Law of International Trade and Finance

LWM727

The Hamburg Rules and the

Recent Developments
(The Rotterdam Rules)
 Introduction
 During the late 1960s, the Hague and the Hague-Visby Rules came
under vehement attack from underdeveloped nations who believe
that the operations of the “maritime law” along with certain attacks
of international trade law, impaired their balance of payments and
ensured their continued poverty and perpetual underdevelopment in
an industrial age.

 The UNCTAD charged with the task of examining the operation of

the Hague Rules and the commission of a working paper, consulted
interested parties ranging from shippers, shipowners, insurers and
legal bodies from many countries and concluded that there was a
compelling need for a new carrier liability regime.
 The chief complaint about the Hague and Hague-Visby
Rules is that they primarily favor the carrier in a contract of
carriage of goods by sea.

 Cargo exporting countries without a strong presence of

shipowners are concerned with the limitations of the
Hague-Visby Rules, particularly in respect of the following:

(1) the Hague-Visby Rules only have mandatory

application where the contract is evidenced by a bill of
lading, anything less such as a sea waybill which is used
frequently for shorter voyages, is not accommodated;
(2) the Hague-Visby Rules only apply to contracts of
carriage by sea, they do not extend to any period of
storage or consolidation of the cargo at the port of
shipment even though the goods have already been
received into custody by the carrier;

(3) the burden of proof under the Hague-Visby Rules

weighs too heavily on the shipper;

(4) the Hague-Visby Rules contains no rules on how

jurisdiction is to be allocated; and

(5) the low financial limits in the Hague-Visby Rules.

 Scope of application

 Unlike the Hague-Visby Rules which apply to contracts

covered by a bill of lading, the Hamburg Rules will govern
all “contracts of carriage by sea between two different
States” under Art 2(1).

 The only exception is charterparties.

 This would mean that unlike a self-imposed constraint in

the Hague-Visby Rules to bills of lading, the Hamburg
Rules apply to any contract of carriage of sea, whatever
the contractual document might be.
 The Rules apply where:

(1) the port of loading as provided for in the contract of carriage is located in a
Contracting State; or

(2) the port of discharge as provided for in the contract of carriage is located in a
Contracting State; or

(3) one of the optional ports of discharge provided for in the contract of carriage is the
actual port of discharge and such port is located in a Contracting State; or

(4) the bill of lading or other document evidencing the contract of carriage is issued in a
contracting State; or

(5) the bill of lading or other document evidencing the contract of carriage by sea
provides that the Hamburg Rules or the legislation of any State giving effect to them are to
govern the contract.
 The main difference between the Hamburg Rules and
Hague-Visby Rules as far as the scope of application
is concerned, is the extension of application to
carriage documents other than the bill of lading.

 A minor change is that the Hamburg Rules refer not

only to the port of loading but also the port of
discharge.
 Who is a carrier?
 The Hamburg Rules refer to the “actual carrier” and the
“contractual carrier” as being susceptible to liability under the
Rules concurrently.

 Art 10 (1) provides:

“Where the performance of the carriage or part thereof has been

entrusted to an actual carrier, whether or not in pursuance of a
liberty under the contract of carriage by sea to do so, the carrier
nevertheless remains responsible for the entire carriage
according to the provisions of this Convention. The carrier is
responsible, in relation to the carriage performed by the actual
carrier, for the acts and omissions of the actual carrier and of his
servants and agents acting within the scope of their
employment.”
 However, the actual carrier is liable only for the part of the contract which he personally
performs.

 The contractual carrier is entitled to exclude his liability for loss or damage caused to the
goods while in the custody of the actual carrier, provided that the actual carrier is named and
details about that part being performed by the actual carrier are given, in the contract of
carriage under Art 11(1) as follows:

Through carriage

“Notwithstanding the provisions of paragraph 1 of article 10, where a contract of carriage by

sea provides explicitly that a specified part of the carriage covered by the said contract is to
be performed by a named person other than the carrier, the contract may also provide that
the carrier is not liable for loss, damage or delay in delivery caused by an occurrence which
takes place while the goods are in the charge of the actual carrier during such part of the
carriage. Nevertheless, any stipulation limiting or excluding such liability is without effect if no
judicial proceedings can be instituted against the actual carrier in a court competent under
paragraph 1 or 2 of article 21. The burden of proving that any loss, damage or delay in
delivery has been caused by such an occurrence rests upon the carrier.”
 Nevertheless, there exists another impediment to the
contractual carrier’s right to exclude liability under these
circumstances where it is not possible for judicial
proceedings to be brought against the actual carrier in a
competent court (as defined in Art 21(1) (2)), that exclusion
clause shall be ineffective.

 There is however no rule which prejudices any right of

recourse between the carrier and the actual carrier.

 There exists between themselves, a mutual right to

indemnity.
 This position is different from that under the Hague-Visby Rules where,
whilst the charterer and the shipowner are both subject to the Hague-Visby
Rules where the contract made is covered by a bill of lading, only one could
be made liable at a time.

 The new position is reflective of the change in international carriage

conventions-for example, the Montreal Convention 1999 also places
concurrent liability on the actual and contractual carrier.

 The rationale is to ensure that the shipper or cargo owner is not

disadvantaged in any way by being compelled to make a choice of
defendant at the outset.

 He should be entitled to sue both, if he so advised.

 Basis of liability

 Art 5 provides that the carrier is liable for loss resulting from loss or damage
to the goods, as well as delay in delivery, if the occurrence which caused the
loss, damage or delay took place while the goods were in his charge, unless
the carrier proves that he, his servant or agents took all measures that could
reasonably be required to avoid the occurrence and its consequence.

 This is clearly a presumption of liability provision, once it has been shown by

the claimant that the goods were in the carrier’s charge and the loss or
damage occurred during the time, the onus shift to the carrier to prove non-
negligence.

 This is starkly difference from the Hague-Visby Rules which set out in Art
IV(2) a list of exceptions to the carrier’s liability. Negligence is thus removed
as an exception to liability.
 Limits on liability

 The financial limits placed on a potential claim under Art 6 (1) are:

(a) The liability of the carrier for loss resulting from loss of or
damage to goods according to the provisions of article 5 is limited to
an amount equivalent to 835 units of account per package or other
shipping unit or 2.5 units of account per kilogram of gross weight of
the goods lost or damaged, whichever is the higher.

(b) The liability of the carrier for delay in delivery according to the
provisions of article 5 is limited to an amount equivalent to two and
a half times the freight payable for the goods delayed, but not
exceeding the total freight payable under the contract of carriage of
goods by sea.
 Art 6(2) provides that:

“Where a container, pallet or similar article of

transport is used to consolidate goods, the package
or other shipping units enumerated in the bill of
lading, if issued, or otherwise in any other document
evidencing the contract of carriage by sea, as packed
in such article of transport are deemed packages or
shipping units. Except as aforesaid the goods in such
article of transport are deemed one shipping unit.”
 Time limit

 The Hamburg Rules. Like the Hague-Visby Rules also require the claimant
to commence action or lodge a complaint within a set time.

 Unlike the Hague-Visby Rules, the time limit is two (2) years.

 This period of two (2) years starts running from the date of delivery or, in the
case of non-delivery, on the last day on which the goods should have been
delivered.

 Art 20 (1) allows the time limit to be extended at any time within the two-year
period by the defendant provided he serves a declaration in writing to the
claimant.
 Duty of carrier to issue shipping
documents
 Under Part IV, the carrier is required to issue a bill of lading to the shipper when the carrier or actual
carrier takes the goods into his charge which as far as Art 15 is concerned, should contain the
following particulars:

(a) the general nature of the goods, the leading marks necessary for identification of the goods, an
express statement, if applicable, as to the dangerous character of the goods, the number of
packages or pieces, and the weight of the goods or their quantity otherwise expressed, all such
particulars as furnished by the shipper;

(b) the apparent condition of the goods;

(c) the name and principal place of business of the carrier;

(d) the name of the shipper;

(e) the consignee if named by the shipper;

(f) the port of loading under the contract of carriage by sea and the date on which the goods were
taken over by the carrier at the port of loading;
(g) the port of discharge under the contract of carriage by sea;

(h) the number of originals of the bill of lading, if more than one;

(i) the place of issuance of the bill of lading;

(j) the signature of the carrier or a person acting on his behalf;

(k) the freight to the extent payable by the consignee or other indication that freight is payable by him;

(l) the statement referred to in paragraph 3 of article 23;

(m) the statement, if applicable, that the goods shall or may be carried on deck;

(n) the date or the period of delivery of the goods at the port of discharge if expressly agreed upon between
the parties; and

(o) any increased limit or limits of liability where agreed in accordance with paragraph 4 of article 6.
 Jurisdiction for dispute resolution
 The Hamburg Rules, unlike the Hague-Visby Rules make specific provisions for
jurisdiction.

 Under Art 21, the claimant has the option of suing the defendant in any of the
following places:

(a) the principal place of business or, in the absence thereof, the habitual residence of
the defendant; or

(b) the place where the contract was made provided that the defendant has there a
place of business, branch or agency through which the contract was made; or

(c) the port of loading or the port of discharge; or

(d) any additional place designated for that purpose in the contract of carriage by sea.
 The courts of these places are not, however, automatically seized.

 They will still need to decide on the basis of their own domestic law whether
they have jurisdiction to entertain the claim.

 The Hamburg Rules merely offer the claimant the option of suing at any of
these places, if the claim is admissible by the law of those places.

 This is however a closed list.

 Art 21 (3) disallows proceedings to be brought in a place not specified in Art

21 despite that court’s own jurisdictional rules.
 The UNCITRAL Convention on the International
Carriage of Goods Wholly or Partly by Sea
(The Rotterdam Rules)

 Adopted by the General Assembly on 11 December 2008, the Convention

establishes a uniform and modern legal regime governing the rights and
obligations of shippers, carriers and consignees under a contract for door-to-door
carriage that includes an international sea leg. The Convention builds upon, and
provides a modern alternative to, earlier conventions relating to the international
carriage of goods by sea, in particular, the International Convention for the
Unification of Certain Rules of Law relating to Bills of Lading (Brussels, 25 August
1924) ("the Hague Rules"), and its Protocols ("the Hague-Visby Rules"), and the
United Nations Convention on the Carriage of Goods by Sea (Hamburg, 31
March 1978) ("the Hamburg Rules").

 The Convention extends and modernizes the existing international rules relating
to contract of maritime carriage of goods. The aim is that the Convention will
replace The Hague rules, The Hague-Visby rules and the Hamburg rules and that
it will achieve uniformity of law in the field of maritime carriage.
 The Rotterdam Rules provide a legal framework that takes into account the many
technological and commercial developments that have occurred in maritime transport since
the adoption of those earlier conventions, including the growth of containerization, the desire
for door-to-door carriage under a single contract, and the development of electronic transport
documents. The Convention provides shippers and carriers with a binding and balanced
universal regime to support the operation of maritime contracts of carriage that may involve
other modes of transport.

 The Rotterdam Rules have been prepared in intergovernmental negotiations that lasted for
over 10 years by the United Nations Commission for International Trade Law (UNCITRAL).
On the other hand the Comité Maritime International (CMI) conducted the preparatory work
on the Convention at the request of UNCITRAL including a preliminary draft text for the
Convention. The signing ceremony was held in Rotterdam from 20 to 23 September 2009. In
the meantime the following - 24 - countries have signed the Convention; Armenia, Cameroon,
Congo, Democratic Republic of the Congo, Denmark, France, Gabon, Ghana, Greece,
Guinea, Luxembourg, Madagascar, Mali, the Netherlands, Niger, Nigeria, Norway, Poland,
Senegal, Spain, Sweden, Switzerland, Togo, and the United States of America, all together
representing 25% of the world's trade. In the meantime Spain has become the first nation to
ratify the Rotterdam Rules.
 The scope of application
 The Convention applies to “contracts of carriage.”

 A contract of carriages defined in Art 1 (1) as “ a contract in which a carrier,

against the payment of freight, undertakes to carry goods from one place to
another.”

 It is also provided that the contract shall provide for carriage by sea and
may provide for carriage by other modes of transport in addition to sea
carriage (Art 1 (1)).

 There is a further condition before the Convention would apply-the place of

receipt and the place of delivery should be in different states, and as
regards the sea leg, the port of loading and the port of discharge should be
in different states.
 It should also be clear that one of the following, as indicated in
the contract, is a contracting state:

(1) the place of receipt;

(2) the place of loading;

(3) the place of delivery; or

(4) the place of discharge

 A few points might be said about the new rules:

(1) there is no requirement that the sea leg has to be the

dominant leg, or otherwise; and

(2) “the contract shall provide for the carriage by sea” suggest
that the sea carriage must be clear, expressly or by implication,
from the contract; the actuality that the goods were carried by
sea is not enough. It would appear too that it is not enough for
the contract to provide for a mere liberty to use sea carriage. The
duty to use sea carriage must be present, expressly or by
implication.
 Mandatory Effect
 Thenew sea Convention is intended to have
mandatory effect.

 Art 81 provides that any term in the contract which

directly or indirectly excludes or limits the carrier’s
obligations under the Convention will be void.
 Liability of carrier

 The carrier is responsible for the goods from when he or a

performing party receives the goods for carriage to when the
goods are delivered (Art 12 (1)).

 The parties may agree on the time and place or receipt and
delivery of the goods but the contract may not stipulate that:

(1) the time of receipt is subsequent to the beginning of their

loading under the contract of carriage; or

(2) the time of delivery is prior to the completion of their final

unloading under the contract of carriage (Art 12(3)).
 It may be called that under the Hague-Visby Rules, the carriage of goods is defined as
covering “the period from the time the goods are loaded on to the time when they are
discharged from the ship” (Art 1 (e)).

 In Art 12. that has been modified.

For the purpose of determining the carrier’s period of responsibility, the parties may agree on
the time and location of receipt and delivery of the goods, but a provision in a contract of
carriage is void to the extent that it provides that:

(a) The time of receipt of the goods is subsequent to the beginning of their initial loading
under the contract of carriage; or

(b) The time of delivery of the goods is prior to the completion of their final unloading
under the contract of carriage.

 The period of cover will be from the time the goods are received (instead of loaded) to the
time they are delivered (as against discharge).
 The carrier’s more specific obligations are detailed in:

(1) Art 14 (duty properly and carefully to receive, load, handle, stow,
carry, keep, care for, unload and deliver the goods);

(2) Art 15 (a duty at the beginning of and during the voyage, to

provide a seaworthy ship, properly crew, equip and supply the ship, and
make and keep the holds and containers supplied by the carrier fit and
safe for the reception, carriage and preservation of the goods).

 These provisions are intended to reflect those in the Hague-Visby Rules

and the Hamburg Rules on seaworthiness, and care of cargo.

 There is a significant feature in Art 15-it is the duty attaches not only at
commencement of the voyage but endures all through the voyage.

 The duty is thus a continuing duty to exercise due diligence to make and
keep the ship seaworthy.
 If the carrier breaches these duties and consequential loss,
damage or delay were to arise, he would be liable if the claimant
is able to prove:

Article 17

Basis of liability

1. The carrier is liable for loss of or damage to the goods, as

well as for delay in delivery, if the claimant proves that the loss,
damage, or delay, or the event or circumstance that caused or
contributed to it took place during the period of the carrier’s
responsibility
 The carrier is relieved of all or part of its liability pursuant to paragraph 1of this
article if it proves that the cause or one of the causes of the loss, damage, or
delay is not attributable to its fault or to the fault of any person referred to in Art
18.

 Unless the carrier is at fault or the carrier had failed to provide and keep the ship
seaworthy, the following will also excuse the carrier from liability:

(a) Act of God;

(b) Perils, dangers, and accidents of the sea or other navigable waters;
(c) War, hostilities, armed conflict, piracy, terrorism, riots, and civil
commotions;
(d) Quarantine restrictions; interference by or impediments created by governments,
public authorities, rulers, or people including detention, arrest, or seizure not
attributable to the carrier or any person referred to in article 18;
(e) Strikes, lockouts, stoppages, or restraints of labor;
(f) Fire on the ship;
(g) Latent defects not discoverable by due diligence;
(h) Act or omission of the shipper, the documentary shipper, the controlling party, or
any other person for whose acts the shipper or the documentary shipper is liable
pursuant to article 33 or 34;
(i) Loading, handling, stowing, or unloading of the goods performed pursuant to
an agreement in accordance with article 13, paragraph 2, unless the carrier or a
performing party performs such activity on behalf of the shipper, the documentary
shipper or the consignee;
(j) Wastage in bulk or weight or any other loss or damage arising from inherent defect,
quality, or vice of the goods;
(k) Insufficiency or defective condition of packing or marking not performed by or on
behalf of the carrier;
(l) Saving or attempting to save life at sea;
(m) Reasonable measures to save or attempt to save
property at sea;

(n) Reasonable measures to avoid or attempt to avoid

damage to the environment; or

(o) Acts of the carrier in pursuance of the powers

conferred by articles 15 and 16.
 Carrier's duty to deliver the goods

 According to Art 11, the carrier shall, subject to this Convention

and in accordance with the terms of the contract of carriage,
carry the goods to the place of destination and deliver them to
the consignee.

 This is different from the Hague-Visby Rules which does not

contain an express duty to deliver the goods.

 This would mean that a claim for misdelivery is could now be

made based on the convention.
 At English law, misdelivery is treated as a strict contractual obligation for
which there are no defenses and where there are limitation of liability
clauses, these would be construed very narrowly.

 In The Sormovski [1994] 2 Lloyd’s Rep. 266 the carrier was not relieved of
liability for misdelivery of the goods when the customs authorities who were
in possession of the goods had passed them on to the buyer who had not
paid for them (and therefore did not have a bill of lading).

 That was the case despite a clause in the bill of lading providing:

“if the carrier is obliged to hand over the goods into the custody of a
customs, port of other authority, such hand over shall constitute due delivery
to the Merchant under the bill of lading.”
 The Rotterdam Rules, on the other hand, it would
appear that there are defenses for the carrier who
misdelivered the goods (Art 17) and the carrier would
be able to rely on the limitation of liability provisions in
Art 60 (so long as he had not committed a personal
act or omission).
 Liability of shipper and
documentary shipper
 The Rotterdam Rules law down specific requirements that the shipper and the
documentary shipper must comply with.

 Although these requirements are by no means new duties, the convention formalizes
their existence and clarifies them in some detail.

 The shipper is required to:

(1) the shipper shall deliver the goods ready for carriage (Art 27)
(2) Cooperation of the shipper and the carrier in providing information and
instructions (Art 28)
(3) The shipper shall provide to the carrier in a timely manner such information,
instructions and documents relating to the goods that are not otherwise
reasonably available to the carrier, and that are reasonably necessary the proper
handling and carriage of the goods, including (Art 29)
(4) provide timely manner and accurate information for the compilation of the
contract particulars and the issuance of transport and carriage of goods ( Art 31)
(5) inform the carrier of the dangerous nature of any goods ( Art 32)
 Dispute Resolution
 The Rotterdam Rules allow the parties to agree to settle their disputes by
arbitration.

 However Art 77 (2) requires that the arbitration proceedings (at the option of
the person asserting a claim against the carrier) take place at:

(1) the carrier’s domicile;

(2) place of receipt agreed in the contract
(3) place of delivery agreed in the contract; or
(4) the port where the goods are initially loaded on a ship or the port
where the goods are finally discharged from ship.
 As regards to litigation, Art 68 (a) provides that the plaintiff can sue the
carrier in the following places:

1. the carrier’s domicile

2. place of receipt agreed in the contract
3. place of delivery agreed in the contract
4. the port where the goods are initially loaded on a ship or the port
where the goods are finally discharged from a ship.

 Finally, where there is a freely negotiated or clearly notified jurisdiction

clause, the plaintiff may sue the carrier at the place pre-arranged in the
clause (Art 68 (b)).
 Thank You

shahrizalzin@salam.uitm.edu.my