Law (International Business) - Problem Question - Essay Example

Law 533: International Business – Problem Question May 31, Step The area of law that is relevant to this question is the International Sale of Goods and the Vienna Convention. Step 2 The Carriage of Goods by Sea Act 1991 applies. The Hague-Visby Rules were designed to signify the carrier’s obligations in the international carriage of goods. The Hague-VisbyRules require that the carrier provides a seaworthy ship; and handles the goods with care (Lex Mercatoria 2003). A number of exceptions are granted which would apply to the “Seagull”.

However, the carrier may not be able to rely on these exceptions if it is found that due diligence was not applied in the carriage of the goods. In the case of Shipping Corporation of India Ltd v Gamlen Chemical Co (A/Asia) Pty Ltd (1980)147CLR 142 (High Court of Australia, 1980), the facts of the case was that the carrier – Shipping Corporation of India Ltd was contracted to transport goods to Gamlen from Sydney in Australia. During the ship’s passage it encountered heavy weather and rough seas in Australian waters.

On arrival the goods were found to be in damaged. The shipper sued the carrier for breach of article 3(2) of the Hague-Visby Rules which requires that the goods be carefully loaded, handed, cared for and discharged. The court of Australia found that the damage to the goods was the result of a combination of factors involving perils at sea and improper stowage. Therefore the carrier was not allowed to invoke the Article 4 exceptions which allows for perils at sea. This was due to the carrier’s failure to exercise due diligence which was considered to be a concurrent or dominant cause of the damage sustained.

The carrier could not therefore deny responsibility for the losses suffered by the shipper in circumstances where the carrier’s failure to exercise due diligence was one of the causes of the losses incurred. The Hague-Visby Rules do not provide a mechanism to apportion liability and so the carrier was liable up to the maximum allowed at that time. Step 3 In the case “Seagull” the Ship Master did not exercise due diligence in ensuring at that point that the goods that were being transported were damaged and so there is no certainty that they were damaged because of the accident.

The ship did not suffer any damages and so it would appear that the area in which the goods were carried was not safe for their reception, carriage and preservation. The stereo systems were both dented and corroded. It is not clear that sufficient checks were done to ensure that the ship was seaworthy before the accident and corrosion suggests that water entered the area in which the cargo was stored. The Act indicates that the seaworthiness of a vessel is not limited to the ship itself but includes all the components necessary for safe transport of the goods from the part of departure to the port of destination.

These components include: a competent master and crew; cargo worthy holds; adequate equipment; and adequate charts for the areas the ship is intended to sale. It is not clear here if the diver was competent. In addition to the seaworthiness of the vessel, the need to properly and carefully load, handle, care for and discharge the goods is of paramount importance in this case. The factors that will influence this decision as to whether this duty was properly discharged by the carrier will include: the nature of the goods; established commercial practices; the terms of the contract; and the reasonableness with which the loading and handling was carried out.

Step 4 It is likely that the court will find that the carrier failed to exercise their duty of due diligence and the possibility that the ship was not seaworthy. It is also likely that the carrier will be found liable on the basis that matters beyond the carriers control were not solely responsible for the shipper’s loss. Bibliography High Court of Australia. “Shipping Corporation of India Ltd v Gamlen Chemical Co A/Asia Pty Ltd [1980] HCA 51; (1980) 147 CLR 142 (12 December 1980)”. http://www.austlii.edu.

au/au/cases/cth/HCA/1980/51.html Lex Mercatoria. “The Hague-Visby Rules - The Hague Rules as Amended by the Brussels Protocol 1968” 2003: http://www.jus.uio.no/lm/sea.carriage.hague.visby.rules.1968/doc.html Dechent, Susanna and Hewitt, Barbara. “International Business Law Text”. 4th ed. 2011