Law of carriage of goods by sea

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The law of carriage of goods by sea is a body of law that governs the rights and duties of shippers, carriers and consignees of marine cargo. [1]

Contents

Primarily concerned with cargo claims , this body of law combines the international commercial law, the law of the sea and admiralty laws.

The typical obligations of a carrier by sea to a shipper of cargo are:

Cargo claims

Consignees (or indeed any lawful holder of the bill of lading) [6] who wishes to make a cargo claim because their goods are substandard or have been lost or damaged at sea, typically have four options:

A claim having been paid, the assured's rights of claim will be subrogated to the insurer, who may consider proceeding against a party who has caused the damage.

A shipowner may sue a time-charterer or voyage-charterer in the event of breach of contract. For instance, if the charterer exceeds laytime, demurrage will have to be paid; and if the charterer cannot comply with a Notice of Readiness (NOR), the shipowner may repudiate (cancel) the contract of carriage and claim damages for any loss. [22]

Carriage conventions

In most contracts of carriage the carrier has greater bargaining power than the shipper, and in the 19th century English judges developed rules to protect the weaker parties. [23] Beginning with the Hague Rules, the various conventions set out to codify and develop such common law principles by providing an international set of basic standards to be met by the carrier, with a view to establishing a universal framework of legal rights and duties. In practice, however, the level of protection was actually reduced because of new provisions allowing the carrier to (i) limit his liability, and (ii) rely on a wide array of exemptions from liability [24] [25] [26] Also, whereas up until about 1885, [27] the carrier's duties were deemed to be strict, by 1905 the duty became one of "reasonable care" or "due diligence" only. [28]

The Hague Rules of 1924 effectively codified, albeit in a diluted form, the English common law rules to protect the cargo owner against exploitation by the carrier. Nearly 50 years later, the Hague-Visby "update" made few changes, so that the newer Rules still applied only to "tackle to tackle" carriage (i.e. carriage by sea) and the container revolution of the 1950s was virtually ignored. The Hague-Visby Rules both excluded cabotage carriage, and declared that deck cargo and live animals were not to be considered as "goods" (although the Carriage of Goods by Sea Act 1971 provided that cabotage, deck cargo and live animals are to be covered in English contracts).

The enormous list of exemptions to liability in Article IV made the Rules seem biased in favour of the carrier. As a result, The United Nations produced its own Hamburg Rules which were both more modern and fairer to cargo-owners; but while these have been enthusiastically adopted by developing nations, the wealthier ship-owning nations have stuck to Hague-Visby. In 2008 the final text of the Rotterdam Rules was agreed at UNCITRAL. [29] These Rules are very extensive, with over 90 Articles against 11 in Hague-Visby. Although the Rotterdam Rules are up-to-date and address multimodal carriage, they have, nine years later, yet to be in force. It now seems doubtful that the Rotterdam Rules will ever be adopted, but there is a slim possibility that a cut-down version of the Rules ("Rotterdam Lite") might find favour.

China has effectively adopted the Hague Rules. The USA, which tends to shun conventions and instead rely on homespun legislation, has its own statutes. These comprise the Carriage of Goods by Sea Act (a mildly updated version of the Hague Rules for goods in foreign commerce), and the Harter Act (for mostly domestic carriage). [30]

Relevant statutes and sources

Related Research Articles

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In a contract of carriage, the consignee is the entity who is financially responsible for the receipt of a shipment. Generally, but not always, the consignee is the same as the receiver.

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The Carriage of Goods by Sea Act ("COGSA") is a United States statute governing the rights and responsibilities between shippers of cargo and ship-owners regarding ocean shipments to and from the United States. It is the U.S. enactment of the International Convention Regarding Bills of Lading, commonly known as the "Hague Rules". It was found in Title 46 Appendix of the United States Code, starting at Section 1301, but has been moved to a note in 46 United States Code 30701.

An air waybill (AWB) or air consignment note is a receipt issued by an international airline for goods and an evidence of the contract of carriage. It is not a document of title to the goods. The air waybill is non-negotiable.

<i>NZ Shipping Co Ltd v A M Satterthwaite & Co Ltd</i> 1974 decision of the Judicial Committee of the Privy Council

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The Hague–Visby Rules is a set of international rules for the international carriage of goods by sea. They are a slightly updated version of the original Hague Rules which were drafted in Brussels in 1924.

The Hague Rules of 1924 is an international convention to impose minimum standards upon commercial carriers of goods by sea. Previously, only the common law provided protection to cargo-owners; but the Hague Rules should not be seen as a "consumers' charter" for shippers because the 1924 Convention actually favoured carriers and reduced their obligations to shippers.

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Affreightment is a legal term relating to shipping.

The Uniform Bills of Lading Act was adopted in 1909 and passed by the US Uniform Law Commission. The act addressed the judicial and legislative treatment of issues such as the extent of the carrier's liability to the consignee of the goods or to the buyer of the bill of lading based upon the carrier's issuance of the bill. It governed the relationship between persons with interest in the goods, and carriers who transported those goods. It set / described how a carrier could limit its liability.

<span class="mw-page-title-main">Rotterdam Rules</span>

The "Rotterdam Rules" is a treaty proposing new international rules to revise the legal framework for maritime affreightment and carriage of goods by sea. The Rules primarily address the legal relationship between carriers and cargo-owners.

<span class="mw-page-title-main">Deviation (law)</span>

The doctrine of deviation is a particular aspect of contracts of carriage of goods by sea. A deviation is a departure from the "agreed route" or the "usual route", and it can amount to a serious breach of contract.

<span class="mw-page-title-main">Carriage of Goods By Sea Act 1992</span> United Kingdom legislation

The Carriage of Goods By Sea Act 1992 is a UK Statute regarding bills for the lading of goods onto ships. It repealed the Bills of Lading Act 1855 and made new provisions.

<span class="mw-page-title-main">Bill of lading</span> Document issued by a carrier (or their agent) to acknowledge receipt of cargo for shipment

A bill of lading is a document issued by a carrier to acknowledge receipt of cargo for shipment. Although the term historically related only to carriage by sea, a bill of lading may today be used for any type of carriage of goods. Bills of lading are one of three crucial documents used in international trade to ensure that exporters receive payment and importers receive the merchandise. The other two documents are a policy of insurance and an invoice. Whereas a bill of lading is negotiable, both a policy and an invoice are assignable. In international trade outside the United States, bills of lading are distinct from waybills in that the latter are not transferable and do not confer title. Nevertheless, the UK Carriage of Goods by Sea Act 1992 grants "all rights of suit under the contract of carriage" to the lawful holder of a bill of lading, or to the consignee under a sea waybill or a ship's delivery order.

A freight claim or cargo claim is a legal demand by a shipper or consignee against a carrier in respect of damage to a shipment, or loss thereof.

Seaworthiness is a concept that runs through maritime law in at least four contractual relationships. In a marine insurance voyage policy, the assured warrants that the vessel is seaworthy. A carrier of goods by sea owes a duty to a shipper of cargo that the vessel is seaworthy at the start of the voyage. A shipowner warrants to a charterer that the vessel under charter is seaworthy; and similarly, a shipbuilder warrants that the vessel under construction will be seaworthy.

<span class="mw-page-title-main">Carriage of Goods by Sea Act 1971</span> United Kingdom legislation

The Carriage of Goods by Sea Act 1971 is a United Kingdom Act of Parliament. It incorporates into English Law the Hague-Visby Rules which are to be found as the Schedule to the Act. The Act does not use the term "Hague-Visby Rules" as such; instead, the Rules are referred to in that Act as the "Hague Rules As Amended".

Grant v Norway (1851) is a case on the Law of Carriage of Goods by Sea; but since 1992 it has no longer been good law.

<i>Leduc v Ward</i>

Leduc v Ward is a leading English case on deviation within the law of carriage of goods by sea. The case also addresses bills of lading, and the parol evidence rule.

References

  1. ↑ The Law of Carriage of Goods by Sea (2011) - L.Singh
  2. ↑ Hague-Visby Rules Art III rule 2.
  3. ↑ M’Andrew v Adams (1834) 1 Bing NC 29
  4. ↑ Glynn v Margetson
  5. ↑ Hague-Visby Rules Art IV rule 4.
  6. ↑ Bill of lading, or sea way bill or ship's delivery order: Carriage of Goods by Sea Act 1992 ss.1 & 2
  7. ↑ Sale of Goods Act1979 (as amended), section 12
  8. ↑ Sale of Goods Act1979 (as amended), section 14
  9. ↑ Sale of Goods Act1979 (as amended), section 15
  10. ↑ Sale of Goods Act1979 (as amended), section 13
  11. ↑ Hague Visby Rules Art. IV Rule 2(n)
  12. ↑ Goodwin v Lamport and Holt [1929] All ER 623
  13. ↑ Hague Visby Rules Art. III
  14. ↑ Parsons v New Zealand Shipping [1901] KB 548
  15. ↑ Bunge v Brasil [2009] 2 Lloyds Rep 175
  16. ↑ Hague-Visby Rules Arts. II & III
  17. ↑ Hague-Visby Rules Art IV
  18. ↑ The Teutonia (1872) LR 4 PC 171
  19. ↑ The Al Taha [1990] 2 LL R 117
  20. ↑ Stag Line v Foscolo, Mango & Co [1932] AC 328
  21. ↑ Scaramanga v Stamp (1880) 5 CPD 295
  22. ↑ Maredelanto Compania Naviera SA v Bergbau-Handel GmbH|The Mihalis Angelos
  23. ↑ M'Andrew v Adams (1834) 1 Bing NC 29
  24. ↑ ...such as "Act of God", "Perils of the Sea" and "negligence in navigation or management of the ship").
  25. ↑ e.g. Hague-Visby Rules Art. IV (1) & (2)
  26. ↑ Principles of the Carriage of Goods by Sea -Paul Todd
  27. ↑ The Glenfruin (1885) 10 PD 103
  28. ↑ McFadden v Blue Star Line [1905] 1 KB 697
  29. ↑ UNCITRAL: United Nations Commission of International Trade Law.
  30. ↑ Lexology report
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