Hague, Visby, Hamburg and Rotterdam
A maritime tour of northern Europe
Francis Reynolds, QC
Professor Emeritus, University of Oxford
The topic of carriage of goods by sea under bills of lading has been the subject of compulsory regulation, or proposed regulation, four times in the last 85 years. The proposals are all associated with the names of cities in Northern Europe, in geographical order starting and finishing with the Netherlands. They all involve interference with freedom of contract in this area of commerce, that is to say, contracts governed by bills of lading.1 The first two, the Hague Rules,2 and the Visby Protocol to them, i.e. the Hague–Visby Rules,3 have always been a major topic of instruction at IMLI, and have strong associations with the CMI, which has been a strong supporter of the Institute. Even though Professor David Attard, to whom this book is dedicated, is a public international lawyer, and many of the students lean in their present and likely future spheres of activity towards public law, they need to know something about these important interferences with contractual freedom, and the effect they may have on the acts of shipowners and others involved in maritime transport. Hence some reference to the four sources of regulation, or possible regulation, seems appropriate to this volume, despite the huge amount that has been written on them since 1924.
The stories of the first three, Hague, Hague–Visby and Hamburg,4 have been told many times and it is not the purpose of this chapter to add yet another account to those already existing.5 There is not yet much written on the proposed Rotterdam Rules, so it will be possible to say a little more, though some of those most closely involved will shortly provide extensive comment. But the intention of this chapter
1 The other most conspicuous such interference is the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea of 1974.
2 International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading, 1924.
3 Protocol to Amend the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading, 1924, 1968.
4 United Nations Convention on the Carriage of Goods by Sea, 1978.
5 E.g. B. Yancey, ‘The carriage of goods: Hague, COGSA, Visby and Hamburg’, Tulane Law Review 57, 1983, pp. 1238–59.
The Hague Rules set out to be a limited code for the obligations of carriers under bill of lading contracts, with some, much less complete, reference to the obligations of shippers. They represented the result of much work which had gone on at least from the production of a draft ‘Common Form Bill of Lading’ in 1882 by a Liverpool Conference of the ILA.6 This was unsuccessful, perhaps because of the many different types of trade for which bills of lading were required. Later the ILA produced at a London meeting broader ‘London Conference Rules of Affreightment 1893’. These again proved unsuccessful. As was written later, ‘It could hardly be expected that the decisions of the Conference on a subject with regard to which the interests and opinions of different sections of the mercantile community were so divergent should at once commend themselves to all parties’7 and this problem has beset all subsequent attempts to provide uniform rules.
The American Harter Act of 1893 was another interference with freedom of contract. It was directed at unfair terms imposed by carriers (especially general exceptions for liability for negligence),8 and gave a lead in the sort of techniques of regulation that might be adopted to control bill of lading contracts.9 On the whole it seems that carriers were not in the last resort opposed to imposed requirements for the provision of a seaworthy ship and care of cargo, but firmly resisted any idea of making them liable for accidents of navigation, even when occasioned by the negligence of the master and crew. This seems to have been based on the ideas that the ship when at sea was out of the control of its owner, and that in many situations (especially in the days of sail) it would not be possible to determine what had happened, or, when it was possible, to establish negligence.
The Hague Rules
A report of the Maritime Law Committee of the ILA resulting from a Conference in the Hall of Gray’s Inn in London was prepared in 1921, and subsequently adopted at a conference of the ILA at The Hague later in that year: it is from this that the Rules take their name. After some further modifications the proposed Rules went to a diplomatic conference at Brussels where they were eventually
6 See in general: F. Berlingieri (ed.), The Travaux Préparatoires of the Hague Rules and of the Hague-Visby Rules (Antwerp: CMI, 1997); and on the American side see M. Sturley, The Legislative History of the Carriage of Goods by Sea Act and the Travaux Préparatoires of the Hague Rules (Littleton, Colo.: F. B. Rothman, 1990). See also M. Sturley, ‘The history of COGSA and the Hague Rules’, JMLC 22(1), 1991, pp. 1–57.
7 See op. cit., Berlingieri, fn 6, p. 17.
8 Though it contained no monetary limitation of carrier’s liability, an idea first introduced in the Canadian Water Carriage of Goods Act 1906.
9 See J. Sweeney, ‘Happy birthday, Harter: a reappraisal of the Harter Act on its 100th anniversary’, JMLC 24(1), 1993, pp. 1–42; G. Chandler, ‘After reaching a century of the Harter Act: where should we go from here?’, ibid., pp. 43–51.
This Conference … is of the opinion that the interests of trade and commerce are best served by full freedom of contract, unfettered by State Control, but that in view of the almost unanimous desire manifested by merchants, bankers and underwriters for the adoption of the Hague Rules this Conference is prepared to adopt them for voluntary international application …10
The Rules took some time to catch on, and some important ratifications came in the 1930s and much later, but they became an established institution in the shipping world. Their international application depended on rules of the conflict of laws, which might differ from country to country; for example, the UK legislation could be taken as only applying them where English law was the governing law,11 and certainly only to shipments out of UK ports.
Of what do the Rules consist? They are in effect a mini-code applicable to carriage under bills of lading, whether in the liner trade, or where the bill is issued in a tramping context, under a charterparty. The initial wording suggests application to any contract of carriage by sea, but subsequent provisions require a bill of lading and exclude charterparties. The structure at the beginning is fairly neat and logical. After some definitions which are important in determining the scope of the Convention12 a general introductory provision appears in Article 2, which indicates that such a contract of carriage by sea subjects the carrier to the liabilities, and entitles him to the rights and immunities, next set forth. It looks fairly clear from this that the scope of the contract regulated was intended to cover loading and unloading, but the English courts have interpreted this so as to regulate those operations only if the carrier undertook them in the first place.13 On the wording of Article 2 such an interpretation may be doubted; but the most recent Rotterdam Rules actually provide for this result,14 suggesting that the English decisions might have been acceptable in practice regardless of whether they can really be justified by the wording.
The Rules then, in a group of provisions at the beginning of Article 3, address the duties of the carrier, providing for the furnishing of a seaworthy ship and exercise of due care of cargo; and also requiring the carrier to issue a bill of lading stating certain particulars as furnished in writing by the shipper unless (to put it crudely)
10 Op. cit., Berlingieri, fn 6, p 40. Another firm statement as to the value of freedom of contract in commerce was made in the preface to the 11th edition of Scrutton on Charterparties (1923), the last edited by Scrutton himself.
11 This was always a great point with the legendary Dr F. A. Mann.
12 E.g. ‘bill or lading or similar document of title’: see The Rafaela S  UKHL 11;  2 Lloyd’s Rep. 173.
13 Pyrene Co Ltd v. Scindia Navigation Ltd  2 QB 402; The Jordan II  UKHL 49;  1 Lloyd’s Rep. 57.
14 Art. 13(2).
there was no opportunity of checking,15 and providing for the evidentiary value of such statements. In this context, however, a defect in the Rules has manifested itself: the custom has grown up of carriers writing, or actually printing on their bills of lading what may be called ‘disclaimers’ indicating that whatever is stated the carrier has not checked or counted the goods, but rather, accepted the statements made to him by the shipper. It is difficult to see that those responsible for the Rules envisaged such clauses as being permissible, and indeed one of the main objectives of proposed but unsuccessful American legislation after the failure to adopt the Hamburg Rules was to deal with this problem. The Rotterdam Rules follow these proposals.16 The problem under the Hague Rules is that it can be argued, and it has actually been held in England,17 that the only sanction which the shipper has for abuse of these provisions is to demand a new bill of lading: the duty on the carrier is only to issue a bill of lading making the full statements required ‘on demand of the shipper’. If this is correct, it is an undoubted disappointment regarding the efficacy of the Rules, for such a demand is not usually practicable, and the possibility of a later holder of the bill making such a demand causes further difficulty. A provision at the end of Article 3, clause 8, makes null and void any contract term ‘relieving the carrier or the ship from liability from loss or damage to or in connection with goods’ provided in the Article, but it is not easy, though not impossible either, to say that some wording of the type described above has the indirect effect of relieving the carrier from liability in respect of the goods described.
A time bar requiring suit by the shipper with a year (but not imposing any such restriction on actions by the carrier) is imposed by Article 3(6): this is justified by the supposed need of the carrier to be able to close his books on a particular voyage reasonably quickly. This presumably appears in Article 3 because it is a restriction on the responsibilities of the carrier, but in another sense it is an immunity which could have come later under Article 4, which deals with the topic. Article 3(7), on the form of the bill of lading to be issued, would have been better placed earlier, after Article 3(5). Finally, comes Article 3(8), already referred to above, which ‘locks in’ the provisions of the Convention when they apply and makes them non-excludable. Article 3 is headed in the Convention, as reproduced in the English Act of 1924 and as enacted in the United States Carriage of Goods by Sea Act of 1936, ‘Responsibilities and Liabilities’. It certainly covers matters coming within those words, though the one-year time bar in favour of the carrier could without any doubtful reasoning have been accommodated within the next Article also.
Article 4 is similarly headed ‘Rights and Immunities’. The reasoning behind its structure is not clear. It begins with a negative statement in clause 1, that neither the carrier nor the ship shall be liable for loss or damage arising from unseaworthiness
15 The shipper guarantees the accuracy of information supplied: Art. 3(5).
16 See Chap. 8.
17 The Mata K  2 Lloyd’s Rep. 614.
unless this is due to a lack of due diligence in securing this; and then follows this in clause 2 by a list of ‘excepted perils’ which certainly constitute immunities. Clause 1 seems simply to be a repetition in negative form of the duty to use due diligence to provide a seaworthy ship already stated in Article 3, and one wonders whether it is worth saying, though it adds wording to indicate that the burden of proof is on the carrier to prove due diligence. One would not expect that unseaworthiness not caused by the carrier’s negligence would be described as an excepted peril any more than would damage to cargo not caused by the carrier’s negligence. On the other hand something in Article 4 to balance out the pre-voyage duty to furnish a seaworthy ship stated at the beginning of Article 3 may be regarded as appropriate, and cannot be expressed in terms of excepted perils.18
By what is presumably the same token Article 3(2), on care of cargo, is made subject to the excepted perils to be indicated in Article 4, whereas Article 3(1) is not. This has led to arguments that the seaworthiness obligation has some sort of overriding status as well as a pre-voyage one, though the consequences purportedly derived from this supposed priority tend to differ.19
Most of the remainder of Article 4 can certainly be regarded as covering ‘immunities’, that is to say, matters for which the carrier is not liable. Of the wellknown list of excepted perils in Article 4(2), the most conspicuous is the defence of negligence in navigation or management of the ship, to which as is well known carriers have been attached with an attachment that persists long after the conditions of nineteenth century shipping in which it originated have passed. This Article also contains the well-known ‘package or unit’ limitation, which gives no indication of the meaning of the word ‘unit’ and (unless reformed to refer to freight unit, as in the United States Carriage of Goods by Sea Act), makes no provision for goods which are not packaged or unitized, i.e. cargo in bulk.20 This also can be regarded as an ‘immunity’; and there are two other provisions which can be so described: one in the middle of the Article (Art. 4(4)) giving limited but uncertain rights to the carrier to make what might otherwise be a deviation, and one at the end, Article 4(5), in part entitling the carrier to dispose of dangerous goods (a phrase not defined) – which can be regarded as a ‘right’. The central part of Article 4(5) has however been treated as a substantive rule, making the shipper strictly liable for dangerous goods where the dangerous quality was not known to shipper or carrier.21 It would have been better to put the power to deal with such goods (which is more obviously a ‘right’) with the ‘rights’, and deal with the shipper’s duty regarding dangerous goods separately. An earlier provision in Article 4 is also difficult to describe as a right: Article 4(3), under which the shipper is not
18 See a valuable comparative discussion by Professor Malcolm Clarke in Aspects of the Hague Rules: a Comparative Study in English and French Law (The Hague: Nijhoff, 1976), pp. 150 et seq.
19 For an example see The Fiona  1 Lloyd’s Rep. 257;  2 Lloyd’s Rep. 506.
20 Also, it does not easily link with the provision in Article 3(3), that the carrier state the number of ‘package or pieces’.
21 The Giannis NK  AC 605, which was followed in the USA.
liable to the carrier for loss or damage not caused negligently: it could be taken at the same point, though the interpretation of Article 4 indicates that this general provision apparently does not apply where the damage is caused by dangerous goods, thus giving it a limited role.