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Lecture 2 - Carriage by Sea & Bill of Ladding

A carrier is defined as any person or organization that transports goods and/or passengers, with or without compensation. Common carriers transport goods as a business for money without discrimination between customers. Carriage of goods by sea is governed by the Carriage of Goods by Sea Act 1925, which is based on international maritime law conventions. There are three main types of charter parties: demise, voyage, and time charters. A demise charter transfers full possession and responsibility of the vessel to the charterer. A voyage charter contracts for one cargo trip, while a time charter rents the ship for a set period of time. A bill of lading serves as a receipt of goods, evidence of the carriage contract, and document

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89 views26 pages

Lecture 2 - Carriage by Sea & Bill of Ladding

A carrier is defined as any person or organization that transports goods and/or passengers, with or without compensation. Common carriers transport goods as a business for money without discrimination between customers. Carriage of goods by sea is governed by the Carriage of Goods by Sea Act 1925, which is based on international maritime law conventions. There are three main types of charter parties: demise, voyage, and time charters. A demise charter transfers full possession and responsibility of the vessel to the charterer. A voyage charter contracts for one cargo trip, while a time charter rents the ship for a set period of time. A bill of lading serves as a receipt of goods, evidence of the carriage contract, and document

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Jahidur Rahman
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Kazi Murad Hossain

Lecturer, Law Discipline,


Khulna University.
 Any person or an organization, by an express or implied contract, with or without
remuneration, carries goods and/or passengers, is called a carrier.

 Government service can be called carrier (but not common carrier) if


it comes within the above definition. Eg – Bangladesh Railway.

 The Common Carriers Act of 1865 defines a common carrier as any individual,
firm, or company (other than the government) who transport goods, as a business,
for money, over land or inland waterways, without discrimination between different
consignors.
 Carrier by Land

Carrier by Sea
 Carrier by Air
 Carriage of goods by sea from any port in Bangladesh to any other port, in or
outside India, is governed by the Carriage of Goods by Sea Act 1925.
 This Act base upon the recommendations of the International Conference on
Maritime Law held in Brussels in 1922.
 A contract of affreightment is a contract between a ship-
owner and another person (called the charterer),
 In which the ship-owner agrees to carry goods for the
charterer in the ship, or to give the charterer the use of the
whole or part of the ship's cargo-carrying space for the
carriage of goods.
 It may be a formal document containing the terms and
conditions between parties called “Charter Party”.
 On a specified voyage or voyages or for a specified
time.
 The charterer agrees to pay a specified price,
called freight, for the carriage of the goods or the
use of the ship.
 Chartering or Charter Party is an activity within the
shipping industry whereby a shipowner hires out the use of
his vessel to a charterer. The contract between the parties
is called a charterparty (from the French "charte partie",
or "parted document").
Demise charter,
Voyage charter, and
Time charter.
A demise charter, or bareboat charter, is an
arrangement for the hiring of a vessel
whereby no administration or technical
maintenance is included as part of the
agreement. The charterer obtains possession
and full control of the vessel along with the
legal and financial responsibility for it.
 The charterer pays for all operating expenses, including fuel, crew, port expenses
and P&I and hull insurance.
 In commercial demise chartering, a subtype of bareboat chartering, the charter
period may last for many years and may end with the charterer acquiring title
(ownership) of the ship.

 In this case, a demise charter is a form of hire-purchase from the owners, who
may well have been the shipbuilders.
 Demise chartering is common for tankers and bulk-carriers.
 A voyage charter is the hiring of a vessel and crew for
a voyage between a load port and a discharge port.
 The charterer pays the vessel owner on a per-ton or
lump-sum basis.
 The owner pays the port costs (excluding stevedoring),
fuel costs and crew costs.
 The payment for the use of the vessel is known as
freight.
A voyage charter specifies a period, known as
laytime, for loading and unloading the cargo.
If laytime is exceeded, the charterer must pay
demurrage.
If laytime is saved, the charter party may
require the shipowner to pay despatch to the
charterer.
 A time charter is the hiring of a vessel for a
specific period of time;
 the owner still manages the vessel but the charterer
selects the ports and directs the vessel where to go.
 The charterer pays for all fuel the vessel consumes,
port charges, commissions, and a daily hire to the
owner of the vessel.
(REF: SEN-MITRA)
 1. Seaworthiness of Vessel
 2 Obligation of reasonable dispatch
 3 No deviation from agreed route
 4 Nomination of safe port
 5 Not to ship dangerous goods
 6 Frustration Clause
 7 Name of the parties and the ship
 8 Nationality of the ship
 9 Class of charter party
 10 Ratings in Llyod’s register etc…
 Bills of lading
 A bill of lading is a document the master or agent for the
shipowner signs (on behalf of the master) to acknowledge
the shipment of a parcel of goods, and the terms under
which it is carried.
 The document used today first appeared centuries ago as a
bill (account) presented to shippers for all charges
incurred by the cargo until properly secured on board.
 Bills of lading are one of three crucial documents used in international trade to
ensure that exporters receive payment and importers receive the merchandise.

 The other two documents are a policy of insurance and an invoice.


 For many years, the industry has sought a solution to the
difficulties, costs and inefficiencies associated with paper
bills of lading.
 One answer is to make the bill an electronic document. An
electronic bill of lading (or eB/L) is the legal and
functional equivalent of a paper bill of lading.
 An electronic bill of lading must replicate the core
functions of a paper bill of lading, namely its functions as a
receipt, as evidence of or containing the contract of
carriage and as a document of title.
 1. Signature
 2. Evidence
 3. Acknowledgement
 4. Document of title
Evidence of the contract of carriage.
Acknowledgement of the goods from the
carrier, and
It is a document of title.
 A charterparty is the contract governing the relationship
between the ship-owner and the charterer. The bill of lading
governs the relationship between the shipper and the carrier
(who will be either a shipowner or a demise charterer).
 If the exporter (the shipper) is shipping a small amount of
cargo, he will arrange for a carrier to carry the goods for him,
using a bill of lading. If the exporter needs the whole (or a very
substantial part) of the ship's cargo capacity, the exporter may
need to charter the vessel, and he will enter into a charterparty
agreement with the shipowner.
Formal document of hire a ship or part of a
ship VS a mere receipt of goods
Sometime captain and crew become the
servants of charterer VS Never.
Contain all terms of the contract VS May or
may not
 Charter party is not a document of title VS Bill of laing is a
document of title.
 A Charter Party does not possess any of the characterstics
of a negotiable instruments VS A Bill of lading possess
some of the features of a negotiable instrument.
 The Stamp to be affixed in a Bill of lading is much lower
than a Charter Party
 to provide a seaworthy ship
 to issue a bill of lading
 to "properly and carefully load, handle, stow, carry, keep, care for, and discharge the
goods carried".
 to proceed with "reasonable despatch"
 to follow the agreed route (and not to deviate from it).

 Additional reading: https://www.handybulk.com/duties-of-the-shipowner-carrier.


 Will follow the contract.
 Ship-owner are not liable for the damages caused by unseaworthiness of ship
unless such damages are due to a failure to perform statutory duties.
 Effect of Force majeure or act of god.
 Liberty to surrender in whole or in parts any of the rights.
 Party should file suit within one year of delivery of the goods or the date when the
goods should have been delivered.
 1. https://incodocs.com/blog/bill-of-lading-in-international-trade-shipments/
 2. https://www.americanexpress.com/us/foreign-exchange/articles/bills-of-
lading/
 3. https://www.handybulk.com/duties-of-the-shipowner-carrier.
Any Question?

THANK YOU!

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