Article

by T.O. Lee

The revised ICC Banking Commission Opinion in response to Query 1 in ICC document TA.635rev (UCP 600) (published in the last issue of DCInsight) states: "However, where a 'congenbill' is presented without reference to 'to be used with CharterParties' it would not, in itself, be an indication that it is subject to a charter party and would be acceptable" under a credit calling for a marine bill of lading.

In my view, this Opinion reflects the views of those who may be not familiar with maritime chartering practice. A charter party bill of lading (CPBL) is issued subject to the terms and conditions of carriage as stipulated in the charter party (CP). BIMCO (Baltic and International Maritime Council) is the international institute that drafts and approves CPs and the corresponding CPBL tailor-made for different commodity trades, whilst the Joint Cargo Committee (JCC) and the Federation of Commodity Associations (FCA) (e.g., FOSFA, GAFTA) in the UK are the international institutes that draft and approve the corresponding cargo insurance policies to be used in conjunction with the BIMCO CP and the CPBL.

Because the name of a CP is quite long, a "code name" is used to indicate the CP to which the CPBL is subject. To borrow the language in UCP 600 sub- article 22 (a), such a code name is "an indication that it is subject to a charter party".

Code names

Popular code names of CPs from shipbroker associations are:

- ASBA (Association of Ship Brokers and Agents USA)

- FONASBA (Federation of National Association of Ship Brokers and Agents)

Popular code names of CPs from the Federation of Commodity Associations (FCA) UK & other commodity broker associations are:

- FOSFA (Federation of Oils, Seeds and Fats Associations UK)

- GAFTA (Grain and Feed Trade Association UK)

- RSA (Refined Sugar Association UK)

The above are CPs covering a specific commodity.

-NYPE 93 (Time Charter Party of New York Produce Exchange 1993)

This is a popular CP covering shipment of all kinds of natural produce.

Popular code names of CPs from BIMCO are:

- Gencon 94 (BIMCO Uniform General Charter Party 1994)

(The Congenbill (BIMCO Gencon Charter Party Bill of Lading 1994)) CPBL has wide coverage suitable for any cargo that does not need special handling. Hence it is the most popular CPBL.

The following are CPs for specific commodity goods:

- CEMENTVOY 2006 (BIMCO Voyage Charter Party for Transportation of Bulk Cement 2006)

- COAL-OREVOYBILL (BIMCO Standard Ore Charter Party)

- CHEMTANKVOY (BIMCO Standard Voyage Charter Party for Chemicals by Tankers)

There are a series of other code names as well, some of which are subject to tailor-made terms and conditions of carriage to be used in shipments by VLCC (Very Large Crude Carrier) or ULCC (Ultra Large Crude Carrier) class tanker vessels either owned or operated (under time charter parties) by the gigantic oil companies.

Relation to UCP articles

There are also several code names for non-negotiable cargo receipts (WORLDFOOD RECEIPT 99) and non-negotiable waybills (GENWAYBILL) subject to charter parties.

Strictly speaking, these documents do not fit into either UCP 600 article 21 (which is only for a sea waybill not subject to a charter party) or article 22 (only for a charter party bill of lading, not in sea waybill format). They run the risk of being discrepant if examined under the present UCP 600 provisions. Since it is now too late to add anything in UCP 600 or ISBP 681, my view, as a transport specialist, is that the only solution is to allow presentation of a charter party sea waybill in the credit to override the transport provisions in UCP 600.

However, the following code names from BIMCO do NOT indicate CPBLs. If they are in bill of lading format, they are subject to the Hague or Hague Visby Rules. If they are in a sea waybill format, they are in general subject to the CMI Uniform Rules for Sea Waybills. These include:

- CONLINEBILL 2000

- LINEWAYBILL

- MULTIWAYBILL 95

BIMCO approaches

Taking BIMCO as an example, there are three approaches in designing a CPBL:

1) where the code name and brief description of the CP are shown on the same page, as in the COALOREVOYBILL CPBL, CONGENBILL Edition 1994 CPBL;

2) where the code name and brief description are shown on separate pages, as in the HEAVYCONBILL CPBL;

3) where the code name is shown on top and brief description is shown on the same page but hidden in the middle amongst the boxes. Examples of this are the AUSTWHEAT BILL CPBL and the CHEMTANKVOYBILL CPBL.

Signatures

As far as the signature is concerned, some CPBLs can be signed by the carrier, the same as the traditional B/L governed by article 20 in UCP 600. Two examples are the COAL-OREVOYBILL CPBL and the GRAINCONBILL CPBL, both of which have a signature box to be signed by the carrier, the master or their agents. Hence a CPBL can be signed by a carrier, and that should not be deemed to be a discrepancy although a signature by a carrier is not specified in article 22 of UCP 600.

To avoid confusion, article 22 of UCP 600 should have expressly allowed a signature by the carrier, although a signature by the master or the shipowner would provide more security and other benefits to the charterers.

GENCONBILL

Some documentary credit experts believe that the bill of lading in Query 1 of ICC Document 470/TA.635rev (UCP 600), mentioned above, should be examined under UCP 600 article 20 (for a traditional bill of lading) simply because this bill of lading, although marked "GENCONBILL", is nevertheless a "carrier document" (though a CPBL is also a carrier document). Because they may not be familiar with maritime chartering practice, they are inclined to take a robotic and literal interpretation of the transport articles in UCP 600.

It is simple common sense that transport documents should be examined taking into consideration transport practice and insurance documents taking into account insurance practice, and not solely banking practice. Otherwise, compliant documents will be unreasonably refused because of a lack of knowledge by document checkers. This is one reason why letters of credit are being replaced by other payment mechanisms in the market place.

The ICC Banking Commission accepts IATA codes to indicate airports in air waybills, such as HKG (Hong Kong), YYZ (Toronto) and SIN (Singapore), and recognizes Incoterms 2000 terms such as FOB and CIF to indicate trade terms in commercial invoices without the need to add a brief description to tell document checkers what they are. For the same reason, code names to indicate CPBLs should also be accepted.

T.O. Lee is a Fellow of the Academy of Experts (L/C) UK, a columnist in Lloyd's "Maritime Asia/ Intermodal Asia" magazine and a member of the UN International Multimodal Transport Association in Geneva.

Further information is available at www.tolee.com.

His e-mail is experts@tolee.com