The Hague Visby Rules - Case Study Example

1.0 Introduction 2.0 The Hague Visby Rules 2 2 Situations when the Hague Visby Rules apply 2 2.2 Obligations of a sea carrier to provide a seaworthy ship under the Hague-Visby rules 5 2.3 Examples of what can make a vessel un-seaworthy 6 3.0 Conclusion 8 1.0 Introduction The Hague Visby rules in maritime law relate to parties dealing with shipping goods by sea. The rules apply to a number of states; however, the manner of implementation differs from state to state. Some countries apply the rules directly while others may decide to amend them to suit their prevailing conditions. Examples of countries bound by the Rules include; the United Kingdom, South Africa, Japan, Singapore, Germany, Australia, Netherlands, Italy, Mexico, Switzerland and many others.1 2.0 The Hague Visby Rules 2.1 Situations when the Hague Visby Rules apply When two parties have signed a bill of lading, then they are bound by the Hague Visby rules under three conditions; 1) When the contract of carriage specifically states that the Hague Visby rules will direct the contract 2) When the shipping of goods will occur between countries bound by the rules and the bill of lading was dispensed in either of those respective nations 3) When the goods to be transported were received in a country that consigned to the Rules When goods are dispensed from the United Kingdom, the contract will be affected by the Rules. Consequently, exporters are bound by the rules. On the other hand, imports will only apply the Rules in the event that the goods came from countries governed by them. Exceptions will be made to parties that expressly agreed to the Rules in their bill of lading. This implies that when a carrier decides to ignore the use of a bill of lading, then he is not bound by the rules. Such a carrier has the mandate to introduce his own terms and conditions. Also, carriers my be exempt from the Rules when they choose to give a receipt instead of a bill of lading and in the event that they are operating between countries that are not bound by the Rules. This gives carriers undue advantage and can be a source of conflict. 2 There are certain limitations on the application of the rules that are not necessarily related to the bill of lading. For instance when the carrier is required to transport live animals, then he is not bound by the rules. Similarly, if the merchandise to be transported comprises of deck cargo, then parties are not obliged to apply the Hague Visby rules. Additionally, if a receipt rather than a contract was awarded, then the rules do not apply. The receipt must be a way bill i.e. it should be non negotiable. It should be noted that the Hague rules can apply to a given situation even when a bill of lading was not issued. The underlying need for a bill of lading is to indicate that a contract of carriage was present. Therefore other documents may replace the bill of lading and some of them include advertisements made by the carrier. Also a booking note may be taken as an indication of the contract of carriage alongside other documents that indicate to the shipper that a carrier is in operation. An example of these exemptions was in the case of Pyrene Company vs. Scindia Steam Navigation Company. 3 In this case, there was no bill of lading issued but it had been argued that the bill of lading was intended. It was based on the fact that the contract of carriage had been completed and a bill of lading would be given in the near future. It was held by the Canadian Supreme court that a limitation be paid by the offender given the fact that they contemplated introducing the bill of lading. However, in circumstances where two parties intend on introducing a charter party, then the rules become irrelevant as seen in the case of Canada Steamship Co. vs. Desgagne. 4 The Hague rules apply to goods that have been received in reality. In the event that the goods have not been delivered, then the contract of carriage is invalid i.e. it will not commence. This means that no party can sue for damages for goods that were never taken to the vessel. Despite mentioning earlier that Hague Visby rules do not apply to situations in which parties are committed to waybills, there are some exceptions. This is because the rules governing waybills accommodate other international laws and agreements if the contract falls under those laws. The Hague Visby rules qualify as a form of international law and will therefore take effect in such an arrangement. 5 Hague rules only apply when the goods have been loaded to the time when they are offloaded. The classical definition of this is when a ship places its tackle on port when loading goods to the point when the ship places its tackle onto another port upon arrival. This scenario was seen in the case of Pyrene Co. vs. Scindia Steam Co. 6 In this scenario, the goods were being loaded onto the vessel but in the process one of the commodities toppled into the sea. Despite the fact that the hip had not begun navigating, it was held that the Hague rules were viable. This was because the tackle had been placed. The Hague rules may also be applicable in instance when two parties agree in their terms of contract. Carriers and shippers are free to stipulate additional obligations. The obligations can govern how goods will be handled and the liabilities that parties are susceptible to in case the property is damaged. Consequently, parties are free to prolong the duration of coverage as stipulated in the bill of lading. Discharging and loading of the goods is an issue that can be decided by parties upon agreement. 2.2 Obligations of a sea carrier to provide a seaworthy ship under the Hague-Visby rules A sea carrier is obligated to dispense a bill of lading that will indicate all the outstanding marks needed to identify the cargo once transportation begins. Additionally, the carrier needs to ensure that he specifies all the conditions that his goods were in before transportation. There must also a specification of the amount of commodities carried. This can be in terms of weight or number depending on the nature of the commodity. 7 Carriers are also expected to issue another bill of lading for goods that have been transferred form the exporter or importer. This can be viewed as an indication of good faith between the two parties. It is also an assertion that the goods being transferred have been dully taken care of prior to the journey. A carrier will be liable if he receives goods in favorable condition and then dispenses them in a worse condition. The carrier is expected to take receive the goods well, handle them properly, transport them and thereafter dispense them properly. In order to meet this obligation, the carrier is expected to make his vessel sea worthy. Sea-worthy vessels are characterized by good mechanical and structural systems. There must be some navigational charts present. Additionally, carriers should ensure that their vessels have the capacity to receive goods by preparing holds sufficiently. 8 2.3 Examples of what can make a vessel un-seaworthy The carrier is expected to ensure that his vessel is sea worthy in a number of ways. He needs to ascertain that all the refrigeration material is in order for goods that will require such facilities. Otherwise, failure to do so may result in the ship being rendered un-seaworthy. Additionally, the sea carrier is obligated to ensure that goods are safely manned once placed in his custody. Also, there should be great care when receiving the goods and offloading them to the respective ship. The carrier needs to follow the Rules in preserving all material in board. This means that there should be proper shipping management. If the vessel's management is done poorly, then the sea may be rendered un-seaworthy9 When a sea carrier shows any sign of neglect in the process of handling goods, then chances are that the vessel will be considered un-seaworthy. A carrier needs to make sure that there are stringent measures to protect cargo because if it has been found that the structural arrangement of the vessel is such that it can cause a natural man made disaster like a fire, then the vessel will be rendered un-seaworthy. A sea carrier must also try his utmost best to ascertain that his ship is protected from all dangers that result from using water as a means of transport. The vessel should be from any leaks or such kinds of defects that are likely to cause damage to the merchandise being transported. Also, the mechanical condition of the vessel should be such that it reduces all the chances of experiencing an accident while traveling. A vessel must also have the right manpower to handle goods on board. The sea carrier needs to ensure that his workers are competent enough to upload the goods, store and preserve them in the right them and finally, offload the gods properly. When workers demonstrate a lack of understanding in this area, then the sea carrier's vessel may be rendered un-seaworthy. 10 A sea carrier is obligated to check on the quality of goods brought on board. Failure to do so could make the sea carrier lack defense in instances when the goods are presented in poor condition at the end of the journey. 3.0 Conclusion The Hague Visby rules apply to United Kingdom and several other countries. However, there are national laws that regulate its implementation. The rules states that parties are bound when they operate in countries that follow the Rules. In addition, they are expected to follow the rules if their contract specifically says so. However, some exceptions include waybills and charter parties. 11 A sea carrier is obligated to make his vessel sea worthy. This can be done by ensuring mechanical and structural correctness, ensuring that all the facilities necessary to store, offload, load and transport the goods are in place. Sea carriers must also have a bill of lading before and after checking the goods. Failure to do so could result in undue liability on the part of the sea carrier. 4.0 Reference: Hague Rules (1991) 22 JMLC 1-57 Sturley, N. (2001): The History of COGSA; McGraw Hill Publishers German Commercial Code (2002): retrieved from http://www.transportrecht.org/ accessed on 3rd June 2008 Tetley, S. (1992): Which Parts of the Hague Rules Decision Are Good Law Today; Oxford Publishers, p 26 Yung, C. (1972): The Applicability of COGSA to Water Bills of Lading; Routledge Shackman vs. Cunard White Star [2001] 14 B. C. Ind. & Comp. L. Rev. 267 Pyrene Co. vs. Scindia Steam Navigation Co. [1954]: 2 QB. 402; pp. 419-420 Giaschi, C. (2007): Hague Visby Rules; A journal for the Canadian maritime law, shipping and admiralty law Canada Steamship Lines Ltd. v. Desgagn [1967]; 2 Ex. C.R. 234: pp. 243 Morris &Dicey (2001): The Conflict of Laws, McGraw Hill S 1(4) COGSA 1971: Applications of The Hague rules in relation to the Bill of lading Read More