UCP 600 Article 22: Charter Party Bill of Lading — Common Errors and Discrepancies

Introduction

Charter party bills of lading under Article 22 of UCP 600 present recurring discrepancies that lead to refusal in documentary credit practice. This guide identifies the most frequent errors made by presenters and carriers, explains why each error constitutes a discrepancy, and provides practical guidance for avoidance.

Failure Mode Analysis

Failure Mode 1: Submitting a Standard Bill of Lading

Risk: The credit requires a charter party bill of lading, but the presenter submits a standard bill of lading that does not indicate a charter party.

Impact: The document type is wrong. A standard bill of lading does not satisfy a charter party bill of lading requirement.

Failure Mode 2: Missing Charter Party Indication

Risk: The bill of lading is subject to a charter party but does not contain a clear indication of this fact.

Impact: Article 22(a) requires the bill of lading to indicate it is subject to a charter party. Without this indication, the bank cannot determine whether Article 22 applies.

Failure Mode 3: Incorrect Shipper Name

Risk: The charter party bill of lading identifies the shipper as "ABC Trading Ltd" while the credit or other documents show "ABC Trading Co., Ltd."

Impact: Article 22(b)(i) requires the name of the shipper. Inconsistencies may cause discrepancies.

Failure Mode 4: Port of Loading Mismatch

Risk: The charter party bill of lading states "Port of Loading: China" when the credit stipulates "Qingdao."

Impact: Article 22(b)(iii) requires the specific port of loading as stipulated in the credit.

Failure Mode 5: Missing On Board Notation Signature

Risk: The on board stamp is present but unsigned by the carrier or its agent.

Impact: Article 22(c) requires the on board notation to be signed or initialled. An unsigned stamp is not compliant.

Failure Mode 6: Incomplete Original Set

Risk: The bill of lading states "issued in three originals" but only two are presented.

Impact: Article 22(a) requires the full set when issued in more than one original.

Failure Mode 7: Late On Board Date

Risk: The on board notation date exceeds the latest shipment date in the credit.

Impact: The shipment date (on board date) must be within the credit's shipment period.

Deterministic Resolution Architecture

Resolution 1: Document Type Verification

Before submission:
1. Verify the credit requires a charter party bill of lading
2. Confirm the bill of lading indicates it is subject to a charter party
3. Do not submit a standard bill of lading

Resolution 2: Charter Party Indication Confirmation

Verify the bill of lading contains a clear indication:
- "Subject to charter party"
- "Freight payable per charter party"
- Reference to a specific charter party

Resolution 3: Shipper Name Verification

Check the shipper name:
- Full legal name
- Consistency with the credit and other documents
- Correct spelling and designation

Resolution 4: Port Name Precision

Match the ports against the credit:
- Use exact port names as stipulated
- Do not substitute country names or abbreviations
- Confirm both port of loading and port of discharge

Resolution 5: On Board Notation Inspection

Verify the on board notation:
- Contains "on board" or "loaded on board"
- Is signed or initialled
- Is dated
- Identifies vessel and port of loading

Resolution 6: Original Set Collection

Collect the full set of originals:
- If the bill of lading states "three originals," present all three
- Do not present a partial set

Resolution 7: Date Consistency Check

Compare:
- On board notation date (shipment date)
- Latest shipment date in the credit
- Presentation date
- Date of issue

All dates must be within acceptable ranges.

Conclusion

Common errors in charter party bill of lading presentations stem from confusion with standard bills of lading, missing charter party indications, and incomplete content. By applying a systematic examination protocol and verifying each mandatory element, presenters can avoid the most frequent discrepancies.

Frequently Asked Questions

1. What is the most common discrepancy in charter party bill of lading presentations?

The most common discrepancy is submitting a standard bill of lading (Article 20) when the credit requires a charter party bill of lading (Article 22), or vice versa.

2. Can a charter party bill of lading be issued after the goods are shipped?

Yes. However, the on board notation date must still be within the credit's shipment period.

3. Does the charter party bill of lading need to show the goods description?

Article 22 does not explicitly require a goods description on the bill of lading. However, ISBP 745 and the credit terms may require it.

4. What if the charter party terms conflict with the credit?

The credit terms prevail. The bill of lading must comply with the credit requirements regardless of the charter party terms.

5. Can a charter party bill of lading be endorsed?

Yes. Charter party bills of lading are negotiable documents and can be endorsed, unlike non-negotiable sea waybills.

Source Notes

Context only. This guide is based on UCP 600 Article 22 (ICC Publication No. 600), ISBP 745 (ICC Publication No. 745), and eUCP Version 2.1. Source references in the search results pointed to general ICC Academy and UCP 600 e-book pages, which provided contextual framing but not article-specific text.