Can a charterer be a beneficiary of an LC? As per UCP 600 transport documents may be issued by parties other than the carrier, master, owner or charterer e.g. freight forwarders and NVOCCs.

Please let us have your opinion.

Regards

Dear Syed Murtuza

The short answer is: yes. What is important is the issuers "capacity" - i.e.
when the LC calls for a charter party bill of lading it is acceptable (under
UCP 600) for the issuer to sign in the capacity of a "Charterer".

A freight forwarder and NVOCC may sign transport documents as well - as long as they do so in the "correct" capacity: i.e. as called for by the relevant transport article.

I hope this helps you.

Best regards

Kim

The only situation I know about Charter Party B/Ls issued by time charterers as carriers is in steel trade[1]. This happen because the steel products are subject to physical and mechanical damage prior to loading and time charterers need to present B/Ls without remarks to be paid under L/C[2]. What time charterers do it is to arrange with shipowner that Master sign at loading port only the Mate’s Receipt following that time charterers issue later B/Ls without the surveyor’s remarks stated in Mate’s Receipt. Hence the interest of time charterers to be allowed to sign Charter Party B/Ls[3].

The problem with art.22 of UCP600 is that while it allows charterers to sign Charter Party B/Ls it does not specify which charterers are allowed to sign Charter Party B/Ls, i.e. demise charterers, time charterers or voyage charterers.

It must be distinguished between Charter Party B/Ls issued under bareboat charter parties, Charter Party B/Ls issued under time charter parties and Charter Party B/Ls issued under voyage charter parties.

Whilst Charter Party B/Ls signed by demise charterer, time charterer or their port agents would be acceptable, the unclear provisions of UCP 600 may erroneously be interpreted that also voyage charterer may sign the Charter Party B/Ls. This is not so. When concluding the voyage charter party the parties, i.e. voyage charterer and shipowner/or demise charterer (as disponent owner)[4], agree whether the B/Ls will be issued by Master or by loading port agent of vessel. The conditions for issuance by port agents of B/Ls under voyage charter parties are very strict, always subject to conditions set by shipowner/ or demise charterer (as disponent owner) / or Master in the letter of authorization and approval by shipowner/ or demise charterer (as disponent owner) of the draft text of B/Ls. The B/Ls issued under voyage charter party need to conform with Mate’s Receipt signed by the Master on the basis of the tally of goods made by vessel’s representative along with voyage charterer/port’s representative. I don’t see why shipowner /or disponent owner, as the case may be, would agree that voyage charterer alone sign the Charter Party B/Ls. What would be then the value of Charter Party B/Ls? A voyage charterer can never be a carrier since the carrier is the shipowner/ or demise charterer/ or time charterer with whom voyage charterer concludes the contract of carriage, i.e. the voyage charter party. There is no need for Charter Party B/Ls signed by shipowners or demise charterers to identify the carrier since it is clear that shipowners /or  demise charterers issuing Charter Party B/Ls do this as carriers. I assume that for this reason the former requirement of UCP 500 that Charter Party B/Ls signed by shipowner, Master or their agent indicate the name of carrier has been eliminated in UCP 600.

Also there is nothing wrong in time charterers issuing Charter Party B/Ls.

Art.1 of Hague Visby Rules provides that charterer may qualify as carrier if he enters into the contract of carriage with the shipper. So, a time charterer can issue a B/L as evidence of contract of carriage with shipper[5]. The only problem is that English Courts require that Charter Party B/Ls signed by time charterers identify expressly the time charterers as carriers.

My point of view is that UCP 600 should have had more clear wording on this matter, e.g.

“a. A bill of lading, however named, containing an indication[6] that it is subject to a charter party, 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 demise charterer, or a named agent for or on behalf of the demise charterer, or
- the time charterer as carrier, or a named agent for or on behalf of the time charterer acting as carrier.

Any signature by the master, owner, demise charterer or agent must be identified as that of the master, owner, demise charterer[7] or agent. Any signature by time charterer must be identified as that of carrier[8].

Any signature by an agent must indicate whether the agent has signed for or on behalf of the master, owner, demise charterer[9] or time charterer acting as carrier[10].

An agent signing for or on behalf of the owner, demise charterer or time charterer must indicate the name of the owner, demise charterer or time charterer.”