The Hague-Visby Rules - Paper Example

The Hague Visby-Rules are a set of international regulations governing the carriage of goods. The rules are an update from the previous Hague rules drafted in Brussels 1924 (Force 1995). The Hague-Visby rules were adopted in 1968 and 1979. The Brussels protocol of 1968, February 3rd, and the Visby rules should not be read as a separate document (Diamond 1978). The convention and the protocol should be interpreted together as a single instrument. If a country accedes or ratifies The Hague-Visby Rules, they consent to be bound by the rules.

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All international conventions attempted to broaden the scope to include the bill of lading and contracts of carriage. The Hague-Visby rules are present in most of the shipping nations in the world. Countries like France have two international regimes (Richardson 1994). They apply the Hague-Visby rules to their outbound shipments and Hague Rules to shipments from Hague Rule nations. The Hague-Visby rules apply to both outbound and inbound in Belgium. Some nations have local rules similar to the Visby Rules, but not identical (Diamond 1978).

The rules are adopted differently by various countries. Some countries such as Australia and Canada have local statutes which attach the Visby rules as a schedule. They cannot be considered as contracting states because they have not adopted the Hague rules. They have neither ratified nor acceded to the original convention of 1924. Countries such as France have ratified the convention, thus making it law in the country. Some countries have never acceded ratified the agreement, but refers to the bill of lading of practice. Such countries include the United States. International trade has an essential feature where a buyer is from one country, and the seller from another. Maritime law has been on the quest for global uniformity, and predictability on international shipping. The U.S was close to uniformity and enacted the Carriage of Goods by Sea Act (COSGA) (Yancey 1982). However, there has been disunity because the government of U.S was indecisive regarding which rules to follow, whether The Hague-Visby rules or the Hamburg rules. As a result they have been left with the 1924 Hague standards and the COSGA (Chandlier III 1984).

Scope of Hague-Visby Rules

The Visby Rules attempt to curb the problem raised by Vita Food Products v. Unus Shipping Co. In this case, a bill of lading was used to ship goods from Newfoundland. The bill of lading had an exemption clause for loss caused by a servant. Under the law of Newfoundland, this exemption was void, but they had enacted the Hague rules. The case was decided in Nova Scotia where the courts applied the law of the contract in the bill of lading, and the exemption clause was valid. This case shows that the choice of law clause in any contract should apply, as long as the agreement was bona fide. The Visby rules were deemed to have no force of law. The Visby rules were held to have more effect in agreement as opposed to the effect of law, with the absence of a paramount clause (Bauer 1993).

The Visby rules seem to have more authority in their application by their wording. Section 1 of UK statute that gave force to the Visby rules stated that the rules should only apply in connection to a certain carriage. Under Article 10, The Visby rules stipulate that they shall apply to a contract if the contract fulfills one the conditions outlined in Article 10.

Geographical scope

In the conflict of laws, the scope of application of The Hague-Visby rules is in Article 10. Which states that the scope of an application shall extend to any bills of lading issued in any of the contracting states. Therefore, the rules do not apply to outward shipment. On incoming shipments, that is to say, shipment from outside contracting states to port in the contracting states, the rules applicable are the rules of the shipping country, not the Hague Rules. The countries applying the Hague rules also have a Clause Paramount standard in countries using the Hague-Visby rules. The Paramount clause, however, does not seem to be necessary anymore, because the Visby rules apply by force of law. Therefore, the U.K Act of 1971, Carriage of Goods by Sea, no longer has section 3 calling for a bill of ladings to have a paramount clause.

The Visby rules apply to the carriage of goods between two states. According to Article 10, a bill of lading has to be issued in a contracting state or when goods come from a contracting state. Also, the bill of lading should state that The Visby Rules are applicable. The application of The Hague-Visby rules may extend to National laws. Sometimes like in the case of Scandinavia and Canada, Visby rules can apply to a domestic carriage.

Contracts of Private and Common Carriage

Through an incorporating clause, the Visby rules not only apply to private contracts but contracts of common or public carriage. The distinction between common and private carriage is not in the Hague-Visby rules. A private carriage is an arrangement for the transportation of particular goods by charter parties. A public or common carriage is carriage issued through public advertisements or offers. Such carriages are usually made by a liner bill of lading or by a steamship company, whose roots ply on an advertised route. Sometimes the goods of a single shipper can include common carriage. The Visby rules apply to common carriage, and sometimes private transport. The criteria are that the contract of carriage must cover a bill of lading as opposed to a contract of hire.

The best evidence to show that a contract exists is a bill of lading. The bill of lading is not usually, necessarily a contract. The contact is usually created by practices which include offer and acceptance; certain practices made by the carriers and accepted by the shippers. Such include the booking note, advertisements and the freight tariff all taken together. The Visby rules apply when a shipment is covered by a document with a similar title to a bill of lading, or a bill of lading. The coverage does not necessitate the issuing of the bill of lading before shipment but mostly given afterward.

Contracts Which The Hague-Visby Rules Apply

The Hague-Visby rules apply to all contracts of carriage of goods by sea, written or oral. They, however, do not apply where there is an extraordinary shipment or where there is issuing of a non-negotiable receipt as stipulated in Article 6.

Under Article 1 (b), The Hague-Visby rules impliedly exclude charter parties and apply to only contracts of carriage covered by a bill of lading. This section gives rise to uncertainty because Article 3(3) requires that on the shippers demand a carrier should issue a bill of lading. When no bill of lading is issued Article 6 provides the carrier with freedom of contract. Hence, rules apply even before issuing of a bill of laden. Certain minor exceptions, however, apply to goods described in the bill of lading but carried on deck, and to live animals. In Sideridraulic System SpA v BBC Chartering & Logistics GmbH & Co KG (2011]) EWHC 3106. QBD (Commercial Court) (Hjalmarsson 2012). In this case cargo of filter, tanks were carried on deck. The contract of carriage in the bill of lading stated that the cargo was carried on deck. The tanks, therefore, were not goods within the meaning of The Hague-Visby rules; consequently, the rules did not apply compulsorily.

To sum up, the Visby rules apply to contracts of carriage of goods by sea with bills of lading or documents with the same title. They also apply to waybills and non-negotiable receipts relating to a bill of lading (Dubovec 2006). The Hague- Visby rules do not apply to contracts of carriage of live animals, contracts of carriage of cargo carried on Deck, no- negotiable receipts not in the ordinary course of business and transportation by a charter party, unless there is issuing of a bill of lading.

When there is no issuing of a Bill of Lading

The Hague-Visby rules apply whether or not a bill of lading is issued. They apply to contracts of carriage covered by a bill of lading or a similar document. The rules apply because a bill of lading is evidence that an agreement exists, even though it is not necessarily a contract (Debattista 1982). In the case of Devlin J. in Pyrene Co. v. Scindia Steam Navigation Co, the court held that to determine whether a contract existed, they need to decide whether a bill of lading was intended, not necessarily whether it was issued (Todd 1990). The court held that in the completion of a contract of carriage, it is contemplated that a bill of lading will be issued in respect to the contract. Therefore, a contract is usually covered by a bill of lading from its creation, hence the Visby rules apply from its inception (Girvin 2007).

The $500 package limit was applied in Pyrene Co. in Anticosti Shipping Co. v. St- Amand, as stipulated in the Visby rules (Tetley 1995). It was held that a bill of lading was intended even though it had not been issued. Sometimes when a charter party is contemplated, even without issuance of a bill of lading, The Hague-Visby rules do not apply. This holding was also seen in the case of Canada Steamship Lines Ltd. v. Desgagne.

On Parsons Corp. v. The Happy Ranger, the Contract of Carriage, had the title, Contract of carriage inscribed on the title page with signatures. The contract had six pages, and the carrier attached a specimen bill of laden. The bill of lading was never issued. The English court of appeal on reversing the trial judge applied the ruling of Pyrene Co. v. Scindia Steam Navigation Co. The court stated that a bill of lading was to be issued. Therefore the contract of the carriage was within the meaning of Article 1(b) of the Hague-Visby rules. The court further stated that the only relevant question was whether issuing of a bill of lading was anticipated, and not whether the bill of lading contained the same terms as agreed in the contract. A considerable authority also exists in COSGA when if a bill of lading is anticipated and not issued. If parties intend a contract of carriage, but do not expect a bill of lading at any point, and issuing of non-negotiable receipt takes place, the Rules will apply under Article 6, 3(8), 1(b) and 2.

Exceptions to Applicability of the Visby Rules

When the carrier never receives the goods, even if there is issuing of a bill of lading, The Visby rules do not apply. This is because the contract of carriage does not commence (Zock 1970).

The Visby Riles can also apply to Charter-parties through an express contract. The explicit statement should be logical. The Hague Rules were not applicable where a paramount clause read This Bill of Lading .. in a charter party in Anglo- Saxon Petroleum Co. v. Adamastos Shipping Co. The court emphasized that wording a charter party in a careless manner was a dangerous way of incorporating the Hague Rules in a charter party (Nabinger 2006).

The Hague-Visby Rules Period of Application

The period of implementation of the Visby Rules commences from the loading of the cargo to the time of discharge, for dry goods. The Rules applicable are in Article 1(b), 1(e) and Article 2 and they are read together. Tackle to tackle is the classic name for these rules. Tackle to tackle means the rules apply from the time of loading, and the tackle is hooked, to the time it is removed from the hook during the discharge of goods. In Pyrene Co. v. Scindia Steam Navigation Co., the cargo was attached to the tackle when they fell from the ship. The tackle to tackle rule applied because the tackle was already hooked on the goods. The Hague-Visby rules give the carrier obligations to make the ship seaworthy. Other obligations are for the career are to carefully and appropriately load, properly handle, keep, take care of and discharge of the goods...