Transport Law Path Selection for Protecting FOB Seller's Rights:System Design of Actual Shipper in the Chinese Maritime Code
Upon the execution of a sales contract,if the buyer demonstrates an anticipated breach or an inability to pay while the goods are in transit,two legal mechanisms can safeguard the unpaid seller's interests.The seller may either invoke the right of stoppage in transit under trade law or exercise rights of control under transport law;both mechanisms require the cooperation of the carrier.However,when a negotiable bill of lading has been issued by the carrier,a seller attempting to exercise the right of stoppage in transit of goods often encounters opposition from the holder of the bill of lading.To ensure the seamless circulation of the bill of lading and maintain trade security,the legislation of many countries grants precedence to the right of control of the bill of lading holder over the seller's right of stoppage in transit.Consequently,these legal protections often prove ineffective due to conflicts or inconsist-encies between trade law and transport laws.This analysis indicates that neither the establishment of a right of stop-page in transit under trade law nor the assertion of right of control under transport law adequately resolves the clash between these domains.Specifically,as FOB sellers are not party to a carriage contract with the carrier,they lack the authority to exercise rights stipulated within such a contract,thereby disabling them from directing the carrier to stop transport or modifying the consignee or destination.In accordance with the principle of privity of contract,the carrier is obligated only to comply with the instructions provided by the shipper,as per the contractual agreement.Similarly,while a seller might wish to assert right of control under transport law,he must first obtain a bill of lad-ing.However,lacking a contractual relationship with the carrier,the seller is not entitled to a bill of lading unless the shipper directs the carrier to issue one.Therefore,the ability of the actual shipper to obtain a bill of lading de-pends solely on the discretion of the shipper.Given that FOB transactions account for over 80%of the market in China,it is critical to safeguard the interests of sellers who have not yet received payment.To address this,it is proposed that the legal definition of FOB sellers be expanded to classify them as actual shippers,thereby granting them the authority to get a bill of lading from the carriers.This adjustment would transform their relationship with the carriers into a statutory transport legal relationship,resembling a quasi-contract.As such,their legal standing would transition from that of an FOB seller under the trade law to that of an actual shipper under the transport law.Under the principle of simultaneous performance in contract law,these sellers would have the right to demand the issuance of a bill of lading at the time of goods delivery,thus asserting control over the goods—a mechanism in-spired by the Hamburg Rules and the Rotterdam Rules models.However,if the actual shipper and shipper have a-greed not to issue a negotiable bill of lading,the actual shipper does not require a bill of lading to protect his rights.Thereby,the shipper may obtain a bill of lading from the carrier and maintain control over the goods.This analysis underpins the recommendation for a revision to the Chinese Maritime Code.The proposed amendment should specify that when the actual shipper requests a bill of lading,the carrier must issue it to the actual shipper and record his name in the shipper section of the transport documents or electronic transport records,unless there is a prior agree-ment between the shipper and the actual shipper to the contrary,and the actual shipper has informed the carrier.This amendment would effectively resolve the issue of protecting sellers'rights under transport law in FOB transac-tions.
FOBactual shipperbill of ladingright of stoppage in transitright of control