The Main Provisions of the Hague-Visby Rules - Term Paper Example

Thе mаin рrоvisiоns оf thе Наguе-Visby Rulеs Customer Inserts His/Her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name 02nd May 2013 Introduction The purpose of this paper is to identify and explain Hague Visby Rules, the term ‘carrier’and the carrier’s duties under the contract of carriage. By reading this paper, one will get an understanding of the term “Carriage of goods” which is the period from the time when goods are aboard a vessel until when they get off loaded. The reader is also expected to understand the applicability of Hague Visby Rules. The rules are applied to carriage of goods contracts that are either oral, written or by sea. The rules are also applied in many countries that undertake shipping such as France and Belgium. They are applied to bill of lading that is related to carriage of goods across ports in two separate states and to both public and private carriage. Hague Visby Rules are applicable on the classic rule of “tackle to tackle”, before loading and after discharge. Finally, the paper has explained a carrier’s duties to provide a ship that is seaworthy, to do proper loading, to provide a bill of lading when the shipper demands for one and to properly supply, equip and operate the ship. Carriage of Goods By Sea Act dated 1971 is a law containing six sections. The parties involved in this law have no means or right to override the operations of the rule contained there-in. Muncaster Castle Amendment was also a part of the Visby Rules. This amendment was a modification to Article 3(1) of the Hague Rules. This article provided that carriers could diligently offer a contractor the responsibility to make a vessel seaworthy. This would mean that the carrier transfers a very crucial responsibility to a third party. Although the Muncaster Castle Amendment was discarded, on February 23, 1968, approval was granted to amend the Hague Rules. In 1977, ten countries had ratified the new Rules which made the Visby Rules to take effect in 1977. The countries that implemented the Visby Rules were United Kingdom, Norway, Switzerland among other European countries. Hague-Visby Rules have been incorporated into the Carriage of Goods By Sea Act in order to impose maximum liability on the cargo owner in the event of damage or loss that he is liable to. The rules were initially referred to as the Hague rules which were amended in accordance to two protocols. The first protocol is the Visby Protocol of 1968 while the second one is the SDR Visby Protocol of 1979. Although the cargo owner may not recover the maximum limit that he is entitled to, the value recovered is dependent on the value of goods at the time of arrival. Hague Visby Rules are also expected to provide greater protection to shippers (Wilson 2010). The level at which the Rules apply “Carriage of goods” is defined under article I (e) as the period from the time when goods are aboard a vessel until when they get off loaded. Loading time begins at the moment when goods start to get loaded on to the vessel. Therefore, goods that get destroyed during loading are considered as falling under the Sea Act of 1971 and Hague Visby Rules. This convention enforced establishment of unified sea carriage legislation. This was meant to reduce the impact of the hard-line approach that was established on the already existing common law. This would protect shippers from unreasonable clauses which are established by ship-owners and powerful contracting parties. Hague Visby Rules established a leveled negotiating ground for the bargaining parties’ unequal obligations. However, in order to achieve this, a long list of defenses had to be included. Such defenses could hinder its operations (David, Barrister & Auckland 2010). Hague Visby Rules are applicable to carriage of goods contracts which are either oral, written or by sea. This is in exception to a case whereby a receipt that is non-negotiable is given in an unusual carriage. This happens in trades of private nature. Visby Rules are also not applied when a receipt that is non-negotiable is given in the “national coasting trade”. Therefore, Hague Visby Rules are applicable to carriage contracts except in circumstances where non-negotiable receipts are issued. In this case, the non-negotiable receipts need to adhere to the terms and conditions of the established statutes. Additionally, the non-negotiable receipts (waybills) are only exempt from Visby rules if they are issued in a non-commercial trade. However, Hague Visby Rules are not applicable on goods that are carried on deck and on live animals. Hague Visby Rules are applied in majority of the countries that engage in shipping across the globe. Countries such as France apply Hague Visby Rules to all shipments that are outbound while Belgium uses the rules to shipments that are both inbound and outbound. Different countries have different methods of adopting the Rules. Countries like Australia and Canada have implemented and attached a local statute that is in form of a schedule, to Hague Visby Rules. However, since both countries have not ratified the Hague Rules, they are not considered as contracting states. Hague Visby Rules found in Article 10 are applicable to bill of lading that is related to carriage of goods across ports in two separate countries if (David, Barrister & Auckland 2010): i. The state involved in carriage is a contracting country ii. The carriage is coming from a contracting State’s port iii. The rules contained in the bill of lading provide that the State should govern the contract despite the ship’s, carrier’s, shipper’s or consignee’s nationality. Every contracting State is required to apply the provisions of Hague Visby Rules as they relate to the bill of lading. Article 10 cannot prevent a Contracting State from implementing the rules found in Hague Visby Rules in relation to the bill of lading but not discussed in the previous paragraphs. iv. The Hague Visby Rules can be implemented upon carriage of domestic goods as it happens in Canada and in Scandinavian countries Hague Visby Rules are applicable to both public and private carriage. Private carriage is established when particular goods need to be transported. Public or common carriage is established after advertisements or public offers. The bill of lading in this case is offered by a steamship company that has ships that use a regular or advertised route. Common carriage can ship goods belonging to a single shipper. Since Hague Visby Rules are applicable to both public and private carriage, the rules of bill of lading are applicable as long as there is no charterparty or contracted carrier involved. However, most private carriages use charterparties, which means that the Visby Rules on bill of laden do not apply (Katsivela 2012). Although Hague Visby Rules are not applicable on charterparties, an express contract can cause applicability of the Rules. For this to happen, the contract statement should be written in a proper and logical manner. Therefore, inappropriate or careless wording can lead to unintended interpretations even in the presence of an express statement. For example, in a court case between Anglo-Saxon Petroleum and Adamastos Shipping Company, the Hague Rules were used due to the contract statement. The statement found in the charterparty was “This Bill of Lading…”. The Court of Appeal determined that the statement made the Hague Rules to be appropriate for the case. This means that careless wording of a paramount clause can lead to integration of Visby Rules into a charterparty (Katsivela 2012). In accordance to Article 2, Article 1(b) and Article 1(e), Hague Visby Rules can be implemented on the classic rule of “tackle to tackle”. This rule is applicable from loading time of goods on to a ship to their discharge time. “Tackle to tackle” is term that refers to the time that the ship is hooked at the port during loading to the rime when it is unhooked during discharge. Therefore, Visby Rules apply to goods that get lost or get damaged during “tackle to tackle”. For example, in the case of Pyrene Company versus Scindia Steam Navigation Company, a cargo dropped off the ship when as it was still tackled. The court determined that Visby Rules were applicable in this case even though the cargo was yet to cross the rail (Katsivela 2012). Visby Rules also apply before loading and after discharge when there is an agreement between the carrier and the consignee to extend the terms of the contract covering carriage of goods. For example, in a court case of Falconbridge Nickle Ltd versus Chimo Shipping Ltd, Visby Rule on bill of lading affirmed that the liability on the ship finished once the goods are discharged from the gear. However, there was an agreement that the ship’s barge was required to lighter the goods ashore. This meant that the Canadian Hague Rules applied in this case. (Katsivela 2012) The meaning of ‘carrier’ Article I (a) of Hague Visby Rules defines carrier as the ship owner and any charterer who boards the ship with the shipper. This means that all the persons that get onboard a ship and the owner of the ship are covered by the Visby Rules (Katsivela 2012). The carrier’s duties under the contract of carriage In all the contracts of carriage of goods, the rules state that the carrier is subjected to the responsibilities and privileges that are found in the Convention in accordance to loading, carriage, care and discharge of cargo. A carrier’s duties are segmented into four principles: The responsibility to provide a ship that is seaworthy. This should be done before and at the start of the voyage. In case of cargo damage or loss, it is the shipper’s responsibility to prove that the vessel lacked seaworthiness. This might be difficult to prove because there are several precedents that deal with such a matter. For example, in the case of ‘Maxine Footwear’, fire to goods was caused by negligence by servants. However, the court held that the fire was caused by vessel unseaworthiness. On the other hand, in the case of ‘The Apostolis’ the court held that the servants caused the fire to goods (Katsivela 2012). Seaunworthiness is a liability to the carrier and the shipping company. It is best handled by incorporating control and ship management in order to reduce risks and accidents caused by reckless ships. The responsibility to do proper loading, carriage and discharge of cargo as set out in Article VI: In cases where there is loss or damage of goods, the shipper can argue that the carrier failed to fulfill his obligation to take proper care of the goods. However, Hague Visby Rule does not apply during the period when the carrier takes charge of goods before they are loaded on board and dispatched to a discharge warehouse. This is the same period when the carrier is in possession of the goods. The carrier should ensure that the holding, refrigerating and cooling chambers as well as any other parts where goods are carried are safe and fit (Katsivela 2012). This reduces damage to both the ship and the cargo and it reduces the liability of the carrier. The responsibility to provide a bill of lading when the shipper demands for one: bill of lading refers to declaration by the carrier that the cargo has been received in good quality and quantity. This is issued after thorough inspection of the goods and ensuring that there are no damages. The carriers become liable for damage or loss of goods that are received in good order. The party that is claiming compensation may only need to establish that the goods were in good quantity and quality before dispatch and that their condition changed on discharge. Carriers can get exclusion from liability by proving that the possible cause of damage is one that is found in Art 1V (2) (a) to (p). However, the shipper can still argue that the carrier neglected his obligation with regard to the goods. Article 6 of Hague Visby Rules provides that in cases where bill of lading is not provided, then the carrier can exercise freedom of contract. In circumstances whereby the bill of lading is given but goods are not received, then Hague Visby Rules are not applicable. This is because the contract of carriage has not yet taken place (Katsivela 2012). The responsibility to properly supply, equip the ship as well as operate it. It is the responsibility of the carrier to ensure that the ship has been loaded with the necessary cargo before sail. The carrier should also ensure that the ship has all the equipment necessary for it to function normally. These equipment should also include safety equipment that can be used in the event of fire or any other disaster. The carrier is held responsible for any damages to the ship and cargo as a result of poor maintenance and security. Exceptions 1. A shipper or the ship are not liable for damage or loss caused by unseaworthiness unless it is caused in due diligence of the carrier’s intentions to make the ship seaworthy, secure and well equipped; the burden to prove the exercise of due diligence falls on the courier. 2. The carrier and the ship are not responsible for loss or damage resulting from (p. 32): (a) neglect or poor management of the ship by the master, servants, mariner or the pilot (c) fire, sea risks, dangers and accidents or navigable waters; (d) God’s act (e) events of war (f) act of public enemies (g) legal processes resulting to arrest or restraint of state rulers (j) labour strikes (k) civil commotions and unrest (n) insufficiency of packing and marks 3. The shipper is not responsible for loss or damage caused by the carrier or the ship arising or resulting from any cause without the act, fault or neglect of the shipper, his agents or his servants. 4. The carrier is not liable for damage or loss caused by attempt to save property or life at sea. Such an act is not considered as infringement of carriage rules. 5. Carriers and the ship are not liable for damage or loss of goods in excess of 666.67 units of account per package. This is unless if the nature or value of the goods has been stated before shipment by the shipper and written in the bill of lading (Reynolds 1990). Defences 1. The defences and limits related to damage or loss of goods apply to the carrier whether the action is in the carriage contract or not 2. The amounts that are recovered from the carrier and ship employees cannot exceed the amounts provided in Hague Visby Rules 3. A carrier can invoke defences and liability limits upon an agent or servant that is liable for loss or damage of goods. 4. The provisions of the carriage contract do not hold the servant or agent of the carrier liable if the damage was caused by omission or reckless acts of the agent or servant with intention to cause damage (Reynolds 1990). Conclusion Hague Visby Rules were incorporated in 1977 in order to impose maximum liability on the cargo owner in the event of damage or loss that he is liable to. The Rule is also expected to provide greater protection to shippers. Hague Visby Rules are applicable when goods get destroyed at the moment when goods start to get loaded on to the vessel. The Rules are applicable to all carriage of goods contracts either by sea, oral or written. This is in exception to a case whereby a receipt that is non-negotiable is given in an unusual delivery. They are also applicable to both public and private carriage. Private carriage is established when particular goods need to be transported. Public or common carriage is established after advertisements or public offers. Visby Rules are also applicable to the classic rule of “tackle to tackle”. This rule is applicable from loading time to discharge of goods. The Visby Rules also apply before loading and after discharge when there is an agreement between the carrier and the consignee to expand the provisions of the contract touching on carriage of goods. The paper has also explained that a carrier refers to the ship owner and any charterer who boards the ship with the shipper. The paper has also analyzed the carrier’s duties under the carriage of goods contract. Therefore, the shipper has a responsibility to provide a ship that is seaworthy. He should also ensure proper loading, carriage and discharge of cargo as set out in Article VI. It is the carrier’s responsibility to provide a bill of lading when the shipper demands for one. The bill of lading refers to declaration by the carrier that the cargo has been acknowledged in fine quality and quantity. The carrier also has the responsibility to properly supply, equip the ship as well as man it. Some of the exceptions to the carriage of goods rules are in regard to unseaworthiness and damages caused by accidents, neglect or poor management of the ship by the master. Defences and limits to the carriage of goods rules have been covered in this paper as well. References David, P, Barrister & Auckland 2010, ‘The Hague-Visby rules back on course?’, New Zealand Law Journal, no. 189, pp. 189-192. Katsivela, M 2012, ‘Loss of the Carrier’s Limitation of Liability Under the Hague-Visby Rules and the Warsaw Convention: Common Law and Civil Law Views’, Australian & New Zealand Maritime, vol. 26 no. 2, pp. 118-135. Reynolds, F 1990, The Hague Rules, the Hague-Visby Rules, and the Hamburg Rules’, Mlaanz Journal, no. 42, pp. 16-34. Wilson, J.F 2010, Carriage of Goods by Sea, Pearson, chapter 6. Read More