Given that the Bill of Lading forms used in the commodity trade contain or incorporate charter party clauses providing for the settlement of disputes based on the English law1, the shippers and final buyers of commodities may become liable under the Bill of Lading contract of carriage, if they breach the terms of the Bill of Lading contract of carriage. The intermediate holders of the Bills of Lading do not remain liable under the contract of carriage after they endorsed over the Bills of Lading to the next buyers in the chain, but the shippers remain liable as the original party to the Bill of Lading contract of carriage, because the shippers` liability under the Bill of Lading does not pass by endorsement to the subsequent holders.
The section 3(3) of COGSA 1992 has the following provisions:

"This section, so far as it imposes liabilities under any contract on any person, shall be without prejudice to the liabilities under the contract of any person as an original party to the contract."


The provisions of section 3(3) of COGSA 1992 are similar to the provisions of section 1 of the Bills of Lading Act 1855. Based on this similarity, in the English law case Effort Shipping Company Ltd. v. Linden Management S.A. and Others (The "Giannis N.K.")2, Lord Lloyd of Berwick made the following comments:

"Whereas the rights under the contract of carriage were to be transferred, the liabilities were not. The shippers were to remain liable, but the holder of the bill of lading was to come under the same liability as the shippers. His liability was to be by way of addition, not substitution. […] [T]he shippers have not been divested of their liability for shipping dangerous goods by the operation of the Act of 1855.
It is satisfactory that this conclusion accords with the recommendations of the Joint Law Commissions3, and that the result would have been the same under section 3(3) of the Carriage of Goods by Sea Act 1992."


Lord Hobhouse of Woodborough made a similar interpretation in The "Berge Sisar"4 case:

"How did endorsement affect the liabilities of the shipper? The answer was given in Fox v. Nott (1861) 6 H&N 630 and Smurthwaite v. Wilkins (1862) 11 CB (ns) 842. The endorser is not liable after he has endorsed over the bill of lading to another who is; the shipper remains liable as an original party to the contract. Two considerations seem to have weighed with the courts in these and the later cases. The words "subject to the same liabilities" were to be contrasted with the words "have transferred to him". The liability of the endorsee was to be additional to that of the original contracting party."

In COGSA 1992 the conditions for the imposition of liabilities upon the Bill of Lading holders are stated in the sections 2(1) and 3(1).
The section 2(1) provides that "a person who becomes the lawful holder of a bill of lading shall have transferred to and vested in him all rights of suit under the contract of carriage as if he had been a party to that contract."
The section 3(1) stipulates that if the person in whom rights are vested by virtue of section 2(1) "takes or demands delivery from the carrier of any of the goods [transported under Bill of Lading], or makes a claim under the contract of carriage against the carrier in respect of any of those goods, or is a person who, at a time before those rights were vested in him, took or demanded delivery from the carrier of any of those goods, that person shall become subject to the same liabilities under that contract as if he had been a party to that contract."

To summarize, in order for the carriers to be able to impose a liability upon the Bill of Lading holders the following conditions must be met:
1. the Bill of Lading holders must be the lawful holders of the Bill of Lading;
2. the Bill of Lading holders must make a demand for delivery of the goods or a claim under the contract of carriage;
3. the liability sought to be imposed by the carrier upon the Bill of Lading holders must be stated expressly in the contract of carriage.
In the sales of bulk commodities the buyers at the end of the chain can become subject to liabilities under the Bill of Lading contract of carriage only if they become the lawful holders of the Bills of Lading and exercise their rights thereunder either by demanding delivery of the goods transported under the Bills of Lading or by making a claim against the carriers. If the buyers do not become the lawful holders of the Bills of Lading, they cannot be held liable under the Bills of Lading.
Since the adoption of the UK Carriage of Goods by Sea Act in 1992, there have been several cases involving claims for liability under the Bill of Lading contract of carriage.
The most recent case reported in the English jurisprudence involving a claim for liability under the Bill of Lading contract of carriage was Sea Master Shipping Inc v. Arab Bank (Switzerland) Ltd.5.
In that case a cargo of 7,000 MT of soyabean meal shipped on board the vessel "Sea Master" at San Lorenzo, Argentina by Oleaginosa Moreno Hnos. was sold on FOB terms to Glencore Grain BV, who had in turn sold it on FOB terms to Agribusiness United DMCC. Agribusiness chartered the vessel "Sea Master" for a voyage from one or two Argentine upriver ports to ports in Morocco with discharge options within a range between Agadir and Casablanca. The voyage charter party was on amended "NORGRAIN 89" form.
The cargo of 7,000 MT was split in seven parcels, for each parcel being issued a separate Bill of Lading. Two of the Bills of Lading stated Agadir as port of discharge, while the other five Bills of Lading stated Casablanca as port of discharge, because Agribusiness intended to sell two parcels to buyers in Agadir and the other five parcels to buyers in Casablanca. However, these sales fell through and the vessel incurred demurrage due to the time spent waiting at Agadir and then at Casablanca until Agribusiness found new buyers in Oran, Algeria.
Agribusiness had to accept the additional freight for the carriage of cargo from Casablanca to Oran, which was outside of the range of discharge ports agreed in charter party, but the vessel sailed to Oran only to incur further demurrage. Agribusiness could not obtain the payment under the letter of credit issued on behalf of the Algerian buyers because the Bills of Lading stated Agadir and Casablanca as ports of discharge and the second sale attempt too fell through.
The third attempt to sell the cargo was with the company Black Sea Grain SARL.
Agribusiness had to negotiate again with the shipowners the additional freight for the carriage of cargo from Oran to Beirut where the cargo had to be delivered under the sale contract with Black Sea Grain SARL.
In the meantime, Arab Bank which financed the purchase of soyabean meal cargo by Agribusiness became on 27 July 2016 the lawful holder of the seven Bills of Lading issued for the cargo after paying Glencore Grain BV under the letter of credit.
In order to obtain the payment from the bank of Black Sea Grain SARL, Agribusiness agreed with the shipowners and Arab Bank to replace the seven Bills of Lading held by Arab Bank with a single Bill of Lading for the entire cargo of 7,000 MT stating Beirut as port of discharge. The replacement of the Bills of Lading was made by the ship`s Master at the counters of Arab Bank`s branch in Beirut. The replacement Bill of Lading was issued to the order of Arab Bank who endorsed it in blank and sent it for payment under the sale contract with Black Sea Grain SARL. When that sale contract too fell through, the Bill of Lading was returned to Arab Bank with the blank endorsement cancelled.
On the fourth sale attempt, Agribusiness finally succeeded to sell the cargo on 28 November 2016 to Yousef Freiha & Sons on CIF Lebanon terms and obtain the payment for the cargo.
Four months later, the collateral costs of Agribusiness commercial adventure emerged. On 22 March 2017, Arab Bank commenced arbitration proceedings for the wrongful delivery of a cargo of corn carried on board the vessel on the same voyage. The shipowners brought a counterclaim against Arab Bank for demurrage and damages for detention under the replacement Bill of Lading issued for the soyabean meal cargo claiming US$1,629,696.06.
From the facts of the case it results that the shipowner sought to make himself justice by selling other cargo carried on board to recover the amount due by Agribusiness under the charter party in respect of demurrage and detention and when Arab Bank commenced arbitration proceedings for the wrongful delivery of corn cargo, the shipowner brought a counterclaim for demurrage and damages for detention, holding the bank liable for the amount outstanding. In other words: I give you the money back for the corn cargo on the condition that you pay me the amount outstanding for the carriage of soyabean meal cargo.
The problem with the shipowner`s claim is that Arab Bank was no longer the lawful holder of the Bill of Lading issued for the soyabean meal cargo at the time it commenced the arbitration proceedings against the shipowner for the wrongful delivery of corn cargo, on 22 March 2017. Arab Bank was the lawful holder of the original seven Bills of Lading from 27 July 2016 until 8 November 2016 when the Bills of Lading had been cancelled by the ship`s Master. Then Arab Bank was the lawful holder of the replacement Bill of Lading from 8 November until 28 November 2016, when it endorsed the Bill of Lading in blank and presented it for payment under the fourth sale contract concluded by Agribusiness with Yousef Freiha & Sons.
In the paragraph 2.31 of the Joint Report of the Law Commission and the Scottish Law Commission, "Rights of Suit in respect of Carriage of Goods by Sea" (Law Com No. 196; Scot Law Com No. 130) published in March 1991, the drafters of COGSA 1992 said that:

"pledgees and others holding the bill merely as security would not be liable for such matters as freight or demurrage unless they sought to enforce their security."

The English High Court did not express a point of view on the question of the bank`s liability for demurrage and damages for detention, the judge remitting the dispute to the LMAA Tribunal, but from the facts of the case it is obvious that the shipowners should have tried to recover the amount outstanding for demurrage and detention from Yousef Freiha & Sons, if they demanded indeed delivery of the soyabean meal cargo against the presentation of the replacement Bill of Lading.
The question of whether the shipowners could have imposed the liability for demurrage and detention on Yousef Freiha & Sons depends on the amendments to "NORGRAIN 89" form agreed by the shipowners with Agribusiness at the time of the vessel fixture. The Clause 20 of "NORGRAIN 89" charter party form gives two options for the payment of demurrage incurred at the port(s) of discharge: either the voyage charterers shall be responsible for the payment of demurrage, in which case the shipowners cannot impose the liability for demurrage upon the Bill of Lading holders or the receivers shall be responsible, in which case the Bill of Lading holders who demand delivery of the goods incur a direct liability for demurrage due to the incorporation into the Bill of Lading of the charter party clause providing for such liability6.
Another relevant case reported in the English jurisprudence involving a claim for liability under the Bill of Lading contract of carriage was The "Berge Sisar"7.
In that case, the LPG tanker "Berge Sisar" was voyage chartered by Stargas Ltd. to carry a cargo of about 42,500 MT of propane from Yanbu terminal, in Saudi Arabia, to "one or two safe ports at charterer`s option, one safe berth each port, out of Le Havre – Hamburg range (including UK and Stenungsund)."
The cargo of propane was shipped on board the vessel at Yanbu terminal, in Saudi Arabia, by Saudi Aramco. The cargo was split in five parcels, for each parcel being issued a separate Bill of Lading stating the destination as "one or more safe ports Netherlands". The five parcels of propane had been purchased by Stargas Ltd. under three separate FOB contracts, two parcels directly from Saudi Aramco and the other three parcels from Trammo Gas and Texaco, who bought themselves the parcels from Saudi Aramco. Stargas Ltd. on-sold the entire cargo to Borealis AB on CFR terms, one safe berth Stenungsund and ordered the vessel to sail to Stenungsund terminal in Sweden.
The discharge of cargo at Stenungsund terminal was to be made against the charterer`s letter of indemnity.
However, when the vessel arrived at Stenungsund terminal, the analysis of cargo samples showed that the propane cargo had been contaminated by sulphur compounds. After the discovery of contamination, the CFR buyer, Borealis rejected the cargo and on the 11th November 1993 re-sold it to Dow Europe in Holland on CIF Terneuzen terms, at a discount price.
Following the rejection of cargo by Borealis, the charterers Stargas Ltd. gave instructions to the vessel to carry on the cargo from Stenungsund terminal, in Sweden, to Terneuzen terminal, in Holland. The cargo was discharged at Terneuzen terminal between 17th and 24th November 1993.
At that time the Bills of Lading and other cargo documents were in paper form and it took more time for the sellers and buyers in the chain to transfer the five Bills of Lading from one to another than for the vessel to sail from Yanbu terminal, in Saudi Arabia to Stenungsund terminal, in Sweden and afterwards to Terneuzen terminal, in Holland. The Bills of Lading were endorsed and forwarded by Stargas Ltd. to Borealis on 18th January 1994 and then by Borealis to Dow Europe on 20th January 1994, that is, long after delivery of the cargo.
The sulphur compounds caused corrosion to ship`s tanks and after the discharge of cargo at  Terneuzen terminal, the shipowners incurred time and expense to remove the rust scale and clean the ship`s tanks in order to be fit to receive the next cargoes. The shipowners sought to recover the costs incurred thereby from the shipper Saudi Aramco and Borealis AB, who allegedly became liable as the lawful holders of Bills of Lading when they requested delivery of the cargo at Stenungsund terminal.
The shipowners contended that apart from the voyages with propane cargoes shipped by Saudi Aramco their vessels had regularly carried propane without any problem or complaint and that the propane cargoes shipped by Saudi Aramco had damaged the carrying vessels` tanks due to their unknown propensity to corrode, reason for which those propane cargoes could be considered dangerous.
The shipowners` claim against Borealis was based on the following allegations:
- That the Bills of Lading incorporated the charter party terms including the English law clause.
- That when Borealis received the Bills of Lading from Stargas Ltd. on the 19th January 1994, Borealis became the lawful holder of the Bills of Lading and subject to liabilities under the contracts of carriage, pursuant to the provisions of section 3(1)(c) of COGSA 19928. The shipowners` counsel argued that on the 19th January 1994 Borealis became liable and remained liable notwithstanding that on the 20th January 1994 Borealis endorsed and forwarded the Bills of Lading to Dow Europe.
- That upon the ship`s arrival at the nominated berth of Stenungsund terminal, Borealis` request for delivery of the cargo samples for the purpose of testing constituted a demand for delivery of the cargo and thereby the provisions of section 3(1)(c) of COGSA 1992 became applicable and Borealis, as lawful holder of the Bills of Lading, became subject to the liabilities under the contracts of carriage contained in the Bills of Lading and inherited the responsibility of the shipper Saudi Aramco not to ship a dangerous cargo9.
Therefore the questions in dispute were:
- whether the intermediate holders of Bills of Lading remain irrevocably liable under the contract of carriage even if they endorse over the Bills of Lading to the next buyers in the chain; and
- whether Borealis` request for delivery of the cargo samples constituted a demand for delivery of the cargo.
In the 1998 decision of the English Court of Appeal10, Lord Justice Millett made the following comments:

"Intermediate holders of a bill of lading remain potentially liable under the contract of carriage, and become actually liable if they take any of the steps mentioned in Section 3(1). But unless and until they take actual delivery of the goods their position is not irreversible; they may, for example, withdraw the claim or demand and endorse the bill to a third party purchaser instead. […]
In my judgment, a holder of the bill […] does not become irrevocably liable under the contract of carriage, but is […] liable unless and until he endorses the bill to someone who also fulfils the conditions of liability. […]
Section 3(1) imposes liability only upon those holders of the bill who have contractual rights vested in them by virtue of Section 2(1). […] After endorsement of the bill, the endorser no longer qualifies as a person in whom the liabilities are vested by the opening words of Section 3(1). The fact that he did so previously and at a time when he satisfied the further conditions of liability specified in Section 3(1) subjected him to liability but, in my opinion, only until he transferred the rights to a new holder."

In the 2001 decision of the House of Lords, Lord Hobhouse of Woodborough made the following comments:

"The liability is dependant upon the possession of rights. It follows that […] the Act should be construed as providing that, if the person should cease to have the rights vested in him, he should no longer be subject to the liabilities."


As regards the shipowner`s allegation that Borealis` request for delivery of the cargo samples constituted a demand for delivery of the cargo, Lord Hobhouse of Woodborough made the following comments:

"[I]n my judgment what occurred fell far short of amounting to the making of any demand for delivery on the part of Borealis. […] The only thing done by Borealis appears to have been to direct the master to their import jetty and then, having allowed her to berth there, to take the routine samples from the cargo tanks before clearing the vessel for discharge into their terminal. This … type of cooperative acts […] cannot on any view be treated as a demand by Borealis to deliver. Further, the trade in which these parties were involved necessitates the routine sampling of the cargo before it can be decided whether the vessel can be allowed to discharge its cargo into the terminal. […] What occurred did not get even as far as the stage of Borealis expressing their willingness to receive this cargo into their terminal. […] Once Borealis knew what the true characteristics of the cargo were, they refused to accept it from the ship."


"The liabilities, particularly when alleged dangerous goods are involved, may be disproportionate to the value of the goods; the liabilities may not be covered by insurance; the endorsee may not be fully aware of what the liabilities are. I would therefore read the phrase "demands delivery" as referring to a formal demand made to the carrier or his agent asserting the contractual right as the endorsee of the bill of lading to have the carrier deliver the goods to him."

Another relevant case reported in the English jurisprudence involving a claim for liability under the Bill of Lading contract of carriage was Primetrade AG v. Ythan Ltd. (The "Ythan")11.
The "Ythan" case was a dispute arising from one of the ship casualties caused by DRI products. The ship "Ythan" sank following a series of explosions in the cargo holds and the cargo was lost. The cargo was bought by Primetrade AG on FOB terms from the Venezuelan shipper Orinoco Iron CA for on-sale on CIF terms to a third party. The FOB purchase contract was dated 24th November 2003, while the CIF sale contract was dated 19th November 2003.
The payment of cargo was to be made through back-to-back letters of credit, one issued by UBS in favour of FOB seller, Orinoco Iron CA, on the back of two letters of credit issued in favour of Primetrade AG by the CIF buyers` banks.
The Charter Party Bills of Lading were required to be made out to order and blank endorsed by the shipper, Orinoco Iron CA. The Bills of Lading arrived at UBS about two weeks after the casualty.
After being informed about the loss of cargo, the CIF buyers cancelled the letters of credit issued by their banks in favour of Primetrade AG.
On 22nd March 2004, UBS made the payment under letter of credit to the shipper Orinoco Iron CA and then, on Primetrade`s instructions, sent the Bills of Lading to insurance brokers, Marsh & Lennan for the settlement of insurance claim with the cargo underwriters.
After the payment of insurance claim for the loss of cargo, the underwriter`s recovery agents demanded a security in the form of a Letter of Undertaking from the ship`s P&I Club for a cargo claim. The underwriter`s recovery agents were specifically authorised by Primetrade AG to seek security from the ship`s P&I Club for a cargo claim. Previously, a week after the casualty, that is before even the Bills of Lading to have arrived at UBS, Primetrade AG had sent a letter to shipowner`s agents, reserving its rights and those of the cargo underwriters.
The problem with Primetrade`s letter addressed to shipowner`s agents was that it was sent at a time when Primetrade did not have the possession of the Bills of Lading to be considered lawful holder of the Bills of Lading pursuant to the section 2(2) of COGSA 1992. The English Commercial Court held that:

"the claim has to be made at the time that the maker is the holder of the bill of lading and the right of suit is vested in the holder, rather than any time before then. […][T]he question of whether a claim is made must be decided by examining what happened after the alleged "claimant" is vested with rights of suit pursuant to section 2(1)."

The Court held that upon payment under letter of credit to the shipper Orinoco Iron CA, UBS had become the lawful holder of Bills of Lading pursuant to Section 5(2)(c) of COGSA 1992. This is because UBS would have become the lawful holder of the Bills of Lading pursuant to Section 5(2)(b) of COGSA 1992 if the "transaction", i.e. the transfer of the Bills of Lading to UBS upon the payment to Orinoco Iron CA12, had taken place before the ship and the cargo were lost.
Although thereafter UBS gave up possession of the Bills of Lading when it sent them to insurance broker, the English Commercial Court held that UBS remained the lawful holder of the Bills of Lading pursuant to Section 5(2)(c) of COGSA 1992. The purpose of mailing the Bills of Lading by UBS to insurance brokers it was not to transfer the rights of suit under the contract of carriage but to enable Primetrade AG to obtain the payment of insurance claim from the cargo underwriters. Had the loss of cargo not occurred, the Bills of Lading would have remained in the possession of UBS until the payment had been made under the letters of credit issued in favour of Primetrade AG. Therefore, Primetrade AG would not have become a holder of the Bills of Lading "by virtue of" such a "transaction" had it occurred at a time when the possession of the Bills of Lading gave a right (as against the carrier) to possession of the goods.
The Court concluded that "as Primetrade was not the "holder" of the bills of lading, no rights of suit could be transferred to it under section 2(1)(a)" so that “Primetrade could not pass on any rights of suit to the underwriters."
The case reached in Court because the shipowner did not wait for Primetrade to bring a legal action for the cargo loss and made a claim against Primetrade for the financial losses incurred as a result of the casualty. The shipowner alleged that the loss of vessel "Ythan" was caused by the shipment on board of a dangerous cargo, that Primetrade AG became the lawful holder of the Bills of Lading and that the request for security with the implicit threat to arrest a vessel owned by the shipowner was a sufficiently formal and unequivocal act to indicate that Primetrade and cargo insurer intended to make a claim against the shipowner under the Bill of Lading contract of carriage.
The English Commercial Court held that the request for security did not constitute a formal claim against the carrier. The Court argued that in their request for security the underwriter`s recovery agents did not state that it was Primetrade AG that was making a claim. Primetrade AG was just one of the possible claimants because at the time of request it was not known who held the title to the cargo. For this reason, the Letter of Undertaking issued by the ship`s P&I Club did not identify a potential claimant being instead addressed to any person entitled to sue in respect of the cargo.
The Court held that the question whether a request for security with an implied threat of arrest of the ship may be considered a formal claim under the contract of carriage is a question of fact depending on what the Bill of Lading holder says or does to shipowners through the P&I Club. In The "Ythan" case Primetrade did not state in the letter addressed to shipowner`s agents that it had decided to exercise its rights of suit under the Bills of Lading nor it expressed its view as to the liability of the shipowner for the cargo loss.
The UK Carriage of Goods by Sea Act 1992 give the carriers the possibility to recover from the buyers of cargo when it is not possible to start a legal action directly against the shippers, but, as it can be seen from the cases mentioned above, the shipping companies often do not know at the time they make the claims or counterclaims in the arbitration or Court proceedings whether the cargo claimants are the lawful holders of Bill of Lading or not.
To date, the only reported case where the provisions of section 3(1)(b) of COGSA 1992 were indeed applicable was Petroleo Brasiliero S.A. and Others v. Mellitus Shipping Inc. (The "Baltic Flame")13, another propane contamination case from 1993 related to the shipments made by Saudi Aramco from Yanbu terminal. The facts were similar to The "Berge Sisar" case, except that in this case the buyer of the propane cargoes, Petroleo Brasiliero S.A. started the legal dispute.
Petroleo Brasiliero S.A. brought two legal actions as lawful holders of the Bills of Lading against the shipowner Mellitus Shipping Inc. for the cargo contamination, making what Lord Hobhouse of Woodborough referred to in The "Berge Sisar" case as a "formal claim".
The shipowner counterclaimed based on the experts` investigation report for the ship`s tanks cleaning costs arguing that the propane cargoes were contaminated before shipment and by making claims under the contracts of carriage as lawful holder of the Bills of Lading, Petroleo Brasiliero S.A., became liable under the contracts of carriage contained therein for the loading of a dangerous cargo. Although the case was ultimately settled by mediation out of Court, it remain a good example of how the carriers can take advantage of the provisions of section 3(1)(b) of COGSA 1992.

by Vlad Cioarec, International Trade Consultant

This article has been published in Commoditylaw`s Oil Trade Review Edition No. 3.

Endnotes:

1. There are also Bill of Lading forms providing for the settlement of disputes in Singapore based on the Singapore law but since the Singapore Bills of Lading Act is based on English COGSA 1992 the issues are equally applicable whether English COGSA or  Singapore Bills of Lading Act apply.
2. [1998] UKHL 1
3. See the paragraph 3.24 of the Joint Report of the Law Commission and the Scottish Law Commission, "Rights of Suit in respect of Carriage of Goods by Sea" (Law Com No. 196; Scot Law Com No. 130), HC 250, 1991.
4. See Borealis AB v. Stargas Ltd. & Ors, [1998] EWCA Civ. 1337, [1998] 4 All ER 821; See Borealis AB v. Stargas Limited and Others and Bergesen D.Y. A/S [2001] UKHL 17; [2001] 2 All ER 193; [2001] 1 Lloyd`s Rep. 663.
5. [2018] EWHC 1902 (Comm)
6. For more on this matter see the article "In What Conditions The Commodity Buyers May Incur Liability Under The Bills Of Lading For Vessel Demurrage At Discharge Port"
7. See Borealis AB v. Stargas Ltd. & Ors, [1998] EWCA Civ. 1337, [1998] 4 All ER 821; See Borealis AB v. Stargas Limited and Others and Bergesen D.Y. A/S [2001] UKHL 17; [2001] 2 All ER 193; [2001] 1 Lloyd`s Rep. 663.
8. The provisions of section 3(1)(c) of COGSA 1992 would only apply in a situation where, like in The "Berge Sisar" case, the consignee takes delivery of the cargo from the carrier before the Bill of Lading was transferred to him and subsequently becomes the lawful holder of Bill of Lading. The Bills of Lading issued for bulk commodities in paper form are transferred along a chain of sellers and buyers with the result that the Bills of Lading reach to the final buyer long after delivery of the cargo. Such Bills of Lading are referred to as "spent Bills of Lading" because they no longer give the holders the right to demand delivery of the goods from the carrier. The only rights transferred by endorsement and delivery of such Bills of Lading are the rights of suit. In English law, the transfer of rights of suit under the spent Bills of Lading is subject to the conditions stated in the Section 2(2)(a) of COGSA 1992. The requirement in the Section 2(2)(a) of COGSA 1992 is that the consignee has to become the holder of the Bill of Lading pursuant to contractual arrangements made before delivery of the cargo. The date of the sale contract between Stargas and Borealis was 13th October 1993, while the vessel arrived at Stenungsund terminal on 6th November 1993, that is, after the "contractual arrangements" of Stargas with Borealis. The date of the sale contract between Borealis and Dow Europe was 11th November 1993, while the vessel delivered the cargo at Terneuzen terminal on the 24th November 1993, that is, after the "contractual arrangements" of Borealis with Dow Europe. Therefore, when the Bills of Lading were transferred to Borealis on the 19th January 1994 and then to Dow Europe on the 20th January 1994, they were successively holders of the Bills of Lading pursuant to the provisions of Section 2(1) and (2) and Section 5(2)(c) of COGSA 1992 and the contractual rights of suit were ultimately transferred to Dow Europe.
9. See Borealis AB v. Stargas Ltd. & Anor, [2002] EWCA Civ. 757
10. See Borealis AB v. Stargas Ltd. & Ors, [1998] EWCA Civ. 1337, [1998] 4 All ER 821.
11. [2005] EWHC 2399 (Comm); [2006] 1 Lloyd`s Rep 457.
12. The English Commercial Court said that the word "transaction" is used in COGSA 1992 with reference to "the physical  process by which the bill of lading is transferred from one person to another".
13. [2001] EWCA Civ 418; [2001] 2 Lloyd`s Rep. 203