Incorporate into B/L

Difficulties arise in distinguishing the effects of the two types of contract of carriage in situations where both charterparties and bills of lading are in use at the same time. Thus charterers shipping their own goods on a chartered vessel require at least an acknowledgement of the quantity of goods taken aboard and the condition in which they were shipped. Bills issued to a charterer in such circumstances act merely as receipts for the cargo shipped and as potential documents of title should the charterer decide to sell the goods while they are still in transit. But the bills provide no evidence of the terms of the contract of carriage between shipowner and charterer since their relationship is governed solely by the terms of the charterparty. Nor will the Hague or Hague/Visby Rules apply to the contract of carriage while the bill remains in the hands of the charterer, although they will apply as soon as the cargo is sold and the bill negotiated to a third party. Time charters will also invariably confer on the charterer the right to issue bills of lading in favour of third party shippers, and to present them to the master for signature, in return for an indemnity from the charterer covering any additional liabilities incurred by the shipowner as a result. Such a right is, for example, essential where a ship has been chartered to augment the charterer’s fleet with the result that he is to control the commercial function of the vessel. In such a case the operative contractual document, so far as the shipper is concerned, will be the bill of lading which, in his hands, will control the contract of carriage in exactly the same way as if the vessel had not been chartered. As between shipper and carrier, the terms of the charterparty will have no relevance unless they have been expressly incorporated into the bill of lading contract. There will, however, generally be the residual problem of deciding whether, under the bill of lading, the shipowner or charterer is to be treated as the carrier for the purposes of the Hague or Hague/Visby Rules.