International Carriage of Goods by Sea

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Chapter 5 International Carriage of Goods by
Sea 1 General Introduction of International
Carriage of Goods 1. Definition of International
Carriage of Goods The transportation of goods
from one place of one country to another place of
another country by one or more means is called
international carriage of goods.
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2. Characteristics of International Carriage of
Goods (1). The goods shall cross the
border (2). Generally speaking, this kind of
transportation is done through contract of
international carriage of goods (3). A lot of
risk accompanied
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(4). International treaties and conventions and
international trade customs are often applied to
regulate this kind of act The Hague Rules The
Hamburg Rules 3. Varieties of international
carriage of goods Transportation by air
Transportation by sea Transportation by
railroad Multi-modal transportation
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2 International Carriage of Goods by Sea 1.
Definition and classification of international
carriage of goods by sea 1.1 definition The
transportation of goods by sea from one port of
one country to another port of another country is
called international carriage of goods by
sea. 1.2 classification Liner transport (carrier
and shipper) and charter transport (shipowner and
charterer)
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2. Two types of contract of carriage by
sea contracts contained in a charterparty and
contracts evidenced by a bill of lading. 2.1
Classification of the charterparty What is a
charterparty? (charterer and shipowner) the
voyage charterparty, The time charterparty, and
the charterparty by demise.
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2.1.1 the voyage charterparty Under the terms of
voyage charterparty, the shipowner will agrees to
provide the ship and it crew to the charter, and
the charter will use the ship and its crew to
transport goods one or many times within named
ports according to agreement between the charter
and the shipowner. So, in the voyage charterparty
both the port of loading and the port of
discharge must be mentioned clearly in the
contract.
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The Implied Terms of Voyage Charterparty The law
implies the following term into every voyage
charter (1 ) that the ship is seaworthy (2)
that it shall proceed with reasonable dispatch
(3) and that there should be no unjustifiable
deviation.
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2.1.2 Time Charterparties Under a time
charterparty the charterer engages the use of a
vessel for a stated period of time. The charterer
normally pays "hire" monthly, and the shipowner
will be entitled to withdraw the ship from the
charterer's use if a monthly installment is not
paid promptly. The charterer has
the right to direct the ship to proceed to
wherever it is needed. The only limitation on
this right is the charterer's promise to engage
only in lawful trades, to carry only lawful
goods, and to only direct the vessel to safe
ports.
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2.1.3 Charterparties by Demise (Bare Boat
Charterparty) Under this type of
charterparty, the charterer obtains possession
and control of the ship and puts in his own
master and crew, who are his employees.
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2.2 Liner Transport The carrier transports
the goods to the agreed destination from the
place of dispatch port, and the shipper or the
consignee pays the fare or the freight. Under
liner transport, the carriage contract is
evidenced by bill of lading, so it is also called
B/L transport. Under Liner Transport The ship
has regular sea route The ship sets off at
regular time and stops at the ports fixed in
advance The shipper or the consignee has no
right to interfere things mentioned above
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Some definitions carrier means any person by
whom or in whose name a contract of carriage of
goods by sea has been concluded with a
shipper. shipper means any person by whom or in
whose name or on whose behalf a contract of
carriage of goods by sea has been concluded with
a carrier, or any person by whom or in whose name
or on whose behalf the goods are actually
delivered to the carrier in the relation to the
contract of carriage by sea. Consignee means
the person entitled to take delivery of the goods.
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3. Bills of Lading According to Hamburg
Rules Bill of lading means a document which
evidences a contract of carriage by sea and the
taking over or loading of the goods by the
carrier, and by which the carrier undertakes to
deliver the goods against surrender of the
document.
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Functions of bill of lading (a), Bill of lading
is a document which evidences a contract of
carriage by sea between the carrier and the
shipper (b), Bill of lading" is a document
which evidences the taking over or loading of the
goods by the carrier (c) Bill of lading is a
document which represents the possession of goods
shipped
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3.1 Laws Concerning Bills of Lading A. The Hague
Rules The Hague Rules (the International
Convention for the Unification of Certain Rules
of Law Relating to Bills of Lading). This is an
international regulation which aimed at
reconciling the interests of the shipowners,
cargo owners and insurers. The Hague Rules
attaches its importance on the protection of the
carriers interests.
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B. The Hague-Visby Rules Ever since the Hague
Rules came into force, many shippers especially
smaller shippers from developing countries began
to complain the Hague Rules about its excessive
limitations to carrier's liability. This
resulted extensive revision on the Hague Rules in
l968, known as the Hague-Visby Rules. Up till
now, only a few countries have adopted the
Hague-Visby Rules.
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C. The Hamburg Rules The United Nations in 1978
completed drafting a new Convention on the
Carriage of the goods by Sea, known as the
Hamburg Rules. These rules are different from the
Hague Rules. They do not relieve the carrier for
errors in navigation or in the management of the
ship, and they make ocean carriers liable for
losses resulting from negligence. They also make
it easier for cargo owners to win their cases
against carriers. The Hamburg Rules serve the
interests of cargo owners and shippers in
developing countries that do not have large
carrier fleets. So many large maritime states
have not adopted the rules.
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D. Maritime Code of the People's Republic of
China Maritime Code of the People's
Republic of China came into force on July 1,
1997. China maritime code has transplanted into
it a number of important international
conventions. Such as Chapter IV (Contract of
Carriage of Goods by Sea) is based on the
Hague-Visby Rules and the Hamburg Rules, and
Chapter X (General Average) has adopted some
rules from the York-Antwerp Rules. Thus, China
maritime code is one of the best maritime laws in
the world.
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3.2 Characteristics of the Bills Of Lading A.
The Receipt Character The receipt which
the carrier gives the shipper may either
acknowledge that he has "shipped" the goods in a
named ship, or it may acknowledge that he has
"received the goods for shipment." The carrier
can issue a "shipped" bill only if he has
actually loaded the goods on board the vessel.
Bills certifying that the goods have been
properly loaded on board are known as clean bills.
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If there is a discrepancy between the goods
loaded and the goods listed, the statement on the
bill is considered the most important evidence
that the goods were received in the condition
shown in any dispute between the shipper and the
carrier. Nevertheless, the carrier can rebut this
evidence by showing that the bill of lading is
false of has been altered. From the point of
view of the buyer, a "shipped" bill of lading is
more valuable than a "received for shipment" bill
of lading because, if he receives the former type
of bill, he knows that the goods is in transit to
their destination.
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B. Evidence of the Contract of Carriage by
Sea The contract of carriage by sea is normally
concluded before the carrier issues the bill of
lading. The contract is made when the goods are
accepted by agents of the carrier for loading.
The bill of lading, especially a shipped bill of
lading is issued only when the ship leaves port.
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C. The Bill of Lading as a Document of
Title This is the most important characteristic
of the bill of lading. Its significance is that
the carrier need deliver the goods only if an
original bill Of lading is presented to him. The
bill of lading is thus "the key to the
goods." Exact meaning of document of title"
According to Benjamin in his Sale of Goods
that there is no authoritative definition of
"document of title to goods" at common law, but
it is submitted that it means a document relating
to goods the transfer of which operates as a
transfer of the constructive possession of the
goods.
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3.3 Transfer of Property under A Bill of
Lading The transfer of the bill of lading does
not mean the transfer of the property in the
goods in transit. There are usually two ways to
transfer the property in the goods under a bill
of lading. 1 The Intention of the Parties The
transfer of property is very important in
international trade, different nations have
different stipulations about this issue. Almost
all the unified international business laws have
no stipulations about this issue. 2. The Law of
the Place Where the Goods Are Located
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3.4 essential terms of B/L Article 73 of
Maritime Code of the P.R.C. A bill of lading
shall contain the following particulars
(1) Description of the goods, mark, number of
packages or pieces, weight or quantity, and a
statement, if applicable, as to the dangerous
nature of the goods (2) Name and principal
place of business of the carrier (3) Name of
the ship (4)  Name of the shipper (5)  Name
of the consignee
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(6)  Port of loading and the date on which the
goods were taken over by the carrier at the port
of loading (7)  Port of discharge (8)  Place
where the goods were taken over and the place
where the goods are to be delivered in case of a
multimodal transport bill of lading (9)  Date
and place of issue of the bill of lading and the
number of originals issued (10) Payment of
freight (11)  Signature of the carrier or of a
person acting on his behalf.
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3.5 the issuance of B/L 3.5.1 the man who issue
the B/L The carrier his agent and the
master 3.5.2 place and date of issue of
B/L Place port where goods was loaded on the
board Date date when the good was
loaded 3.5.3 numbers of B/L issued
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3.6 classification of B/L 3.6.1, shipped B/L
and received for shipment B/L 3.6.2, named
B/L?open B/L and order B/L 3.6.3, clean B/L and
unclean B/L (IN APPARENT GOOD ORDER AND
CONDITION)
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3.7 Carrier's Duties under A Bill of Lading
3.7.1 period of responsibility The
responsibility of the carrier for the goods
covers the period during which the carrier is in
charge of the goods at the port of loading,
during the carriage and at the port of
discharge. In the following circumstances, the
carrier is deemed to be in charge of the
goods (a) From the time he has taken over the
goods
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(b) Until the time he has delivered the
goods (1) By handing over the goods to the
consignee (2) In cases where the consignee does
not receive the goods from the carrier, by
placing them at the disposal of the consignee in
accordance with the contract or with the law or
with the usage of the particular trade,
applicable at the port of discharge (3) By
handing over the goods to an authority or other
third party to whom, pursuant to law or
regulations applicable at the port of discharge,
the goods must be handed over.
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3.7.2 basis of liability (1) The carrier is
liable for loss resulting from loss of or damage
to the goods, as well as from 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
servants or agents took all measures that could
reasonably be required to avoid the occurrence
and its consequences.
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(2) Delay in delivery occurs (a) when the goods
have not been delivered at the port of discharge
provided for in the contract of carriage by sea
within the time expressly agreed upon or, (b)
in the absence of such agreement, within the time
which it would be reasonable to require of a
diligent carrier, having regard to the
circumstances of the case.
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(3) The carrier is liable (a) For loss of or
damage to the goods or delay in delivery caused
by fire, if the claimant proves that the fire
arose from fault or neglect on the part of the
carrier, his servants or agents (b) For such
loss, damage or delay in delivery which is proved
by the claimant to have resulted from the fault
or neglect of the carrier, his servants or
agents, in taking all measures that could
reasonably be required to put out the fire and
avoid or mitigate its consequence.
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(4) The carrier is not liable, except in general
average, where loss, damage or delay in delivery
resulted from measures to save life or from
reasonable measures to save property at sea. (5)
Where fault or neglect on the part of the
carrier, his servants or agent combines with
another cause to produce loss, damage or delay in
delivery the carrier is liable only to the extent
that the loss, damage or delay in delivery is
attributable to such fault or neglect.
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3.8 Carriers Immunities See Page 165-166 for
details.
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4. Marine Cargo Insurance. 4.1 definition A
contract of marine insurance is a contract
whereby the insurer undertakes, as agreed, to
indemnify the loss to the subject matter insured
and the liability of the insured caused by perils
covered by the insurance against the payment of
an insurance premium by the insured.
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What is perils? The covered perils mean any
maritime perils agreed upon between the insurer
and the insured, including perils occurring in
inland rivers or on land which is related to a
maritime adventure. 4.2 essential terms of such
contract A contract of marine insurance mainly
includes (1)       Name of the insurer
(2)       Name of the insured (3)      
Subject matter insured
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(4)       Insured value (5)       Insured
amount (6)       Perils insured against and
perils excepted (7)       Duration of
insurance coverage (8)       Insurance
premium.
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4.3 coverage of the marine cargo
insurance Perils and losses 4.3.1 perils In
marine insurance, perils are generally of two
kinds (1 ) Perils of the sea. This include
natural calamities and fortuitous accidents, such
as weather, thunder and lightning, tidal wave
earthquake, etc. (2 ) Extraneous risks. This
cover theft, rain, shortage, leakage, breakage,
dampness, etc. they may include special risks,
such as war risks, strikes, non-delivery of
cargo, refusal to receive cargo, etc.
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2. Losses losses fall into two main classes
total loss and partial loss. (1 ) Total loss.
This loss can either be actual total loss where
vessel or cargo are totally and irretrievably
lost, or constructive total loss in a case where
the ship or the goods have been abandoned because
the cost of salvage or recovery would have been
out of proportion to the value. (2) Partial loss.
This means the loss to the goods is on1y partial.
In case of partial loss a fine distinction is
drawn between particular average and general
average.
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What is General Average? General average means
the extraordinary sacrifice or expenditure
intentionally and reasonably made or incurred for
the common safety for the purpose of preserving
from peril the ship, goods or other property
involved in a common maritime adventure.
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What is particular average? Particular average
is a partial loss to the insured cargo and the
loss must be borne by the one who was suffered.
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4.4 insurance cover According to the
stipulations of the People's Insurance Company of
China, the following basic insurance covers are
available in marine insurance 4.4.1. Free From
Particular Average Insurance (FPA) Under FPA the
insurance company will be responsible to pay
claims for (1) total losses during
transportation suffered by natural calamities
(2) total or partial losses due to fortuitous
accidents
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2. With Particular Average Insurance (WPA) The
cover of this insurance is more extensive. The
insurer is liable for (1) All FPA
insurance (2) The partial losses of the insured
goods due to natural calamities mentioned under
FPA insurance.
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3. Ail Risks Insurance under an "all risks"
policy the goods are insured against all risks,
e. g. from natural calamities, fortuitous
accidents at Sea, or general extraneous risks,
irrespective of percentage of loss, total or
partial. The following things are not
covered (1) A natural deterioration of
perishable goods, delay, loss or damage caused
by inherent vice or nature of the subject
matter (2) Exemptible issues expressly
stipulated in the insurance contract