UCP 600 Article 22: Charter Party Bill of Lading — When Is It Acceptable?

Introduction

A charter party bill of lading is a transport document issued under a charter party — a contract for the hire of a vessel. Unlike a regular bill of lading, which is issued by a carrier to a shipper, a charter party bill of lading is issued by the master of the chartered vessel or the charterer. UCP 600 Article 22 sets out the specific requirements that this document must satisfy to be acceptable under a documentary credit, reflecting the distinct commercial and legal characteristics of charter party arrangements.

Failure Mode Analysis

Failure Mode 1: Failure to Identify the Charterer

Article 22(a) requires the charter party bill of lading to indicate the name of the charterer. If the document identifies only the vessel owner or the carrier, without naming the charterer, it does not comply.

Consequence: The bank refuses the presentation. The presenter must obtain a corrected document from the master or charterer.

Failure Mode 2: Absence of "On Board" Notation

Like a regular bill of lading, the charter party bill of lading must indicate that the goods have been "shipped on board" (Article 22(a)(ii)). A "received for shipment" notation is insufficient.

Consequence: The bank refuses the document for failure to evidence shipment on board the vessel.

Failure Mode 3: Incorrect Port of Loading or Discharge

The charter party bill of lading must indicate the ports of loading and discharge as stated in the credit. If the document shows different ports (e.g., due to a change in the vessel's route), the presentation is discrepant.

Consequence: Refusal for incorrect port information. The presenter must obtain a corrected document or request an amendment.

Failure Mode 4: Missing or Incorrect Shipment Date

The charter party bill of lading must indicate the date of shipment. If the date is missing, or if the date falls outside the credit's latest shipment date, the document is discrepant.

Consequence: Refusal for missing or late shipment date.

Deterministic Resolution Architecture

Step 1: Confirm the Credit Permits a Charter Party Bill of Lading

Before obtaining the document, verify that the credit either requires or permits a charter party bill of lading. Some credits specifically exclude charter party bills of lading, requiring instead a regular carrier's bill of lading.

Step 2: Obtain the Charter Party Details

Before the vessel sails, obtain the charter party agreement and identify: the charterer's name, the vessel name, the port of loading, the port of discharge, and the expected shipment date. These details must appear on the charter party bill of lading.

Step 3: Instruct the Master to Include All Required Data

Provide the vessel's master with a written instruction set specifying the data elements required by Article 22: charterer name, "on board" notation, ports of loading and discharge, and shipment date.

Step 4: Verify the Document Upon Issuance

When the charter party bill of lading is issued, verify each required element: (a) charterer's name is present; (b) document is signed by the master, charterer, or named agent; (c) "on board" notation is present; (d) ports match the credit; (e) shipment date is within the credit's period.

Step 5: Review for Consistency With the Charter Party Agreement

Cross-check the charter party bill of lading against the charter party agreement. The vessel name, charterer, ports, and dates should be consistent. Discrepancies between the charter party and the bill of lading may indicate an error.

Step 6: Assess Transhipment Implications

If the vessel's route involves transhipment, confirm whether the credit permits transhipment. If transhipment is prohibited, ensure the charter party bill of lading shows direct carriage from the port of loading to the port of discharge.

Step 7: Present the Document With Supporting Evidence

If the credit permits, present the charter party bill of lading alongside a copy of the charter party agreement or a summary of the charter party terms. This assists the examining bank in verifying the charterer's identity and the vessel details.

Conclusion

Charter party bills of lading are a specialised transport document used in bulk cargo and vessel chartering. Article 22 imposes specific requirements that reflect the unique characteristics of charter party arrangements, including the requirement to identify the charterer and the requirement for an "on board" notation. Presenting parties who coordinate with the vessel's master early in the chartering process and verify the document against Article 22 before presentation will minimise the risk of refusal.

Frequently Asked Questions

Q1: Can a credit accept a charter party bill of lading by default?

If the credit does not specify the type of transport document, a charter party bill of lading may be acceptable under Article 14(c) if it meets the requirements of Article 22. However, the credit's specific terms govern.

Q2: Does the charter party bill of lading need to contain the full charter party terms?

No. Article 22 and ISBP 745 do not require the full charter party terms to appear on the bill of lading. A reference to the charter party date and parties, along with the required data elements, is sufficient.

Q3: Is transhipment permitted under a charter party bill of lading?

Yes, unless the credit expressly prohibits transhipment. Article 22(c) confirms that transhipment is permitted under the same conditions as for regular bills of lading.

Q4: Who can sign a charter party bill of lading?

Article 22(a)(i) permits signature by the master, the charterer, or a named agent of either. An unsigned charter party bill of lading does not comply.

Q5: What if the credit says "not acceptable: charter party bill of lading"?

The credit has expressly excluded charter party bills of lading. Presenting a charter party bill of lading in this case would be a discrepancy. The presenter must obtain a regular carrier's bill of lading instead.

Source Notes

The following sources are provided as context only and were not used as textual source material for this guide.

• ICC, "Set of Guidance Papers on Recommended Principles and Usages around UCP 600" (March 2023)
• ICC Academy, "Uniform Rules for Documentary Credits (UCP 600) — eBook" (December 2024)
• ICC, "UCP 600 — Uniform Rules and Practice for Documentary Credits, Including eUCP Version 2.1" (July 2023)
• ICC Academy, "Certified UCP 600 Specialist (CUCP)" (July 2025)
• ICC, "Commentary on UCP 600" (August 2019)