Article-22-UCP-600-Charter Party Bill of Lading

A Charter Party Bill of Lading is used for commodity or bulk shipment cargoes such as oil, rice, wheat, sugar, steel, etc – will be made on a vessel hired specifically for the shipment. This hiring arrangement is called a ‘charter party’. Such arrangements may be concluded either for a period of time or for a single or multiple voyage. The party hiring the ship concludes a contract of carriage with the owner or its agent. This is known as the ‘charter party contract’ and will include terms such as the time period for the charter, the basis for loading and unloading the cargo, the ports of loading and discharge, and the party responsible for the freight cost.

Article-22-UCP-600-Charter Party Bill of Lading

a. A bill of lading, however named, containing an indication that it is subject to a charter party (charter party bill of lading), must appear to:
i. be signed by:
- the master or a named agent for or on behalf of the master, or
- the owner or a named agent for or on behalf of the owner, or
- the charterer or a named agent for or on behalf of the charterer.
Any signature by the master, owner, charterer or agent must be identified as that of the master, owner, charterer or agent. Any signature by an agent must indicate whether the agent has signed for or on behalf of the master, owner or charterer. An agent signing for or on behalf of the owner or charterer must indicate the name of the owner or charterer.

Explanations: A CPBL may not be titled (however named), must need to indicate that subject to charter party bill of lading. A CPBL may be signed by one of the below: 

1.    By the Master of the Ship, when a Master signs a bill of lading it need not to indicate the name; as only authority "as master" and a signature will suffice the need; or by a named agent on behalf of the Master.

2.    By the Owner of the Ship, or by a named agent on behalf of the owner.  
3.    By the Charterer of the Ship, or by a named agent on behalf of the charterer.  

It must indicate whether agent has signed on behalf of the Master, Owner or Charter. An agent signing for or on behalf of the owner or charterer must indicate the name of the owner or charterer.

ii. indicate that the goods have been shipped on board a named vessel at the port of loading stated in the credit by:

- pre-printed wording, or
- an on board notation indicating the date on which the goods have been shipped on board. 

The date of issuance of the charter party bill of lading will be deemed to be the date of shipment unless the charter party bill of lading contains an on board notation indicating the date of shipment, in which case the date stated in the on board notation will be deemed to be the date of shipment.

Explanations: A CPBL must indicate the status of the goods whether the goods have been shipped or on board at the port of loading as per credit by one of the below method:

1-Pre-printed wording.

2-A stamp or notation indicating the actual date of the action taken or containing an onboard notation.

It is not necessary in case of CPBL to have the date of the issuance until stipulated in credit, however, if on board date have not been indicated then the issuance date will be deemed to be the date of shipment and become necessary. 

iii. indicate shipment from the port of loading to the port of discharge stated in the credit. The port of discharge may also be shown as a range of ports or a geographical area, as stated in the credit.

Explanations: A CPBL must evidence a port of lading as per credit. However, the port of discharge may also be shown as a range of ports or a geographical area, for an example credit requires POD as "any port in India", a CPBL may also show the same as "any port of India" and goods may be unloaded at anywhere as per charterer or owner convenient  at anywhere in India. 

iv. be the sole original charter party bill of lading or, if issued in more than one original, be the full set as
indicated on the charter party bill of lading.

Explanations: At least one original is require to take the delivery of the goods, an original CPBL need to be presented if issued in one original or if it is more than one original, all need to be presented as per credit to avoid any risk of fraud or conversion.

b. A bank will not examine charter party contracts, even if they are required to be presented by the terms of the credit.

Explanations: There is a contract between charterer and owner of the ship at the time when shipped are hired, bank will not examine that contracts even if they are required to be presented by the terms of the credit. 

Points to Remember:

1.    Owner: Person or entity who owns the ship and provide it on lease to charterer.

2.    Charterer: Person or entity who hires the ship for their on shipment or group shipment, it may be a beneficiary or an applicant based on incoterms.
3.    There is no involvement of carrier in CPBL.
4.    Port of discharge may be a geographical port.
5.    Bank will not check charter party contracts.

Risk in Charter Party BL:

CPBL is one of the riskiest BL as owner involvement is there who is no where related to trade deal between an applicant and beneficiary and may take over the goods and sell out in the case of contravene of charter party contracts. 

There may be also a risk of being a geographical port of discharge and an applicant may have to pay an additional cost to voyage the goods from port of discharge to actual warehouse in the same or different countries.