The Right Of Control Of The Bill Of Lading Under The Rotterdam Rules

The rules of the right of control in non-maritime conventions are inadequate todeal with the specificity of maritime transportation, where the bill of lading incirculation. There may exist conflicts between interests of parties of sales contract,transportation contract and financial relationship when the goods are in transit. Rightof stoppage in transit could regulate the rights and the obligations between partiesduring the maritime transportation in certain extent. However, restricted byboundaries of the sales law department and lack of coordination with thetransportation law, the right of stoppage can only provide limited relief to the unpaidseller with many restrictions. The legal basis of right of control in maritimetransportation must be sought in national laws and in the terms and conditions ofcontract of carriage. The lack of uniformity has the negative impact on the clarity ofparties’ position and legal certainty.The Rotterdam Rules provide detailed and mature regime of the right of controlof the bill of lading in the Chapter10, making a good balance of rights and dutiesbetween the shipper and the carrier. The core elements of the Chapter10contain thecontent of the right of control, the identity and transfer of the control party, theexercise and execution of the right of control. The new convention pays specialattention to the situation where negotiable documents are issued. Relied ontransportation documents issued during the carriage, the new convention makesdifferent arrangements on the rules of controlling party’s identity and transfer, whichcomplies with maritime practice and servers interest of right held parties. The Rotterdam Rules break the balance of the liability system built by the Hague-VisbyRules and increase the burden of the carrier. In order to make a new balance, the newconvention confines the content of the right of control to three specific rights andrequires the instructions given by the controlling party shall be “reasonably executed”and not interfere the normal operation of the carrier. In addition, the carrier is grantedthe right to request the security ex ante and reimbursement ex post from thecontrolling party. Under certain circumstances, the convention even grants the carrierthe right to refuse executing the controlling parties’ instructions.The right of control of the bill of lading is of great importance either to theunpaid seller under the sales contract or to the bank financing the goods under thedocument transaction. Nevertheless, there is vacancy referring to the right of controlof the bill of lading under Chinese law regime. The Maritime Law keeps silent on theright of control, while the Contract Law only sets out relevant rules for non-maritimetransportation under Article308, which can hardly provide security or protection forvarious cargo side parties holding bills of lading. The absence of the stipulation hasalready exposed its disadvantage and brings increasing judicial risks in legal practice.Being aware of the defect of Article308, judges lean to evade its adaption, whichresults in different judgments between similar cases. It significantly weakens andchallenges certainty and predictability of laws.Therefore, I think it is necessary and valuable to add the right of control as a newsection in the Maritime Law. As for specific stipulations of the right of control, theRotterdam Rules’ mature and well-designed structure can be used in the newamendment of the Maritime Law. Besides, legal compulsory enforcement methods forthe controlling party shall also be taken into consideration of the regime establishment.Rules such as maritime injunction under maritime procedure law could indeedguarantee the execution of the right of control.