Bills of lading have been known from at least the thirteenth century. At that times shippers (usually the owners of the goods) as a rule accompanied their cargoes on the voyage to destination and bill of lading served only as an invoice of the goods shipped. Later, in the sixteenth and seventeenth centuries, when larger ships has begun to carry varied cargoes belonging to several shippers this practice gradually came to naught and it became the custom to incorporate the terms of the contract of carriage into bill of lading
In Glyn Mills Currie & Co. v East & West India Dock Co (1882) 7 App. Cas. 600 per Willes J.:
I think the bill of lading remains in force at least so long as complete delivery of possession of the goods has not been made to some person having a right to claim under it.
The Ythan  1 Lloyd’s Rep. 456 per Aikens J at p.475-6:
67. The question of the scope of the phrase "at a time when possession of the bill no longer gave a right (as against the carrier) to possession of the goods to which the bill relates" is less easy. [Council for shipowners] submits that the phrase deals only with the case of "spent" bills of lading, ie bills which cover goods that have been delivered to the person entitled to delivery under the bills. [Council for shipowners] submits that the wording was not intended to deal with the situation where the goods never arrive at the destination under the contract of carriage because they have been destroyed or totally lost. But [Council for FOB buyer] points out that in the Explanatory Notes to the draft Carriage of Goods by Sea Bill which is annexed to the Law Commission Report, it gives an example of what is intended to be covered by the wording of clause 2(2) which became section 2(2).82 The note says: "The words possession of the bill no longer gives a right to possession of the goods' cover inter alia the case where delivery of the goods has been made and also the case where the goods are destroyed".
69. It is clear from the wording of section 5(4) of the Act that the draftsman had well in mind the possibility that a bill of lading could be issued and then the goods covered by it "ceased to exist". The Explanatory Notes to the Bill state that this subsection "makes it clear that rights of suit in relation to any document can exist84 in respect of goods carried on a vessel which sinks". Therefore there is no reason to confine the circumstances covered by the words "possession of the bill no longer gives a right (as against the carrier) to possession of the goods to which the bill relates". How the Act operates depends on its wording. That is emphasised by the particular reference to sections 2(2) and 4 in section 5(4).
70. In my view, valuable assistance on the ambit of the words in section 5(2)(c) "at a time when possession of the bill no longer gave a right (as against the carrier) to possession of the goods" is gained from the analysis of Lord Hobhouse in his speech in The Berge Sisar. In para 31 of his opinion Lord Hobhouse notes that the 1992 Act is concerned solely with contractual obligations created in a bill of lading in relation to the carriage and delivery up of the goods. He emphasises that the Act is not dealing with proprietary rights of anyone who becomes a holder of the bill of lading.85 This distinction is important. It means that when a ship sinks and the cargo carried under a bill of lading is lost permanently, the question to ask in connection with the wording in section 5(2)(c) under consideration is: does possession of the bill of lading any longer give a contractual right (as against the carrier) to possession of the goods to which the bill relates? Like the authors of Carver, my view is that there cannot be a contractual right (as against the carrier) to possession of goods that no longer exist (for practical purposes) because they are at the bottom of the sea. If the reason for the loss is a breach of contract by the carrier, there may at that stage spring up a contractual right to damages, but whether there is and who can exercise that right are different questions which I need not discuss here.
71. So I conclude that the phrase in section 5(2)(c) "at a time when possession of the bill no longer gave a right (as against the carrier) to possession of the goods to which the bill relates" do apply to a situation where the goods have been lost forever, as in this case. That does not stop the Act operating to transfer rights of suit or liabilities. Whether that occurs depends on whether the conditions set out in the Act, particularly those in sections 5(2), 2(2) and 3(1) are fulfilled.