Draft surveys – a critical tool to defend dry bulk cargo shortage claims

Gard has updated an old article on the benefits of draft surveys, noting that they remained a means of checking that the shipper’s figures inserted in the bill of lading are correct.

“The receiver has paid for the quantity stated in the bill and that figure is prima facie or even conclusive evidence that the amount stated was loaded aboard. A draft survey may be the best evidence to refute claims for shortage, so we recommend that members routinely order draft surveys for dry bulk cargo”, the Club said.

While performing a draft survey is not an exact science, with much depending on the weather conditions at the time, the swell, the accuracy of the draft marks and the care which is taken in carrying out the required calculations, Gard said that the accuracy of a draft survey which had been properly performed was generally regarded as being up to more or less 0.5% of the final figure for dry bulk cargoes. “Therefore, barring exceptional circumstances, such as a high swell during the survey, if the difference between the shore figure and the draft survey figure is greater than 0.5%, it may well represent a physical gain or loss, rather than being simply a “paper” difference”, the Club said.

If the shore figure is less than the draft survey figure, any such difference was likely to be relatively unimportant. The shipowner may be legally bound to deliver the weight or quantity stated in the bill of lading, regardless of the actual quantity received on board and available for discharge.

However, if the figure which the shippers wish to have inserted into the bill of lading is greater than the draft survey figure by more than 0.5%, “the alarm bells should ring, both on board and in the shipowner’s office”, said Gard. The reason for this is that the quantity stated in the bill of lading will often be legally binding as against the shipowner, whether or not it is in itself accurate, and the shipowner may be prevented (the legal term is “estopped”) from arguing that the bill of lading figure was wrong and that the “excess” cargo was in fact never loaded.

According to the Hague-Visby Rules the carrier is obliged, upon the demand of the shipper, to issue a bill of lading stating, inter alia, the quantity or the weight of the goods. Once issued, the bill of lading is, subject to any valid qualifying statements on the bill of lading itself, prima facie evidence of the quantity or weight recorded on the bill, but once negotiated, i.e. endorsed, by the shipper in favour of some other third party, it will in most cases amount to conclusive evidence in the hands of a third party acting in good faith.

It follows that the carrier must inspect the goods diligently upon receiving them for shipment by conducting draft measurements for bulk cargoes.

Senior Claims Adviser, Alexandra Chatzimichailoglou, for updating the article.

Full article (in considerably more detail) at:

https://www.gard.no/web/updates/content/32482473/draft-surveys-a-critical-tool-to-defend-dry-bulk-cargo-shortage-claims