The Obligations of the Carrier Regarding the Ilian Djadjev

The Obligations of the Carrier Regarding the Cargo The Hague-Visby Rules Ilian Djadjev Private International Law University of Groningen Groningen, The Netherlands

ISBN 978-3-319-62439-6 ISBN 978-3-319-62440-2 (eBook) DOI 10.1007/978-3-319-62440-2

Library of Congress Control Number: 2017946184

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This Springer imprint is published by Springer Nature The registered company is Springer International Publishing AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland To my grandfather Iliya Guev (1926 – 2015) who has always inspired me Preface

This book addresses the legal and contractual obligations of sea carriers relating to the care for the cargo under a . While the general framework employed is the leading international liability regime on the carriage of goods by sea—the Hague-Visby Rules—the discussions in each chapter also account for the possible future adoption of a new regime, the , with the latter being adequately referred to in each of the chapters. The subject matter is related to the standard for the duty of care for the goods as codified in the Hague-Visby Rules, but the work touches also upon a wide range of related topics found both in law and in practice and provides valuable commercial, technical and historical links as well as various solutions that have been found at the national and international levels to address the challenges arising in this specialized area of law. The book is divided into six chapters, which gradually reveal the complexity of the topic. Chapter 1 provides a thorough introduction to the two main transport documents in use and to the basic logic behind shipping, seagoing trade, and related national and international legislation in that area. In turn, Chap. 2 presents an overview of the relevant provisions of the Hague-Visby Rules (most prominently Article III rule 2). The focus shifts from a critical analysis of the respective articles in the context of the current commercial practices to adding to the current debate on whether the rather fragmentized framework of sea carriage liability regimes could be updated and modernized. Chapter 3 examines the problems arising out of the insertion of a FIOS(T) clause in the contract of carriage and addresses the tension between this contractual arrangement and the provisions of the Rules. Chapter 4 focuses on the problems associated with the carriage of cargo on deck and, in particular, the obligations of the carrier over such cargo. The discussions comprise various technical, legislative and judicial issues related to deck cargo in the context of the Hague-Visby Rules. Chapter 5 is dedicated to the idiosyncrasies of contain- erized transport in the context of the carrier’s cargo-related obligations. The contents of this chapter encompasses also the entire process of containerization

vii viii Preface because of its unparalleled impact not only on the shipping business but, more generally, on international trade and even the social and economic development due to the irreversible changes that the shipping container brought to the modern world. Lastly, Chap. 6 summarizes the observations and implications derived from the various discussions in the previous chapters, which generally aim at ascertaining whether the current law corresponds to the commercial practice and the shipping industry’s needs of today. This final chapter provides an overall conclusion on the current status of the law and practice in the area of the carrier’s cargo-related obligations as well as on the prospects in the future. Overall, this book points in a clear fashion to the gaps between statutory law and commercial practice and traces their development, as well as the various ingenious methods of jurisprudence to link those two shores. Furthermore, the noticeable lack of uniformity between the various legal systems currently in force is also illustrated. Given the historical underpinnings and the evolution of the national and interna- tional codification of maritime law, the book is quite naturally centered around English law and English jurisprudence. However, the discussions are not constrained to English law only as there are numerous references made to other common law and civil law jurisdictions as well. This comparative element adds to the quality of the legal discussions and contributes to the international character of the book. The book was written with a number of potential readers in mind, and it is intended to open up the topic to a broader audience. It may be a valuable read both for readers who wish to advance their learning (e.g., professionals, practitioners and postgraduates) and for readers with little or almost no prior knowledge of the topic (e.g., students and researchers). This is because each chapter is provided also with sufficient background information, which allows even a less experienced reader to the more intricate problems discussed in the book without having to resort to external materials.

Groningen, The Netherlands Ilian Djadjev Acknowledgements

The writing of this book was an undertaking that required intensive work and dedication, which alone, however, would not suffice if it was not for the assistance and support of a number of people over the course of the past few years. It is first and foremost my supervisors Prof. Dr. Mathijs H. ten Wolde (University of Groningen) and Prof. Dr. Erik Røsæg (University of Oslo), with whom we have come a long way together and whose wise guidance and expertise were paramount for the successful completion of this project. I would also like to extend my gratitude to Prof. J.B. Wezeman, Prof. P.H.J.G. van Huizen, Prof. E. Eftestol-Wilhelmsson,€ Prof. G. van der Ziel, and Prof. H. Honka for their valuable input at various stages of the writing of this book. I feel very fortunate to have had the opportunity to extract knowledge from experts like them despite the geographical distance at times. I am sincerely grateful to the Noord Nederlandsche P&I Club (NNPC). The endless support and influence of both the management and the colleagues at the NNPC have left a great impact on this book. Mr. Robert Beets and Mr. Johan de Haan, in particular, were there for me from the very beginning, providing me with valuable practical insights and showing me the way forward. My deep gratitude also goes to my publisher Springer and, in particular, Ms. Anke Seyfried and Ms. Julia Bieler for their kind attention and professionalism in the process of preparing this book. In addition, I would like to thank my colleagues at the Private International Law department at the University of Groningen for supporting and encouraging me and for contributing to the perfect research environment. My sincerest of thanks goes to Mr. Jan-Ger Knot, Ph.D.; Mr. Juan Salmero´n, Ph.D.; and Mr. Federico Pincione. Also, I am incredibly indebted to Daniela Zhelyazkova for her patience and encouragement. Her wise advice was always on point and proved to be much helpful in moments of difficulties during my work-related and academic commitments. Finally, I would like to single out my family, in particular my mother Gloria, my father Nikolay and my sister Maria, as well as my dear friends for positively encouraging and supporting me throughout the years. Thank you.

ix Contents

1 Shipping and the Law on Bills of Lading and Charter Parties ..... 1 1.1 Parties to a Contract of Carriage ...... 1 1.2 Types of Contracts of Carriage ...... 6 1.2.1 Contract of Carriage ...... 7 1.2.2 Charter Party Contract of Carriage ...... 16 References ...... 28 2 The Carrier’s Obligations over the Cargo Under the Hague-Visby Rules and the Rotterdam Rules ...... 31 2.1 Introduction ...... 31 2.2 The Evolving Law of the Carriage of Goods by Sea ...... 32 2.2.1 The Hague Rules (1924) and Hague-Visby Rules (1968) . . . 34 2.2.2 The (1978) ...... 37 2.2.3 The Rotterdam Rules (2008) ...... 38 2.3 The Obligations of the Carrier Regarding the Cargo Under Common Law ...... 40 2.3.1 Cargo Claims ...... 41 2.3.2 Burden of Proof ...... 43 2.4 The Obligations of the Carrier Regarding the Cargo Under the Hague-Visby Rules ...... 43 2.4.1 The Carrier’s Responsibilities: General Overview ...... 43 2.4.2 Article II ...... 57 2.4.3 Article III Rule 2 ...... 58 2.4.4 The Carriers’ Cargo-Related Duties Under Charter Parties ...... 70 2.5 The Obligations of the Carrier Regarding the Cargo Under the Rotterdam Rules ...... 73 2.5.1 The Launch of a New Liability Regime: Foreword ...... 73 2.5.2 Defining the Principal Parties to a Contract of Carriage . . . 76 2.5.3 Identity of the Carrier ...... 78

xi xii Contents

2.5.4 The Obligations of the Carrier Regarding the Cargo ..... 79 2.5.5 The Period of Responsibility of the Carrier (Article 12) . . . 90 2.5.6 Burden of Proof ...... 92 2.5.7 What Lies Ahead: Prospects of the New Convention to Modernize and Harmonize the Law ...... 93 References ...... 96 3 The FIOS(T) Clause ...... 101 3.1 Introduction ...... 101 3.2 Shipping Terms ...... 102 3.3 The Tension Between the Hague-Visby Rules and the FIOS(T) Clause ...... 104 3.4 English Jurisprudence on the FIOS(T) Clause: Defining the Limits of the Carrier’s Responsibilities over the Cargo ...... 110 3.4.1 Opening the Door to FIOS(T) Clauses ...... 111 3.4.2 Incorporating a Charter Party FIO Clause in a Bill ofLading...... 117 3.4.3 Enforceability of FIOS(T) Provisions ...... 119 3.4.4 FIOS(T) Clauses in Charter Party Agreements ...... 127 3.4.5 Summary ...... 141 3.5 The Approach Taken in the Rotterdam Rules ...... 142 3.6 Conclusion ...... 146 References ...... 147 4 The Carrier’s Obligations over Deck Cargo ...... 151 4.1 Introduction ...... 151 4.2 What Is Deck Cargo? ...... 152 4.3 The Position Under the Hague/Hague-Visby Rules: Deck Carriage as an Exception to the Rules ...... 154 4.3.1 Deck Carriage Performed Within the Ambit of the Rules: Undeclared (Unauthorized) Stowage on Deck ...... 156 4.3.2 Deck Carriage Performed Outside the Ambit of the Rules: Declared (Authorized) Stowage on Deck ...... 160 4.4 Current Law on Deck Cargo: How Technology and Modern Practices Remodeled the Old Doctrine ...... 163 4.4.1 Factual Study ...... 164 4.4.2 Deck Cargo as a Custom in the Trade ...... 173 4.4.3 An Express Agreement Between the Parties to Carry the Goods on Deck ...... 178 4.5 The Evolving Views on Deck Cargo Under English Law: Toward a Less Restrictive Regime ...... 184 4.5.1 The Traditional Deck Cargo Doctrine: The Implied Duty of the Carrier to Carry the Goods Under Deck ...... 184 4.5.2 Interpreting the Bill of Lading ...... 195 Contents xiii

4.5.3 Deck Cargo and the Obligation to Care for the Goods (Article III Rule 2) ...... 198 4.5.4 The Carrier’s Defenses Against Claims for Damaged or Lost Deck Cargo ...... 200 4.5.5 Deck Carriage Under Charter Parties ...... 209 4.6 Selected Problems of Deck Carriage in Other Jurisdictions . . . . . 218 4.6.1 France ...... 218 4.6.2 Germany ...... 222 4.6.3 The Netherlands ...... 227 4.6.4 Norway ...... 230 4.6.5 Sweden ...... 231 4.7 Deck Cargo Under the Rotterdam Rules ...... 232 4.7.1 A Modernized Approach to Deck Cargo ...... 232 4.7.2 Permissible Deck Carriage ...... 234 4.7.3 Nonpermissible Deck Carriage and the Carrier’s Liability ...... 237 4.7.4 Assessment of the Rotterdam Rules’ Position on Deck Cargo ...... 239 4.8 Conclusion ...... 241 References ...... 242 5 The Carrier’s Obligations over Containerized Cargo ...... 247 5.1 Introduction ...... 247 5.2 The Fascinating World of Containers ...... 248 5.2.1 History of the Container Revolution ...... 248 5.2.2 Impact on the World Economy ...... 253 5.2.3 Containerization Today ...... 256 5.3 Technical Parameters ...... 258 5.3.1 Containers: Size, Dimensions, Design, and Types ...... 259 5.3.2 Container Vessels and the Necessary Infrastructure ..... 266 5.4 The Concept of Containers: Is a Container Considered a Package for the Purpose of the Hague and Hague-Visby Rules? ...... 273 5.4.1 The Hague Rules ...... 276 5.4.2 The Hague-Visby Rules ...... 283 5.5 The Carrier’s Period of Responsibility Under the Hague-Visby Rules and the Carriage of Containers ...... 288 5.5.1 Modification of the Traditional Contractual Model ...... 288 5.5.2 The Carrier’s Period of Responsibility Under a Through B/L and a Combined B/L ...... 290 5.5.3 Contractual Terms Designating the Container Service .... 292 5.6 “Properly and Carefully Load, Handle, Stow, Carry, Keep, Care for and Discharge” Applied to Containerized Cargo ...... 296 5.6.1 Article III Rule 2 Applied to Containers ...... 296 5.6.2 Article III Rule 2 Applied to the Cargo Inside Containers ...... 307 xiv Contents

5.7 Weighing the Containers: The Hidden Pitfalls. Who Owes That Duty? ...... 310 5.8 The Carriage of Containers Under the Rotterdam Rules ...... 315 5.8.1 A Package, or Not a Package, That Is the Question . . . . . 316 5.8.2 The Carrier’s Obligations over Containers ...... 317 5.8.3 The Evidentiary Effect of the Bill of Lading and the Contents of a Container ...... 322 References ...... 324 6 Conclusion ...... 329 Abbreviations

ADHGB Allgemeine Deutsche Handelsgesetzbuch (General German Commercial Code) AIMU American Institute of Marine Underwriters AMD Association Mondiale de Dispacheurs ANSI American National Standards Institute ASA American Standards Association BCCI Bulgarian Chamber of Commerce and Industry BIMCO Baltic and International Maritime Council BOL (B/L) Bill of Lading BTS Bureau of Transportation Statistics C&F/CFR Cost and Freight CFS Container freight station CIAIM Standing Commission for Maritime Accident and Incident Investigations [Comisio´n Permanente de Investigacio´nde Accidentes e Incidentes Marı´timos] CIF Cost, insurance, and freight CMI Comite´ Maritime International COA Contract of COGSA Carriage of Goods by Sea CSC Container Safety Convention CSCL China Shipping Container Line CY Container yard D&D and Detention DWT Deadweight tonnage EGHB Einführungsgesetz zum HGB (Introductory Law to the Commercial Code) FAS Free alongside ship FCA Free carrier

xv xvi Abbreviations

FCL Full container load FEU Forty-foot equivalent FI Free in FILO Free in liner out FILTD Free in liner terms discharge FIO Free in and out FIOS Free in and out stowed FIOSLSD Free in and out stowed, lashed, secured, and dunnaged FIOST Free in and out stowed and trimmed FIOT Free in and out trimmed FIS Free in and stowed FISLO Free in stowed liner out FLO/FLO Float-on/Float-off FO Free out FOB Free on board HBG Handelsgesetzbuch (Commercial Code) HR Hague Rules HVR Hague-Visby Rules ICC International Chamber of Commerce ICS International Chamber of Shipping ILA International Law Association IMDG International Maritime Dangerous Goods Code IMF International Monetary Fund IMO International Maritime Organization IMSBC International Maritime Solid Bulk Cargoes Code ISM International Safety Management ISO International Organization for Standardization JIML Journal of International Maritime Law LCL Less than container load, less-than-carload LIFO Liner in free out LO/LO Lift-on/Lift-off LTL Less-than-truckload LOI Letter of indemnity MAIB UK Maritime Accident Investigation Branch MARPOL International Convention for the Prevention of Pollution from Ships MOPOG Russian Regulations for Carriage of Dangerous Goods by Sea MSC (1) Maritime Safety Committee (IMO); (2) Mediterranean Shipping Company NOR Notice of Readiness NVOC Nonvessel owning carrier NVOCC Nonvessel operating NYPE New York Produce Exchange OOG Out of gauge cargo P&I Protection and indemnity Abbreviations xvii

PSL Practical storage life RORO Roll-on/Roll-off (RORO or ro-ro) RR Rotterdam Rules SCN Supreme Court of the Netherlands SDR Special drawing rights SIDS Small Island Developing States SLAC Shippers load, stow, and count SOLAS International Convention for the Safety of Life at Sea STC Said to contain STO-RO Stow and row TEU Twenty-foot equivalent TNPA Transnet National Port Authority (South Africa) UCP Uniform Customs and Practice for Documentary Credits UNCITRAL United Nations Commission on International Trade Law UNCTAD United Nations Conference on Trade and Development VGM Verified Gross Mass WO/WO Walk-on/Walk-off