Bad Bills

A ship agent was presented with a correctly endorsed bill of lading by the consignee’s nominated clearing agent and in line with usual procedures issued the Delivery Order for clearing the cargo. The container was then cleared by the consignee from the port and subsequently was returned empty.

The agent then received notice of a claim from the shipper through the carrier advising that the original bills of lading remained in the bank as they had not received payment from the consignee. As a result the ship agent undertook a full review of the documentation and noted that there were some small discrepancies with them. It turned out the bill of lading they were presented with was a fake.

The main areas of difference were the terms and conditions on the reverse of the bill, the carrier’s stamp was different from the correct one and the dates were mismatched.

As a result, following discussions with ITIC, it was agreed that this was not a fraudulent or deliberate release but rather a mistaken negligent release. As such, it fell within the ITIC cover and the carrier’s claim (passing on the shipper’s claim) was settled for US$ 124,000.

ITIC looked to the possibility of recovering the monies from the fraudulent consignee, but they had disappeared.