Sea transport is an economical way to trade between countries over

waters. International trade developed with advances in technology,

transportation and even laws, especially international conventions. As
a result, developed countries found themselves in need of set
uniformed rules to govern the process of trade. Accordingly, that is
why the Hague rules came into existence in 1924 under the
International Convention for the Unification of Certain Rules of law
relating to Bills of Lading. According to the OECD, Hamburg rules are
ratified by 27 countries. However, it was then amended Hague-Visby
rules in 1968. Due to the variety and large coverage of the rules, this
paper will discuss the Hague-Visby Rules. These Hague-Visby Rules
have come under scrutiny by some groups. These situations have
caused much criticism, and so because of this scrutiny a new set of
laws called the Hamburg rules were created. However, the Hamburg
Rules have an advantage of being able to re-construct some of the
Hague-Visby rules that are thought to be unfair, unclear or likely to
cause misinterpretation. It is important to note that founders of Hague-
Visby rules can be said that developed nations that were “colonial
maritime nations”.(Wanigasekera, A., n.d) For that reason, these
nations did not want to bear the high amounts of risks involved in
shipping in the early days. Their main reason for undertaking sea
shipment was because of the ‘inexpensiveness’ of the cost of shipping.
From that point of view it could be concluded that Hamburg Rules had
an intention in reducing such ‘unfair’ points. This paper will not only
compare these two international sea transport conventions, but will
also aim to contrast the liabilities of shippers and carriers involved in
the trade. It is also thought be beneficial to explain the meanings of
some important terms under these two conventions, terms such as
carrier, shipper e.t.c. This will hopefully give the reader a complete
understanding.

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APPLICATIONS OF THE CONVENTIONS
As mentioned earlier, despite some of its unclear statements and
misinterpretations, The Hague-Visby Rules have been the most
common used convention. According to the Hague-Visby Rules in
Article 2, it states that
‘The provisions of this convention shall apply to all bills of lading issued
in any of the contracting states.’

Also, in relation to the bill of lading, Article X ‘tries’ to explain so-called

‘details’:
10(a) a bill of lading is issued in a contracting state
10(b) the carriage begins in the port of a contracting state
10(c) the contract of carriage specifically incorporates the rules by
reference
These statements seem relatively vague when compared to the
Hamburg Rules.
Under the Article 2 (1) of the Hamburg Rules, it applies to ‘all contracts
of carriage by sea’ As Reynolds (1990) states, it can be said that the
application of Hamburg Rules does not rely upon the issue of the bill of
lading.

To conclude, Hamburg Rules have distinctly more extensive application

than the Hague-Visby Rules.

EXPLAINATION OF BILLS OF LADING UNDER THE CONVENTIONS

Martin (2009) defines the bill of lading as “A document acknowledging

the shipment of a consignor's goods for carriage by sea when the ship
is carrying goods belonging to a number of consignors.” Even if the
general explanation could be stated as above, under the Conventions it
does not give readers a clear understanding. Such as, the Hague-Visby

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Rules do not particularly explain that. However, as Mo (2003, pg. 239)
indicates, it contains the followings:

- The carrier or an agent of the carrier is a subject to a bill of lading

under 3(3) of the Hague-Visby Rules. The bill of lading can be in two
forms. First, it can be either a statement such as ‘goods shipped in
good order and condition’ or can be a clause stating the defects in the
goods or whatsoever.

- Secondly, according to the Article 3(4) of the Hague-Visby Rules, the

bill of lading shall be prima facie evidence of the receipt by the carrier.
It can be determined that in relation to a bill of lading uncertainties
and misunderstanding are most likely to be perceived under the
Hague-Visby Rules.

On the contrary the Hamburg Rules explains these situations in a much

clearer manner. The explanation under the Hamburg Rules is stated
below.
Article 7(1) : ‘Bill of lading’ means a document 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. A
provision in the document that the goods are to be delivered to the
order of a named person, or to order, or to bearer, constitutes such an
undertaking.

As clearly stated in the Hamburg Rules, any possible dispute is highly

kept away from whereas The Hague-Visby Rules fails herein.

WHAT IS A CARRIER UNDER THE CONVENTIONS?

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Under the Hague-Visby Rules, definition of a carrier is relatively trivial
compared to the Hamburg Rules. It states that: “Carrier includes the
owner or the charterer who enters into a contract of carriage with a
shipper” (Article 1 para. 2 of the Carriage by Sea under Bills of Lading
Rules.).
However, Under the Hamburg Rules: “A carrier means any person by
whom or in whose name a contract of carriage of goods by sea has
been concluded with a shipper” (Part I, General Provisions, Article 1.).
It must be noted that the need to implement or state this definition has
been rare. Only a few litigation cases have used this definition to
define and impact on the court decision.

Even though it has only been used in a few litigation cases where the
definition of a carrier mattered, it is still worth consideration because
the local laws of countries may not perceive the same meanings.

DEFINITION OF A SHIPPER

Under the Hamburg Rules, the shipper is defined as ‘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 relation to the contract of carriage
by sea.( Part I, General Provisions, Article 1(3). ) Nevertheless, the
word ‘shipper’ has a general meaning under the Hague-Visby Rules.
From the evidence gathered so far, it can be stated that the Hamburg
Rules have a clearer definition of such terms.

After explaining the meaning of some terms that are most common
under the conventions rules, one will gain a better understanding of

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liability. This is so, because the liability of carriers and shippers should
be clear about their rights and in what cases who is liable for what.
They should not leave any room for errors and misinterpretations. They
should also have a proper understanding of all the dealings that are
happening in the transactions of supplies and funds.

THE LIABILITY OF CARRIERS

The liability of a carrier is to take care of the goods and make sure for
a seaworthy voyage. However, under the Hague-Visby Rules, the
carrier is not responsible of his/her servants, pilots or any related
management for the loss and damages.

However under the Hague-Visby Rules;

Article 4 (1) ‘Neither the carrier nor the ship shall be liable for loss or
damage arising or resulting from unseaworthiness unless caused by
want of due diligence on the part of the carrier to make the ship
seaworthy’.

4(2) ‘Neither the carrier nor the ship shall be responsible for loss or
damage arising or resulting from:
(a) Act, neglect, or default of the master, mariner, pilot, or the servants
of the carrier in the navigation or in the management of the ship.’
However, the Hamburg Rules are more “strict” on liability. Under
Article 4 it mainly states that the carrier is liable ‘for loss or damages
to the goods or delay in delivery’ if its 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
avoid such cases.

So, under the Hamburg Rules the majority of risk is beared by the

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carrier, after taking reasonable steps to avoid such damages. Whereas
The Hague-Visby rules does not burden the servants for the losses of
damages in the goods.
Therefore, the Hague-Visby rules can impose exclusive clauses to
avoid or limit the liability.

WHEN DOES THE RESPONSIBILITY START?

There have been numerous cases where the responsibility of the

carrier has been questioned, as to when their responsibility
commences. Article 1(e) of the Hague-Visby Rules states that:
‘Carriage of goods covers the period from the time when the goods are
loaded on to the time when they are discharged from the ship.’
In the response to that rule, it is worth considering the case in Pyrene
v. Scindia Navigation Co.
In that case, the cargo was dropped and damaged by the negligence of
the shipowner during loading. At this stage, before the goods had
passed the ship's rail, they were still the property of the seller. The
seller sued the carrier, for the full value of the damage (£966), in the
sort of negligence. The argument was whether the shipowner could
claim the benefit of an exemption clause written into the contract of
carriage by virtue of the Hague Rules, the effect of which was to limit
his liability to £200.

Devlin J. held that, at least where the shipowner had undertaken

responsibility for the entirety of the loading and discharging process,
the Hague Rules should also apply to the entire process. (Ourworld, 16
Dec, 2008.).

Conversely, the Hamburg Rules clearly provides when the

responsibility starts. It states under Article that.

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4(1) ‘The responsibility of the carrier for the goods under this
Convention 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.’
4(2) ‘For the purpose of paragraph 1 of this article, the carrier is
deemed to be in charge of the goods
(a) from the time he has taken over the goods.’

Again, the Hamburg rules provides a clear explanation thus, it mostly

avoids potential disputes. As it can not be misinterpreted or read in a
different manner.

CLAUSES AND EXCLUSIONS TO THE LIABILITY OF CARRIERS

Hague-Visby Rules are known by its negligence clause and exclusive

liability decisions. As mentioned earlier, Article 4(2) of the Hague-
Visby Rules is a clear negligence clause to the liability stating any
servants and masters of the ship are not liable.
Nevertheless, the Hamburg Convention would not agree with that;
Article 23 (1) ‘Any stipulation in a contract of carriage by sea, in a bill
of lading, or in any other document evidencing the contract of carriage
by sea is null and void to the extent that it derogates, directly or
indirectly, from the provisions of this Convention.’ (and continues).

It is noted that the Hamburg Rules blocks any ‘out of contract’

statements where the Hague-Visby rules applies some exclusions or
exemptions.

THE CHARGES

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Under Article 6(1)(a) of the Hamburg Rules;
‘The liability of the carrier of 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 kilograms of gross weight of the goods lost
or damaged, whichever is the higher.’

These charges are comparably high when the Hague-Visby Rules are
considered in contrast.
It is 66.67 units of account per kilogram of gross weight of the goods
(Mo, J. 2003).

CONCLUSION

Despite the fact that both conventions have their own advantages and
disadvantages, it is clearly shown that the Hamburg Rules have overall
better definition and explanation of the terms. This is highly important
as such situations have a tendency to avoid probable disputes that
could arise from misinterpretations. Even though Hamburg Rules have
such positive attributions, not surprisingly the Hague-Visby Rules are
the most ‘popular’ in the world. One may consider that this is due to
being the first. Also, the Hague-Visby Rules successfully govern its
rules in the global. However, the rules are not faultless. There are
some pitfalls and ambiguities. It is recommended that in the near
future, as technology and transportation and even local laws advances
and develop, these shortcomings are overcome and the laws cover a
wider range of issues and will not be a cause of error.

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BIBLIOGRAPHY

Books and articles

Mo, J. (2003). International Commercial Law. Australia : LexisNexis

Butterworth. Pp 236-289.

Reynolds, F. (1990). The Hague Rules, the Hague-Visby Rules, and the
Hamburg Rule. pp. 18. This paper is an edited transcript of an address
given by Dr. Francis Reynolds to the MLAANZ New Zealand Branch
Conference heId at Tokaanu in April 1990.

Wanigaseker, A. (n.d) Comparison of Hague-Visby Rules and Hamburg

Rules. pp.2-3 Accessed on 26, May 2009. Retrieved from

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www.juliusandcreasy.com/inpages/publications/pdf/comparison_of_hag
ue_and_hamburg-AW.pdf

Websites

OECD website at http://www.oecd.org/dataoecd/38/5/2751633.pdf

Accessed on 26 May. 2009.

Legislative

The Hague Rules.

The Hamburg Rules.

Cases

Pyrene v. Scindia Navigation Co. (1954) 2 QB 402

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