LEGAL PRINCIPLE: COMMERCIAL LAW – Bill of Lading – Right to Sue – Statutory Provision – Section 375(1) Merchant Shipping Act
PRINCIPLE STATEMENT
It is crystal clear from the provisions of section 375(1) of the Merchant Shipping Act that it is not every consignee or indorsee of a bill of lading who may have a right to sue on it, but only a consignee or indorsee to whom the property in the goods mentioned therein shall pass upon by reason of such consignment or indorsement because, at that juncture, he would have transferred to and vested in him the right to sue and the reciprocity of the corresponding liabilities relating to such goods.
RATIO DECIDENDI (SOURCE)
Per Achike, JSC, in Boothia Maritime Inc. & Ors v. Fareast Mercantile Co. Ltd. (2001) NLC-901999(SC) at p. 19; Paras A–C.
"It is crystal clear from the provisions of section 375(1) of the Merchant Shipping Act that it is not every consignee or indorsee of a bill of lading who may have a right to sue on it, but only a consignee or indorsee to whom the property in the goods mentioned therein shall pass upon by reason of such consignment or indorsement because, at that juncture, he would have transferred to and vested in him the right to sue and the reciprocity of the corresponding liabilities relating to such goods."
EXPLANATION / SCOPE
Under Section 375(1) of the Merchant Shipping Act, not every consignee or indorsee of a bill of lading has the right to sue—only those to whom property in the goods passes by consignment or indorsement. When property passes, the right to sue and corresponding liabilities also vest in that person. The statute links the right to sue to the transfer of property, not merely to possession of the document. A mere consignee or indorsee without property interest cannot maintain an action. The provision ensures that only parties with a genuine proprietary interest can sue. The right to sue follows ownership. This prevents persons without interest from litigating over goods.