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Hague-Visby Rules defining cargo ships obligations and liability

Hague-Visby Rules (HVRs) are properly called the Hague Rules as Amended by the Brussels Protocol 1968 and apply to every bill of lading or any similar document of title relating to the carriage of goods between ports in two different States if:

i) the bill of lading or document is issued in a contracting State; or
ii) the carriage is from a port in a contracting State; or
iii) the contract contained in or evidenced by the bill of lading provides that the Hague-Visby Rules or the legislation of any State giving effect to them (e.g. the UK’s Carriage of Goods by Sea Act 1971) are to govern the contract.

Under Article V, the Rules will not be applicable to charter-parties, but if bills of lading are issued in the case of a ship under a charter-party, they must comply with the Rules.
Many States, such as the UK, have legislation incorporating the Hague-Visby Rules into national law. Where no such national law applies, the Hague-Visby Rules may still apply to the carriage by agreement of the contracting parties. (See Clause Paramount in bill of lading, waybill or charter party.)

Article II provides that, subject to the provisions of Article VI, under every contract of carriage of goods by sea, the carrier, in relation to the loading, handling, stowage, carriage, custody, care and discharge of such goods, will be subject to the responsibilities and liabilities, and entitled to the rights and immunities, set out in the Rules.

“Goods” is defined in Article I as including goods, wares, merchandise, and articles of every kind whatsoever except live animals and cargo which by the contract of carriage is stated as being carried on deck and is so carried.

Carrier’s responsibilities under the Hague-Visby Rules

The carrier has three basic obligations:

i) to ensure the vessel’s seaworthiness;
ii) to care for the cargo; and
iii) to issue a bill of lading where the shipper requests one.

Obligation in respect of seaworthiness

Article III paragraph 1 provides that the carrier must, before and at the beginning of the voyage (i.e. up to the moment of sailing), exercise due diligence to:

• make the ship seaworthy;
• properly man, equip and supply the ship; and
• make the holds, refrigerating and cool chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation.

“Exercising 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.

“Seaworthy” 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 tugs.

If a cargo owner can show that his loss was caused by a failure of the carrier to exercise due diligence to make the vessel seaworthy, the carrier will not be able to rely on any other clauses in the Rules which reduce his liability (i.e. the exceptions from liability).

The holds must be fit and safe for the reception, carriage and preservation of the cargo and, in particular, the hatch covers must be tight and there must be no instability of the vessel through improper stowage. It has been held that the neglect to protect a water pipe in a hold from frost which could have been expected at the time of year showed lack of due diligence to make the vessel seaworthy.

Carrier’s obligation in respect of the cargo

Article III paragraph 2 provides that, subject to the provisions of Article IV, the carrier must “properly and carefully load, handle, stow, carry, keep, care for and discharge any goods carried”. Unlike seaworthiness, this duty extends throughout the voyage and implies a greater degree of care than exercising “due diligence”. The courts do not expect perfection from the carrier, but it has been held that stowage was improper where -

• contamination of other goods occurred;
• there was inadequate or no ventilation;
• dry cargo was damaged by liquid goods; and
• vehicles were secured only by their own brakes.

The carrier must have a proper system for looking after the cargo when stowed. He has a duty to use all reasonable means to ascertain the nature and characteristics of the cargo and to care for it accordingly, although the shipper should give special instructions where special care is required. (Where water in tractor radiators froze, it was held that the carrier should have been told of the risks.)

Obligation to issue a bill of lading

Article III paragraph 3 provides that after receiving the goods into his charge, the carrier, the master or the carrier’s agent must, if the shipper demands, issue a bill of lading to the shipper showing, amongst other things:

• all leading marks for identification of the goods, as stated by the shipper before loading (in his shipping note), provided these are visible on the goods or their coverings;
• either the number of packages or pieces, or the quantity, or weight, as stated by the shipper (in his shipping note); and
• the apparent order and condition of the goods.

The carrier, master or agent need not insert any inaccurate statements on the bill of lading or give any details which he cannot reasonably check. (Hence the practice for statements to be made such as “said to weigh....” and “shipper’s load and count”.)

Any bill of lading thus issued will be prima facie evidence of receipt of the goods by the carrier as described, but proof to the contrary will not be admissible if the bill of lading is transferred to a third party acting in good faith (Article III paragraph 4).

Any bill of lading issued after loading must be a “shipped” bill of lading if the shipper demands, provided he surrenders any previously issued document of title (e.g. a “received” bill of lading issued when the goods arrived at a warehouse or depot before shipment) (Article III paragraph 7).

Carrier’s rights and immunities

• the carrier’s exceptions from liability;
• the carrier’s right to deviate; and
• the carrier’s rights in respect of dangerous goods.

Article IV paragraph 2 grants seventeen exceptions from liability to the carrier (compared with six under English common law). Neither the carrier or ship will be responsible for loss or damage arising or resulting from:

• act, neglect or default of the master, mariner, pilot, or the servants of the carrier in the navigation or management of the ship;
• fire, unless caused by actual fault or privity of the carrier;
• perils, dangers and accidents of the sea or other navigable waters;
• act of God;
• act of war;
• act of public enemies;
• arrest or restraint of princes, rulers or people, or seizure under legal process;
• quarantine regulations;
• act or omission of the shipper or owner of the goods, his agent or representatives;
• strikes, lockouts, stoppage or restraint of labour;
• riots and civil commotions;
• saving or attempting to safe life or property at sea;
• wastage in bulk or weight or any other loss or damage arising from inherent defect, quality or vice of the goods;
• insufficiency of packing;
• insufficiency or inadequacy of marks;
• latent defects not discoverable by due diligence;
• any other cause arising without the actual fault or privity of the carrier, or without the fault or neglect of the agents or servants of the carrier (but the burden of proof will be on the carrier to show that his fault or privity or the fault or neglect of his agents or servants did not contribute to the loss or damage).

Article IV paragraph 4 provides that any deviation in saving or attempting to save life or property at sea, or any reasonable deviation, will not be an infringement or breach of the Hague-Visby Rules or of the contract of carriage, and the carrier will therefore not be liable for any resulting loss or damage.

Article IV paragraph 6 provides that goods of an inflammable, explosive or dangerous nature, if not properly marked, or if shipped without the knowledge or consent of the carrier, may be landed, destroyed, jettisoned or rendered innocuous at any time before discharge. Such goods, even when shipped with the carrier’s knowledge and consent, may be dealt with in this way without liability to the carrier, should they become dangerous.

General Average under the Hague-Visby Rules

Under Article V, nothing in the Rules may be held to prevent the insertion in a bill of lading of any lawful provision regarding General Average. (Most bills of lading have a clause making the merchant or shipper aware that he may become liable for a contribution in General Average.)

Exclusion of deck cargo and live animals from Hague-Visby Rules cover

Article I(c) excludes from the items defined as “goods” live animals and cargo which by the contract of carriage is stated as being carried on deck and is so carried. Live animals are excluded from cover at all times. Cargo which is carried on deck without being stated as such in the contract will, therefore, be subject to the Rules, as will cargo which is stated as being carried on deck but which is, in fact, carried below deck.

Where the carrier’s terms and conditions of carriage incorporate the Hague-Visby Rules, then in the absence of any term expressly providing to the contrary those terms will not cover live animals or deck cargo. A shipper of live animals or deck cargo should therefore make a special contract with the carrier, and should specifically state “FOR DECK CARRIAGE” on his shipping note.

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