” is treated as false-dated. Under FOSFA, as noted above, the standard of proof is higher — the evidence must be “conclusive”, so the completeness and internal consistency of the evidential picture is of particular importance.
If the B/L carries a wrong date: the two rights of the buyer under Kwei Tek Chao
Kwei Tek Chao v British Traders and Shippers Ltd [1954] 2 QB 459 is the key authority on the consequences of false-dating. The facts: CIF Hong Kong, shipment no later than 31 October; the goods were actually loaded on 3 November, but the B/L was falsely dated 31 October.
Devlin J formulated the principle of two independent rights of rejection of a CIF buyer:
- The right to reject the documents — arises at the moment of tender of documents. If at that stage the buyer discovers the discrepancy (or could have discovered it), he is entitled to refuse to pay against and accept the documents.
- The right to reject the goods — becomes exercisable at landing and after examination of the goods. Acceptance of the documents without reservation does not destroy this separate remedy track: if false-dating comes to light after payment against the documents, the second right is held in reserve and becomes exercisable when the goods are landed and inspected at the port of discharge.
This fundamentally changes the balance: false-dating of the B/L is not “cured” by the fact that the buyer accepted the documents without noticing the problem. Until the goods are landed and the reasonable period for examination has elapsed, the second right remains in the buyer’s hands.
The carrier’s liability for a false date: The Saudi Crown and Standard Chartered Bank v PNSC
The buyer has yet another independent claim — this time not against the seller, but against the carrier. The starting authority is The Saudi Crown [1986] 1 Lloyd’s Rep 261. The facts: a CIF contract for ricebran; the B/Ls were dated 15 July whereas loading was actually completed on 26 July. Sheen J held the shipowners liable to the CIF purchaser for misrepresentation of the date of shipment made by the shipowners’ agents authorised to sign bills of lading. The reasoning: the agents had actual authority to insert the date in the B/L, the B/L is issued in the shipowner’s name, and when it bears an incorrect date it amounts to a misrepresentation addressed to the consignee.
This approach was confirmed and significantly strengthened by the House of Lords in a more recent case — Standard Chartered Bank v Pakistan National Shipping Corporation [2002] UKHL 43. The facts: a CIF sale of Iranian bitumen to Vietnam, payment by letter of credit through Standard Chartered Bank with a shipment deadline of 25 October 1993. Loading was not in fact completed by that date, and the parties (seller and carrier) agreed to issue falsely dated B/Ls bearing the date “25 October 1993”. The documents were presented to the bank, and the bank paid out more than USD 1.1 million under the L/C. Loading was in reality only finished in December 1993.
The House of Lords held: (a) the deliberate issuance and tender of falsely dated B/Ls to the bank in order to obtain payment under the letter of credit, in these circumstances, amounted to deceit; (b) a director of the seller company bears personal liability for the submission of false documents, notwithstanding that he acted on behalf of the company; (c) contributory negligence on the part of the bank is not a defence to a claim in deceit.
Standard Chartered v PNSC is the leading modern case on this topic. It shows that antedating a B/L in commodity trading is not “cured” by formal paperwork and is not cushioned by the corporate structure. In practice, this is one of the decisions that must be kept in mind when analysing any disputed situation around a B/L date.
Thus, where false-dating is established, the buyer has three parallel lines of attack: (1) breach of condition against the seller under the CIF contract, (2) misrepresentation/deceit against the carrier and the signatories, and (3) where a bank is involved — the bank’s claim under the L/C against the presenter of false documents.
What the seller should do if loading will not be finished in time
If loading will not be completed within the shipment period, false-dating the B/L is a path with serious risks. Standard Chartered v PNSC shows that where the facts come to light, liability can be personal and can pierce the corporate veil.
The legal instruments available depend on the form of contract:
- Contracts on GAFTA and FOSFA proformas: most CIF proformas contain an Extension of Shipment Clause giving the seller up to an additional 8 days (in exchange for carrying charges and a price allowance). The conditions of the extension clause, the size of the allowance, the notice deadlines and the applicability thresholds vary across different proformas and editions. One must check the exact text that the parties have incorporated into their contract. I analysed the extension mechanism in detail on the example of a situation with several bills of lading in the article “How does the GAFTA Extension Clause work if the seller has issued several bills of lading”.
- Bespoke CIF contracts without a proforma: an extension clause may be absent. The legal route then is to agree with the buyer on an additional period by side letter or addendum. This is possible where there is a working relationship and the buyer is willing to accept compensation.
- Force majeure: if the cause of delay fits the force majeure definition in the contract (usually set out in detail in the proformas), the seller may invoke force majeure, subject to the notice procedure.
Practical takeaways
For the CIF seller: shipment “takes place” only on completion of loading — not at its beginning and not at the moment the B/L is signed. Asking the master to put an earlier date on the document is a questionable course. If the facts come out, the buyer acquires the right to reject documents and goods (Kwei Tek Chao), a parallel claim by the carrier or the bank for misrepresentation (Standard Chartered v PNSC) becomes available, and a director of the seller company is exposed to personal liability. The more reliable path is to make timely use of the extension clause (if the contract is on a GAFTA/FOSFA proforma) or to negotiate an extension with the buyer by addendum.
For the CIF buyer: the B/L date is not the truth — it is a presumption. Always cross-check it against the SOF, NOR, ship’s log, port records and AIS data. Where a discrepancy is detected, record it immediately and preserve both rights — rejection of documents and rejection of goods. If the B/L is clearly false-dated, the parallel claim against the carrier for misrepresentation can materially improve the buyer’s position, especially where the seller is in an offshore jurisdiction and enforcement against him is problematic.
For all parties in string trading: false-dating of a single B/L “flows” through the entire chain of contracts. Each intermediate buyer-seller acquires its own right of rejection. A chain reaction can halt the movement of tens of thousands of tonnes of goods.
If you have a dispute around a bill of lading date, false-dating or review of the shipment period in a GAFTA or FOSFA arbitration — please get in touch:
