UK: Incorporation Of Charterparty Clause Into Bill Of Lading: Arbitration Or Court Jurisdiction?

Last Updated: 30 January 2014
Article by Rania Tadros and Pavlo Samothrakis

Caresse Navigation Ltd v. Office National de L'Electricite and others (Channel Ranger) [2013] EWHC 3081 (Comm)

In this case, the bill of lading incorporated the "law and arbitration clause" (our emphasis) of a charterparty identified in the bill of lading. The dispute resolution clause in that charterparty, however, provided for English law and court jurisdiction, rather than arbitration. The Court held that although a mistake had been made in the words of incorporation used in the bill of lading, this mistake could be rectified to give effect to the parties' intentions. The Court's view was that the parties had intended for the words "law and arbitration" in the bill of lading to incorporate the law and court jurisdiction clause from the charterparty, despite the reference to "arbitration".

The background facts

The Claimants (Owners of the vessel) sought a declaration of non-liability from the English Commercial Court regarding salt-water damage to the cargo at the discharge port in Morocco. The Defendants (cargo receivers and their insurers) challenged the English Court's jurisdiction under the English Civil Procedure Rules, Part 11. The insurers also commenced proceedings in the Moroccan Court against the Owners in relation to the cargo damage. The Owners applied for an anti-suit injunction from the English Court to restrain pursuit of the Moroccan proceedings on the ground that this was a breach of the exclusive jurisdiction clause in the charterparty which the Owners argued was incorporated into the bill of lading.

The Owners chartered the vessel to U-Sea Bulk A/S (U-Sea) for a one time charter trip with a cargo of coal in bulk. In turn, U-Sea had concluded a voyage charterparty with Glencore International AG. The voyage charterparty contained the following clause:

"This Charter Party shall be governed by English law, and any dispute arising out of or in connection with this Charter shall be submitted to the exclusive jurisdiction of the High Court of Justice of England and Wales."

The vessel loaded the cargo at Rotterdam and the local agents signed a bill of lading on behalf of the master. The bill of lading was negotiable, naming Glencore as the shipper but consigned to the order of the first defendant.

The bill of lading was concluded on the Congenbill 1994 standard form. The front of the form included the following typed clause: "Freight payable as per Charter Party. All terms, conditions, liberties and exemptions including the law and arbitration clause, are herewith incorporated."

The reverse of the bill of lading further provided that: "All terms and conditions, liberties and exceptions of the Charter Party, dated as overleaf, including the Law and Arbitration Clause, are herewith incorporated." Box 1 on the front of the bill identified the charterparty by date.

There was, therefore, an inconsistency between the jurisdiction clause in the charterparty, which provided for English High Court jurisdiction and the express words in the bill of lading, which purported to incorporate the "Arbitration Clause" from the charterparty. There was no arbitration clause in the charterparty.

In their claim before the Commercial Court, the Owners invoked two of the jurisdictional gateways under which they argued the English court should accept jurisdiction. These were, first, that the bill of lading contract was governed by English law and, second, that the bill contained a term conferring jurisdiction on the English court.

The Commercial Court decision

In relation to the first jurisdictional gateway, the Court found that the express reference to the governing law of the charterparty amounted to an irrefutable case that the parties to the bill of lading intended for that contract to be governed by the same law as was applicable to the charterparty. The Court therefore held that the bill of lading was governed by English law.

As to the second jurisdictional gateway, the Court held that the provision in the bill of lading expressly seeking to incorporate an arbitration clause from the charterparty, which did not contain an arbitration clause, was sufficient to incorporate the English High Court jurisdiction clause in that charterparty.

The Court reiterated the established principle that general words of incorporation, however wide and whether or not these include the word "whatsoever", are not effective to incorporate an arbitration (or court jurisdiction) clause. This is because such clauses are "ancillary" to the main contract to which they relate. Therefore, specific reference to an arbitration (or court jurisdiction) clause is required and provided there is such specific reference, the Court will allow some degree of verbal manipulation of the relevant clauses to ensure compatibility.

In this case, the Court found that the words "law and arbitration clause" were sufficiently specific and that the issue was one of construction of those words, rather than an issue of incorporation. The Court took the view that the "real question is what the parties should reasonably be understood to have meant by the words 'law and arbitration clause' which plainly contemplates the incorporation of at least one kind of ancillary clause".

The Court held that the only clause in the charterparty that the parties could have intended to refer to was the law and court jurisdiction clause. The Court took the view that construing the clause in this way did not offend against the need for clarity and certainty. The consignee would know from the specific words of incorporation that the incorporation of charterparty terms extended to at least some ancillary clauses related to choice of law and dispute resolution.

On this basis, the Court held that the Defendants were bound by the court jurisdiction clause in the charterparty. The Judge found the Defendants to be in breach of the exclusive English jurisdiction clause and granted the anti-suit injunction to restrain the proceedings that the insurers had instigated in Morocco.

The Commercial Court has granted the Defendants permission to appeal.


The Court's ruling confirms that where specific words are used to incorporate a clause from a charterparty into a bill of lading, a mistake in those words of incorporation may still be rectified to give effect to the parties' intentions. In this case, the words "law and arbitration" in the bill of lading were sufficient to incorporate the law and court jurisdiction clause from the charterparty despite the reference to "arbitration" rather than "jurisdiction". For certainty, however, and to avoid any potential disputes in this area, it is advisable to use clear words in bills of lading and, where possible, to refer to the correct law and jurisdiction clause(s) in the relevant charterparty that the parties wish to be incorporated.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.