On The Validity Of The Arbitration Clause Of A Lease Contract Incorporated Into Bills Of Lading

The question of the validity of the arbitration clause of a lease contractincorporated into bills of lading has been a major problem in China’s maritime lawtheory and judicial sectors. China has not reached a unified approach，the SupremePeople’s Court usually in the form of reply to settle the difficult and complicatedproblems, so as to guide the judicial practice. In fact, the courts recognize the validityof the arbitration clause of a lease contract incorporated into bills of lading. But in theconcrete review often limits a lot for a variety of reasons. How to judge theincorporation clause make into force, the relevant laws only do the principleprovisions. It leads to the courts in judicial practice of similar case may make adifferent result. It not only damages our country’s judicial authority, but also is notuseful for maintain the legal rights of the party.In this paper，first，the author discuss about the reason of the arbitration clause ofa lease contract incorporated into bills of lading and potential legal consequences: Inorder to bear the same obligations and responsibilities between the lessee and theholder of the bill of lading, the carrier will increase an incorporation clause in the billof lading issued and states that incorporate the arbitration clause of a lease contractinto the bill of lading, which causes the validity of the arbitration clause of a leasecontract incorporated into bills of lading. From the way of dispute settlement, if thearbitration clause of a lease contract incorporated into bills of lading is effective, thearbitration agency can obtain arbitration rights, excluded from the jurisdiction of thecourt. If the arbitration clause of a lease contract incorporated into bills of lading isinvalid, it will be judged by the court. From the dispute settlement consequences, itwill lead to recognition and enforcement of arbitral awards.Second, the author discuss about the conditions of the arbitration clause of alease contract incorporated into bills of lading, including the formal requirements and the substantial requirements. According to the attitude of China that the arbitrationclause of a lease contract can be incorporated into bills of lading, we can infer thatconclude an incorporation clause in the bill of lading, which quoted voyage charterparty’s arbitration clause is accord with the request in writing, and does not be signedby the parties. For its substantial requirements is to review the records of theincorporation clause in the bill of lading. There are two kinds of views ininternational maritime practice. China tends to apply to the principle of special termsincorporated into bills of lading. The current legal provisions on these issues aregeneral and vague, but the court to review the arbitration clause of a lease contractwhether incorporated into bills of lading is very strict. When the lower court review itleads to problems arise, only to seek the Supreme People’s Court to issue a reply view,which would make the lower court to review the case of different standards, ratherconfused. Therefore, the author suggested to amend the law or make a judicialexplanation to define it, which is to define the arbitration clause of the lease and thebill of lading holder, make the formal requirements of the arbitration clause of a leasecontract incorporated into bills of lading in legal and the substantial requirementswithout distinction is recorded in the bill of lading on the back or front, as long as thecontent of the arbitration clause is not unsuitable to detract from the carrier’s liability.The purpose is to make rights and obligations between the carriers and the holders ofthe bills of lading more specific.Finally, the author fully discuss about the validity of the arbitration clause of alease contract incorporated into bills of lading. Whether effective merges into the billof lading lease arbitration clause restrains the holder of bill of lading. When the bill oflading itself over the arbitration clause, and in conflict with the arbitration clause of alease contract, how to choose. How to determine the judgments of the effectiveness ofthe arbitration clause of the applicable law. Arbitrability of the arbitration clause.These problems in our laws are not explicitly stipulated. Therefore, the authorsuggests making clear that the arbitration clause of a lease contract incorporated intobills of lading can restrain the holder of bill of lading. When the bill of lading itselfover the arbitration clause in conflict with the arbitration clause of a lease contract,the priority for the arbitration clause in the bill of lading. After the arbitration clause of a lease contract effective incorporated into bills of lading, it also needs to examinethe validity of the arbitration clause, effective arbitration clause can exclude judicialjurisdiction. Applicable law for judging the validity of arbitration clause, first applythe applicable law which the parties choose, if the lease laws is to solve thesubstantive issues, it should be separately appointed by the lessee and the holder ofthe bill of lading, however，it also may under the law of the country where the awardswas made. If the above all have no agreement, it should apply to the closestconnecting law, which issued the bills of lading. Then according to the applicable lawto review the arbitration clause is whether effective and executable.By using of comparative analysis, according to our country and internationaljudicial practice of similar cases, in combination with the different national legislationand judicial practice, which is to analyses the deficiencies of our legal and putforward a sound proposal. By using of empirical research methods, which is toanalyses the typical judicial case and summarize our judicial practice issues related tothe preference. By using of the method of notes, which is to analyses the relevantlegal previsions about the arbitration clause of a lease contract incorporated into billsof lading.