BILLS OF LADINGOUTLINE OF APPLICABLE CONVENTIONS AND LEGISLATION IN UK

Capt. Amarinder S. Brar, AFNILLM Maritime Law student at Univ. of Southampton

Presentation at:South Shields Marine School, South Tyneside College on 06 June 2015

History• Eleventh Century – Bill of Lading virtually unknown• Records required, ship’s register, local statutes• Fourteenth Century – Later functions of B/L accomplished

by onboard records• Gradual change in trading practices• A sample from 1390s…

A Bill of Lading from 1390 (translated)1390, the 25th day of June. Know all men that Anthony Ghileta shipped certain wax and certain hides in the name and on behalf of Symon Marabottus which things must be delivered at Pisa to Mr Percival de Guisulfis, and by order of the said Mr Percival who shall deliver all his things to Marcellino de Nigro his agent, and I Bartholomeus de Octono shall deliver all his goods at Portovenere and for the better caution I affix my mark so.

A copy

Bartholomeus de Octono, mate of the ship of Anrea Garoll.

History – contd…• Prior to 1800’s – no exclusion clauses• First half 19th century – ‘freedom of contract’, exclusion

clauses by ship owners

• UK – BLA 1855, COGSA 1971, COGSA 1992• Other jurisdictions – USA Harter Act 1893, Australian

COGSA 1904, Canadian WCGA 1910)• HR, HVR, Hamburg & Rotterdam Rules

Functions of a Bill of Lading

1. Receipt or evidence goods shipped• Quantity and Quality• Shipper’s count, ‘said to contain’

2. ‘Lawful holder’ to claim delivery• Lawful holder

3. ‘Evidence’ of carriage of contract• Common Law – Public or Private Carrier• Time Charter Party or Voyage Charter Party • CIF or FOB Sale Contract

‘Hidden’ Functions of a Bill of Lading

4. Transfer to holder rights and duties under carriage of contract

5. Depending upon terms of sale contract, transfer of BL can also transfer property on the goods.

These are the driving force behind conventions and legislations, and legal interpretation of BL clauses.

Law• Freedom of Contract

• Relative bargaining strength of parties

• Duty to carry with care• To prevent unfair reliance by carrier on exclusion clauses

Carrier’s position as a bailee of goods – Public policy issuesStandard approach to interpretation of exclusion clauses

• Duty to provide seaworthy ship, including cargoworthiness• Fundamental nature • Carrier’s position as a bailee of goods

• Duty not to depart from proper route• Wide wordings used to describe general area instead of specific ports• Exclusion – Life salvage

• Liability in tort• (not discussed in this presentation)

Caution

Types of Bills of Lading and subsequent implication upon application of conventions or legislations are NOT covered in this presentation

Conventions Applicable• Hague Rules, Visby Amendments, SDR Protocol

(UK COGSA 71)

• Hamburg Rules(not ratified by the UK)

• Rotterdam Rules(not ratified by the UK)

Hague Rules, Visby Amendments, SDR Protocol• The International Convention for the Unification of Certain

Rules of Law relating to Bills of Lading of August 1924

• The Hague Rules as amended by the Brussels Protocol of February 1968

• Protocol amending the International Convention for the Unification of Certain Rules of Law relating to Bills of Lading of August 1924 (The Hague Rules), as amended by the Protocol of February 1968 (Visby Rules) (December 1979)

Hague-Visby Rules• Why

• Freedom of contract ‘tilted’ in favour of ship owners• To protect the interests of the shipper/cargo-owner, the law should

impose some minimum obligations upon the carrier.

• What• “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, shall be subject to the responsibilities and liabilities, and entitled to the rights and immunities hereinafter set forth”

• Structure• Article I to X• Not 10 but 11 articles (Art IV bis)

Hague Visby Rules• Art I

• carrier, contract of carriage, goods, ship, carriage of goods

• Art II • carrier … shall be subject to the responsibilities and liabilities, and be

entitled to the rights and immunities hereinafter set forth

• Art III – 8(9) parts (#4, #6, #6bis HV)• Seaworthiness (no exceptions) Duty of Care (exceptions later)• ‘on demand’ issue a BL, • BL prima facie evidence of receipt, proof to the contrary shall not be

admissible when the bill of lading has been transferred to a third party acting in good faith. (HV)

• Shippers deemed to have guaranteed accuracy of info to carrier• Notice of damage in writing, hidden damage 3 days, time bar 1 year for

suit 6 bis – court may extend time bar (HV)

Hague Visby Rules• Art III (contd)

• Shipped BL in lieu of return of previous documents• Any clause, covenant, or agreement in a contract of carriage relieving

the carrier or the ship from liability for loss or damage … lessening such liability otherwise than as provided in this Convention, shall be null and void and of no effect (The Benarty case)

• Art IV – 6 parts (#5 HV, #5 SDR)• (double negative) not liable for unseaworthiness, unless want of due

diligence• exceptions listed (‘catch all’ subpart q – any other cause)• negligence of shipper, carrier not liable• deviation permitted• SDR - 666.67 units of account per package or unit or 2 units of account

per kilogramme of gross weight of the goods lost or damaged, package as enumerated in BL. (Container issues as a package)

Hague Visby Rules• Art IV (contd)

• Dangerous goods - not consented with knowledge, may at any time before discharge be landed or destroyed or rendered innocuous by the carrier without compensation … shipper liable for all damages and expenses directly or indirectly arising out of …

• Article IV bis (HV) – 4 parts• defences and limit of liability apply in action against carrier – contract

and tort; available to owner’s servants; aggregate can not exceed limits; exception if reckless

• Artcle V• A carrier … liberty to surrender (whole or part, all or any, rights and

immunities) and to increase any of his responsibilities and obligations under this Convention, provided … embodied in the BL issued

• Not applicable to CP but BL shall comply with the terms of this Convention, lawful insertion of GA clause

Hague Visby Rules• Art VI

• Particular goods, agreement, so far as this stipulation is not contrary to public policy, … provided that in this case no BL has been or shall be issued … terms embodied in non-negotiable document (receipt) and shall be marked as such… Any agreement so entered into shall have full legal effect. … only to other shipments where the character or condition of the property to be carried or the circumstances, terms and conditions under which the carriage is to be performed are such as reasonably to justify a special agreement.

• Art VII• agreement prior loading or after discharge outside the scope of this

convention

• Art VIII• shall not affect rights and obligations of the carrier relating to the

limitation of the liability of owners of sea-going vessels.

Hague Visby Rules• Art IX (The Rosa S case)

• monetary units at gold value• non pound sterling countries – reserve right to convert into own

monetary units• National law may reserve debtor to exchange rate at day of discharge

• Art IX (HV)• shall not affect the provisions of any international Convention or national

law governing liability for nuclear damage.

Hague Visby Rules• Article X

• provisions apply to all BL issued in any of the Contracting States.

• Article X (HV) (The Vita Foods case, The MSC Amsterdam case)

• provisions apply to every BL relating to the carriage of goods between ports in two different States if:

• (a) the bill of lading is issued in a Contracting State, or• (b) the carriage is from a port in a Contracting State, or• (c) the contract contained in or evidenced by the bill of lading provides

that this Convention or legislation of any State giving effect to it is to govern the contract, whatever may be the nationality of the ship, the carrier, the shipper, the consignee, or any other interested person.

• Each Contracting State shall apply the provisions of this Convention to the bills of lading mentioned above.

• This Article shall not prevent a Contracting State from applying the Rules of this Convention to bills of lading not included in the preceding paragraphs.

Hamburg Rules

United Nations Convention on the Carriage of Goods by Sea 1978•Why

• an ‘attempt of developing countries' to level the playing field.

•What• Part I – General Provisions (Art 1 – 3)• Part II – Liability of Carrier (Art 4 – 11)• Part III – Liability of Shipper (Art 12 – 13)• Part IV – Transport Documents (Art 14 – 18)• Part V – Claims and Actions (Art 19 – 22)• Part VI – Supplementary Provisions (Art 23 – 26)• Part VII – Final Provisions (Art 27 - 34)

Hamburg Rules• Critical Provisions

• Voyages – HVR (3) terms, and if B/L states Hamburg rules to apply• Covers contract of carriage by sea• Carrier responsible while in ‘charge’ of goods; Actual and Contractual

carrier covered• Carrier – to take all measures that could reasonably be required• Carrier – to prove reasonable steps were taken to avoid loss unless

damage by fire• Limitation – 2.5 SDRs per kg or 835 SDRs per package or shipping unit• Delay liability – 2.5 x freight, subject to upper limit above• Deviation – no special provision• Prima facie evidence in hands of shipper; conclusive evidence with 3P• BL Information – Art 15 (a) to (o)• Notice of damage - next working day or (latent) 15 days of delivery; delay

60 days of delivery; • 2 years time bar, may sue in any of listed places, or arbitrate

Rotterdam RulesUnited Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea 2008

•Why• The aim of the convention is to extend and modernize international rules

already in existence and achieve uniformity of admiralty law in the field of maritime carriage, updating and/or replacing many provisions in the Hague Rules, Hague-Visby Rules and Hamburg Rules

•What• establishes a modern, comprehensive, uniform legal regime governing

the rights and obligations of shippers, carriers and consignees under a contract for door-to-door shipments that involve international sea transport

Rotterdam Rules• Structure

• 96 Articles arranged in 18 Chapters• 30 definitions (compare to only 5 in HVR)

• New terms coined - Transport Document, Maritime Performing Parties etc

• Critical Provisions• extends the period of time that carriers are responsible for goods• allows for e-commerce and electronic documentation• obligates ships are seaworthy and properly crewed throughout the

voyage• elimitates ‘nautical fault defence’• increases package limitations to 875 SDR per unit or 3 SDR per kg• increases the time that legal claims can be filed to two years • allows parties to certain "volume" contracts to opt-out of some liability

rules set out

UK Legislation, in force• Carriage of Goods by Sea Act 1971

• An Act to amend the law with respect to the carriage of goods by sea.• Gives effect to ‘Hague Rules, as amended’

• Carriage of Goods by Sea Act 1992• An Act to replace the Bills of Lading Act 1855 with new provision with

respect to bills of lading and certain other shipping documents.• (Bill of Lading Act 1855 - An Act, to amend the Law relating to Bills of

Lading)

Carriage of Goods by Sea Act, 1971• Why

• Incorporates ‘Hague Rules as amended’ by national legislation into UK law

• What • 6 Sections, 1 Schedule

Carriage of Goods by Sea Act, 1971• Section 1

• Application of ‘Hague Rules as amended’, has force of law in UK• Applies where port of shipment is in UK• Deck Cargo excluded in s.1(c), covered as goods in s.1(7) • Bill of Lading – Prima Facie evidence of receipt by carrier of goods

• Section 2• Contracting States

• Section 3• Absolute warranty of seaworthiness not to be implied

• Section 4• Application of Act to British Possessions

Carriage of Goods by Sea Act, 1971• Section 5

• Extension of Rules to carriage from ports in British Possessions

• Section 6• Supplemental

• Schedule• Text of Hague Rules, as amended

Carriage of Goods by Sea Act, 1992• Why

• Bill of Lading Act 1855• Rights assigned upon transfer, couldn’t transfer liabilities• Tied transfer of contract with transfer of property• Complicated, lot depended upon precise timing of transfer• Restricted to shipped BL only. Stale BL not covered• Rights and liabilities dealt together

• Law commission paper• Rights of Suit in Respect of Carriage of Goods by Sea

• COGSA92 ‘supposed’ to fill the gaps of BLA 1855

Carriage of Goods by Sea Act, 1992• Section 1

• Expands range of documents

• Section 2• Transfers Rights to lawful holders, named consignees, persons entitled

to acquire right

• Section 3• Transfers Liabilities - demands delivery or make a claim under contract

• Section 4• Representation in BL about quantity of cargo• BL for goods shipped or received for shipment, and signed by Master or

authorized person, shall be conclusive evidence against the carrier of the shipment of the goods, or of receipt for shipment

Carriage of Goods by Sea Act, 1992• Section 5

• Defines contracts of carriage but does not include charterparties

• Section 6• Short Title etc; without prejudice to application of HVR under COGSA71

Questions?

Thank you