Non-Negotiable Sea Waybill in Letters of Credit Transactions

Definition and Usage of Non-negotiable Sea Waybill :

Non negotiable sea waybill or non negotiable bill of lading is a transport documents used in sea shipments. It is commonly referred as straight bill of lading. A straight bill of lading names the consignee which is entitled to take delivery of the cargo. A straight bill is non-negotiable, which means that the consignee cannot endorse the bill and transfer it to another person to take delivery of the cargo. (source : http://thelawdictionary.org/bill-of-lading/) 

Non negotiable sea waybill share two out of three basic functions of negotiable bill of lading:

  • Non negotiable sea waybills are receipts for the goods as negotiable bills of lading; 
  • Non negotiable sea waybills evidence the terms of the contract of carriage (by way of clauses usually printed on one side of the document) as negotiable bills of lading; 
  • But non negotiable sea waybills are not said to be “negotiable documents of title” unlike negotiable bills of lading.  

Important Note : Please keep in mind that court decisions vary from one country to another whether non negatiable sea waybill is a document of title or not. Courts in country A could decide that non negotiable bill of lading is a document of title and at least one original copy must be surrendered to the carrier for delivery of the goods whereas courts in country B decides the opposite. Here is a small piece from The Hong Kong Court of Appeal decision, "In Carewins the carrier argued that straight bills of lading are not documents of title; therefore, the carrier can deliver the cargo to the consignee without production of the original bill of lading because the carrier already knows the identity of the consignee without the original bill being produced..However, the Court of Appeal agreed with the first instance judge and held that a straight bill of lading is a document of title. Furthermore, it held that the carrier can deliver the cargo only against production of the original bill. ( for full article please follow this link )

Non-negotiable Sea Waybill in Letters of Credit Transactions :

Non-negotiable Sea Waybill is covered under article 21 of UCP 600. 
a. A non-negotiable sea waybill, however named, must appear to:
i. indicate the name of the carrier and be signed by:
- the carrier or a named agent for or on behalf of the carrier, or
- the master or a named agent for or on behalf of the master.
ii. indicate that the goods have been shipped on board a named vessel at the port of loading stated in the credit.
iii. indicate shipment from the port of loading to the port of discharge stated in the credit.
iv. be the sole original non-negotiable sea waybill or, if issued in more than one original, be the full set as indicated on the non-negotiable sea waybill.
v. contain terms and conditions of carriage or make reference to another source containing the terms and conditions of carriage (short form or blank back non-negotiable sea waybill). 
vi. contain no indication that it is subject to a charter party. (source : UCP 600)
Special Hints on Non-negotiable Sea Waybill  :

  • To comply with UCP 600 article 21, a non-negotiable sea waybill must appear to cover a port-to-port shipment but need not be titled “Non-negotiable Sea Waybill” or similar.
  • If a credit requires presentation of a non-negotiable sea waybill (“Sea Waybill”, Non-negotiable Port-to-Port transport Document” or similar) covering sea shipment only, UCP 600 article 21 is applicable.
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What is Non-Negotiable Sea Waybill? How can we use aNon-Negotiable Sea Waybill in a letter of credit transaction? 
On this page I will try to explain you "Non-Negotiable Sea Waybill" and their application in letters of credit transactions. Banks mention non-negotiable sea waybill as "Sea Waybill", "Non-negotiable Bill of Lading" or "Straight Bill of Loading" on letter of credit texts. 

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Sample Sea Waybill