A Brief History of the Foundation of Maritime Law as it Relates to the Development of the Bill of Lading

The bill of lading is arguably the most important and most widely-used document in the shipping industry. It is defined as a memorandum or acknowledgment in writing, signed by the captain or master of a ship or other vessel, that he has received in good order, on board of his ship or vessel, therein named, at the place therein mentioned, certain goods therein specified, which he promises to deliver in like good order, (the dangers of the seas excepted,) at the place therein appointed for the delivery of the same, to the consignee therein named or to his assigns, he or they paying freight for the same. The bill of lading is assignable, and the assignee is entitled to the goods, subject, however, to the shipper's right, in some cases, of stoppage in transitu. But despite the fact that it is used daily in the shipping industry, many people may be unaware of its longstanding and distinguished lineage. Therefore, to examine this document's origins, one must first know a few things about the history of maritime law.

The cultural and economic richness one finds in the world relies heavily on maritime trade and the resulting exchange of goods and ideas. When wind was first harnessed for transportation in Egypt in 5000 BC, it laid the foundation for a global economy, influencing trade development between major civilizations. However, complex systems of trade could not have been successful, efficient or profitable without some form of maritime law concerning navigation and overseas commerce. These shipping regulations are rooted in many cultures and civilizations: Indo-China, Phoenicia, and both the Greek and Roman Empires. These epicenters of early trade are the historical origins of our maritime law, and the bill of lading - the contract all modern day shipping relies upon.

Perhaps the most widely adopted practice of trade and evidence of the earliest beginnings of globalization, was the use of negotiable documents. The first known examples of trade documents/negotiable instruments were found in Babylonian tablets of credit from 677 to 197 BC. Paper credit was first issued in Arab trade in the eighth century, and in the eleventh century, was used by various peoples including the Lombards, and the Moguls of Southeast Asia. As a result of this new method of trading via waterways, Asian, Middle Eastern, and Mediterranean connectivity and interdependence advanced dramatically.

The first recognizable maritime nation in the Mediterranean was Phoenicia established around 600 BC. It was a flourishing civilization with an extensive trading system, and yet no recorded laws governing their maritime commerce seem to have existed. However, historians believe laws must have been responsible for their success. But as is the case with the rise and fall of nations, Phoenicia was eventually overshadowed by the growing prominence of the Greek Empire. Consequently, it was Demosthenes, a Greek, who was the first known maritime lawyer, who noted, "neither ship nor ship owner nor merchant can put to sea without the assistance of the lenders' with the vessel being pledged as security."

By 400 BC, the Greeks had developed and detailed a system of maritime laws addressing issues such as liability of cargo in the instance of shipwreck and jurisdiction of admiralty court. More importantly, disputes arising from maritime contracts were subjected to specially appointed judges who constituted tribunals which are analogous to our modern commercial courts of admiralty. Additionally, Greek civilization was heavily dependant on imports and established regulations regarding security and payment of freight. For instance, on arrival in Athens, cargo was held as security by the owner/shipmaster until his lump sum freight was settled.

While many of the early regulations of maritime law were never recorded, the earliest codification concerning maritime commerce came from India under the reign of Emperor Chandrapupta Maurya in 321 BC, with his creation of the Board of Admiralty. The shipmaster on merchant vessels had primary control of this new method of trade. These laws were applied to Indian trade between Babylon and China, and by 250 BC Egyptian-Chinese trade flourished under variations of these laws as well.

However, the most widely influential of all maritime practices, the Lex Rhodia de jactu originated from the Greek island of Rhodes. In 100 AD Lex Rhodia addressed the five most important matters concerning maritime trade and drafted detailed regulations regarding each. Mare, the sea, was declared a resource to be used by all states freely, a philosophy greatly differing from that of the next great empire, the Roman Empire, who regarded the sea as something to be defended. Navis, the ship, had a set of rules establishing legal ownership of vessels and their operation. The purpose of all commercial maritime activity, Merx, the cargo, was strictly monitored by laws assuring proper carriage, delivery and payment for delivery. Obligationes, responsibilities, were established for the merchant, the ship owner, and the shipmaster, and implied authority to purchase equipment, contract for repairs, borrowing of money for a voyage to proceed, and the expectation on compensation for carriage of freight to a destination. Action, the settlement of disputes, was decided under a system of marine jurisdiction and proceedings. An excerpt from a written digest prepared for Roman Emperor Justinian regarding the Lex Rhodia states, "The Sea is the medium, the ship is the vehicle, and the cargo is the purpose for the entire operation. There must be responsibilities for the operation and method for which to settle disputes arising from neglected responsibilities must be created."

But there is more to the world than simply the Mediterranean. And although the Dark Ages had left Northern Europe largely underdeveloped with regard to maritime law, in the eleventh century, the Hanseatic League comprised of Anglo-Saxons, French, German, Viking, and Jutes who often traded with Mediterranean cultures, had created their own sets of maritime codes. The Codes of Visby (Baltic), Laws of Hansa Towns (Germanic) and the Laws of Oleron (French) laid the foundation for England's maritime laws and are largely responsible for the British dominance of maritime trade in the thirteen and fourteenth centuries.

An important British development in maritime law was the Lex mercatoria, or "merchant law" based on common maritime practices and Medieval European affairs. First passed in 1283 and intended to bring a speedy settlement of commercial disputes between merchant trading, this statute allowed a creditor to sue a debtor before the Mayor of London based on a negotiable document.

Yet with all these advances in the development of maritime law, there is not a single case in any court of common law on any maritime subject, or any textbook on the maritime law before the beginning of the seventeenth century. The first work on merchant law was written by Gerard Malynes and was published in England in 1622, called Consultudo Vel Lex Mercatoria. It stated that issues involving commerce should be governed by a separate set of laws to be followed by all nations and particularly held by England. Lex mercatoria set the precedent for standardization in the maritime industry. After the seventeenth century, Lex mercatoria, became part of English common law and established the first modern negotiable instrument that would later develop into present day bill of lading. Interestingly though, the bill of lading was not officially created until 1794, and it was a special verdict of the jury in Lickbarrow v. Mason in England which officially established the transferability of property by endorsement of the bill of lading. In 1855 under the Bill of Lading Act, Lord Esher M.R. in Leduc & Co. v. Ward established that the endorsee of a bill of lading would acquire the benefit of the contract contained in or evidenced by the bill of lading when the bill of lading was originally issued to the charterer of the vessel, in whose hands it was not a contract at all. Even as recently as 1992, the revised Carriage of Goods by Sea Act allows a consignee to sue or be sued on the bill of lading contract.

In summation, we realize that this is not an exhaustive examination into the bill of lading and is merely a glimpse into its historical origins. However, when one sees how this document has evolved and developed throughout the centuries, it is with renewed respect that one should look at the standardization that one finds within the maritime industry, specifically with regard to the bill of lading.

End Notes:

We would like to thank the following authors for their detailed research into this topic: Stewart Boyd, JEB Anthony Clulow, Edgar Gold, Lawrence A. Harper, Peter Jones, Spyros M. Polemis, Nick Szabo and R. L. Tallack. Their works were heavily consulted and helped in the formulation of this article.

Additionally, we would like to credit the following with its definition of the bill of lading: 1 T. R. 745; Bac. Abr. Merchant L Com. Dig. Merchant E 8. b; Abbott on Ship. 216 1 Marsh. on Ins. 407; Code de Com. art. 281. Abbott on Shipping. 331; Bac. Ab. Merchant, L; 1 Bell's Com. 542, 5th ed.