The identity of the contractual carrier in a bill of lading contract is a matter of importance. A bill of lading issued by shipowners (i.e. an owner’s bill) is preferable, as it allows a cargo claimant to arrest the vessel carrying the cargo, as opposed to a bill of lading issued by a voyage or time charterer of the vessel (i.e. a charterers’ bill). It is common in international trade for bills of lading issued to state they are signed by or on behalf of the Master, without expressly stating the identity of the contractual carrier, and for such bills of lading to be treated as having been issued on behalf of the owner (or demise charterer) of the vessel. However, the position under PRC Law may not be as clear as it may first appear.
The Supreme People’s Court of the People’s Republic of China has issued a judgment (2016 Supreme Court Civil Application No 530) in which it held that a bill of lading issued on behalf of the Master, but which did not otherwise identify the carrier, should be treated as having been issued on behalf of the time charterers (and not the owners) of the vessel. This Update looks at the reasoning of the decision and assesses the impact of the decision under PRC law, and whether a cargo claimant seeking recourse under a bill of lading may be deprived of its right to arrest the carrying vessel before the PRC Courts.
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