Is a document a bill of lading just because it is titled and worded as such? The question was up before Singapore Court of Appeal in The Lune [2021]. It had the attention of [Singapore’s] bunker industry where it is common to issue B/Ls which actually do not play any significant role in the whole commercial arrangement of the transfer of bunkers. An outcome against the carrier (bunker barge owners) would have had a major impact on local practices in bunker trade in Singapore and related contracts.
Phillips 66 sold several parcels of bunker as cargo to Singapore subsidiary of OW on FOB terms. After a nominated barge was loaded, a B/L would be generated with the destination mentioned as “bunkers for ocean going vessels”. The barge would then deliver the bunkers to ships. Phillips 66 would keep the B/Ls with them and not pass it over to the buyers, OW in this case. OW became insolvent and Phillips 66 being the holder of these B/Ls, now looked towards the bunker barge owners, i.e. the ‘carrier’ to re-deliver the bunkers back (which was impossible) or settle unpaid dues.
The court said that a bill of lading has always been regarded as the key to the warehouse, however in this case Phillips 66 had left the warehouse unlocked by reason of the terms of the sale contract and the B/Ls served none of the functions of a bill of lading. The fundamental difference between carriage of bunkers and a typical contract of carriage for goods suggested that B/Ls as in this case were not B/Ls in a traditional sense.
Specifically, the court noted that (a) bunkers were sold with a 30d credit period and within that period the bunkers ceased to be in existence as they had been supplied to sea going ships; (b) title and possession of bunkers passed to the buyers upon loading; (c) the B/Ls did not specify a place of discharge and the phrase “bunkers for ocean going vessels” indicated that the parties intended to omit a destination altogether. Absence of a destination port illustrate the point that the B/Ls were not intended to function as contracts of carriage and/or as documents of title.
A sigh of relief from Singapore bunker barge owners.
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