What is a sea waybill? A non-negotiable document, otherwise similar in functions to a bill of lading, which is often used in preference to a bill of lading where this is permitted. It is not a document of title and can not, therefore, be used to transfer title in the goods to a third party. It may travel with the goods on the ship and does not need to arrive ahead of the goods for the receiver to claim the goods. It is often used where there is trust between the buyer and seller, and is preferred to a bill of lading in trades where bills of lading often lag behind the cargo (e. g. short-sea trades), and where there is no contractual requirement for bills of lading (e. g. in a sale not involving a letter of credit).
Can a sea waybill be required under
the terms of a letter of credit sale? Yes, as long as both parties to the sale of the goods agree to its use. Usually, however, Letters of Credit stipulate bills of lading. What statement normally appears in
the title of a sea waybill? The words 'Non-negotiable sea waybill'. Why does a sea waybill not need to be
issued in a 'set' of, say, three like a bill of lading?
Because it is not a negotiable document and is therefore less likely to be used for fraudulent purposes than a bill of lading. Two copies of the sea waybill do not need to be sent to the consignee.
HAGUE, HAGUE-VISBY and HAMBURG RULES
What are the Hague Rules, the Hague-Visby Rules and the Hamburg Rules?
Internationally-agreed rules, drafted by lawyers, defining the basic contractual obligations, rights, liabilities and immunities of sea carriers and cargo
shippers where a bill of lading or sea waybill is issued. They are sometimes known as 'liability regimes'.
Which of these rules are generally
used in sea carriage? The Hague Rules and Hague-Visby Rules are incorporated into the national law of many states, but the Hamburg Rules are not widely used since they are less favourable to shipowners. For cover of cargo liabilities by his P&l club, a carrier must incorporate rules at least as favourable as the Hague
Rules into his contracts of carriage with shippers. Liner and other bills of
lading normally do this by inclusion of a Clause Paramount.
Application of Hague-Visby Rules
To which goods do the Hague-Visby
Rules apply? All goods shipped under bill of lading terms except for (1 ) live animals; and (2) cargo which is stated by the contract of carriage as being, and is actually carried on deck.
To which documents do the Hague-
Visby Rules apply? Every bill of lading relating to the carriage of goods between ports in two different states if: (1)the bill of lading is issued in a contracting state; or (2) the carriage is from a port in a contracting state; or (3) the contract contained in or evidenced by the bill of lading provides that the Hague-Visby Rules or the legislation of any state giving effect to them (e. g. the UK Carriage of Goods
by Sea Act 1971) are to govern the contract. Many states have legislation
incorporating the Hague-Visby Rules into national law. Where no such national law applies, the Hague-Visby Rules may still apply to the carriage by agreement of the contracting parties.
Carrier's obligations under Hague-Visby Rules
In a nutshell, what are the carrier's three basic obligations under the Hague-Visby Rules?
(1 ) To ensure the vessel's seaworthiness as far as reasonably possible; (2) to look after the cargo; and (3) to issue a bill of lading if the shipper wants one.
Where the Hague-Visby Rules apply, what are the carrier's obligations in respect of seaworthiness?
The carrier must, before and at the beginning of the voyage (i. e. up to the moment of sailing), exercise due diligence to: (1) make the ship seaworthy; (2) properly man, equip and supply the ship; and (3) make the holds,
refrigerating and cool chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation. (These requirements cover the 3 aspects of seaworthiness: technical seaworthiness, cargoworthiness and fittedness for the voyage. ) The vessel must be
seaworthy only at the commencement of the voyage, which usually means when she leaves the berth, whether under her own motive power or with the aid of tugs.
What does 'exercise due diligence'
mean? Taking all reasonable precautions to see that the vessel is fit for the voyage contemplated. It could be argued that a shipowner who fails to check the qualifications of his ships' officers fails to exercise due diligence. The carrier is not obliged to give an absolute guarantee of seaworthiness. The carrier may delegate his duty to exercise of due diligence (e. g. to surveyors or repairers) but he will be responsible if they fail to exercise due diligence in carrying out their work.
Where the carrier must exercise due diligence to make the ship seaworthy, what does 'seaworthy' mean?
The hull must be in sound condition, the vessel must be mechanically sound, equipped with charts, etc., and crewed by a property trained crew. The holds must be fit and safe for the reception, carriage and preservation of the cargo and, in particular, the hatch covers must be tight and there must be no instability of the vessel through improper stowage. It has been held that the neglect to protect a water pipe in a hold from frost which could have been expected at the time of year showed lack of due diligence to make the vessel seaworthy.
What will be the legal effect of a failure by the carrier to show that he
exercised due diligence, etc. ?
If a cargo owner can show that his loss was caused by a failure of the carrier to exercise due diligence to make the vessel seaworthy, the carrier will not be able to rely on any other clauses in the Hague-Visby Rules which reduce his liability (i. e. the exceptions to liability).
Where the Hague-Visby Rules apply, what are the carrier's obligations regarding looking after the cargo?
The carrier must 'property and carefully load, handle, stow, carry, keep, care for and discharge any goods carried'. Unlike seaworthiness, this duty extends throughout the voyage and implies greater care than 'due diligence'. The courts do not expect perfection from the carrier, but it
- has been held that stowage was improper where contamination of other goods occurred; there was inadequate or no ventilation; dry cargo was damaged by liquid goods; and vehicles were secured only by their own brakes. The carrier must have a sound system for looking after the cargo when stowed. He has a duty to use all reasonable means to ascertain the nature and characteristics of the cargo and to care for it accordingly, though the shipper should give special instructions where special care is required. (Where water in tractor radiators froze, it was held that the carrier should have been told of the risks. )
Do the words 'properly and carefully' imply the same degree of care as exercising 'due diligence'?
No - a greater degree of care. 'Properly and carefully' caring, etc. for the cargo means looking after it with the greatest degree of care and attention, as if it were the carrier's own property.
Where the Hague-Visby Rules apply, what are the carrier's obligations regarding issue of a bill of lading?
On receiving goods into his charge, the carrier, the master or the carrier's agent, if the shipper demands, must issue a bill of lading to the shipper showing, amongst other things: all leading marks for identification of the goods, as stated by the shipper before loading (in his shipping note or boat note), provided these are visible on the goods or their coverings; either the number of packages or pieces, or the quantity, or weight, as stated by the shipper (in his shipping note or boat note); and the apparent order and condition of the goods. Any bill of lading thus issued will be prima facie evidence of receipt of the goods by the carrier as described, but proof to the contrary will not be admissable if the bill of lading is transferred to a third party acting in good faith. Any bill of lading issued after loading must be a 'shipped' bill of lading if the shipper demands, provided he surrenders any previously issued document of title (e. g. a 'received' bill of lading issued when the goods arrived at a warehouse or depot before shipment).
Carrier's rights and immunities under Hague-Visby Rules
In a nutshell, what three things do the carrier's rights and immunities under the Hague-Visby Rules concern?
(1 ) His exceptions to liability; (2) his right to deviate; and (3) his rights in respect of dangerous goods.
What exceptions to liability are granted to the carrier under the Hague-Visby Rules?
The carrier or ship will not be responsible for loss or damage arising from: act, neglect or default of the master, mariner, pilot, or the servants of the carrier in the navigation or management of the ship; fire, unless caused by actual fault or privity of the carrier; perils, dangers and accidents of the sea or other navigable waters; act of God; act of war; act of public enemies; arrest or restraint of princes, rulers or people, or seizure under legal process;
quarantine regulations; act or omission of the shipper or owner of the goods, his agent or representatives; strikes, lockouts, stoppage or restraint of labour; riots and civil commotions; saving or attempting to safe life or property at sea; wastage in bulk or weight or any other loss or damage arising from inherent defect, quality or vice of the goods; insufficiency of packing; insufficiency or inadequacy of marks; latent defects not discoverable by due diligence; any other cause arising without the actual fault or privily of the carrier, or without the fault or neglect of the agents or servants of the carrier (but the burden of proof will be on the carrier to show that his fault or privity or the fault or neglect of his agents or servants did not contribute to the loss or damage). Where the Hague-Visby Rules apply,
what rights has the carrier regarding deviation?
Any deviation in saving or attempting to save life or property at sea, or any reasonable deviation, will not be an infringement or breach of the Hague-
Visby Rules or of the contract of carriage, and the carrier will therefore not be
liable for any resulting loss or damage.
Dangerous goods carried under Hague-Visby Rules
Where the Hague-Visby Rules apply, what rights does the carrier have regarding dangerous goods shipped?
Goods of an inflammable, explosive or dangerous nature, if not property marked, or if shipped without the knowledge or consent of the carrier, may be landed, destroyed, jettisoned or rendered innocuous at any time before discharge. Such goods, even when shipped with the carrier's knowledge and consent, may be dealt with in this way without liability to the carrier, should they become dangerous.
Live animals and ceck cargoes carried under Hague-Visby Rules
When are live animals excluded from
cover by the Hague- Visby Rules ? At all times. What should a shipper of live animals
or deck cargo state in his Shipping Note or Boat Note?
'For deck carriage'. In what circumstances is deck cargo
excluded from cover by the Hague- Visby Rules?
When there is a statement on the face of the bill of lading issued to the shipper that the goods are stowed on deck, and the goods are, in fact, stowed on deck.
Why do deck cargoes warrant a special agreement between shipper and carrier?
Because of the special risks to which cargo stowed on deck are exposed. Generally, at whose risk is a deck
cargo carried? At shipper's risk.
What must a shipper of cargo intended to be stowed on deck do where the carrier's normal contract terms incorporate the Hague-Visby Rules?
Make a special agreement with the carrier (I. e. a contract which will not be governed by the carrier's standard terms, conditions and exceptions). What should be stated on a bill of
lading issued to the shipper of deck cargo, and why should this statement be made?
'Shipped on deck at shipper's risk'. Any innocent transferee of the bill of lading acting in good faith (i. e. a third party obtaining title in the cargo by transfer of the bill of lading) will then know the risks attaching to the goods he is gaining title to. (It would not be fair to transfer a bill of lading in respect of deck cargo without declaring to the transferee that the goods to which he has obtained title are on deck and may therefore be exposed to sea water damage. )
The Hague-Visby Rules will not normally cover cargo shipped on deck. Under what circumstances will the Hague-Visby Rules cover a deck cargo?
(1 ) If cargo which should have been stowed under deck is stowed on deck; or (2) if a bill of lading in respect of cargo which should have been shipped on deck does not clearly mention the deck carriage on its face.
What do the P&l clubs recommend owners do if they want to carry cargo on deck at their option?
To cover the deck cargo by an 'on deck' bill of lading expressly recording the deck stowage, and to insert (i. e. stamp) on the face of the bill of lading a clause disclaiming liability for loss or damage, howsoever caused.
What would be the consequences for the carrier if you stowed cargo on deck that should have gone under deck?
The deck carriage would be a fundamental breach of contract similar in gravity to an unlawful deviation. The carrier would have no defences to a claim for loss or damage, and he would not be indemnified by his P&l club.
You are loading a bus on deck, and an 'on deck' bill of lading will be issued in respect of it. Can you stow the bus anywhere you like on deck?
No - it may be a fundamental breach of the contract to stow cargo in an unsuitable place on deck. The place of stowage on deck is important. The bus should not be stowed in an exposed place, especially on the fore deck. You are master in containerships
operated by a company which does not normally clause its bills of lading for 'on deck' carriage. What should the company do in this case?
The company, as carrier, should incorporate a suitable liberty clause permitting on-deck stowage at the carrier's option. This is recommended by the P&l clubs even when the custom of the trade permits on-deck stowage, e. g. when closed containers are carried on purpose-built container ships. The purpose of these clauses (which are nevertheless ineffective in a few jurisdictions which don't follow the generally accepted principles of maritime law) is to ensure that the carrier has a contractual right to stow cargo on deck at his option. However, the clause must be used reasonably, and cannot be used to justify deck stowage for cargo which is unsuitable for deck stowage.
You are master of a coaster operated by a small company which does not issue bills of lading to shippers. The owner tells you to stow a piece of unprotected machinery on deck for a passage across the Irish Sea, even though it could easily be stowed under deck. Will your owners be breaching the contract of carriage?
Even when there is no express or implied agreement for under-deck stowage, it may well be a fundamental breach of the contract of carriage to stow cargo on deck which is not suitable for on-deck carriage. Goods are not suitable for deck carriage if they are not packed in such a way as to be protected from contact with sea water which could occur during the voyage and which, if it did occur, would inevitably or probably cause damage to the goods. For example, sensitive machinery transported in a flat or open-top container should not be carried on deck.
How does the law generally view the carriage of containerised cargo on deck on purpose-built containerships?
As being equivalent to underdeck carriage of goods. Container line bills of lading therefore usually give the carrier the option of stowing the cargo either on or under deck.
How does the law view the carriage of containerised cargo on deck on ships other than purpose-built
containerships?
As the carriage of ordinary deck cargo. The bill of lading should therefore be property claused for deck stowage and/or a proper liberty clause should be inserted in it.
If deck cargo has to be jettisoned as a General Average act, what is the cargo owner's position under the York- Antwerp Rules?
Unless the cargo is carried on deck in accordance with a recognised custom of the trade, e. g. it is a timber deck cargo or containerised cargo, the cargo owner will have no claim under the York-Antwerp Rules to a General Average
contribution from the other parties to the adventure. What is the General Average position
where deck cargo has been saved by a General Average act?
If deck cargo is saved by a General Average act (e. g. the refloating of a grounded ship), the owner of the deck cargo will be liable to make a General Average contribution along with other parties to the adventure who have benefited from the General Average act. carriers usually underline this by an express statement in their bills of lading.
What is the General Average position where the jettisoned cargo was wrongfully stowed on deck?
If the jettisoned deck cargo had been stowed on deck without the shipper's consent or knowledge, the shipowner, apart from being liable for breach of contract, will be totally liable to the goods owner.
Carriage of Goods by Sea Act 1971 (COGSA 71)
What is the main purpose of the UK Carriage of Goods by Sea Act 1971 (COGSA 71)?
To give legal effect in the UK to the Hague-Visby Rules, i. e. to make the Rules part of UK statute law. (Many countries have a similar law incorporating one or other of the 3 sets of rules into their national legislation. )
When does COGSA 71 apply to a shipment?
Where the port of shipment is a port in the UK, whether or not the carriage is between ports in two different states. Where the cargo is shipped as part of a multi-modal operation (for which a 'combined transport or multi-modal bill of lading has been issued), COGSA 71 applies only to the seaborne part of the carriage. How does COGSA 71 alter the
carrier's obligations as to live animals and deck cargoes?
Although the Hague-Visby Rules as they stand alone do not apply to live animals or to deck cargo which is stated (on the face of the bill of lading) as being carried on deck and is so carried, COGSX\ 71 reverses this by stating that the rules will