The Maritime Law and The Hague-Visby Rules - Paper Example

The Maritime Law

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A ship owner, based in Netherlands, is contracted by a shipper based in Stoke city in the United Kingdom, to carry a consignment of electronics from the United Kingdom to Netherlands (Riskin & Westbrook, 1987). However, when there is an expectation of the arrival of goods in Netherlands, it is discovered that nearly half of the shipment was inoperable, mainly due to an error made by the cargo handler that failed to secure them with the proper cables.

It would be quite apparent to any observer, that the ship owner and his crew, though not intentionally, are responsible for the damages that have occurred. However, upon the claim, the ship owner may push back the blame to the shipper. The ship owner can then petition that the shipper did not visually inspect the cargo before the departure. Moreover, his or her only task as the ship owner was to transport the cargo and not take care of it (Riskin & Westbrook, 1987). It was also apparent that such act would obviously be a source of conflict between the two parties, a conflict that would be rather difficult to solve if the ships registration is from the UK and the goods have already arrived at their destinations in the Netherlands (Force &Mavronicolas, 1990). The questions that would therefore arise would be; under whose jurisdiction does this case fall, is it the United Kingdom or is Netherlands? What procedures must the shipper take to file the claim and what should he or she gain if he wins the case?

The questions raised above describe the need to have rules that have been laid down and that are knowledgeable to both parties. These rules should spell out, clearly and concisely, the obligations that the ship owner has to the shipper and the liabilities that the shipper should have been prepared to accept on commencement of the delivery. These rules would have also spelt out the mitigations guidelines for cases that would have arisen during the execution of the contract. One such law is The Hague-Visby law (Schoenbaum, 1987). The Hague-Visby rules remain a significant legislation that governs maritime trade across the globe. It is thereby important to have an understanding what the laws are, the applications and the cases of dispute that have arisen and solved by this legislation.

The Hague-Visby Rules

The Hague-Visby rules define a range of transnational rules, which govern goods that are in transit. Initially drafted in 1924 in Brussels (Chandler, 1984), the formulation of these rules or laws was govern the interactions of the carrier and the shipper during the export transaction. The laws thereby become the center of reference in most quarters, as the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading (Force, 1995). The Hague-Visby rules were drafted to provide explicit stipulations on the management of waybills (Tetley,1983) accorded to a chartered cargo ship, as well as the imposable liabilities on the parties involved in the transaction i.e. the carrier and the shipper, and outlines the requirements for both.

Almost all countries that are engaged in maritime activities adopted the Hague-Visby rules, with some states fully adopting it or modifying it to be compatible with local laws (Girvin, 2007). However, some nations did not fully adopt the stipulations of these international maritime statutes. Instead, such countries maintained the provisions of the original Hague rules and merged the provisions of the Hague-Visby rules with their own established law to create a framework. The established framework would further help govern the issuance of waybills to the concerned parties or completely ignore the provisions of Hague-Visby rules (Tozaj & Xhelilaj, 2010).

Applications of The Hague-Visby Rules

The Hague-Visby rules are binding and applicable between two participating parties from states under these laws if (Force, 1995):

There is a valid bill of lading issued to the party in a contracting state, as postulated in Article 10, section (a) of the laws

The carriage request is possible from a port located in a contacting state; as stipulated in Article 10 section (b)

The rules are clearly and concisely incorporated into the contract of carriage between the two parties; as specified in Article 10 section (c)

The applications of The Hague-Visby Rules can have a further extension by the national laws of a contracting state; as stipulated in the last paragraph of Article 10 of the law. As such, it includes the bills of lading that had not specified in both Articles 10 section (a) and Article 10 section (b) or Article 10 section (c)

The introduction of the Hague-Visby may also aim at adopting the government of domestic carriages, as successfully implemented in Canada and a host of Scandinavian countries.

Case Studies of Disputes that have arisen from The Hague-Visby Law

Case one: No Bill of Lading Issued

Kozolchyk (1992) defines a bill lading as an evidence of the carriage contract between a shipper and a carrier. It is however not necessarily an actual contract or title of one. A contract, on the other hand, specifies the tariffs involved, the advertisements made by the carrier, booking notes among other information (Ayres, 2012). The Hague-Visby rules, therefore, apply only in the presence of a valid contract supported by the bill of lading or any other document of title as stipulated under the law (Hai, 1996). However, the law will still apply even if there was no issue of the bill of lading.

In the Pyrene Company vs. Scandia Steam Navigation Company case, the Supreme Court of Canada was to determine whether the intent of the bill of lading was under the provision in the stead or not. In this case, the court ruled that the contract of carriage was indeed valid and subject to the rules as initially judged under the cover by the bill of lading by the intent to provide such by the defendant.

In another case, The Parsons Corporations vs. The Happy Ranger, the contract of carriage signed between the two parties consisted of signed and printed front page an attached specimen of the bill of lading that was to be issued by the carrier. The front page, provided for the issuance of the bill of lading even further stipulating that the contract should, at all times, take precedence over the bill of lading if a dispute would arise from their agreed terms (Riskin & Westbrook, 1987). Notably, no actual bill of lading was actually under that issue. During the hearing and determination of the case, the Court of Appeal in England was able to establish that there was indeed intent to issue a bill of lading as was evidenced by the specimen attached in the contract documentation. It made the contract subject to The Hague-Visby rules, judging from the precedence that was set by the Pyrene company case.

Case two: Trans-shipment.

During the case of the Captain Vs the Far Eastern Steamship Company, the two parties had entered into a contract to ship goods from Madras to Vancouver via Singapore. Although there had been the incorporation of The Hague rules into the contract, they did not apply to local transportation. Therefore, any eventualities that would have arisen from transportation of the goods while in Singapore was not attachable onto the carrier (Vis & De Koster, 2003). However, as later published, the court later established that the shipper was indeed aware of the trans-shipment leading to the issuing of two bills of lading. The same issue came out during the hearing of another case - Mayhew Foods vs. O.C.L., in which the shipment (frozen chicken) was to be from the U.K. to Le Havre for storage for almost a week. After storage, the food was transported to Saudi Arabia on board a different vessel. The court was able to establish in this case that indeed the rules did apply from the time the ships left the U.K. to the time they arrived at the final destination. Notwithstanding the fact that the goods had undergone transshipment in the process of the shipment as the bill of lading had covered the entirety of the journey.

Case three: Charter Parties

Charter parties are in cases most times exempt from The Hague-Visby law (McMahon, 1970). However, they can be made subject to the legislation in the event of a provision of an express contract, which must be not only logical but also proper and concise. In a case in the United Kingdoms Court of Appeal, The Anglo-Saxon vs. Adamastos Shipping Company, the court was able to establish that The Hague rules were indeed not applicable since a clause in the charter partys had been carelessly worded. Although, after considering the facts of the case, the House of Lords reversed the ruling of the court of appeal but did indeed acknowledge that such careless wordings in Paramount clauses are a rather risky method of including The Hague rules into a charter party (Bulow, 2006).

Criticism of The Hague-Visby Rules

The primary criticism of The Hague-Visby rules stems from the issues raised by some of maritime experts and shipping conglomerates (Margolis, 1991). Their argument is that these laws tend to favor the owners of the cargo ships more than the shipping companies. (Tetley, 1995). According to the critics, the law stipulates that it is a requirement for the shipping companies to disclose information on their consignments fully, and if the shipper fails to disclose the information completely, and a problem arises amid shipment, then the carriers are to exempt from liability unless specified otherwise (Sturley, 1993). Although this section targeted at ensuring maximum compliance among the shippers it has and the effect of reducing the level of care provided to the goods being shipped by the cargo ship owners.

Conclusions

The Hague-Visby rules have been and remain one of the most significant legislation to govern maritime trade to date. With its widespread adoption and merger with local laws, The Hague-Visby rules have established clear stipulation for the issuance of carriage contracts and what action to take if one of the parties involved in the contract disputes the conduct of the other. By looking back at the cases that arose from the implementation of The Hague-Visby law, the lawmakers alongside the stakeholders involved in the maritime trade can make prudent and informed decisions when entering into a contract to ship goods. They can as well as have the necessary legal recourse in the event of a conflict between any two parties involved. Although this law is not perfect, with several criticisms thrown at it, it remains the most imposing and binding maritime law to date.

References

Ayres, I., 2012. Studies in Contract Law. Foundation Press.

Bulow, L.C., 2006. Charter Party Consequences of Maritime Security Initiatives: Potential Disputes and Responsive Clauses. J. Mar. L. & Com., 37, p.79.

Chandler III, G.F., 1984. Comparison of COGSA, The Hague/Visby Rules, and the Hamburg Rules, A. J. Mar. L. & Com., 15, p.233.

Force, R., 1995. Comparison of The Hague, Hague-Visby, and Hamburg Rules: Much Ado About (?). Tul. L. Rev., 70, p.2051.

Force, R. and Mavronicolas, A.J., 1990. Two models of maritime dispute resolution: Litigation and arbitration. Tul. L. Rev., 65, p.1461.

Girvin, S., 2007. Carriage of goods by sea (pp. 232-235). Oxford: Oxford University Press.

Hai, L., 1996. Reconsideration on Bill of Lading as Document of Title-And on the Nature of the B/L [J]. Annual of China Maritime Law, pp.1996-00.

Kozolchyk, B., 1992. Evolution and present state of the Ocean Bill of Lading from a Banking Law Perspective. J. Mar. L. & Com., 23, p.161.

Margolis, R., 1991. Combined Transport Bills and a New Limitation to The Hague-Visby Rules-Horst Karcher v. Piff Shipping Ltd. Hong Kong LJ, 21, p.116.

McMahon, J.P., 1970. Hague Rules and Incorporation of Charter Party Arbitration Clauses into Bills of Lading, The....