The incorporation of a charterparty arbitration clause in the bill of lading: binding effect of contract without consent

Abstract: Arbitration as a dispute settlement mean is widely used in the disputes on a carriage of goods by sea. As world trade of goods is mainly based on the carriage by sea services, the predictability and certainty regarding to the arbitration of shipping disputes is very important. The fundamental question is an existence of a valid arbitration agreement and accordingly whether or not there is a duty to perform it. It is of critical importance in a maritime dispute to commence proceedings in the proper jurisdiction and correct institution within the time limit provided in contract of carriage. Most disputes on a validity of arbitration agreement are related to the enforcement of a charterparty arbitration clause against the holder of a bill of lading. The holder of a bill of lading is not a signatory to the charterparty and usually in shipping practice he has not seen it and even unaware of its existence. Therefore, the intention of the holder of the bill of lading to be bound by a charterparty arbitration clause incorporated in the bill of lading can be disputable. Nevertheless, incorporation by reference is one of the legal theories that can be used to bind the bill of lading holder to an arbitration contract, which he has not signed. This dissertation addresses the issue of binding the holders of a bill of lading to the arbitration contract created by incorporation of a charterparty arbitration clause in a bill of lading. The dissertation will answer to the question what are common principles that are to be followed for establishing that a charterparty arbitration clause is validly incorporated in the bill of lading and is binding to the holder of a bill of lading in according to a recent case law of leading maritime dispute forums in London and New York.