Forged bills of lading

The shipment of six containers of castor oil, worth USD 270,000, was arranged by a ship agent member of ITIC. The containers were to be transported from India to Antwerp. Unfortunately, the Belgian agent released the cargo to the consignee against a bill of lading that appeared genuine at first glance – but was in fact a clever forgery.

The shipper claimed they had not been paid for the cargo and still held the original bills of lading. As such, they arrested one of the carrier’s vessels in India and obtained a bank guarantee from the carrier as security for their claim. In turn, the carrier looked to their ship agent for indemnity.

The ship agent contacted ITIC for support. Unfortunately, examination of the bills of lading that had been presented showed that the agent should have spotted the forgery. The agent had therefore been negligent. The forged bills included clearly incorrect details, such as the name of the load port and also spelling errors including the name of the carrier. The claim brought against the carrier by the shipper was for the cargo value plus costs and interest.

The case was fought in the Indian courts, which is usually a slow process. As it was unlikely that the claim could be successfully defended, ITIC and the carrier pushed the shipper to settle the matter. Finally, after almost four years of negotiations, a settlement of USD 160,000 was agreed, USD 100,000 less than the original amount claimed. ITIC also reimbursed the carrier’s legal costs and the bank charges incurred in maintaining the bank guarantee.

It has never been easier for documents to be cleverly forged and ship agents need to ensure that they thoroughly check the details on bills of lading and other such documentation.