UCP600 Article 22 deals with the requirements for a Charter Party Bill of Lading under a letter of credit. Let’s break down each clause with explanations and examples:
Clause a.i
Text: “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.”
Explanation: A Charter Party Bill of Lading must be signed by an authorized person:
- The master (captain) of the vessel.
- The owner of the vessel.
- The charterer (the person or company that has chartered the vessel).
- A named agent acting on behalf of any of the above.
The signature must clearly indicate the capacity in which the person is signing (e.g., “Master,” “Owner,” “Charterer,” or “Agent for Owner”). If an agent signs, they must specify whom they are signing on behalf of and mention the name of the owner or charterer if signing for them.
Example:
- “Signed by John Doe, Master of MV Sea Explorer.”
- “Signed by Jane Smith, Agent for ABC Shipping Co. (Owner).”
- “Signed by Mike Brown, Agent for XYZ Traders (Charterer).”
Clause a.ii
Text: “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.”
Explanation: The Charter Party Bill of Lading must show that the goods have been loaded onto a specific vessel at the port of loading. This can be done either through pre-printed wording or an onboard notation. If there’s no onboard notation, the date of issuance of the bill will be considered the shipment date. If there is an onboard notation with a shipment date, that date will be considered the shipment date.
Example:
- “Shipped on board MV Sea Explorer at Port of Loading on June 15, 2024.”
- If the bill is issued on June 10, 2024, but contains an onboard notation stating “Shipped on board June 12, 2024,” then June 12, 2024, will be considered the shipment date.
Clause a.iii
Text: “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.”
Explanation: The bill of lading must specify the shipment route from the port of loading to the port of discharge as stated in the letter of credit. The port of discharge can be a specific port, a range of ports, or a geographical area.
Example:
- “Shipped from Port of Loading: Shanghai, China to Port of Discharge: Hamburg, Germany.”
- “Shipped from Port of Loading: Shanghai, China to Ports in Northern Europe.”
Clause a.iv
Text: “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.”
Explanation: If the Charter Party Bill of Lading is issued in multiple originals, all originals must be presented unless the letter of credit states otherwise. If only one original is issued, that single document must be presented.
Example:
- If the bill of lading states “Originals: 3,” then all three originals must be presented.
- If the bill of lading states “Originals: 1,” then only that one document must be presented.
Clause b
Text: “A bank will not examine charter party contracts, even if they are required to be presented by the terms of the credit.”
Explanation: Banks are not required to examine the actual charter party contracts themselves, even if the letter of credit stipulates that these contracts must be presented. The bank’s examination is limited to the Charter Party Bill of Lading.
Example: Even if the letter of credit demands the presentation of a charter party contract along with the bill of lading, the bank will only verify the bill of lading and not the details or validity of the charter party contract itself.
Understanding UCP600 Article 22 helps in ensuring that the Charter Party Bill of Lading meets the documentary requirements under a letter of credit, thereby facilitating smooth international trade transactions.