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“Hague, Hague-Visby and Hamburg Rules”

Is carrier friendly or shipper friendly?

A critical analyzes.

Subject : Business and Law

Candidate’s Name : Rajeewa. S. W. Hewage

Words Count : 2200

Date : 15th February 2013

of 22 Rajeewa S.W.Hewage, Chief Mate-Batch-024

Contents

Part -A List of Tables, Figures and Statutes

Part -B Definition and Abbreviations

Part -C the Task

Part -D Introduction to maritime transportation of cargo and The Hague-Visby Rules are

carrier friendly and the Hamburg Rules are Shipper friendly!

1. Definition of contract of carriage

2. Geographical Scope of application

3. Exclusions from the scope of application

4. Period of application and period of responsibility of the carrier

5. Obligations of the carrier

6. Liability of the carrier

7. Notice of loss, damage or delay

8. Liability of the carrier for other persons

9. Liability of servants, agents and independent contractors

10. Obligations and liability of the shipper

11. Contract documents

12. Limitation of liability

13. Time for suit

14. Freedom of contract

15. Conclusion

Part - E Appendices

Part - F Bibliography

Part -A List of Tables, Figures and Statutes

International Conventions

Membership List

1 - HAGUE RULES (1924)2 - HAGUE-VISBY RULES (1968)3 - HAMBURG RULES (1978)4 - SHIP'S LIMITATION CONVENTION (1957)5 - SHIP'S LIMITATION CONVENTION (1976)6 - WARSAW CONVENTION (1929)7 - AMENDED WARSAW CONVENTION (1955)8 - CMR (1956)9 - COTIF (1980) - no ratifiedx ratified+ ratified the protocol SDR too= no ratified, but the Country applies a national law

COUNTRIES

1HAGUERULES

2HAGUEVISBYRULES

3HAMBURG

4SHIP'SLIMIT.CONV.

5SHIP'SLIMIT.CONV.

6WARSAW

7AMENDEDWARSAW

9COTIF

(1924) (1968) (1978) (1957) (1976) (1929) (1955) (1956) (1980)

AFGHANISTAN - - - - - x x - -ALBANIA - - - - - - - - xALGERIA x - - x - - - - -ANGOLA x - - - - - - - -ANTIGUA and BARBUDA x - - - - x - - -ARGENTINA x - - - - x x - -ARMENIA - - - - - x x x -AUSTRALIA - + - - x x x - -AUSTRIA - - x - - x x + xAZERBAIJAN - - - - - x x x -BAHAMAS x - - - x x x - -BANGLADESH - - - - - x x - -BARBADOS x - x x - x - - -

BELARUS - - - - - x x x -BELGIUM - + - + - x x + xBELIZE x - - x - x x - -BENIN - - - - x x x - -BOLIVIA x - - - - - - - -BOSNIA x - - x - x x x xBOTSWANA - - x - - x - - -BRAZIL - - - - - x x - -BRUNEI - - - - - x - - -BULGARIA - - - - - x x x xBURKINA - - x - - x - - -BURMA - - - - - x - - -CAMBODIA - - - - - x - - -CANADA - + - - - x x - -CHAD - - - - - x - - -CHILE - - x - - x x - -CHINA - - - - - x x - -COLOMBIA - - - - - x x - -CONGO x - - x - x x - -CROATIA x - - x - x x x xCUBA x - - - - x x - -CYPRUS x - - - - x x - -DENMARK - + - - x x x + xDOMINICA - - - - - x - - -ECUADOR - x - - - x x - -EGYPT - - x - x x x - -EL SALVADOR - - - - - - x - -ETHIOPIA - - - - - x - - -FIJI x - - x - x x - -FINLAND - + - - x x x + xFRANCE - + - - x x x + xGABON - - - - - x x - -

GAMBIA x - - - - x - - -GEORGIA - - - - - x x x -GERMANY - = - - x x x + xGHANA x - - x - x - - -GREECE - + - - - x x + xGRENADA x - - x - x x - -GUATEMALA - - - - - - x - -GUINEA - - x - - x - - -GUYANA x - - x - x - - -ICELAND - - - x - x x - -INDIA = - - x - x x - -INDONESIA - - - - - x - - -IRAN x - - x - x x - xIRAQ - - - - - x x - xIRELAND x - - - - x x + xISRAEL x - - x - x x - -ITALY - + - - - x x + xIVORY COAST x - - - - x x - -JAMAICA x - - - - x - - -JAPAN - + - - x x x - -JORDAN - - - - - x x - -KAZAKHSTAN - - - - - x x x -KENYA x - x - - x - - -KIRIBATI x - - - - x x - -KUWAIT x - - - - x x - -LAOS - - - - - x x - -LATVIA - x - - - x x x -LEBANON - - x - - x x - xLESOTHO - - x - - x x - -LIBERIA - = - - x x - - -LIBYA - - - - - x x - -LIECHTENSTEIN - - - - - x x - x

LITHUANIA - - - - - x x x -LUXEMBOURG - + - - - x x + xMACEDONIA x - - x - x x x xMADAGASCAR x - - x - x x -MALAWI - - x - - x x - -MALAYSIA = - - - - x x - -MALI - - - - - x x - -MALTA - - - - - x - - -MAURITIUS x - - x - x x - -MEXICO - - x - - x x - -MOLDAVIA - - - - - x x x -MONACO x - - x - - x - -MONGOLIA - - - - - x - - -MOROCCO - - x - - x x + xNAMIBIA - - - - - x x - -NAURU x - - - - x x - -NEPAL - - - - - x x - -NETHERLANDS x + - x - x x + xNIGER - - - - - x x - -NIGERIA x - - - - x x - -NEW ZELAND - + - - - x x - -NORTH KOREA - - - - - - - - -NORWAY - + - - x x x + xOMAN - - - - - x x - -PAKISTAN - - - - - x x - -PAPUA-N.GUINEA x - - x - x x - -PARAGUAY x - - - - x x - -PERU x - - - - - - - -PHILIPPINES - - - - - x x - -POLAND - + - - x x x x xPORTUGAL x - - + - x x x xQATAR - - - - - x x - -

ROMANIA - - x - - x x + xRUSSIA - - - - - x x x -RWANDA - - - - - x - - -ST.KITTS-NEVIS x - - - - x - - -S.LUCIA x - - - - x - - -ST.VINCENT x - - - - x - - -SALOMON ISL. x - - x - x x - -SAMOA OCCID. - - - - - x x - -SAUDI ARABIA - - - - - x x - -SENEGAL - - x - - x x - -SEYCELLES x - - x - x x - -SIERRA LEONE - - x - - x - - -SINGAPORE - x - x - x x - -SLOVAKIA - - - - - x x x xSLOVENIA x - - x - x x x xSOMALIA x - - - - - - - -SPAIN - + - - x x x + xSRI LANKA - x - - - x - - -SOUTH AFRICA - = - - - x x - -SOUTH KOREA - - - - - - x - -SUDAN - - - - - x x - -SURINAME - - - - - x x - -SWAZILAND - - - - - x x - -SWEDEN - + - - x x x + xSWITZERLAND - + - - x x x + xSYRIA - x - x - x x - xTADJIKSTAN - - - - - x x x -TAIWAN = - - - - = = - -TANZANIA - - x - - x - - -THAILANDIA - - - - - - - - -TOGO - - - - - x x - -TONGA - x - x - x x - -

TRINIDAD & TOBAGO x - - - - x x - -TUNISIA - - x - - x x - xTURKEY x - - - - x x - xTURKMENISTAN - - - - - x x x -TUVALU x - - - - x - - -UGANDA - - x - - - - - -UKRAINE - - - - - x x x -UNITED ARABS EMIRATES - - - - - x - - -

UNITED KINGDOM x + - - x x x + xURUGUAY - - - - - x - - -USA x - - - - x - - -UZBEKHISTAN - - - - - x x x -VANUATU - - - - - x x - -YEMEN - - - - x x x - -YUGOSLAVIA x - - x - x x x xZAIRE - - - - - x - - -ZAMBIA - - x - - x x - -ZIMBABWE - - - - - x x - -NOTE -

United Kingdom applied the HAGUE-VISBY RULES (in 1976) and WARSAW CONVENTION (1929) to Bermuda, Hong Kong, Gibraltar and to other ruled Countries. France and Denmark did the same. United Kingdom extended the application of CMR to Gibraltar.With respect to this list, it has been assumed the Republics of ex RSFSR are bound by the Convention that RSFSR ratified (but it might be not). The same about the ex-Yugoslavia Republics.*

*Reference from http://www.informare.it/dbase/convuk.htm

Part -B Definition and Abbreviations

Definition

1Hague rules: International 1922 convention at The Hague (Netherlands) that established standard basic obligations and responsibilities of the shipper and ocean-carrier for goods covered under a bill of lading. These rules were the result of widespread dissatisfaction among shippers and their insurers with arbitrary restrictions imposed by carriers to limit their liability in case of loss of, or damage to, cargo. These rules are followed by some 90 percent of nations and (after some changes) the US adopted them in 1936 as Carriage Of Goods By Sea Act (COGSA) *.

2Hague and Visby rules: New name for The Hague rules as amended in 1968 at Visby (Sweden). Also called The Brussels Protocol of Amendments to The Hague Rules, these rules (ratified by most nations except the US) increase a surface transport carrier's liability limit and include containerized cargo under their provisions.

3Hamburg Rules: Hague-Visby rules amended under the auspices of UN Conference on Trade & Development at Hamburg (Germany) in 1978, at the behest of the developing countries. These rules make a surface transport carrier liable for all damage resulting to cargo under the carrier's care, without limitation and without regard to cause, unless it can be shown that the carrier took all reasonable measures required to protect the cargo. However only 20 nations have approved Hamburg rules, with notable exceptions such as the UK, USA, and other developed nations.

4Charter Party: Hire or lease contract between the owner of a vessel (aircraft or ship), and the hirer or lessee (charterer). Under a charter party, a vessel is rented (in full or in part) for one or more voyages (voyage charter) or for a fixed period (time charter). Normally, the vessel owner retains rights of possession and control while the charter has the right to choose the ports of call. Also called charter agreement or charter contract, and written also as charter party.

5Carrier: Shipping: Company that transports goods and/or people by air, land, or sea, in its own or chartered vessels or equipment, and is named as the carrier in the contract of carriage.

6Shipper: Consignor, exporter, or seller (who may be the same or different parties) named in the shipping documents as the party responsible for initiating a shipment, and who may also bear the freight cost.

7Consignee: A party (usually a buyer) named by the consignor (usually a seller) in transportation documents as the party to whose order a consignment will be delivered at

the port of destination. The consignee is considered to be the owner of the consignment for the purpose of filing the customs declaration, and for paying duties and taxes. Formal ownership of the consignment, however, transfers to the consignee only upon payment of the seller's invoice in full.

8Exercising due diligence means taking all reasonable precautions to see that the vessel is fit for the voyage contemplated. The carrier is not obliged to give an absolute guarantee of seaworthiness. The carrier may delegate his duty to exercise due diligence (e.g. to surveyors or repairers) but he will be responsible if his servants or contractors, etc. fail to exercise due diligence in carrying out their work.

9Seaworthy in this context means that the hull must be in sound condition, the vessel must be mechanically sound, equipped with charts, etc., and crewed by a properly trained crew. She need only be seaworthy at the commencement of the voyage, which usually means when she leaves the berth, whether under her own motive power or with the aid of tugs1.2.3.4.5.6.7 http://www.businessdictionary.com/definition

8, 9 The Ship Master’s Business Companion by Malcolm Maclachlan – Published by The Nautical Institute Fourth edition 2004- page 543

Abbreviations

1-UNCITRAL - United Nations Commission on International Trade Law

2-HVR - Hague and Visby Rules 2-UN – United Nations

Part – C

of 22Rajeewa S.W.Hewage, Chief Mate-Batch-024

The Task

“Historically the international legal regimes governing the carriage of goods by sea have certainly been seen in that light – with the Hague and Hague and Visby rules being considered too carrier friendly, and the Hamburg rules being considered too much in favor of shippers”(Kate Lannan – Legal Officer, UNCITRAL† Secretariat, Vienna, Austria)

Critically analyzed the above statement made by Kate Lannan.

†UNCITRAL is the core legal body of the United Nations system in the field of international trade law. A legal body with universal membership specializing in commercial law reform worldwide for over 40 years. UNCITRAL's business is the modernization and harmonization of rules on international business. Trade means faster growth, higher living standards, and new opportunities through commerce. In order to increase these opportunities worldwide, UNCITRAL is formulating modern, fair, and harmonized rules on commercial transactions. These include: Conventions, model laws and rules which are acceptable worldwide. Legal and legislative guides and recommendations of great practical value. Updated information on case law and enactments of uniform commercial law. Technical assistance in law reform projects. Regional and national seminars on uniform commercial law. Reference from: www.uncitral.org on 15th Feb 2013

Part -D

INTRODUCTION

A contract of carriage of goods by sea is between the shipper and the ship owner or carrier. The terms of the contract of carriage are generally evidenced by a document called a bill of lading. This is a receipt issued by the ship owner acknowledging that goods have been delivered to him for the purpose of carriage and the terms of the contract are incorporated in the bill of lading. This document is generally issued only after the contract of carriage is well on its way to performance. Under the common law the parties to contract of carriage of goods by sea covered by a bill of lading or similar document had complete freedom to negotiate their own terms. This led the carrier to a stronger bargaining position. Ship owners/carriers went on incorporating exclusion clauses in the bills of lading, which provoked the cargo owners. Most shippers were expected either to ship on terms dictated by the carrier or not to ship at all. In England, these considerations led to the promotion of model bills of lading, which attempted to achieve a fairer balance between carriers, shippers and consignees. In other countries cargo owners were powerful enough to obtain legislation in order to adjust the balance in their favour. The first codification of law concerning the carriage of goods by sea is the Harter Act 1893 of U.S.A., which was followed by the Australian Sea Carriage of Goods Act of 1904 and Canadian Carriage of Goods by Water Act of 1910. These Acts influenced the formulation of the Hague Rules of 1924. At the International Conference on Maritime Law held at Brussels in October 1922, the delegates at the conference, agreed unanimously to recommend their respective government to adopt as the basis of a convention a draft convention for the unification of certain rules such as responsibilities, liabilities, rights and immunities attaching to carriers under the bills of lading. In Great Britain the Draft Convention of 1923 was given statutory effect by the Carriage of Goods by Sea Act 1924. Subsequently the Draft Convention of 1923 was signed at Brussels on

the 25th of August, 1924. The United States adopted the Hague Rules subject to some modifications, in the Carriage of Goods by Sea Act of 1936. This Act did not replace the Harter Act.

In 1963 after study by the Comite Maritime International, (C.M.I.)1 at Visby on the Swedish Island of Gotland adopted the text of a draft Protocol intended to make limited amendments to

the 1924 Convention. This draft was considered at the 12th session of the Brussels Diplomatic Conference on Maritime Law in 1967 and 1968. The U.K. Carriage of Goods by Sea Act of 1971 was passed to give effect to the protocol. The 1971 Act was brought into force in June 1977 and it repealed the 1924 Act and re-enacted the Hague Rules in their amended Hague Visby form. Although the 1968 Protocol made important changes, it did not radically after the compromise between the demands of the carriers on the one hand and cargo interest on the other which was embodied in the Hague Rules.

A report requesting for the revision of Hague Rules by the secretariat of United Nations Conference on Trade and Development (UNCTAD) was published by the United Nations in 1971. The movement for reform, which began with the UNCTAD report, culminated at the United Nations Conference on the Carriage of Goods by Sea at Hamburg in 1978, with the adoption of a new convention of the Carriage of Goods by Sea “the Hamburg Rules”.

The Hamburg Rules became effective on 1st November, 1992. Although there are already 25 parties to the convention it has so far had no major impact on world trade.2

Now, we will analyze how the following matters have been regulated in Hague, Hague-Visby and Hamburg rules. Here in this note Hague and Hague-Visby rules are considering as a one rule as mentioned below.Quote-The Visby Rules (the Brussels Protocol of February 23, 1968) should not be considered as a separate convention. The Visby Rules are amendments to the Brussels Convention 1924 and art. 6 of the Protocol stipulates:

“As between the Parties to this Protocol the Convention and the Protocol shall be read and interpreted together as one single instrument. A Party to this Protocol shall have no duty to apply the provisions of this Protocol to bills of lading issued in a State which is a Party to the Convention but which is not a Party to this Protocol.”

Thus the result of ratification of or accession to the Visby Protocol by a nation is that the nation consents to be bound by the Hague/Visby Rules.3

Unquote-

1 A representative body of National Maritime Law Associations, whose main object is the unification of maritime laws.

2 Quoted from Ms Anomi Wanigasekera, Attorney-at-Law, Partner, Messrs Julius & Creasyhttp://www.juliusandcreasy.com/inpages/publications/pdf/comparison_of_hague_and_hamburg-AW.pdf

3It should be noted that ratification of the 1968 Protocol by a state which did not ratify the 1924 Convention constitutes accession to the latter (art. 11(2) of the 1968 Protocol). Ratification of the 1979 Protocol by a state not a party to the 1924 Convention constitutes ratification of that Convention, as amended by the 1968 Protocol (arts. I and VI(2) of the 1979 Protocol). Accession to the 1968 Protocol by a state which did not ratify the 1924 Convention constitutes accession to the 1924 Convention as well (art. 12(2) of the 1968 Protocol). Accession to the 1979 Protocol constitutes accession to the 1924 Convention, as amended by the 1968 Protocol (arts. I and VII(2) of the 1979 Protocol). See also Ian Brownlie, Principles of Public International Law, 3 Ed. 1979 at pp. 603-605; Hugh M. Kindred et al, eds., International Law Chiefly as Interpreted and Applied in Canada, 6 Ed., Toronto, 2000 at pp. 102-103. Prof. W. Tetley, Q.C., Faculty of Law, McGill University, Montreal, Quebec, Canada http://tetley.law.mcgill.ca/

I he Hague-Visby Rules are carrier friendly and the Hamburg Rules are Shipper friendly! A Critical Analyse,

1. Definition of contract of carriage (HVR-Article 1, HAM-Article 1. Definitions)Normally a contract is defined on the basis of the obligations of the parties. The Hague-Visby Rules do not contain any such definition, but merely connect the notion of Contract of carriage to the document issued thereunder, the bill of lading. For that reason it has been said that they have adopted a documentary approach.In the Hamburg Rules there is instead a definition of the contract of carriage but it differs in respect of the description of the obligation of the carrier which is merely the carriage of goods by sea from one port to another. The Hamburg Rules expressly exclude their application to the carriage by modes other than sea in case the contract involves the carriage by other modes.

2. Geographical scope of application (HVR-Article 10, HAM-Article 2. Scope of application)Under all Conventions the carriage must be international and must be linked to a contracting State. But while in the Hague-Visby Rules it is required for their application that either the bill of lading or the port of loading be located in a contracting State, in the Hamburg Rules the place of issuance of the bill of lading is rightly ignored because it may not be connected at all with the voyage, but reference is made to both the port of loading and to the port of discharge. Therefore the Hague-Visby Rules do not apply to a contract from a port located in a non-contracting State to a port of discharge located in a contracting State, while the Hamburg Rules do apply. In addition they both apply when they or a national law giving effect to them are incorporated in the bill of lading.Furthermore, the reference in both the Hague-Visby Rules and the Hamburg Rules to a national law giving effect to them may be the cause of significant uncertainty and of lack of uniformity, because national laws may give effect to them with variations.

3. Exclusions (HVR-Article 1(b), (c), HAM-Article 2. Scope of application)The Hague-Visby Rules, pursuant to article 1(b), apply only to contracts of carriage “covered” by a bill of lading or similar document of title and therefore they impliedly exclude charter parties. This provision gives rise to some uncertainty, for article 3(3) provides that the carrier must issue a bill of lading on demand of the shipper and article 6 grants the carrier freedom of contract when no bill of lading is issued. Therefore the Rules apply also before a bill of lading is issued. The Hamburg Rules provide for their application to contracts of carriage by sea, thereby adopting a contractual approach, but then state that they do not apply to charter parties, thereby using a documentary approach in order to exclude from their scope of application contracts for which the basic document is the charter party.

4. Period of application and period of responsibility of the carrier (HVR-Article 1(e), HAM-Article 4. Period of responsibility)On the basis of the definition of carriage of goods in article 1(e) of the Hague-Visby Rules, it is now settled that the period of their application is, for dry cargo, from the beginning of loading of the goods on the ship to the completion of their discharge from the ship. Therefore, since very frequently – this is always the case in the liner trade – the carrier takes the goods in charge before their loading on board and delivers them to the consignee in a warehouse of the port of discharge, there are periods when the goods are in the custody of the carrier to which the Hague-Visby Rules do not apply. That creates uncertainty, because the rules applicable may vary from port to port. Such uncertainty is cured by the Hamburg Rules, for they provide that their period of application (as well as the period of responsibility of the carrier under the Convention) is that during which the carrier is in charge of the goods at the port of loading, during the carriage and at the port of discharge. Therefore, in a port-to-port contract the Rules normally apply to the whole period during which the carrier is in charge of the goods.

5. Obligations of the carrier (HVR-Article 2 & 3, HAM-Article 4 &5)The original nature of the Hague Rules as standard bills of lading clauses may explain why the basic obligation of the carrier, viz. to deliver the goods to the consignee, is not mentioned. Nor is it mentioned – and this is surprising – in the Hamburg Rules, even though it is implied in its article 5(1).

6. Liability of the carrier and allocation of the burden of proof (HVR-Article 1 & 4, HAM- Article 5. Basis of liability)The first difference between the two Conventions consists in the fact that the Hague Visby Rules do not cover liability for delay while the Hamburg Rules do. As regards the basis of the liability of the carrier, although the basis is fault under all Rules, there are significant differences between them in respect of the exceptions to the general rule that fault entails liability and of the allocation of the burden of proof. Under the Hague-Visby Rules (Article 4(2) (a) – (q)) the carrier is exonerated from liability a) in respect of loss of or damage to the goods arising or resulting from unseaworthiness unless caused by the breach by the carrier of his due diligence obligation and, b) as well as for loss of or damage to the goods arising from fault of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship and for loss of or damage to the goods due to fire caused by fault of the crew. Under the Hamburg Rules Doesn’t exist such lists like Hague and HVR; instead the carrier is always liable for loss, damage or delay caused by fault of the carrier, his servants or agents.

7. Liability of the carrier for other persons (HVR-Article 4, HAM-Article 5 & 10)The categories of persons for whom the carrier is liable gradually increase from the Hague-Visby Rules to the Hamburg Rules.Under the Hague-Visby Rules, except for the exonerations mentioned in article 4(1)(a) and (b), the carrier is liable for the faults of his servants or agents; a liability that results by implication from article 4(2)(q). The category of the agents appears to be rather limited, because article 4bis(2) provides that they do not include independent contractors and because the scope of application of the Hague-Visby Rules is limited to the period between commencement of loading on and completion of discharge from the ship; therefore, actions performed ashore in the

ports of loading and discharge are not subject to the Hague-Visby Rules. But agents probably include the master and crew of the ship if they are not under the employment of the carrier, as is the case where the carrier is the time charterer of the ship.Also in article 5(1) of the Hamburg Rules reference is made to the servants or agents of the carrier but, since the exclusion of independent contractors does not result from other provisions, agents may include also independent contractors performing services within the port areas. Furthermore, pursuant to article 10 (1) the carrier is responsible for loss, damage or delay for which a sub-carrier is liable.

8. Liability of servants, agents and independent contractors (HVR-Article 4 bis, HAM-Article 7 & 10)The Hague-Visby Rules and the Hamburg Rules do not regulate the liability of the servants or agents but merely provide, respectively in article 4bis (1) and in article 7(2), that if an action is brought against them, they are entitled to the defences and limits of liability of the carrier. The question may therefore arise whether the formulation adopted in both such Rules entails that the servants or agents are also subject to the liabilities of the carrier. But although that should be the logical consequence, and, therefore, the claimant should be entitled to sue the agent in contract, in the Hamburg Rules the heading of article 7 is “Application to non-contractual claims”. The position is different for the actual carrier, for article 10 of the Hamburg Rules provides that theliability regime applicable to the carrier applies also to the actual carrier, thereby implying that the claimant has a direct right of action against him.

9. Notice of loss, damage or delay (HVR-Article 111, HAM-Article 19)Under The Hague-Visby Rules the notice must be given before or at the time of delivery and, if the loss or damage is not apparent, within three days of delivery. Under the Hamburg Rules the notice must be given not later than the working day after delivery or, when the loss or damage is not apparent, within 15 days after delivery. Both Rules provide that failing such notice delivery is prima facie evidence of delivery of the goods as described in the bill of lading or transport document.

10. Obligations and liability of the shipper (HVR-Article 3 & 4, HAM-Article 12, 13 & 17)The Hague-Visby Rules have three provisions on the obligations and liability of the shipper scattered in different parts of the text. First, in article 3(5) they provide that the shipper is deemed to have guaranteed to the carrier the accuracy at the time of shipment of the marks, number, quantity and weight furnished by him. Secondly in article 4(3) they provide that the shipper is not responsible for loss or damage sustained by the carrier or the ship arising or resulting from any cause without its act, fault or neglect, thereby implying, with a language similar to that used in article 4(2) for the carrier, that the shipper is liable for loss or damage sustained by the carrier caused by the act, fault or neglect of the shipper. Thirdly, article 4(6) provides that the shipper is liable for all damages and expenses directly and indirectly arising out of or resulting from the shipment of dangerous goods the shipment whereof the carrier has not consented with knowledge of their character. Strict liability in the first and third case; fault liability in the second case.The Hamburg Rules mainly regulate the liability of the shipper in Part III, consisting of two articles, 12 and 13. Article 12 corresponds to article 4(3) of the Hague-Visby Rules and article 13 corresponds to article 4(6) but expressly states that the shipper must inform the carrier of the dangerous nature of the goods. One aspect of the liability of the shipper – liability for incorrect

description of the goods – is, however, dealt with in the subsequent Part IV that deals with transport documents: article 17 in fact contains a provision similar to that in article 3(5) of the Hague-Visby Rules.

11. Contract documents (HVR-Article 3, HAM-Article 14, 15, 16, 17 & 18)The Hague-Visby Rules provide in article 3(3) that after receiving the goods into his charge the carrier must on demand of the shipper issue a bill of lading and in article 3(7) that after the goods are loaded the carrier must issue a shipped bill of lading. They then set out, still in article 3(3), the particulars of the goods that must be indicated in the bill of lading and provide that the carrier is not bound to state particulars that he has reasonable ground for suspecting not accurately to represent the goods. A provision that was, even at the time of adoption of the Rules, at odds with the practice of qualifying the description of the goods with clauses such as “said to weigh”, etc. Finally, pursuant to an amendment adopted in 1968, article 3(4) provides a protection for the bona fide holder of the bill of lading by stating that proof to the contrary of the description of thegoods is not admissible when the bill of lading has been transferred to a third party acting in good faith.The Hamburg Rules, after providing in article 14 that the carrier upon receiving the goods into his charge must issue to the shipper a bill of lading, enumerate with much greater details the contract particulars and then, similarly to article 3(7) of the Hague- Visby Rules, provide that the carrier after loading the goods must issue a shipped bill of lading. Article 16 regulates the evidentiary effect of the bill of lading similarly to the Hague-Visby Rules and, contrary to the Hague-Visby Rules, grants the carrier the right to qualify the description of the goods, rather than to refuse to insert the particulars when he has reasonable grounds to suspect that they are incorrect.

12. Limitation of liability (HVR-Article 4, HAM-Article 6 & 8)The scope of application of the limits of liability has been widened in the Rotterdam Rules. While in fact under the Hague-Visby Rules it covers loss of or damage to or in connection with the goods and under the Hamburg Rules loss of or damage to the goods, The limits that under the Hague-Visby Rules are 666,67 SDR per package or unit and 2 SDR per kilogram, have been increased in the Hamburg Rules to 835 SDR and 2.5 SDR respectively.The limit for economic loss due to delay, which is not mentioned in the Hague-Visby Rules under which liability for delay is not regulated, is under the Hamburg Rules two and one-half times the freight payable in respect of the goods delayed.

13. Time for suit (HVR-Article 3, HAM-Article 20)The formulation of the provision on the time for suit in the Hamburg Rules is opposite to that in the Hague-Visby Rules in that it considers the time from the standpoint of the claimant rather than from that of the defendant. Its scope is wider, since it covers any action that may be brought under the Rules. The limitation period also differs: one year for the Hague-Visby Rules and two years for the Hamburg Rules.

14. Freedom of contract (HVR-Article 3 & 6, HAM-Article 23)Even though this may seem strange, the Hague-Visby Rules allow generally freedom of contract in situations in which they do not apply. They in fact provide in article 3(8) that any clause

relieving the carrier from liability otherwise than provided by the Rules is null and void and then provide in article 6 that the carrier may enter into any agreement in respect of its obligations and its liability if no bill of lading has been or will be issued and the goods carried are not ordinary commercial shipments; they further provide in article 7 that freedom of contract is permitted prior to loading and after discharge. The Hamburg Rules instead provide in article 23 that any stipulation is null and void to the extent that it derogates from the provisions of the Convention but that the carrier may increase his responsibilities and obligations under the Convention. They further increase the protection of the shipper or consignee by providing that if it has incurredloss as a result of a stipulation which is null and void by virtue of that article the carrier must pay compensation.

Note: Some of above information was taken from the article of A COMPARATIVE ANALYSIS OF THE HAGUE-VISBY RULES, THE HAMBURG RULES AND THE ROTTERDAM RULES-By FRANCESC BERLINGIERI. http://www.uncitral.org/pdf/english/workinggroups/wg_3/Berlingieri_paper_comparing_RR_Hamb_HVR.pdfReference date 12th Feb 2013

SUMMARY

After considering all the comparison between Hague, Hague Visby rules and Rotterdam rules, here I would like to summarize the main differences among them.

The principal feature of the Hamburg Rules is the new basic rule of liability that carrier is liable in certain circumstances defined unless he proves that he; his servants or agents took all measures that could reasonably be required to avoid the occurrence and its consequences.

There are provisions that extend the carriers' responsibility before unloading and after unloading.

The long list of defenses under the Hague-Visby Rules have been narrowed down to such degree that carrier may find it extremely difficult to succeed in avoiding liability.

The categories of persons for whom the carrier is liable gradually increase from the Hague-Visby Rules to the Hamburg Rules.

The Hamburg Rules apply to deck cargo and it is specified when cargo can be carried on deck; and to live animals.

While no special provisions exist in Hague and HVR on Jurisdiction and Arbitration, Hamburg rules provides on both respects.

There is a new joint and several liabilities of carriers and actual carriers, which certainly potentially makes it easier to sue the actual carrier.

The package or unit limitation is defined in the special drawing rights and is raised - which is done by Visby anyway.

The time for suit is extended to two years and the time for giving notice of non-apparent damage has been extended from three days to fifteen.

There are provisions about liability for delay in the Hamburg Rules, with special limits on damages for it.

CONCLUSION Though the Hague-Visby rules were brought up following the international traders’ impression that The Hague rules are too much carrier-friendly and still constitute the rules that govern the vast majority of contracts globally, there are serious shortcomings in their scope of application. There are inconsistencies in interpretation that can leave huge amounts of uncertainty. This uncertainty is all too often abused by the stronger bargaining partners and many weaker parties cannot afford the speculative litigation that would be required to safeguard their rights.There is an imbalance in the interests, rights and liabilities which are in favour of carriers.

From the foregoing analysis, it is the conclusion of this paper that The Hague and the Hague-Visby Rules are too much Carrier-friendly. And though Hamburg rules provide significant improvements in terms of certainty of law, clarity of contracts, they are in favour of Shippers in many respects including the allocation of liabilities.

Part - E Appendices

Case Studies

Pyrene v. Scindia Navigation Co. Ltd. Pyrene Co. Ltd. v. Scindia Navigation Co. Ltd. QUEEN'S BENCH DIVISION [1954] 2 Q.B. 198.

This page was last updated on 16 Dec 98.

Case 01

The cargo (a fire tender) was dropped and damaged by the negligence of the ship owner during loading. At this stage, before the goods had passed the ship's rail, they were still (or so it was supposed) the property of the seller. The seller sued the carrier, for the full value of the damage (£966), in the tort of negligence. The issue was whether the ship-owner could claim the benefit of an exemption clause written into the contract of carriage by virtue of the Hague Rules, the effect of which was to limit his liability to £200. It was essentially a question of privity of contract, in effect whether the seller was party to the contract of carriage. The seller claimed that he was not, and that therefore he was not bound by the exemption clause

1. The shipowner was entitled to the benefit of the clause limiting liability to £200. The £200 limit was derived from the British Maritime Law Association's Agreement of Aug. 1, 1950, which is no longer in force, the limit under the Hague-Visby Rules being generally higher.

2. After discussion of the varieties of f.o.b. contract, that the buyer was shipper.

3. The Hague Rules, incorporating the clause, applied to the loading process. The sellers had argued that the Rules only applied once the goods were loaded, i.e., from ship's rail at loading to ship's rail at discharge. Devlin J. was unimpressed by this argument, observing that:

"Only the most enthusiastic lawyer could watch with satisfaction the spectacle of liabilities shifting uneasily as the cargo sways at the end of a derrick across a notional perpendicular projecting from the ship's rail."

Devlin J. held that, held that, at least where (as in the case itself) the shipowner had undertaken responsiblity for the entirety of the loading and discharging process, the Hague Rules should also apply to the entirety of the process. This aspect of the case is an interpretation of Art. 1(e) of the Rules, which remains unchanged under the revised Visby Rules. Thus the case is still an authority on this issue, even though the Hague Rules have been revised in other respects in the U.K.

On another aspect of the Hague Rules also discussed in Pyrene v Scindia, see The Coral.

4. Although the buyer was shipper, the seller was party to an implied contract with the carrier, even though he did not expressly make the contract of carriage. The reasoning adopted was that buyer, seller and carrier were all parties in a joint venture. Therefore the seller was bound by the exemption clause, despite not being expressly party to the contract of carriage. This aspect of the decision must be regarded with suspicion in the light of Midland Silicones Ltd. v. Scruttons Ltd.

Case-02 the Coral

The issues

The plaintiff cargo-owners sued the defendant shipowners for damage caused by breach of the carriage contract, and sought summary judgment against the defendants on the ground that the defendants had no defence to the claim except as to the amount of damages. The shipowners defended the action on the grounds that the damage had been caused by bad stowage, and that they had not undertaken to stow the cargo, that obligation having been placed on the charterers.

Held by the CA

1. Article III, r. 2 of the Hague-Visby Rules (which were incorporated into the bill of lading contracts) does not impose upon the carrier an obligation to load, handle, stow, carry, keep, etc, the goods carried. The shipowner can therefore place this responsibility on the charterer, without contravening the Rules. Beldam LJ approved the following passage from Devlin J's judgment in Pyrene v. Scindia Navigation Co Ltd:

"... I see no reason why the rules should not leave the parties free to determine by their own contract the part which each has to play. On this view the whole contract of carriage is subject to the rules but the extent to which loading stowing and discharging are brought within the carrier's obligations is left to the parties themselves to decide."

He also cited the House of Lords authority to the same effect of G.H. Renton & Co. v Palmyra Trading Corporation of Panama [1957] A.C. 149, [1956] 2 Lloyd's Rep. 379.

2. The general words of incorporation in the bill of lading were apposite to incorporate the terms of the charterparty placing responsibility for stowage on the charterers, since those terms were:

"... directly germane to the shipment, carriage and delivery of goods ... and such clauses may be treated as incorporated even though the precise words may need some modification."

Beldam LJ cited Miramar Maritime Corporation v Holborn Oil Trading Ltd [1984] AC 676 at p 683; [1984] 2 Lloyd's Rep 129 at p 134, col 2; per Lord Diplock.

3. It was arguable that the terms of the charterparty, as incorporated into the bill of lading, not only allowed the shipowner to delegate to the charterer the loading and stowage, but also exempted him from liability for loading and stowage.(Another possible interpretation was that if as a result of the bad stowage the shipowner incurred liability to the bill of lading holders, the charterer would indemnify the owner.) On the shipowners' interpretation, further facts would need to be adduced to determine how the damage occurred, but since the defendants' claim was at least arguable, summary judgment against them would be refused.

If the defendants' contention were correct, it would follow that the plaintiffs would have no express contractual claim against anyone for the damage that had occurred, but Beldam LJ considered that an implied contract might arise on principles similar to those adopted in Pyrene v Scindia.

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These notes were last updated on 16 Dec 98.

Part – F - BIBILOGRAPHY

LEGISLATIVE INSTRUMENTS

1. HAGUE RULES, 1924.

2. HAGUE-VISBY RULES, 1968

3. HAMBURG RULES, 1978

ARTICLES.

1. A COMPARATIVE ANALYSIS OF THE HAGUE-VISBY RULES, THE HAMBURG RULES AND THE ROTTERDAM RULES-FRANCESC BERLINGIERI

2. COMPARISON OF HAGUE-VISBY AND HAMBURG RULES. MS ANOMI WANIGASEKERA, ATTORNEY-AT-LAW, PARTNER, MESSRS JULIUS & CREASY

WEBSITES

1. United Nations Convention on the Carriage of Goods by Sea ("Hamburg Rules") http://www.admiraltylawguide.com

2. http://www.informare.it/dbase/convuk.htm

3. http://www.businessdictionary.com/definition 4. http://www.juliusandcreasy.com/inpages/publications/pdf/comparison_of_hague_and_hamburg-AW.pdf

5. http://tetley.law.mcgill.ca/

1. The Ship Master’s Business Companion by Malcolm Maclachlan – Published by The Nautical Institute Fourth edition 2004

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