Why Some Banks Refuse to Accept Charter-Party Bill of Lading

memo · Post by **memo** » Mon Mar 12, 2012 1:17 pm

hi
why do some banks refuse to accept applications of L/C contains a clause such " presentation of charter party B/L"? how could assist applicant to reduce the risks of such shipments if presented ?
Memo

he123 · Post by **he123** » Mon Mar 12, 2012 6:42 pm

May i have full clause - what the L/C says.

picant · Post by **picant** » Mon Mar 12, 2012 6:49 pm

Hi Pals,

IMHO, charter party bill of lading and bill of lading are different way to control the goods, the first document does not give the bank the possibility to have a controll of the goods, as those are carried by a vessel under controll of the buyer. Banks have only to treat the possibility of Charter Party Bill of Lading more risky, but banks cannot refuse, a priori, such document.
Charter party bill of lading, in my opinion is issued only when relative to a full cargo.
Other comments appreciated
Ciao

abrar · Post by **abrar** » Mon Mar 12, 2012 9:40 pm

To amplify on picant's comments, the C/P contract is between the charterer and the shipowner, whereby the charterer will effectively hire all, or part of the vessel from the shipowner for a period of time, or for specific voyage(s). Where the Charterer agrees to ship a third party’s goods (i.e LC beneficiary), a bill of lading will be issued to the shipper (third party).

Although the C/P contract does not have any relevance to the shipper or consignee, in case of dispute between the charterer and the shipowner, the shipowner may be able to lay claim to the goods.Subect to the B/L remaining un-negotiated (not endorsed to another party) the C/P contract will also not be subject to the applicable maritime rules and conventions such as COGSA 1992/ Hague-Visby. Due to these uncertainties, banks are reluctant to accept such B/Ls as collateral, a provision which is written into the UCP.

memo · Post by **memo** » Tue Mar 13, 2012 2:21 pm

he123 wrote:May i have full clause - what the L/C says.

CHARTER PARTY B/L IS NOT ACCEPTABLE
regards
memo

SleepingAngel · Post by **SleepingAngel** » Fri Jul 27, 2012 12:49 am

Hi
My opinion on that the issuing bank does not accept charter party B/L due to a reasonable risk for applicant is that the charterer agent in the importing country and shipowner may have problems with discharge costs and demurage etc. therefore the shipowner may refuse to discharge the goods.
as nominated bank we have experienced such case just last week...

dinesh2476 · Post by **dinesh2476** » Mon Jan 06, 2014 7:41 am

Dear abrar,

Please clarify the below points.

Subject to the B/L remaining un-negotiated (not endorsed to another party) the C/P contract will also not be subject to the applicable maritime rules and conventions such as COGSA 1992/ Hague-Visby. Due to these uncertainties,

Regards
Dinesh

JAX1066 · Post by **JAX1066** » Mon Jan 13, 2014 10:48 pm

Hello

The reason why some banks refuse to accept c/p bills of lading is that if the charterer does not pay the fees for chartering the vessel, the owner may take possession of the goods in lieu of payment. I have seen some cases where owner of the vessel is only interested in recovering their costs and the cargo is sold for a lot less than it is worth.
Thanks
Jackie

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