May an arbitration clause contained within a charter party be considered validly embedded in a bill of lading?

The Court of Ravenna[1] has recently dealt with a matter of great practical relevance for transport operators, i.e. whether the arbitration clause contained within a charter party may be considered validly embedded in a bill of lading.

Italian case-law tends to consider the validity of such incorporation whenever the bill of lading makes a perfect reference (so-called “per relationem perfectam”) to a valid arbitration clause contained in the relevant charter party (please see Supreme Court’s judgements no. 6787/1992 and no. 3029/2002).

In the case at issue, the parties had entered into a charter party containing an arbitration clause providing that any dispute arising from the commercial relationship was to be brought before an arbitration panel. Said provision was also referred to in the charter party’s additional clauses, where the applicability of the English law and the directions for the appointment of arbitrators were also specified.

As far as we are concerned, it should be highlighted that the aforementioned charter party was explicitly referred to in the front page of the bills of lading on the strength of which the complainant took legal action and that a provision on the back of such bills of lading provided that all the terms of the charter party, including arbitration clause and dispute settlement, should be considered as incorporated therein.

So, the Court confirmed the abovementioned case-law, declaring it had no jurisdiction and acknowledging, on the contrary, the jurisdiction of the arbitral panel, since the “relatio perfecta” between the bill of lading and the charter party allowed the arbitration clause to be considered validly incorporated in the bill of lading.

Who is entitled to compensation pursuant to Article 13 of the CMR?

As is known, pursuant to Article 1689 of the Italian Civil Code, the rights arising from the contract of carriage vis-à-vis the carrier are transferred to the consignee when, once the goods have reached their destination or the deadline for their delivery has expired, this latter demands or takes delivery of the goods or makes a claim under the contract of carriage.

In the event the contract of carriage is governed by the CMR[2], pursuant to Article 13 thereof, if the loss of goods is ascertained or if the goods have not arrived within the deadline provided for in Article 19, the consignee shall be entitled to enforce in its name, against the carrier, the rights deriving from the contract of carriage.

Clearly, for any potential insurers who may claim reimbursement as a result of paying an indemnity, it is crucial to understand who is entitled to the rights arising from the contract of carriage towards the carrier.

Indeed, in the case under examination, an insurance company, in its capacity as assignee of all the remedies against the carrier responsible for damages, sued said carrier claiming the reimbursement of the compensation paid to its insured as a result of the accident.

The carrier pleaded, inter alia, that the insurance company had no capacity to sue, since the latter surrogated to a party that had no right to act against the carrier pursuant to the abovementioned provision under Article 13 of the CMR.

In dealing with the matter, the Italian Supreme Court[3] established that, also in relation to CMR-regulated cases, the right to indemnification is attributed, as provided as well by Article 1689 of the Italian Civil Code, on the basis of the impact of the prejudice resulting from the loss or deterioration of the property carried.

From a practical point of view, the Supreme Court confirmed that the mechanism provided for by Article 13 of the CMR is essentially the same as the one provided for in Article 1689 of Italian Civil Code, thus giving the operators a clear reference on the issue of ownership of rights arising from the contract of carriage against the carrier.