pi_circular Insurance & claimsCargo risk West of England
Incorporation of Charter Party Terms into Bills of Lading Claims Guides As a matter of English law the extent to which the incorporation is effective will depend upon the wording of the incorporation clause. Some standard form bills, like Congen 2007, are designed to incorporate all terms including the law and jurisdiction of the referenced charter party. Congen 2007 reads: “ (1) All terms and conditions, liberties and exceptions of the Charter Party, dated as overleaf, including the Law and Arbitration Clause/Dispute Resolution Clause, are herewith incorporated.” Other bills of lading simply state “all terms as per cp dated...”. Though similar, these two different wordings can have drastically different results as to what terms are incorporated into the bill of lading contract. The following Claims Guide sets out the position under English law but the caution as to the applicability of these principles when English law does not apply contained in the conclusion should be carefully noted. What is incorporated? Under English law, the extent to which terms from the charter party will be incorporated into the bill of lading depend upon several factors including; Whether or not terms that are said to be incorporated actually exist at the time the incorporation is said to take place; Whether the clause to be incorporated is consistent with other terms in the bill of lading; and Whether the bill of lading describes the clause it seeks to incorporate There must be a charter party or clause in existence before its terms can be incorporated into a bill of lading. If the charter party does not exist prior to issue of the bill of lading, there can be no incorporation of its terms into the bill of lading. There is extensive case law on what ‘existence’ means, resulting in the general rule that if terms are not reduced to writing before issue of the bill of lading, they cannot be incorporated. If some terms, but not all, have been put in writing and are said to be incorporated in the bill of lading only those which were in writing at the time the bill is issued can be incorporated. It is important to note that where terms in the charter party are inconsistent with those in the bill of lading, the bill of lading terms will prevail. Finally, to determine what clauses from the charter party are incorporated, one should look at the exact wording of the incorporation clause. With only general wording like “all terms as per cp dated...” the entirety of the law and jurisdiction and dispute resolution provisions of the charter party will not be incorporated. Whilst the choice of law in the governing charter may be incorporated by use of general wording, jurisdiction can only be incorporated by express reference. Some standard forms, like Congen 2007, include reference to terms, conditions, liberties and exceptions and also expressly refer to law, jurisdiction and dispute resolution. This wording has developed as a result of a string of case law and should be included where the intention is to incorporate all terms of the charter party insofar as possible. Other Charter Party Terms Incorporated into the Bill of Lading Successful incorporation does not mean that consignees will necessarily become liable for all obligations of the charterer to the owner. The terms that will apply will be those relevant to shipment, carriage, discharge of cargo and payment of freight. As an example, the consignee could be responsible for the cargo stowage if the charter party s
Incorporation of Charterparty terms into Bill of Lading
West of England
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