On The Legal Effects Of Incorporation Clause In Bill Of Lading Issued Under Charterparty

Bill of Lading is an important document in international trade and transport. The validity of the terms of a bill of lading influences the rights and obligations of the relevant parties thereof. The Incorporation Clause does not have explicit expression as the other clauses and only incorporates the terms of the charterparty under which the bill of lading is issued into the bill. The contents of the Incorporation Clause are always indefinite because they can only be determined by virtue of the contract quoted and they involve different parties. They affect the benefit of the parties to the bill of lading directly and such the indefiniteness has different impact on the rights and obligations of the parties to the bill of lading.A special operating theory of the Incorporation Clause has formed in the international shipping and judicial practice. There is no deep discussion on it in the domestic judicial theory, especially there is little research on it combining with the relevant domestic laws and regulations. There is only one fundamental provision about the Incorporation Clause in the China Maritime Code, i.e. Art.95 which provides: "Where the holder of the bill of lading is not the charterer in the case of a bill of lading issued under a voyage charter, the rights and obligations of the carrier and the holder of the bill of lading shall be governed by the clauses of the bill of lading. However, if the clauses of the voyage charter party are incorporated into the bill of lading, the relevant clauses of the voyage charter party shall apply." How to comprehend and apply the fundamental clause? How to make judges according to the relevant clauses (such as Arts. 87,78 & 45 etc.) combined with the fundamental clause? All these are to be solved by legislation and judicial practice.This paper brings forward the theoretical basis of the Incorporation Clause combining with the international practice on the basis of the domestic legal theory. It analyzes the legal consequence caused by the Incorporation Clause including the charging of freight and the bearing of the expenditure etc. It puts forward the construing principle of the Incorporation Clause which accords with requirement of international trade combining with the characteristics of international trade. It makes a material and profound analysis on the conditions of incorporation into the bill of lading of the arbitration clause contained in the charterparty.