Hague Rules
Formally the "International Convention for the Unification of
Certain Rules of Law relating to Bills of Lading”
Drafted at Hague in 1921 and signed at Brussels on 25th August
1924.
It is an international convention to impose minimum standards
upon commercial carriers of goods by sea.
The 1924 Convention actually favoured carriers and reduced
some of their obligations to shippers.
The Hague Rules represented the first attempt by the
international community to find a workable and uniform means
of dealing with the problem of ship-owners regularly excluding
themselves from all liability for loss or damage to cargo.
The objective of the Hague Rules was to establish a minimum
mandatory liability of carriers which could be derogated from.
Under the Hague Rules the shipper bears the cost of
lost/damaged goods if they cannot prove that the vessel was
unseaworthy, improperly manned or unable to safely transport
and preserve the cargo, i.e. the carrier can avoid liability for
risks resulting from human errors provided they exercise due
diligence and their vessel is properly manned and seaworthy.
Under the rule the carriers liability was restricted to G.B. pounds
100(gold equivalent) per package- unless of course a higher
limit had been mutually agreed.
The Hague Rules form the basis of national legislation in almost
all of the world's major trading nations, and probably cover more
than 90 per cent of world trade.
The Hague Rules have been updated by two protocols, were
later amended very slightly to become the Hague-Visby Rules.
Hague-Visby Rules
Drafted on 23rd Feb 1968, Effective on 23rd Jun1977
The premise of the Hague–Visby Rules was that a carrier typically has
far greater bargaining power than the shipper, and that to protect the
interests of the shipper/cargo-owner. The law should impose some
minimum obligations upon the carrier.
The provision of the rule fall into 2 main categories. Rules in the 1st
categories establish the minimum obligations of the carrier, and
second define the maximum immunity to which he is entitled and
extent to which he may limit his liability.
The rule apply only to contracts in/evidenced by Bill of Loading
The rule apply to all goods except to live animals and to goods stated
to be carried on deck.
Under the Rules, the carrier's main duties are to
(i) Properly and carefully load, handle, stow, carry,
keep, care for, and discharge the goods carried
(ii) to make the ship seaworthy
(iii) to properly man, equip and supply the ship.
the shipper has fewer obligations namely:
(i) to pay freight;
(ii) to pack the goods sufficiently for the journey;
(iii) to describe the goods honestly and accurately;
(iv) not to ship dangerous cargoes (unless agreed by both
parties);
(v) to have the goods ready for shipment as agreed;
The carrier's duties are not strict, but require only a reasonable
standard of professionalism and care; and Article IV allows the carrier
a wide range of situations exempting them from liability on a cargo
claim. These exemptions include destruction or damage to the cargo
caused by: fire, perils of the sea, Act of God, and act of war.
Immunity from due to deviation: any deviation in saving or
attempting to save life or property at sea or any reasonable deviation,
the carrier is not liable for loss or damage
Rights in respect of dangerous goods: if the carrier was not informed
by shipper or cargo not properly marked, the carrier is free to
jettison, land, destroy or render them harmless at any time before
discharge without any liability to the carrier and the shipper of the
goods is responsible for all the damages and expenses resulting for
the shipment of such goods.
Even when the dangerous goods are shipped with the knowledge
they may be dealt with likely manner with out any liability to the
carrier. In this case the shipper is not liable for any consequential
losses.
A controversial provision exempts the carrier from liability for neglect
or default of the master in the navigation or in the management of
the ship.
Rules require a ship to be seaworthy only "before and at the
beginning" of the voyage
Under the rule the liability for the carrier’s above limit was raised to
10,000 francs per package or 30 francs per kilogramme whichever is
higher. A franc means 65.5mgs of gold.
