International Commercial Law Problem Solving - Assignment Example

Download file to see previous pages The ship owner insulates the shipping company against arrest and subsequent charges in a court of law. The other obligation is to load all the goods safely onto the ship so that the goods do not get lost or damaged during loading, after which the goods should be held securely in location to avoid damage or falling off during the ship ride. The ship owner is also obliged to provide complete onboard security for the goods so that the goods do not get lost in the hands of the staff or passengers. However, since sea piracy is an external problem, the ship owner’s obligation may not extend to protection against piracy at sea. The other obligation is to inform the sender of the route the ship will follow and the expected date of arrival at the destination port so that the sender consents to the terms depending on the urgency of the cargo. The other obligation is to deliver the cargo to the correct destination on or around the date agreed. The cargo may arrive earlier or later by a day because of certain unforeseeable circumstances (CISG, Article 25) such as storms may occur at sea. However, the ship owner must keep the sender informed on the ship's progress, especially if this forms part of the contract. Failure to do this may expose the ship owner to accusations of negligence and dishonesty. The ship owner is also obliged to hand over the goods at the correct port and time to the receiver appointed by the sending party.

Although the destination state i.e. Australia is not a member state of the CISG, the cargo originated from the USA, a CISG member state. So the carrier took the cargo in full agreement with the terms in the sending state. If proof exists that the ship owner did not ensure that the goods were carried in observance of the necessary standards, then the ship owner becomes culpable. The security of the goods on the ship, including due care is the responsibility of the ship owner. There are some basic protective measures that the sender expects the ship owner for the transport of the goods such as securing the firmly, protecting them against them from the staff, and so on. The goods become the responsibility of the ship owner the moment they are handed to him with the appropriate documentation by the owner and remain so until the goods are received by the sender-appointed agent at the destination port. Probably the challenge would be getting the proof that indeed the goods were not carried properly on the deck, especially because neither the sender nor his agents accompany the goods in transit.

Sending the goods from the London port would not have made much difference to the obligations because the UK is a signatory to the CISG. However, there may be only one impact of sending the goods from London or another port for that matter; time. If the suggested port was nearer to the destination port than the initial port, then the goods may have arrived earlier despite the diversion to Auckland. Probably, the shortened period may have made the ship miss the storm and therefore the goods would have arrived safely. Again, if the new source was farther than the initial port, it could have had the same effect because the goods would have taken longer to arrive, and maybe the ship would have missed the storm. However, the later situation caused the goods to arrive much later than expected.

Concerning the Hague Visby Rules, the obligations in 1(A) above would change to include other obligations like ensuring that the ship is in good condition, employing adequate personnel, supplying the necessary equipment, food, and other supplies, and providing adequate and secure storage for the items (Hague Visby Rules, Article III). A technicality however would arise because according to the bill of landing, the goods would be carried on the deck, but in reality, the goods were carried inside the ship. The ship could find itself in trouble because the sender could argue that carrying the goods under the deck is what damaged them and not the storm. Hague Visby Rules, Article III (3) demands that the ship owner issue a bill of lading to the shipper describing the cargo. The bill of landing is the only proof of the shipment. However, the ship owner has no obligation to understand the minute details of the cargo and especially if he has no reliable systems to determine the same. Hague Visby Rules, Article IV completely discharges the ship owner of any responsibility of damage or loss in transit, unless a specific item has been expressly indicated on the bill of landing. The sender may opt out of the bill of landing and choose a non-negotiable document such as a receipt instead. In this case, the shipper is obliged to fully compensate for the loss or damage of any item indicated on the receipt. Concerning the Hague-Visby Rules, even if the goods were improperly carried on the deck, the ship owner would still be discharged of any responsibility. Article IV (2) discharges the owner of any responsibility even in the face of neglect by the agents of the ship owner on the ship. Maybe this could change and the ship owner could become culpable if he was a member of the ship crew. Again, sending the goods from London would have exempted the ship owner from the CISG, but would have bound him instead to the Hague-Visby Rules because the United Kingdom is a signatory to the Hague-Visby Rules. In this case, the ship owner may have set himself up to pay compensation because the Hague-Visby Rules are very particular about the bill of landing. Having agreed in the bill of landing that the items would be carried on the deck, the fact that the carrier instead put the items under the deck, an event which happened during loading at the port makes the owner culpable because he cannot pretend not to be privy of where the items were stored.

In respect of the Hamburg Rules, the carrier’s obligations would be of no consequence or importance because none of the states is a signatory to the Hamburg Rules. Even if the goods were carried improperly or if they originated from London, the carrier would still be discharged of any responsibility. ...Download file to see next pages Read More