Dr Melis Ozdel discusses the impact of The Channel Ranger at the LMAA Spring Seminar

Following the publication of new her book, Bills of Lading Incorporating Charterparties (Hart Publishing, 2015), Dr Melis Ozdel was invited to discuss her research findings with maritime practitioners at this year’s London Maritime Arbitrator Association (LMAA) Spring Seminar.

In the seminar, Dr Ozdel discussed the impact of the recent Court of Appeal decision in The Channel Ranger [2015] 1 Lloyd’s Rep 256, on the question of the incorporation of charterparty forum selection clauses into bills of lading. Incorporation clauses are commonplace in bills of lading used in tramp trade, where ships do not have a fixed schedule or published ports of call.

The main cause for concern arising from the incorporation clauses is that copies of the charterparties referred to in bills of lading seldom travel with bills of lading, and that the bill of lading holders hardly ever have the chance and the right to see the relevant charterparty terms.

Under English law, a bill of lading holder can be bound by a number of unseen charterparty provisions, so long as the bill of lading and the relevant charterparty overcome a set of hurdles, which are popularly known as the rules of incorporation.

In wake of the decision in The Channel Ranger, it is now clear that as long as the reference in the bill of lading alerts the holder as to the possible incorporation of at least one kind of dispute resolution clause, the holder can be bound by another form of dispute resolution clause found in the relevant charterparty.

Discussing the effect of the decision Dr Ozdel said: “The Channel Ranger is a welcome decision, as it provides the desired degree of flexibility to the description test. It should now be possible to incorporate a charterparty arbitration clause into a bill of lading without having to use of the word ‘arbitration’ in the incorporation clause. Thus, it now seems that even a reference to ‘litigation’ as opposed to arbitration in the incorporation clause should be sufficient to incorporate an arbitration clause into the bill of lading.”

The seminar paper will be available on the LMAA website in July 2015.