Arbitration clause incorporation in bills of lading upheld where charter party terms were clearly and consistently incorporated.

An arbitration clause in a charter party was held to apply to disputes under a bill of lading where the bill expressly incorporated the charter party terms, including the law and arbitration clause. The controlling question was the parties' intention as gathered from the bill of lading and its incorporation clause. The clause was not to be disregarded merely because "charter party" was not mechanically replaced with "bill of lading"; if the incorporated term is clear, consistent and workable, effect must be given to it to preserve the commercial bargain. The disputes under the bill of lading were therefore referable to arbitration.

---

---

Issues: Whether the arbitration clause in the charter party agreement was incorporated into the bill of lading so as to bind the parties to arbitration of disputes arising under the bill of lading.

Analysis: The controlling question was the intention of the parties to the bill of lading, as gathered from the bill of lading itself and the incorporation clause contained in it. Where the bill of lading specifically incorporates the charter party terms, including the law and arbitration clause, the clause is not to be rejected merely because the expression "charter party" is not mechanically replaced by "bill of lading". If the incorporated clause is neither inconsistent nor insensible, effect must be given to it and the commercial document must be construed to preserve efficacy rather than frustrate the expressed bargain. Here, the incorporation clause expressly referred to the arbitration clause, and no inconsistency, absurdity, or unworkability was shown.

Conclusion: The arbitration clause stood incorporated into the bill of lading and the disputes under the bill of lading were referable to arbitration; rejection of the stay application was in law.

Ratio Decidendi: Where a bill of lading expressly incorporates the law and arbitration clause of a charter party, the arbitration clause binds disputes under the bill of lading if the incorporation is clear and the clause can operate without inconsistency or insensibility.

---