Charterers’ bills of lading

Charterers’ bills of lading. The relationship between charterparties and bills of lading can range from a simple one, where the bill of lading from a shipowner to a charterer/shipper has the status only of a receipt for cargo, to a complex one, where, for example, a charterer issues a bill of lading on his own form but includes a “demise clause” which states that the person issuing the bill of lading is not the owner nor demise-charterer of the vessel and the holder of the bill of lading is then left with the uncertainty of whom to sue for loss, damage or delay of the cargo carried under the bill of lading.

If a charterer is also the shipper of the goods under a charterparty, the master or agent of the shipowner may issue a bill of lading when the cargo is received or shipped. The actual contract between the owner and the charterer is contained in the charterparty. Therefore the bill of lading is essentially a “receipt for cargo”. It may also become a “document of title” if the goods are sold by the charterer and the bills of lading are endorsed to the consignee or endorsee. Until the bill of lading becomes a document of title it is not a “bill of lading” (under the Hague Rules or Hague-Visby Rules) and the Rules may not apply to carriage of goods under this document. When the bill becomes a document of title, the new holder may want to be able to bring an action under section 1 of the U.K. Bills of Lading Act 1855, for example, if the property -in the goods has passed to him, but the terms of the contract are still contained in the charterparty to which he may have no access. Moreover, these Rules do not apply to charterparties, so the shipper/holder of the bill of lading may be able only to seek remedies under the contract of carriage contained in the charterparty, in addition, of course, to bringing an action in tort.

Under time charters, for example, contained in the NYPE form, a clause usually allows the time charterer to present bills of lading for the signature of the master- or to sign and issue bills of lading themselves or through their agents, provided the bills of lading are in conformity with the mate’s receipts arid without prejudice to the charterparty. In the ASBTIME form; derived from NYPE, an indemnity is provided should the shipowner incur any liabilities by such signing.

The carrier, under the contract of carriage of goods by sea, is still the shipowner if the bills of lading are signed “For the master” or “For the shipowner”. Without this form of signature, the charterer may be considered by the shipper to be the “carrier”, especially if the charterer’s forms are used.

Sometimes the bill of lading may contain a “demise clause”. The purpose of such a clause is to transfer any liability for loss, damage or delay to the actual shipowner or to the demise-charterer who controls the management and operation of the ship. The demise-charterer is seen as the “disponent owner”, because the vessel is at his disposition. The demise clause can be considered as unclear, as far as the shipper or holder of the bill of lading is concerned, because it is ambiguous as to the identity of the carrier. If the holder of the bill of lading has a limited time in which to bring an action against the “carrier” (one year in the Hague Visby Rules and two years in the Hamburg Rules), by the time the endorsee holder discovers who is the “carrier” he may have lost the right to bring an action.

Better forms of bills of lading contain an “Identity of carrier clause” which makes it very clear to the holder of the bill of lading that the carrier is the shipowner. An example is CONLINEBILL, approved by BIMCO.


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Written by Ship Inspection

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Charterer’s agents

Chartering brokers