Hague-Visby Rules
International convention for the unification of certain rules relating to bills of lading 1924 (HAGUE RULE) as amended by Protocol 1968 (HAGUE-VISBY RULES) and as amended in 1979.
India has the original Indian carriage of goods by Sea act of 1925 and this has been amended upto 1993 to give effect to the amendments of 68 & 79.
The HAGUE RULES are discussed below and wherever it differs from the HAGUE-VISBY RULES the points have been highlighted.
DEFINITIONS CARRIER: Includes the owner or the charterer who enters into a contract of carriage with the shipper.
CONTRACT OF CARRIAGE: Applies only to contracts covered by a bill of lading or similar document so far as it relates to the carriage of goods by sea. This includes any bill of lading or similar document issued under a charter party from the moment when such bill of lading makes the relationship between the carrier and the holder of the bill of lading regular and formal.
GOODS: Includes goods of all kind except live animals and cargo stated to be carried on deck and so carried.
SHIP: Any vessel used for carriage of goods by sea. CARRIAGE OF GOODS: This covers the period from the time when the goods are loaded to the time they are discharged from the ship.
DUTY OF CARRIER: The carrier is bound before and at the beginning of the voyage to exercise due diligence to.a) Make-the ship seaworthy.b) Properly man, equip and supply the ship.c) Make the holds, refrigerating compartments and all other parts of the ship in which goods are carried fit and safe for their reception, carriage and preservation.
NOTE: Exercising due diligence means taking all reasonable precautions to see that the vessel is fit for the voyage contemplated. The carrier only needs to ensure seaworthiness at the beginning of the voyage which means when she leaves berth. The carrier is not obliged to give an absolute guarantee of seaworthiness for the full voyage. The burden of proof for ensuring due diligence lies with the carrier.
The carrier will properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried.NOTE: Unlike seaworthiness the duty for cargo extends throughout the voyage.
Examples of improper stowage are (i) Contamination of cargo (ii) Cargo not lashed (iii) Improper ventilation (iv) Vehicles not secured properly etc.
1. After receiving the goods into his charge the carrier or the master or the agent of the carrier shall on demand of the shipper issue a bill of Tiding.
2. Information in Bill of Lading will include:
a) Marks necessary for identification of the goods as the same are given in writing by the shipper before loading. These marks should be stamped or shown clearly upon the goods if uncovered or in case of covered goods on the coverings of or the cases. These should be legible till the end of the voyage.
b) Either the number of packages or pieces or the quantity or weight as the case may be as furnished by the shipper.
c) The apparent order and condition of the goods. The carrier master or agent shall not be bound to state any marks, numbers, quantity or weight for which he reasonably suspects not to be accurate for the goods being shipped and for which he had no reasonable grounds for checking.
NOTE: Due to this, the Bills of Lading are stamped SAID TO WEIGH … OR SAID TO CONTAIN ETC.
3. Such a bill of lading is Prima Facie evidence of the receipt by the carrier of the goods as described in it.Under the HAGUE-VISBY RULE – the following sentence is also added. “However, proof to the contrary shall not be admissible when the bill of lading has been transferred to a third party acting in good faith.”
4. The shipper guarantees to the carrier the accuracy of the information regarding quantity, marks etc. furnished by him and also indemnifies the carriage against loss arising from inaccuracies in such particulars. This right of carrier does not reduce his liability under the contract of carriage to any person other than the shipper.
NOTE: e.g. the responsibility for exercising due diligence at the beginning of the voyage is still paramount even if the shipper has successfully provided details of weights etc. of the cargo
5. It is the duty of the carrier, master or agent to issue a “shipped bill of lading” after loading at the request of the shipper provided the shipper submits any previously issued documents by title.
NOTE: e.g. A “Received for shipment” bill of lading will have to be returned back to the carrier by the shipper when he receives / demands a – shipped bill of lading.
6. The notice for loss or damage and the general nature of loss or damage should be given in writing to the carrier or his agents at the port of discharge before or at the time of removal of the goods or if the loss or damage is not apparent within three days. Otherwise the removal of cargo is prima facie evidence of the delivery of the goods by the carrier as per bill of lading. Under any circumstances, the carrier and ship is discharged of all liability in case of loss/damage if suit is not brought within one year after delivery of the goods or the date when the goods should have been delivered.
The above has been replaced by the following in the HAGUE-VISBY RULES:
The carrier and the ship shall in any event be discharged from all liability whatsoever for the goods unless suit is brought within one year of the date of delivery/expected delivery. This period may be extended if the parties agree after the cause of action has arisen. An action for indemnity against the third person may be brought even after one year if allowed by the court handling the case.
7. Ally agreement or clause in the-contract of carriage relieving the carrier or ship from liability for loss or damage to the goods due to negligence, fault or failure in the duties or obligation provided wherein or reducing his liability to a lesser figure than that of this convention shall be null and void and of no effect. e.g. A benefit of insurance in favour of the carrier or similar clause relieving the carrier from his liability is deemed to be a clause of such nature.
8. Exceptions to the carrier’s responsibility for loss or damage:a) Act, neglect, or default of the master/ mariner/ pilot/ servant of the carrier in the navigation or in the management of the ship.b) Fire, unless caused by the actual fault of the carrier.c) Penis, dangers and accidents of the sea or other navigable waters.d) Acts of Gode) Act of warf) Act of public enemies.g) Arrest or restrain of princes, rulers or people or seizure under legal process.h) Quarantine restrictions.i) Acts or omissions of the shipper or owners of the goods, his agents or representatives.j) Strikes or lockout or stoppage or restraint of labour whether partial or general from whatever causek) Riots and civil commotion.l) Saving or attempting to save life or property at sea.m) Wastage in bulk or weight or any loss or damage arising from inherent defect quantity or vice of goods.n) Insufficiency of packingo) Insufficiency / inadequacy of marksp) Latent (hidden) defects, not discernable (visible) by due diligence.q) Any other cause arising without the actual fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claming the exemption to show that neither the actual fault or neglect of the carrier nor that of the agents or servants of the carrier contributed to the loss or damage.
9. The shipper shall not be responsible for loss or damage sustained by the carrier or ship arising from any causes without the act, fault or neglect of the shipper his agents or servants.
10. Any deviation in saving or attempting to save life or property at sea or any reasonable deviation shall not be considered a breach of the convention or contract of carriage and the carrier shall not be liable for any loss or damage thus resulting.
11. As per HAGUE RULES maximum liability of a carrier or ship for loss or damage to or in connection with the goods is 100 sterling pound per package or its equivalent in other currency unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading. By agreement another maximum amount can be fixed but not less than 100 8terling pound per package.
If the nature/value of the goods has been mis-stated by the shipper knowingly in the bill of lading then the carrier/ship are not responsible for loss or damage.
As per the HAGUE-VISBY RULE the above paragraph has been replaced by the following:
- Unless the nature/value of the goods have been declared by the shipper before shipment and inserted in the bill of lading, neither the carrier nor the ship Will be liable for loss or damage to or in connection with the goods exceeding 10,000 gold francs per package or unit or 30 gold francs per kg of gross weight of the goods, lost or damaged whichever is higher.
- The value of the goods will be at the place and time at which the goods are discharged or should have been discharged or its current market price or if current market price is not available then the normal value of the goods.
- If a container/ pallet is used for transportation then the number of packages/units in the bill of lading shall be considered as the number of packages/units for this calculation.
- If the damage has resulted from an act / omission of the carrier done with malified intent or recklessly and with prior knowledge then the carrier / ship will not be able to limit his liability
- If the nature / value of the goods has been knowingly mis-stated by the shipper then the carrier / ship is not responsible for loss or damage.
- Any other maximum amount may be agreed to between the parties but not lesg than mentioned above.
As per 1979 amendment 10,000 gold francs has been replaced by 666.67 SDRs per package or unit. Instead of 30 g francs it is now 2 SDR/Kg.
12. DANGEROUS GOODS : Inflammable/ explosive or dangerous goods if loaded without the consent and knowledge of the carrier, master or agent, may at any time before discharge be landed at any place or destroyed or made harmless by the carrier without compensation, making the shipper liable for all damages and expenses resulting from the shipment.
If any such goods loaded with the consent and knowledge becomes a danger to the ship or cargo they may be similarly dealt with by the carrier without liability on the carrier except general average if any.
13. HIMALAYA CLAUSE: This is an addition in HAGUE-VISBY RULES and deals with the liability of the carrier servants.
a) The defenses and limits of liability of the convention shall apply in any action against the carrier in respect of loss or damage caused by a contract of carriage irrespective if the action has been founded in contract or in tort (Note: Tort means under civil action).
b) If such an action is brought against the servant or agent of the carrier (such servant / agent not being an independent contractor) such servant or agent shall be entitled to avail himself of the defenses and limits of liabilities of the carrier, unless it is proved that the damage resulted from a malified act or recklessly and with prior knowledge of resulting damage.
c) The total of the amounts recoverable from the carrier and such servants/ agents shall not be greater than that provided by this convention.
14. Provisions of this convention shall not apply directly to charter parties but if bills of lading is issued under a charter party then such bills of lading shall comply with the terms of this convention. Any lawful provision regarding general average is allowed to be inserted in the bill of lading.
15. SEAWAY BILL:
In certain circumstances goods may be carried under an agreement between the carrier and shipper under any legal contractual terms. In such cases, bills of lading may not be issued and the terms of the agreement are embodied in a non-negotiable receipt which is marked as such. Note: B/L — Negotiable
Seaway Bill-or way Bill — Non — Negotiable
In container trade or the where B/L transactions cause the bill of lading to lag behind the cargo or where the cargo is unlikely to be sold in transit, such seaway bills are used. This is also encouraged by BIMCO (Baltic International Maritime Conference) and well established trading patterns. The seaway bill need not be presented for delivery of cargo. It normally contains a paramount clause which makes either of the following rules applicable to the contract as mentioned namely HAGUE RULES or HAGUE-VISBY RULES or HAMBURG RULES. As it is non-negotiable it is less likely to be used for fraud.
16. The rules do not prevent a carrier and shipper from entering into any agreement regarding loss or damage to goods prior to the loading and subsequent to the discharge from the ship on which goods are carried by sea.
17. The convention does not affect the rights and obligations of the carrier under any law dealing with limitation of liability of owners of seagoing ships. [Note: E.g. CLC convention, Athens convention etc.]
18. This is an addition in HAGUE-VISBY RULES. The convention does not effect the provision of any convention or national law regarding liability for nuclear damage.
19. APPLICATION OF THESE RULES:
As per HAGUE RULES the provision of this convention shall apply to all bills of lading issued in any of the contracting states. As per HAGUE VISBY RULES the provisions shall apply to every bill of lading for carriage of goods between two ports in two different states if
a) B/L is issued in a contracting state. Or
b) The carriage is from a port in contracting state. Or
c) The contract contained in or evidenced by the B/L provides that the rules of the convention or national law of the state giving effect to them govern the contract.
Whatever may be the nationality of the ship, carrier, shipper or any other interested person. Each contracting state shall apply the provisions of this convention to the B/L.
This article shall not prevent a state from applying the rules of this convention to the bill of lading not included above.