Voyage Charter – Bill of Lading to be Signed by Master – Whether Charterparty Terms Incorporated

August 2000

(Sea Venture Volume 19)

In the ''Ikariada''¹, the English Commercial Court reviewed the position where the Master was required to sign bills of lading as presented but where Charterers had failed to insert the charterparty date into the bill. Owners wished to bring a claim for indemnity against the Charterers for losses incurred as a result.

The vessel was chartered on the Gencon form providing, inter alia:

''9. The Captain to sign Bills of Lading at such rate of freight as presented without prejudice to this Charterparty.

35. Any act neglect default or error of judgement whatsoever…in the management and/or navigation of the vessel…always excepted.…''

Charterers presented a bill of lading on the Congenbill form for signature. The reverse of the bill stated at clause 1: ''All terms and conditions liberties and exceptions of the charterparty, dated as overleaf, are herewith incorporated''. However, the blank on the front of the Congenbill, which should have contained the date of the charterparty, was not filled in. The box on the front of the bill ''Freight payable at'' was completed with the words ''as per c/p''.

Owners faced a claim in Greece by Consignees named on the bill of lading. Owners argued that as a matter of Greek law the failure to identify specifically the governing charterparty on the front of the bill of lading rendered clause 1 of the bill ineffective to incorporate the exceptions in clause 35 of the charterparty which, they argued, would have given Owners a defence to the claim brought by Consignees.

The charterparty was subject to English law and jurisdiction and Owners sought a declaration from the English High Court that they were entitled to damages and/or an indemnity from Charterers in respect of Owners' liability to the Consignees and/or damages for loss of the chance of successfully defending the Consignees' claim.

The Court had to decide, inter alia, the following issues:

(i) whether the Charterers were in breach of any express and/or implied terms of the charterparty in failing to fill in the blanks on the face of the bill, in particular in failing specifically to identify the governing charterparty by date or otherwise;

(ii) whether the Charterers were under an obligation to indemnify the Owners against the consequences of requiring the Master to sign the bill of lading in that form.

The Court decided that in order to establish whether the Charterers were in breach of any express and/or implied term as above, it was necessary to look at the bill of lading and see whether it was a contractual and proper one in accordance with the proper law of the charterparty, English law. Clause 9 of the charterparty required the bills to be signed without prejudice to the charterparty. The obligations of the Owner under the bill must, therefore, be no more onerous than the relevant obligations under the charterparty.

The Court decided it was also necessary to distinguish between charterparties that require the Master to sign the bills of lading ''as presented'' and charterparties which provide that the Master shall sign the bills of lading in a specified form. If the charterparty had required the bill to be in a specified form, then the Court said that providing a bill which contained blanks for signature would mean that the bill was not in the form required by the charterparty and the Master is not bound to sign it. On the other hand, where the charterparty requires the Master to sign bills of lading as presented, as long as the bill presented does not contain extraordinary terms, or terms which are manifestly inconsistent with the charterparty, the Master must sign them.

In this case, clause 9 required the Master to sign bills ''as presented''. The Court held that the bill of lading was a contractual and proper bill of lading according to English law, the law governing the charterparty pursuant to which the bill was issued. The bill of lading as presented was in a form which did not impose more onerous terms than the charterparty. It was common ground between the parties that in this case the failure to fill in the blank on the front of the bill did not as a matter of English Law prevent the incorporation of the terms of the charterparty which were relevant to the loading, carriage and discharge of the goods. It was agreed that as a matter of English law the effect of the failure to fill in the blank is the same as if the reference was simply to ''the Charterparty'' and the omission does not demonstrate an intent to negative the incorporation of relevant charterparty clauses into the bill.

Accordingly, it was held that Charterers were not in breach of any express or implied terms of the charterparty. Nor were the Charterers obliged to indemnify the Owners against the consequences of requiring the Master to sign the bill of lading in the form presented. There was no disparity between the bill which, under the charterparty, the Charterers were entitled to present and the bill which they did, in fact, present.

¹ [1999] 2 Lloyd's Rep 365