Maritime law 2012

Course HANDOUTS

carriage of goods by sea

Faculty of Law - English Section

Prepared by

Dr. Yassin EL SHAZLY

PhD in Law, Lyon Law School, France

Teacher, Business Law Department,

Faculty of Law, Ain Shams University,

Cairo, Egypt

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1- Main idea of the chapter

The chapter discusses the main trade terms used in transportation contracts and the legal aspects of the various means of transportation and the legal commitments and responsibilities of the sellers and buyers and carriers of goods.

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Introduction

Lack of uniformity

Origins Sources of maritime law

Alternative to international conventions

Pro uniformity

Cons uniformity

The New Definitions of International Maritime Law

Based on the above definitions, I propose the following new definitions of international maritime law:

"International Public Maritime Law" (or "Public International Maritime Law") concerns the legal relationship between States in respect of maritime matters.

"Private International Maritime Law" (or "Conflict of Maritime Laws") is the collection of rules used to resolve maritime disputes as to choice of law, choice of jurisdiction and recognition of foreign judgments between private parties subject to the laws of different States.

"International Private Maritime Law" concerns the legal maritime relationships between private parties of different States.

The Lack of Uniformity in International Private Maritime Law Conventions

There are many excellent international private maritime law conventions, which have been brought into existence by the CMI, UNCITRAL, UNCTAD AND IMO, as can be seen from Appendix "A", but many conventions are not in force or are only in force for a few major shipping and trading nations.

Appendix "B".The lack of uniformity due to the lack of

adoption of major international maritime law conventions can be seen from Appendix "B". The document sets out the international maritime law in respect of twelve major sectors - carriage of goods, collision, pollution etc. - and compares the adoption of those conventions by five representative shipping nations the United Kingdom (common law), Canada (common law), France and China (civil law origins but recent common law assimilations), and the United States (common law with civil law origins).

The lack of uniformity in respect of international maritime law is disheartening for those who believe in uniformity, particularly in comparison with air law, which started far behind but has now gone far ahead of maritime law.

Sources of maritime law

a) international conventions and treaties

b) international model laws

c) standard form contracts

d) standard terms

e) international custom

f) the lex maritima, being part of the lex mercatoria

g) doctrine - writings of leading authorities on the law

h) decisions of international courts and international arbitral tribunals

i) decisions of national supreme and other courts and arbitral tribunals of international

reputation.

The Particular International Origins, Sources and Nature of Maritime Law

1) Maritime law, from its very beginnings has been international law rather than national law and was declared to not be a part of Roman law, which was land law.

2) A lex maritima, a part of the general, customary mercantile law, or lex mercatoria, of the Middle Ages, has evolved over the centuries.

This rich and ancient legal heritage has become the lex maritima, and is the source of our modern "general maritime law".

In consequence maritime law in Western society has a common international origin - the civil law traditio


3) Ships, seamen, passengers, merchants and cargo of all nations are subject to the same seas, the same weather, the same climate, the same natural elements, the same perils, and the same ocean routes. Thus many maritime law disputes arise in similar contexts and circumstances.

4) Most national maritime law crosses international borders. In other words, national maritime law is usually international law in its application.

5) Ships are international because they easily change nationality; in fact, flags of convenience,


6) Ships, shipowners, charterers, crews and passengers, although citizens of different states, are often involved together in the same international voyage or common venture.

7) Shipping is international, because ships and crews have a common international science and language, so that crewmembers and at times whole crews are quite interchangeable.


8) The various trades and professions involved in the shipping industry have international organizations to defend and promote their respective interests.

9) Merchants have a common international language and terminology (e.g. the Incoterms CIF, FOB, etc.) which lends itself to "internationality".

10) Maritime law today includes a host of international conventions and model laws to which many States are party and which therefore apply to ships of different flags and to shipowners, charterers, shippers and consignees of different nationalities, domiciles and residences.


11) Shipbuilding, ship sales, carriage of goods and ship chartering are increasingly effected using standard-form contracts with legal terms understood internationally, including bill of lading and charterparty forms.

12) Marine insurance forms, policies and terms, (hull, cargo and P. & I., as well as reinsurance), apply internationally, to ships of many different flags and cargoes, having many different origins and owners. The Marine Insurance Act, 1906 of the United Kingdom is the mother of most national marine insurance act and is frequently a guide to marine insurance law in the United States, which has no federal marine insurance act.


13) The jurisdiction of admiralty courts around the world tends to cover the same types of maritime disputes, and is often expressed in similar legal terminology.

14) Admiralty procedures are similar throughout the world. For example, maritime pre-judgment security procedures apply to all ships, regardless of nationality


maritime attachment. 15) Maritime legal disputes arising anywhere in the

world are increasingly decided by "alternative dispute resolution" mechanisms (particularly arbitration, but also conciliation and mediation). The disputes are often entrusted to international arbitral institutions (e.g. the Society of Maritime Arbitrators, the American Arbitration Association, the London Maritime Arbitration Association, the Chambre Arbitrale Maritime de Paris, the International Chamber of Commerce).

A significant body of international "arbitral jurisprudence", part of the modern lex maritima/mercatoria, is developing, especially within these institutions, and is being applied by maritime arbitrators internationally.

Uniformity versus international origin

Plurality of

institutions

Disparity of conventions

National lawn

preference

Useful Alternatives to International Private Maritime Law Conventions

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Model Rules

Standard forms

Standard terms

National statutes of international

stature International

judicial cooperation the "Maxwell order "

Lex mercatoria-lex maritima

The pro and Cons of Uniform International Private Laws

1. Certainty and predictability of result

2. Ease in the determination and application of the law to be applied

3. Fairness 4. Order 5. Economic

development 6. Procedural

effectiveness

1. Offences to fundamental principles of national public order/policy

2. Offences to fundamental national principles of justice and social order

3. Unnecessary international laws

4. Civil law/common law styles of drafting and terminology

5. Loss of cultural diversity

What Divides Us 1. Different systems of justice distributive v.

corrective justice 2. Different political and social objectives 3. Different political systems 4. Different standards because of differences in

national wealth 5. Transnational interests, shipowners, cargo

insurers, P&I Clubs, freight forwarders 6. The refusal of some states to give up their

legislative sovereignty or authority over some maritime matters

7. The indifference of some governments towards international uniformity of maritime law and even to maritime law, because of their preoccupation with national matters and in the international field, with International Public Law

8. Lack of vision and courage

A Useful Solution to Lack of Uniformity of International

Law:

An innovation: the

"tacit acceptance

procedure"

Uniform Conflict of Law Rules

"Tacit vs. express Acceptance Procedure" of IMO

The response of the IMO was creative. It devised a "tacit acceptance procedure", under which an amendment to a given convention or protocol would automatically come into force on a specified date, unless a certain percentage of Contracting States objected by another specified date. This procedure in fact reversed the traditional "express acceptance procedure". It meant that technical amendments to IMO conventions on crucial matters such as maritime safety could enter into force after only two or three years, rather than five or ten, as would have been the case under the traditional express acceptance procedure.

A major defect of most international conventions is that they can only be brought up to date with great difficulty. In effect, each protocol to a convention must be renegotiated and readopted by the traditional diplomatic procedure known as the "express acceptance procedure".

for example, in order to come into force, typically require the support of a fixed number of contracting States and sometimes also require support by States having a specific percentage of the world's tonnage.

Conclusion "Often in Error, Never in Doubt")

International uniformity

Alternatives

Leadership

Objectivity Courage

tacit acceptance procedure

Effectiveness through

executive authority

Carriage of goods by sea : Most goods are transported by a common carrier holding itself to carry goods for more than one party , only few shipments are large and has to be delivered by one vessel ( Charterparty ).

Common carrier :

A ship that carries goods for all the persons who choose to employ it as long as there is room.

There are three sorts of carriers :

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1-Conference line : An association of seagoing common carriers operating on established routes that have joined together to offer common freight rates.

2-Independent carrier : they have their own rate schedule.

3-Tramp vessels : they have there own rate schedule but they do not operate on established schedules

Bill of lading :

An instrument issued by an ocean carrier to a shipper that serves as a receipt for goods shipped , as evidence of the contract of carriage , and as a document of title for the goods that is the person rightfully in possession of the bill is entitled to possess , use and dispose of the goods that the bill represents ( governed by the convention called hague rules )

Bill of lading :

Bill Of Lading

Clean bill of lading

Claused bill of

lading

Bill Of LadingClean bill of lading :

A bill of lading indicating that the goods have been properly on board the carrier’s ship ( carriers clerk will check the labels and the goods are not damaged an comply with the goods list then sign the bill and return it to the shipper ) .

Claused bill of lading :

A bill of lading indicating that some discrepancy exists between the goods loaded and the goods listed on the bill.

Note : However they are unacceptable to a third party including the buyers of the goods under CIF contract or a bank that agreed to pay the seller under a documentary credit on receipt of the bill of lading. It only server as a prima facie evidence that the goods were received in the condition shown in any dispute between the carrier and the shipper.

Bill of Lading Format :

Case 11 – 3 Court of appeal , Civil division ( England )

. ( A ) Golodetz & co.inc is the plaintiff VS ( B ) Czarnikow – ridna .co.inc ( defendant ) .

Case Summary:

The sellers ( A ) contracted to sell the buyers ( B ) about 13000 tons of sugar, the contract was made on clean on board bills. After loading a fire destroyed 200 tons , the remainder was loaded and carried to the destination. The case here who is to stand the loss of 200 tons. The court decision was based on whether the bill of lading was clean or claused and also the contract stated ( loaded on the ship ) . Since the bill of lading noted no problems when the goods were shipped , the document was therefore clean under applicable law , Therefore the buyer has to pay for the 200 tons destroyed.

Carrier

Shipper Consignee

Straight bill ((Non

negotiable ))

Straight Bill of Lading :This gives the transferee no grater rights than those of his transferor

Order Bill of Lading The holder of an order bill of lading has a claim to tittle and delivery of goods

Carrier

Shipper Consignee

Order bill (( negotiable ))

Carrier Duties under a bill of Lading

Making the ship

seaworthy

Manning , equipping &

supplying the ship

Loading , handling , keeping & discharging the goods

Making the wholes , cool chambers for safe reception carriage and preservation of the goods

Carriers ImmunitiesFire , unless cause by the actual

fault

Perils and dangers of the sea

Act of Public enemies

Quarantine restrictions

Riots and civil commotions

Insufficiency of packing

Insufficiency or inadequacy of marks

Act of war Act of war Act of war

Case 11 – 4 High court of Australia . ( A ) Great China metal industry is the plaintiff VS ( B ) Malaysian International shipping ( defendant ) .

Case Summary: (B) the carrier for the goods , , adverse weather conditions were forecast before the ship departed. On its way to the destination , the ship encountered bad the weather conditions and it cause a damage for part of the goods . (A) filed a suit against the carrier for negligence as it was aware of these weather conditions. The court noted that their were various interpretations for the phrase “perils of the sea” .In conclusion the court ruled that there was no negligence of the part of the carrier and the goods had been properly loaded and stowed , and the damaged caused by the bad weather was one of the perils of the sea .

The Hague Visby rules set monetary limits on the liability in case of loss or damage of a cargo .

This limits do not apply if :

a- the parties agree to a higher amounts b- the carrier acted with the intend to cause damage c- the carrier acted recklessly knowing that damage would result

Liability limits

Time limitations

A claim for loss or damages must be institutive within one year after the goods were delivered where the claim may be initiated by filing suit or starting arbitration proceeding

Himalaya Clause

The Hague and Hague Visby rules apply only to the carrier and the party shipping goods under a bill of lading. Third parties who help in the transport of the goods but who are not parties to the carriage of goods contract contained in the bill of lading have no contractual right to claim the liability limits established in the conventions.

6 - Charterparties

Charterparty : A contract to hire an entire ship for a particular voyage or for a particular period of time

Voyage Charter party : A contract to hire an entire ship for a particular

voyage

Dead freight : A charge imposed on a charterer when chartered ship has less than full load

Lay days : The number of days that a charterer may keep a chartered ship idle for loading goods

Demurrage : A charge made by a ship owner

when a charterer keeps a ship idle more than the agreed number of

lay days

Time charter party : A contract to hire an entire ship for a particular period of time.

7- Maritime liens

A lien is a charge or claim against property that exists to satisfy some debt or obligation . A maritime lien is a charge or claim against a vessel , its freight or its cargo . The main purpose of maritime liens is to insure that a vessel can adequately obtain credit to properly outfit itself for a voyage.

Res : the vessel or cargo to which a maritime lien attaches.

Education

Maritime law 2012