Carriage of Goods by Sea Act of 1992 - Essay Example

Carriage Contract Introduction: All goods that are transported by sea will be covered by the provisions of the Carriage of Goods by Sea Act of 1992.The “Contract of carriage” is defined under section 5(a) of the Act in relation to a bill of lading as “the contract contained in or evidenced by that bill or way bill.” A bill of lading is not the carriage contract itself, it merely providence of the existence of and some terms of that contract. Lord Bramwell in referring to a bill of lading, stated that it was “a receipt for the goods, stating the terms on which they were delivered to and received by the ship, and therefore excellent evidence of those terms, but it is not a contract.”1 Rather the contract of carriage will be determined by the written agreement of the parties, the booking note the payment of foreign tariffs and normal practices of the carrier of the goods. Therefore, O’s contract with Cherie is the actual contract of carriage between the parties, spelling out the terms and nature of the delivery which is to take place. Since this includes a specific provision that O is not to deviate in any form whatever from the terms of the contract, it is likely that this provision will carry some weight. However, a contract for transportation of goods by sea will be primarily determined by the terms on the bill of lading. The Hague Visby rules provide a uniform standard that applies to most of the world’s shipping nations and has been in force since June 2, 1931. As per Article 1(b) of the Hague Visby rules, the term contract of carriage will only be applicable to those contracts dealing with the transportation of goods by sea, which are covered by a bill of lading which regulates the relations between a carrier and a party holding the bill of lading.2 In this context, it is therefore important to note that in Cherie’s case, the bill of lading, which is the best evidence of the contract and also the instrument that will be actionable in the Courts, does not contain the specific provision that O is not to deviate from the contractual terms. As a result, it is likely that when the dispute comes to the Courts, the focus of the Court will be in determining the causation link, and finding out whether any damages are due and which party is the primary causal factor for those damages. Application of Case law: Every contract of carriage will be governed by the Hague Visby rules, even if it is not specifically stipulated in the contract between the parties, as per the principle spelt out in the case of Shackman v Cunard White Star Ltd.3 In the case of Vita Food products v. Onus Shipping Company4, an English Court held that the Hague Visby rules were not legally actionable, but this precedent was soon overturned with the passage of the UK Carriage of Goods by Sea Act of 1971, which specifically gives the Hague Visby rules the force of law in the U.K. Moreover, these rules will also apply in the case of private charter parties, or when special contracts are entered into for transportation of goods, as in the case of O and Cherie to transport the gin.5 Therefore, all the rights and liabilities that exist under the Hague Visby rules will apply to both the United States and the UK who are both signatories to it. The ship’s master and owners are therefore likely to be held liable for the losses that have occurred and damages resulting there from and both Tony and Cherie have a good chance to win this suit by filing in a UK Court . This would be the appropriate jurisdiction for filing the case since it is the destination port and both plaintiffs, Cherie and Tony are from the U.K. Application of case law to the present scenario: One of the earlier cases involving a carriage contract was that of Heskell v. Continental Express.6 Grunfeld has discussed the issue of causation as related to this case7, in which a purchaser placed an order with a vendor who instructed his broker to ship the goods. But the broker negligently failed to do so, despite the fact that bills of lading were issued to the purchaser and vendor by the broker. In this case, the purchaser then proceeded to sue both the broker and the vendor. The broker and vendor were sued for issue of a false bill of lading and a breach of promise inherent in that bill of lading The Court held however that the party that would be adjudged to have broken the contract would be the one whose breach remained an effective cause of his loss, thereby examining the issue of causation in allotting responsibility for damages and failure to deliver as per contract. This principle was also invoked in the case of Vigmer International Limited and Others v Theresa Navigation SA8 where the cargo owners claimed damages against both the ship owners and the cargo loaders since the entire cargo was contaminated when it reached the port of call. Signs of the contamination had been noticed with partial loading but the decision was made to continue loading the goods. The ship owners claimed that the decision to continue loading the cargo was that of the claimants and on this basis tried to absolve themselves of responsibility. However, the judge Tomlinson refused to absolve the ship owners of responsibility for causation of the damage, stating that “a shipowner cannot in my judgment abdicate responsibility in this manner.9 He stated that the master of the ship should not have allowed loading to continue since he was aware that damages were occurring and therefore, the ship owners were in breach of their duty to carefully load the cargo. This case also establishes that where responsibility for damages is to be assigned, it will be the party that is the primary cause of the reach that will be held responsible. This case precedent will also apply in the case of O and Cherie, because it ensures that the master of the ship is not absolved of the responsibility for the goods on his ship. It may be seen that there has been a flagrant violation of the duty of care that is owed by the ship and its master to the parties who have contracted for carriage of the goods. In the first place, the goods were not delivered in a timely fashion but delivered so late that the gin season for which they were meant, was over when the goods finally arrived. Secondly, the master and his crew are also in breach of their duty of care to transport the goods safely to their destination because they left the ship unguarded and unmanned so that local youths were able to board the ship and stead several of the crates, including some of those that were meant to go to Tony. In some cases, a loss of goods or damages may occur through the perils of the sea, such as heavy weather or storms. For example, in the case of Shipping Corp of India Ltd v Gamlen Chemical Co A/Asia Pty Ltd10 several drums of cleaning solvent broke loose from their fastenings and were lost at sea. While the trial judge held that the carriers should be allowed to escape liability, the Court of Appeal in Australia reversed the decision. It held that despite the argument about the perils of the sea, this did not absolve the carrier of responsibility. The carrier had not properly stowed the drums and should have anticipated the normally rough weather conditions in the sea along the voyage path, therefore he should have taken extra precautions to stow the drums carefully and fasten them properly so that they would not break loose and be lost in the storm. Hence, a carrier is expected to reasonable foresee the perils that could exist and take precautions for them. Therefore when O’s ship was in the ports at the Caribbean, the ship’s master should have reasonably foreseen that leaving the ship unattended could result in the loss of valuable cargo and precautions should have been take to protect against such a loss. The issue of causation will be applied by the Courts in arriving at a decision in this case. Therefore the question that arises is, to what extent is the master of the ship liable in the chain of causation of events leading to the loss? In the case of Hartford Insurance Co v M/V OOCLBravery11 some bicycles were shipped from the United States to the Netherlands via a Bill of lading, but they were stolen while on the road towards Belgium. The Court held that in this case, the ship’s owners and master were absolved of responsibility since they had delivered the goods safely to the port of call, but the theft had occurred subsequently. In the case of O however, the theft has occurred during the voyage, when the responsibility for the goods lay with the shipowner/master and therefore they will be held liable for the losses that have occurred. Moreover, it may be noted that the ship’s master and his crew are specifically the causal factors for the loss because they stopped too long at the port in breach of their contract and moreover, were careless enough to leave the ship unattended while they were enjoying themselves. Moreover, the losses that have been caused need to be examined in this context. Not only have several crates been stolen, thereby resulting in a loss of the investment that was made, further losses have occurred, such as the loss of potential revenues that could have come to both Tony and Cherie during the gin drinking season. There is a slim chance that if the UK court allows the suit to be transferred to the Caribbean, it is likely that the liability of the carrier may be reduced below amounts that are provided under English law, as was the case for example, in the case of The Benarty.12 Cherie will have the right to file for damages for breach of contract and for the loss of the crates of gin, while Tony will also be able to file suit against the carrier for both the loss of the crates as well as the loss of potential revenues because the crates have arrived well after the gin season and will not have such a good sale value. In so far as Tony’s rights are concerned, he will also have provision to enforce his rights, since the Carriage of Goods by Sea Act of 1992 confirms under section 2(b) that a person “to whom delivery of the goods to which a sea way bill relates is to be made by the carrier in accordance with the contract” will also “have transferred to and vested in him all rights of suit under the contract of carriage as if he had been a party to the contract.”13 As a result, since Cherie has endorsed a ship’s delivery order to Tony, therefore Tony will have the same rights as the original contract maker Cherie, to enforce the provisions of the contract. Moreover, since he is the purchaser of the goods, applying the principle established in Haskell, he can sue both Cherie and O, for a failure to deliver the goods, since the breach of conditions of delivery spelt out in a bill of lading equals a breach of the promise inherent in that bill of lading. Conclusions: On the basis of the above, it may therefore be concluded that both Cherie and Tony have the right to sue O and the ship owner for the losses they have sustained. There are certain responsibilities that O had under the carriage contract which was evidenced in the bills of lading that he provided to Cherie which were subsequently transferred to Tony. Moreover, the fact that O is from the United States will in no way limit his liabilities under UK law, because the provisions of the Hague Visby rules will apply equally in both the United States and the UK. Moreover, the case law cited above clearly establishes that the carrier has a responsibility to carefully stow the goods and transport them carefully and responsibly to the port of call where they are destined. However O has not carried out his duties as laid out in the bill of lading. Although the bills of lading he has issued do not specifically mention that he is not to deviate from the carriage contract, nevertheless, the fact that the delivery is so late and far beyond the expected date of delivery, will go against him unless he can show good cause for such delay or that some extenuating circumstances were present. But in the case of the carrier O, the delay has occurred through carelessness, negligence and irresponsibility. O’s voyage was delayed not due to some reason that could not be prevented but because the ship master and the crew decided to enjoy themselves at the reggae festival. Moreover, instead of staying a day or two, they stayed so long that the gin season was over when they finally arrived. Finally, leaving the ship unattended is a clear breach of duty of care by the carrier and he will be held fully responsible and the causal factor for the losses that have occurred. Therefore, the fact that the no deviation principle was not spelt out in the bill of lading is not likely to be a limitation in this case since so much evidence exists of the carrier’s negligence and irresponsibility. Therefore both Tony and Cherie can file suit against O and the ship master for recovery of losses in a UK court of law. Moreover, Tony will also be entitled to file a suit against Cherie to recover the amount that he paid against the bills of lading. But there is a chance that the Court may absolve Cherie of liability, since the causal factor for the loss was not Cherie but the ship’s master and crew. My research process: As a preliminary step to understanding the problem scenario, I researched the provisions of the Carriage of Goods Act of 1992 by securing a copy online from www.opsi.gov.uk. During the next step, I researched “carriage contracts” on google and was able to find some good pointers on http://ourworld.compuserve.com/homepages/ pntodd/intr/refs/carriage.htm , which also pointed to Heskell v Continental Express as one of the important earlier cases. I them researched on JSTOR with the words “carriage contracts” and was able to pull up two relevant articles (a) one by Grunfeld on causation and (b) another by Peter Tribe. I typed in Hague Visby rules into Google and was able to come up with an explanatory file, which helped me to understand the Rules and apply it to the problem scenario and also provided me some valuable case references which I was able to look up in the appropriate law reports. These materials formed the basis of my analysis for this problem scenario. Bibliography * Application of the rules generally.” [online] available at: http://www.mcgill.ca/files/maritimelaw/ch1marine.pdf at pp 5 * Carriage of Goods by Sea Act 1992 [online] available at: http://www.opsi.gov.uk/acts/acts1992/Ukpga_19920050_en_1.htm * Grunfeld, C, 1950. “Issue of bill of lading: causation.” The Modern Law review, 13(4): 516-521 * Tribe, Peter, 2002. “Guidance on causation where there may be more than one potential cause of loss.” Shipping and Trade Law, [online] available at: http://www.elbornes.com/index.php?section=articles¶m=27 Cases cited: * The Benarty (1984) 2 Lloyd’s Rep 244 (CA) * Hartford Insurance Co v M/V OOCL Bravery 230 F 3d 139 * Heskell v. Continental Express Ltd [1950] 1 All ER 1033 * Sewell v Burdick (1884) 10 App Cas 74 at 105 * Shackman v Cunard White Star Ltd, 46 U.S. Code Appx 1312 * Shipping Corp of India Ltd v Gamlen Chemical Co A/Asia Pty Ltd 147 CLR 142 * Vigmer International Limited and Others v Theresa Navigation SA (The Artice) Commercial Court * Vita Food products v Onus Shipping Company (1939) AC 277 Read More