Hague, Hague-Visby and Hamburg Rules - Essay Example

Popularity of Hague and Hague-Visby Rules as Against Hamburg Rules Introduction 2 Hague, Hague-Visby and Hamburg Rules 2 Comparison between Hague, Hague-Visby and Hamburg Rules 4 Application of the Contract 4 Deals with the Documentation 5 Conflict of Law 6 Availability of Cargo Varieties 7 a. Ordinary Cargoes – 7 b. Dangerous Cargoes – 8 c. Period of Coverage 10 d. Carrier’s Covered 11 e. Carriers duties and liabilities 12 f. Carrier Immunities 13 g. Limitation of Carriers Liability 15 Conclusion 16 References 18 Introduction The major issue dealt by this paper is the difference between the acceptance of Hague, Hague-Visby and Hamburg Rules by the business communities and the ordinary people. It has been seen that the Hamburg rules are not gaining much popularity worldwide, whereas Hague and Hague Visby rules are highly applicable. The foremost codification of law for the carriage of goods by sea is the Harter Act 1893 of U.S.A. this law can be considered as the paving stone for the rules that got followed. The next was the Australian Sea Carriage of Goods Act of 1904 and Canadian Carriage of Goods by Water Act of 1910. The formulation of the Hague Rules of 1924 is just a further development of all these rules. The attempts were made in order to safeguard the contradictions between the ship owners and the carrier services, as well as the clients. There were many controversies for the denial of the Hamburg Rules. These rules were opposed by the ship owning interests due to the fear of the increase carrier’s liability which makes the cost of unpredictable. This paper is trying to look at the specific legal causes for the denial of these particular rules. Hague, Hague-Visby and Hamburg Rules The Carriage of Goods by Sea Act; "COGSA" is for the maintenance of the rights and responsibilities between shippers of cargo and ship operators. It has also got the responsibility of to and from shipment from US. Hague Rules are actually U.S. enactment of the International Convention Regarding Bills of Lading, as placed in the Title 46 Appendix of the United States Code, starting at Section 1301, but has been moved to a note in 46 United States Code 30701. As this rule was not giving much of the security to the owners and also to the cargoes; the rule was amended by Congress. There was an increase in the amount of the charges that the shipowners will be paying to the cargo-owners for any kind of damage in transit. The rise was GBP100 per package to US$500 per package or, for goods not shipped in packages, per customary freight unit. This rise in the charges for the damages in transit made Hague rules far better than any other implementation. It was in 1968, the Hague Rules got amended by the Visby Amendments, which means officially the "Protocol to Amend the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading". After this Hague Rules became the Hague-Visby Rules. Again in 1979A final amendment was made in the SDR Protocol. After that it got officially declared as a set of international rules for the carriage of goods by sea. The allotted official title for these rules is "International Convention for the Unification of Certain Rules of Law relating to Bills of Lading". Subsequently, the Hamburg Rules are the rules governing the international shipment of goods, resulting from the United Nations International Convention on the Carriage of Goods by Sea adopted in Hamburg in 1978. It was in 1992, that the Hamburg Rules became effective. The basic idea of these rules was to supersede the 1924 Hague Rules together with the 1968 Visby amendments. The effort was strong but the results varied to a large extent. It has got 25 parties but could not perform as effectively as it should have been. It got the new convention on maritime transport be in agreement under the auspices of the United Nations at a conference at Hamburg on 31st March1978. The basic targets of these rules are the functionality of imports and exports between the sea destinations. The factor of shipment with all responsibility is the basic need behind these rules. Comparison between Hague, Hague-Visby and Hamburg Rules To make a presentation between Hague, Hague-Visby and Hamburg Rules, it is very important to see the rules from the practical point of view. In all cases the Hamburg Rules are more relaxing and liberal, but are losing popularity. The causes are discussed below. The Hague, Hague-Visby rules are as compared to Hamburg Rules are stricter and are having obstructions in most cases. They are not only strict but are not at all liberal. There are a number of deviations; however these deviations are at the risk of both the carrier and the client. As my investigation goes, I discovered that the Hamburg Rules are not being able to gain much acceptance just because of it liberal characteristics. It increases the amount of risk taking without anybody be at a state of being liable. Whereas Hague, Hague-Visby rules make the client and the carrier responsible for all the transhipment that takes place, and as a result they get bound to be more careful and gives personal attention wherever necessary. Application of the Contract In case of Hague and Hague-Visby Rules, all the transactions made by sea are evidenced by the means of a bill of lading or a similar document. This document gets the title between ports in different States (Article I). It is applicable to all the shipments from the U.K. but in case of imports the rule varies. If the carriage is from other state or the bill of lading gets issued in those states or clause paramount in the bill of lading expressly applies them. If no bill of lading is issued the carrier is not legally bound to apply them and can be subject to the applicability of national law. Quite the opposite of this, the Hamburg Rules are applicable to all contracts for the carriage of goods between the states (Article II). These rules are not much bounded by the purpose of the issue of bills of lading and are equally applicable for both exports and imports. The Deals with the Documentation Under the Section 1(b) of the U.K. Carriage of Goods by Sea Act 1971, Hague and Hague-Visby Rules have the force of law where the bill of lading gets into concern. They are very strict in following that the rules shall govern contract. They do not cover contracts of carriage which can foresee the issue of a way bill or other non negotiable document since they are not considered documents of title. As for the instance, in the case of Pyrene Co Ltd., v. Scindia Navigation Co Ltd1 it was declared that if somehow the party envisaged that the contract of carriage then there will be the provision to cover it by the means of a bill of lading. This provision got implemented in order to show that the rules will take effect even though, in the event, no such documents got issued. On the contrary, the Hamburg Rules make the application of the contract of carriage and not to the bill of lading. However there is the scrutiny on the carrier for issuing a bill of lading. Conflict of Law Art 6 EGHGB is a law that is implemented in order to check the accessibility of §662 HGB. Art 6 EGHGB is applicable without any regards to the proper law of the contract of carriage.2 The attitude of Germany towards Hague-Visby Rules was not of much appreciation. Even being a party to Hague Rules Germany maintained certain obligations at international law. This was a conflicting status to the other Hague Rules nations.3 By the means of Art 6 EGHGB these conflicts were tried to make little soluble. It tries to give the German version of the HGB that replicates the Hague-Visby Rules and makes the understanding clear and accessible. However it followed the obligations led by Germany Hague Rules4 and made certain distortions to it for. The only divergence between the two versions of the HGB is that references to the carrier’s liability as 2 SDRs per kilogram in §612(2) and §660(1) which is under any circumstance is not applicable under the Hague Rules version. These types of diversions are not available with Hamburg Rules, as they are far beyond the margin of acceptability. Availability of Cargo Varieties a. Ordinary Cargoes – Under both Hague and Hague-Visby Rules takes the job of transshipment of almost everything except for live animals and deck cargo. However if there is a very important need, then the rules allow for some kind of negotiation in their own terms of carriage. The decisions and risk will be all on the particular carriage system and the owner or the client. The provision is considered as a justified option as both the categories of cargos are of fragile character and needs personal attention in particular for safe loading, traveling ad unloading. On the contrary the Hamburg Rules agrees for the transshipment of all types of cargo including live animals and deck cargo. It is permissible trough Article 5 (1) of the Hamburg Rules that very specifically refers to the carriage of live animals. However it is also clear with the point that the carrier will not be at any kind of responsibility or risk for some unwanted loss resulting from any particular risk intrinsic in that type of carriage. To check some cases we can have a look at the case of Svenska Traktor v. Maritime Agencies5, there was a consignment of tractors that was shipped from Southampton under a bill, which conferred a liberty on the carrier to stow the cargo on deck. Unfortunately when one of the tractors was washed overboard during the voyage, the ship owners sought to rely on a clause in tile bill of lading excluding his liabilities for loss or damage to the deck cargo. The court did not give him the permission, as for the cause of general liberty to carry goods on deck is not, a statement in the contract of carriage that the goods in fact carried on deck. In case of the live animals the carrier is at liberty to negotiate the terms of carriage, and that makes the point much clear and responsible. This is the twist where the responsibility of taking the risk on ethical ground gets threatened. In the former case there is no particular rule for the transshipment of any living animals or deck cargo, yet it gives the permission under personal care, whereas in the second one the permission is available but without anybody taking the responsibility. This is where the former gets more popular than the later. In case of deck cargo, it has been clearly stated in the bill of lading deck cargo that if the cargo is literally much stowed than it can be very easily excluded from Hague and Hague-Visby Rules. b. Dangerous Cargoes – As for the dangerous Cargo the Article 4 Rule 6 of Hague and Hague-Visby Rules, characterises the liability in clear words. There are the implied terms at common law. According to this implementation, the shipper under any circumstances is not allowed to have any sort of dangerous shipment. If somehow there is a need then there should be a proper process of permission. The written documents are the basis for these types of negotiations. At the same time Rule 6 makes the provision that whenever any such dangerous cargo are shipped for transshipment, then the carrier must be full aware of every movement of it. The carrier needs to neutralize them at the expense of the shipper, and at the same time has to take care of all sorts of obligation to compensate the cargo-owner. However in addition to all the liabilities the shipper is the one who is at the risk. He is the person in liable for any loss or damage resulting from their shipment. Subsequently in case of the application of Hamburg Rules for the shipment of dangerous cargos, there are three requirements. The first one is the avaibility of an indication in the cargo that it is dangerous. This can be done by some symbols or symbolic representations. The next requirement is to make the carrier full aware of the characteristics of the dangerous cargo. The carrier must understand the effects and the harm that it can cause. This not always technically supported as all carriers are not a science graduate. To know about a chemical reaction the carrier must know about the chemicals and if he does not understand the harm of the cargo then it is not allowed for shipment. In a way this is a very lose and invalid cause of transshipment. It is neither full proof nor is anyway related to the risk that a dangerous cargo can have. It is all about the understanding level of the carrier. The third requirement of transshipment of such cargo is the adaptation of all sorts of necessary precaution. The shipment has to be well equipped with all the assistance for any kind of unwanted situation. Added to this there has to be some steps taken and the bill of lading must comprise of a full proof express statement that the goods are dangerous. Thus in the former case; the rules by itself does not allow dangerous cargo. However, it permits it under strict supervision. Both the client and the carrier are the determined responsible sides for the shipment. While in the later case, the law permits for the dangerous shipments as a result the risk taking factors of the individuals get diminished and there comes every possibility of facing a danger in the transport. This is another reason for which the former is more popular than the later. c. Period of Coverage The Hague and Hague-Visby Rules under Article (1) (c) declares the contract of carriage. The rule comprises of the time span from the time when the goods are loaded to the time they are discharged from the ship. In technical terms it is called the period from Tackle to Tackle. Whereas the Hamburg rules covers the period with some extended coverage. It considers the period from which the carrier is in charge of the goods at the port of loading and at the port of discharge too. The carrier gets deemed to be in charge of the goods at the time of receipt of goods to the time of delivery. It is comparably a longer period than what the Hague and Hague-Visby Rules gives. Under Hamburg rules, the ship is all at risk until someone comes for delivery. It creates all sorts of unnecessary responsibility and also increases the risk. These rules in fact cover the whole period of carriage even during transshipment. In a way this makes the carrier fall in some greater responsibility for deck cargo. In the absence of a statement in a bill of lading that deck carriage is permitted the carrier. Along with that it has unlimited liability if it in fact carries on deck is having the burden of providing permission. In one transshipment the carrier gets the responsibility and liability of both carrying on deck and also the under deck carriage. This make the factor of risk go bigger than what actually it should be. As a result the rules are losing faith and popularity at the same time. These hassles are not entertained by Hague and Hague-Visby Rules. These rules have no such risk factors on the individual carrier. A case once came up with Pyrene Co Ltd., v Scindia Navigation Co Ltd6. In this case, it was held that ‘although the damage was caused before the goods had crossed the ship rails this did not essentially mean the exclusion of the rules. In the said judgment it was stated that no special significance should be placed on the phrase “loaded on”. These are the variation that needs to be taken care on. These are the probable situation that the adaptation of Hamburg rules, makes way for. However Hague and Hague-Visby Rules, leave no scope for such situational cases. They are in a way more full proof and put the company in lesser risk for the same. This is another factor of popularity of these rules. The amount of liabilities gets shared under Hague and Hague-Visby Rules, and so the acceptance is more. d. Carrier’s Covered Under Hague and Hague-Visby Rules, Article 1 (a) states that the carrier includes the owner or charterer who enters into a contract of carriage with a shipper and they are equally involved in all the proceedings. For Hamburg Rules, the carriers conclude a contract of ‘carriage of goods’ by sea with a shipper, which gets authenticated for the further proceedings. They are more individualistic in their approach and are very much kept apart from sharing any liabilities. These Rules also cover actual carriers, which include any person entrusted by the carrier to perform all or part of the carriage of the goods. This makes the shipment companies loaded with more risk taking factors and more liabilities. The worse part is that they are not allowed to share the risk. This make the companies stand all alone in the sea, when any risk comes up. The avoidance of these rules are thus more among the shipping companies and the dealers of the contracts. e. Carriers duties and liabilities Hague and Hague – Visby rules makes the provision for the carrier under (Article III) to exercise due diligence to in three specific ways. These are basically in the making of the ship seaworthy, with a proper men along with the equip and supply ship and under Article (III) Rule (1), the act of making parts of the ship in which goods are carried fit and safe for the receipt, carriage and preservations of the goods. Article (III) Rule 2, states that the carrier shall properly load, handles, stows, carry, keep, care for and discharge the goods that are to be carried by the ship. In these cases the Hamburg Rules makes some variations. For these rules there are a wide range of distinction between the “carrier” and the “actual carrier”. Under Article 5 (1) of these rules, the carrier is liable for loss, damage, or delay in delivery of goods, if the loss occurred while the goods were under the carriers charge, unless the carrier proves that he, his servant or agents took all measures that would reasonably be required to avoid the occurrence and its consequences. This gives a sense of getting trapped under well planned programme. The risk factor is quite visible and the amount of bigger charges even can’t compensate the same. In Article 5 (2) the reason and definition of the factor behind any sorts of delay is counted when the goods have not been delivered at the port. It is also applicable to the situation where the goods are not discharged within the time which has been mentioned in the Contract of Carriage. The situation is such that the shipment company is made feel more like a bonded labour than an individual corporation with entity and dignity. These types of rules make the company very prone to controversies and can lead to the state of spoiling the brand identity. f. Carrier Immunities Hague and Hague – Visby Rules, under Article IV (I) (i) – (xviii) makes way for a wide list of exceptions in favour of the carrier. The factors effecting the loss and damages are well knitted under these rules. Whenever there is a kind of loss or damage due to un-seaworthiness the burden gets into the shoulders of the carrier without any fail. The case of Riverstons Meat Co Ltd., v. Lancashire Shipping Co. Ltd7, is one such example in this field. In this case the law was very clear. The defendants had engaged a firm of reputable repairers to repair the ship before sailing; however the repairers were negligent and caused water to enter the ships hold damaging the claimants’ goods. In the situational twist Lord Radcliffe held the carrier responsible for every inch of loss that appeared due to the mishap. Their duty is to exercise due diligence in ensuring that the ship is seaworthy, and not due diligence in securing the Services of a reputable and competent professional fulfill that task. For the same case the Hamburg rules would have facilitate with some other solutions. As these rules do not have an extensive list of exception clauses, rather these rules follow three main exceptions. These exceptions are in favour of the carriers’ operational and handling and shipping skills. These are the handling and shipping of Live Animal - under Article 5 (5), Deviation - under Article 5 (6) and Fire - under Article 5 (4) (i) (a). For all these options, the carrier are at all risk. There should be an assurance from the carrier’s side that all his servants or agent took all measures. He is also the one to answer to the entire occurrence and its consequences that might happen in the process of transshipment. Under the German limited liability regime the risk taking factors get varied and the responsibilities are kept under well considerations. In the process of content of the bill of lading, there are some notes made regarding the cargo. These particulars are marks, number, quantity and weight. In a way it is the collection of all details regarding the cargo. For the effective purpose of 563(1) HGB there is the facility to make a Befrachter/Ablader responsible to the carrier for all sorts of particulars. These particulars are basically of "quantity, number or weight as well as marks". The Befrachter/Ablader was made a straight liable target to the carrier for all the rated damage caused by its own inaccuracies concerning those particulars irrespective of fault.8 The application and implementation of the HGB’s strict liability regime is therefore considered under all prevailing conditions as more severe than the Hague-Visby Rules. This holds the rules with its fault-based liability.9 563(2) HGB with all its consent provides that 563(1) which is said to be free from any deliberate affect to the relationship between the carrier and persons other than the Befrachter/Ablader.10 The receiver’s relationship with the carrier is therefore not affected.11 There are two particulars as to the functioning of order and condition implementation. With all the strategical notions 564(1) HGB makes a Befrachter and Ablader liable to each other, the carrier, ship owner, receiver, travellers and crew for any damage caused by inaccuracies as to the type and condition of the goods brought on board.61 That liability is fault-based. §564 does not apply compulsorily to a bill of lading and may be contracted out of. g. Limitation of Carriers Liability The variations are also applicable in case of the limitation of the liabilities of the carriers. In case of both Hague and Hague-Visby Rules, the liability limits for loss or damage are666.67 SDRs per package or it will be 2 SDRs per kilogram; which ever is higher. In terms of the Hamburg Rules 835 SDRs per package or or 2.5 SDRs per whichever is higher. The liability limit for delay under Hague and Hague-Visby Rules are not applicable as a provision, while under the Hamburg Rules, it is 2.5 times freight payable for goods delayed. However the recovery may not be at an increase amount to the total freight payable under the contract of carriage. For the sharing out of liability, both Hague and Hague-Visby Rules do not leave any provision just like the former one. Whereas for Hamburg Rules, any kind offault or neglect on the part of the carrier, gets combined with another cause to produce loss, damage or delay in delivery. The responsibility is all on the carrier. The carrier is liable to the the loss, damage or delay in delivery. It gets attributed to its fault or neglect The proceedings regarding the notification of loss or damage, both Hague and Hague-Visby Rules gives in writing to the carrier or his agent at the port of discharge. It is given before or at the time of delivery, or where the loss or damage is latent, within 3 days of delivery. If there is a kind of failure in giving such notice from the company considered as prima facie evidence of delivery which will be in accordance with the Bill of Lading. For the Hamburg Rules, follows Article 19 where it has been stated that the notice of loss or damage must be given in writing by the consignee or carrier within a working day. It has to be hand over after the goods were delivered to consignee. It can also be given where the loss or damage is latent, within a time span of 15 days. This gets counted with the consecutive days after delivery to the consignee. In case of failure of such notification it too considered as prima facie evidence of delivery in accordance with the document of transport, of if no such document has been issued in good condition. The provision for the compensation for loss gets resulted from the act of delay in delivery. This may not be provided unless there is the delivery of the notice. The notification has to be given on the primary state has been given in writing to the carrier within 60 consecutive days after delivery to the consignee. Conclusion In a whole the balance for every issue might well appear to be in favour of cargo, as the ship owner hardly gats the chance to exclude his liability beyond what the rules any all possible ways can provide. The target is to check out for those that have got the more reliable declarations for both the sides. That is to say, the ship owner no doubt that is never gets the opportunity to get out of his liability. These responsibilities are bounded for the due courses of diligence to seaworthiness and care of cargo. This is the reason that in return for that he gets hold of negligence in navigation and management exception. The factor of sharing of this responsibility is the only solution for smoother rides. This is in severe demand for a situation where the indulgence gets shared to a great extent to at least to a legally right option. Leaning in favour of cargo, the ship owner though cannot have much favour, yet a minimal risk has to be kept in account. However, to remember that the ship owner obtained the benefit of the one year time bar and the package or unit limitation; and although the latter a t that time represented a more considerable sum per package or unit, especially for the smaller packages then used, I imagine, than now, nevertheless those two represented considerable benefits to the ship owner. The mechanism is thus to follow those rules that can safeguard both the ends and gives a strong chance of negotiation and bonding between the owner and the client. The application of law is always feasible and determines the risk taking factor for both the parties. By this means the selection of rules becomes the vital part for any deals that can be feasible for a kind of negotiable contract. Thus it has been discovered that no matter what are the rules are, there should be the space for ethical understanding of the responsibilities among every sector of transshipment. It is al about realizing and sharing the sense of responsibility for better conditions of dealings. Hague and Hague-Visby Rules are popular than the Hamburg Rules, just because they channelised the sense of responsibility in every section of transshipment. Moreover they make the adequate space to share the responsibility between the client and the carrier. The rules are so constructed that in all cases both the parties have to understand the value of the goods and negotiate in the process of transport. The damages of all types of goods are not bestowed upon the carrier alone. There are the provisions for declaration in certain goods where the client is compelled to share the risk. This is the vital point that most of the companies prefer to follow and adapt the Hague and Hague-Visby Rules, rather than the Hamburg Rules. There is no place for doubt that the Hamburg Rules are more liberal and are more permissible, but there is no ethical side of taking the risk. This is not there in case of the implementation of Hague and Hague-Visby Rules. Thus these rules are more popular and universally more accepted. References 1. Hoffmann 219-42. and Prüßmann/Rabe 707; Hoffmann 238. HOLG Hamburg MDR 70, 146, 2. HOLG Hamburg Hansa 85, 798 and 800 ("Kapetan Martinovic"); Prüßmann/Rabe 674 3. If the receiver is not the Befrachter or Ablader or their agent: see Prüßmann/Rabe 389. 4. In particular, the obligation not to impose a limit on the carrier’s liability that is lower than that found in the Hague Rules. 5. Prüßmann/Rabe 639. 6. R Herber "Das zweite Seerechtsänderungsgesetz" (1986) Transportrecht 249, 254. 7. R Herber Das neue Haftungsrecht der Schiffahrt (1989) 219 and Mankowski "Neue international privatrechtliche Probleme des Konnossements" (1988) Transportrecht 410, 416. 8. See Prüßmann/Rabe 387. 9. See Prüßmann/Rabe 388; §254 BGB 10. See Prüßmann/Rabe 390-1. 11. The United States and Switzerland, which represent two of the world's foremost financial markets, today jointly signed the Hague Convention on the Law Applicable to Certain Rights in Respect of Securities held with an Intermediary. 12. The "STC" clause is effective in relation to containerised cargo: Puttfarken 76. Read More