When Goods May Be Carried on Deck

International Max Planck Research School, Max Planck Institute for Comparative and International Private Law, Hamburg, Germany


The carrier’s liability for deck cargo, which shall be further developed in Chap. 6, is closely connected with the question of whether the goods have been stowed on deck with authorisation or not.

Deck cargo, as a starting point, constitutes a breach of contract. This long recognised rule originates in the recognition that deck cargo is exposed to additional risks as given account of in Chap. 2. However, the carrier is authorised to carry cargo on deck in three situations: when he has the shipper’s consent, when there is such a custom or where he is required to stow on deck according to law. A new fourth exception for the carriage on deck of containerised cargo (which seems likely, however, to already amount to a custom) is gaining ground against the backdrop of modern shipping realities.1

Although the state of law as to when cargo can be stowed on deck thus may seem clear, this is far from being the case. The terms agreement, custom and law are broad and leave room for interpretation and have proven to be quite differently understood in various jurisdictions.

For elucidatory purposes, the three situations in which cargo may be stowed on deck shall be dealt with in this chapter in turn, with the Nordic and English view on that particular authorisation ground given account of in sequence. This approach, it is hoped, will facilitate the comparison of the national differences and similarities with regard to each situation in which goods may be stowed on deck.

5.1 The Main Rule: Cargo May Not Be Stowed on Deck

Whether appearing as a statutory provision or a principle of interpretation, the main rule in both the Nordic countries and England is that cargo may not be stowed on deck.

5.1.1 Nordic Law

The prohibition against deck stowage is found in 13:13 (26The Main Rule: Cargo May Not Be Stowed on Deck3) of the 1994 NMCs, which is modelled after Art. 9.1 and 2 of the Hamburg Rules. However, as seen above, the general prohibition against deck stowage is an old rule in Nordic law.2

13:13 (263) Deck Cargo

Goods may be carried on deck only if it is allowed by the contract of carriage, follows from any custom or practice of the trade or if it is required by any law or statutory provision.

If according to the contract the goods shall or may be carried on deck, this shall be indicated 3 in the transport document. If this has not been done, the carrier must demonstrate that carriage on deck has been agreed. The carrier may not invoke such agreement against any third party who has acquired the bill of lading in good faith.

Special rules on liability for deck cargo are provided in Section 34. 4

5.1.2 English Law

Also in England, deck stowage is, as a starting point, considered a contractual breach, whether the contract is governed by the 1971 COGSA or common law.5 The prohibition bases on the assumption that cargo is to be stowed in the usual carrying places.6 It appears as a standardised implied term in every contract of carriage that the cargo is stowed in the hold. In “Dixon”, Lord Halsbury equated a bill of lading stating that the cargo was to be stowed under deck with a bill of lading being silent as to the place of stowage, in accordance with the principle expressio eorum quæ tacite insunt nihil operatur (the expression of those things that are tacitly implied has no effect).7

5.2 Agreement

The simplest and safest way for a carrier to ensure that deck stowage will not be deemed a breach of contract is to obtain the shipper’s consent. In practice, the transport document will often include a standard clause, giving the carrier an optional right to stow cargo on deck. This raises a number of issues. Do terms in a subsequently issued transport document affect the content of the original contract of carriage? What is the legal status of an optional right to stow on deck? Will the shipper be considered to have consented to deck cargo if he does not object to such a clause? Can a third party be bound by such a clause? These and further issues are to be dealt with in what follows. Whereas in the contractual relationship between carrier and shipper what is stated in the following discussion about bills of lading can generally be presumed to apply by way of analogy8 also to sea waybills and other non-negotiable transport documents, in the relationship between the carrier and a third party holder, the rules relating to bills of lading are generally stricter than those relating to other transport documents.

5.2.1 Nordic Law

According to 13:13 (263) paragraph 1 of the 1994 NMCs, cargo may be carried on deck when such carriage is allowed by the contract of carriage. The 1994 NMCs for this purpose recognise an optional right or liberty to stow on deck, but they do not, with exception for with regard to the relationship between the carrier and a third party holder, further develop under which conditions such an “allowance” (read: agreement) can be held to form part of the contract of carriage. The underlying general private law therefore applies. It is to be noticed in this regard that the contract law of the Nordic countries, like the maritime law, has much in common. Contract Acts with almost identical wording were enacted in the Nordic countries in the beginning of the twentieth century9 and Nordic writers refer without prejudice as to the country of origin to Nordic case law and academic literature. How Can the Parties Agree on Deck Stowage?

Lacking a specific requirement in law, a contract of carriage need not be in any particular form, meaning that a party’s action or omission may depending on the circumstances replace an express offer or acceptance.10 In the majority of cases, however, an agreement on deck cargo is not a separate contract but part of the contract of carriage.11 The issue of whether there is an agreement on deck stowage, thus, in most cases will be a question of the contractual content (as opposed to a question regarding the conclusion of agreement).

Also as to the content of a contract of carriage however, one has to differentiate between express and implied terms. An implied term is generally defined as a condition that has been in the parties’ mind and become subject to their decision although not expressly articulated.12 A carrier may, for example, claim that he has signalled his intentions to stow the cargo on deck so clearly that the shipper must have agreed to deck stowage.13 An implied term may further evolve out of the parties’ previous course of dealing, trade practice or custom of the trade.14

In ND 2001.9 “Götaland”,15 a part of the cargo load of rebar to be shipped from Sweden to the US via Bremerhafen in Germany was damaged and another part lost during the first sea leg of the voyage. The shipper had employed the carrier several times before in the same trade. The procedure had always been quite informal: An electronic booking note was issued upon the shipper’s order, and a physical booking note16 was printed and sent to the shipper along with an invoice for the whole transport upon the reloading in Bremerhafen to an Atlantic-going vessel. The latter contained the carrier’s general terms including a clause giving the carrier the liberty to stow on deck. This time, no physical booking note was printed in Bremerhafen, and on this basis the plaintiff (the shipper’s insurance company) claimed that the carrier had not been entitled to stow the cargo on deck. The Court of Appeal held that irrespective of whether a booking note had been issued or not, it was clear that the shipper had been aware that the goods could be carried on deck. He had even contacted the carrier prior to the transport with a request for under-deck carriage but was informed that the carrier could make no such promise. As the shipper, notwithstanding the possibility that goods may be carried on deck, delivered them for transportation, he must have tacitly consented to deck carriage.

In ND 2005.574 “MacKenzie”,17 three carriers were invited to tender offers for the under deck transatlantic carriage of a converter basket. The shipper (who was equally the buyer acting through the seller of the converter basket) chose the carrier offering the lowest freight rate. Upon acceptance the shipper referred again to the conditions in its original invitation to tender offers, which included the requirement for under-deck stowage. Unlike the other offers, the offer accepted was silent as to the place of stowage. The cargo was shipped on deck under a bill of lading incorporating by reference standard terms including a liberty clause to stow on deck. As the cargo was lost in rough seas in the North Atlantic, the shipper asserted that the carrier had stowed the cargo on deck in breach of the contract. The court held, however, that it must have been clear to the shipper that the offer tendered, being considerably less expensive than the other offers, involved deck stowage. Additionally, the shipper had objected neither upon information in a fax sent 16 days prior to loading that the cargo was to be stowed on deck, nor upon surveying the loading operations in Antwerp. The carrier had consequently been entitled to stow the cargo on deck.

An agreement on deck carriage may, however, also be concluded subsequent to the original contract of carriage with the purpose of overruling the initial contract.18

In ND 1928.417 “Glitne”,19 the carrier informed the shipper per telegram after departure that a larger part of a load of coal than initially agreed had been stowed on deck. The coal carried on deck went lost in rough seas and the carrier was sued for damages. The carrier pleaded in his defence that the shipper had agreed to the additional deck stowage by not objecting to it. To the contrary, he had taken out additional deck cargo insurance for the surplus deck cargo upon being informed of it. Secondarily, the damages should be mitigated because if the shipper had objected to the telegram, the carrier would have taken out additional insurance cover, which he had accordingly not done. The court held that the shipper could not be required to object to a document which, seen against the express charter party,20 seemed to contained erroneous information, and even if it did not constituted a breach of the initial contract. As to the secondary claim, the court held that it seemed unreasonable to require the shipper to take action upon receipt of a document, which came across as incomplete (only the front page was sent to the shipper) when the time for action was scant (the telegram stated that the vessel was to have already left port). The shipper, consequently, was entitled to presume that the carrier was aware of his contractual obligations and that he would take out insurance if he had stowed cargo on deck without authorisation. Consequently, both arguments were rejected. Standard Terms in a Bill of Lading: Part of the Contract of Carriage?

Although the bill of lading is generally said to evidence 21 the contract of carriage, in practice it often also supplements it. It is a peculiarity of contracts of carriage of goods that the initial contract is generally concluded quite informally with the intention of being supplemented at a later stage by standard terms in the bill of lading or another transport document.22 The question here is to which extent such terms form part of the initial contract of carriage.

It is a generally debated issue in Nordic law to which extent standard terms can become incorporated into an agreement without having been physically presented to the counterparty.23 In the absence of statutory provisions, case law is the main source of law in this area. As a main rule, standard terms have at least to be brought to the counterparty’s attention orally or in writing.24 The ultimate answer, however, depends on the circumstances of each case, including possible previous undertakings between the parties and the character of the terms in question.25 There is, for instance, a tendency to demand a higher degree of notification for standard terms that are unexpected or onerous (compared with dispositive rules or customary terms of the trade). Such terms generally form part of the agreement only if the counterparty was or should have been aware of their existence.26

Standard terms may as an exception be accepted even without reference in the initial agreement where both parties are familiar with the trade.27 For this reason, supplementary terms in a bill of lading are de facto often read into the initial agreement without any reference. Adlercreutz contemplates that the willingness in case law to accept such terms may be due to the fact that “everyone” knows that a bill of lading will be issued at a later stage.28

The shipper is entitled, however, to protest against general terms upon receipt of the bill of lading. It is unclear whether an objection to a term in the bill – if justified29 – entails that a binding contract was never concluded or merely that the disputed clause is set aside in favour of what would apply according to the agreement without the clause, complemented by dispositive law.30 At the latest, a shipper not objecting upon receipt ought generally to be considered as having tacitly accepted the terms in the bill of lading.31

Schmidt finds statutory support for the incorporation of standard terms in a bill of lading in 1:6 paragraph 2 of the 1915 Swedish Contracts Act.32 Although primarily dealing with the conclusion of a contract, that provision was held in SvJT 1922 rf s 7333 by the Court of Appeal and in NJA 1949 s 60934 by a minority of the Swedish Supreme Court to be applicable also for establishing the content of an agreement. If the rule is applicable, it would have the effect that the shipper has to object upon receipt of the bill of lading without unreasonable delay.35 The provision, however, seems not to add anything to the legal position given account of above: With possible exception of unexpected or onerous terms, the shipper de facto accepts the standard terms as content of the contract already upon conclusion of the agreement; and even where the shipper is exceptionally entitled to object upon receipt of the terms, the threshold for “without unreasonable delay” must logically be upon acceptance of the bill of lading.

In order for a shipper to be able to tacitly agree to deck carriage, he must have a real option to have the cargo repositioned. This is not the case where the vessel has already departed with full cargo holds (see e.g. ND 1928.41736 given account of above).37

In ND 1919.398 “Thure”,38 the validity of an “ice-clause” in the bill of lading, stating that in case of ice-obstacles the carrier was entitled to deliver the cargo to the nearest ice-free port on the shipper’s risk and expense against full freight, was put to test. The original oral contract of carriage did not comprise or make any reference to such an “ice-clause”. The Swedish Supreme Court stated that the clause was a justifiable supplement to the contract of carriage under the existing circumstances. Also, the shipper had not objected to the clause upon receipt of the bill of lading. Thus, the shipper was bound by the clause.

Adlercreutz comments on the case that even if the “ice-clause” might have been burdensome for the shipper, it was hardly unexpected.39 Similarly, in NJA 1949 s 72440 a jurisdiction clause in the bill of lading was accepted as forming part of the contract of carriage. In NJA 1948 s 611,41 however, a liability exclusion clause in the bill of lading was not incorporated into the contract.42

Adlercreutz comments that the grounds for the decision in NJA 1948 s 611 are unclear but that it may be an example of terms in an individually negotiated contract superseding general terms.43 According to the author’s understanding, however, the clause was never given contractual force to start with because of its unexpected and onerous nature. The Swedish Supreme Court emphasised: (1) that the bill of lading was issued without the shipper’s involvement, (2) that it had been drafted by a carrier other than the defendant in question, (3) that it was fortuitousness that the carrier had made use of this standard form bill of lading and not any other, and, finally, (4) that the bill had been issued to a person without authority to undertake contractual changes on behalf of the shipper. Whereas the first three circumstances show that the clause was unexpected (it is hardly doubted that a liability exclusion clause is onerous) and, as such, could not be read in into the initial contract of carriage, the fourth circumstance shows that the shipper’s agent did not have authority to accept any new terms on behalf of the shipper (if he had had authority one could argue that the clause was tacitly accepted upon receipt without objection). If this is the correct reading of the judgment, and the author believes that it is, there is no need to discuss conflicting terms (and neither has the Supreme Court shown a tendency to think along such lines). This reading ties in well with the presumption that standard terms in bills of lading are often accepted because the parties’ expect them. An onerous and unexpected general clause, conversely, will not form part of the agreement. Liberty to Stow on Deck

Already the wording of 13:13 (263) paragraph 1 that goods may be carried on deck if it is “allowed by the contract of carriage” is held to imply that an option or liberty to stow on deck is sufficient to authorise deck stowage.44 13:13 (263) paragraph 2 of the 1994 NMCs confirms this position. Paragraph 2 reads: “If according to the contract the goods shall or may be carried on deck, this shall be indicated in the transport document” (emphasis added).45 The same wording in Art. 9.2 of the Hamburg Rules, on which the provision is based,46 has been held by UNCTAD to clarify the previously unclear state of law as to when the carrier may stow cargo on deck: “Clauses in the contract of carriage permitting him to do so will be sufficient”.47

That an option or liberty to stow on deck authorised deck stowage (at least of certain types of cargo) was the predominant view in the Nordic academic literature also before the introduction of the 1994 NMCs.48 Also in practice, and in particular in container trade, carriers have long made use of such clauses in their standard form transport documents.49 The issue, however, has never come before a Nordic court and the travaux préparatoires to the Earlier NMCs and their amendments do not clarify the matter.

It is stated in the Swedish travaux préparatoires that the state of law under 13:13 (263) corresponds in large (emphasis added) with the state of law under the Earlier Nordic Maritime Codes but does not clarify the reservation. The drafter emphasises how the need to make use of liberty clauses mainly arises in connection with the transport of containerised goods.50 The special characteristics of container trade are similarly emphasised in the Norwegian and Danish travaux préparatoires as the rationale behind the express recognition of a liberty clause.51

Based on these comments in the travaux préparatoires, one is inclined to question whether the possibility to rely on a liberty clause is limited to containerised cargo or whether an option to stow on deck is now sufficient to authorise deck carriage of all types of goods, including for example also cargo not suitable for deck stowage. This was not necessarily the case under the previous NMCs.52 In view of the clearly worded legal text, however, it seems difficult to argue other than that a liberty clause will now authorise the deck stowage of any type of goods.

It is however, another matter that a liberty clause may upon its proper construction apply only to certain types of cargo. In ND 1997.161 “Bakkafoss”,53 the Icelandic Supreme Court construed narrowly a liberty clause giving the carrier a right to stow containers on deck, holding that a flatrack was not a container, neither under Icelandic nor international linguistic usage. The fact that a flatrack may fall under the definition of “container” under the 1972 International Convention on Safe Containers did not change the matter.

One must not forget in this regard that the shipper can always specially request stowage under deck for particularly sensitive goods. Moreover, it is possible that even where no such request is made, a carrier stowing sensitive cargo on deck based on a liberty clause may be in breach of his duty to care for the cargo (although not being in breach of the contract) if he realised or should have realised that it may be damaged there.54 Third Party Protection

The contractual issues dealt with so far have focused on the relationship between the carrier and the shipper. The carrier’s duty to insert a statement in the transport document specifying that there is an agreement on deck stowage, however, aims to protect a third party holder of the transport document, including in this context also a consignee.55

13:13 (263) paragraph 2 imposes on the carrier an obligation to include a statement in the transport document regarding an agreement on deck stowage. Where electronic transports routines are used, the travaux préparatoires state that a notification in the EDI fulfils this requirement.56

Vis-á-vis the shipper, this is not an absolute obligation, because it follows from the second sentence of paragraph 2 that the carrier is entitled to subsequently prove that the parties had de facto agreed on deck stowage (as seen above, the agreement need not be in any particular form). The lack of a statement in relation to the shipper thus constitutes merely prima facie evidence that there was no agreement on deck stowage.

Against a third party who has acquired a bill of lading in good faith, however, the carrier is estopped from invoking an agreement on deck stowage, unless it is inserted in the bill of lading. Accordingly, in the absence of such a statement the carrier’s liability will be settled under the stricter regulation on unauthorised deck carriage in 13:34 (284).

The stricter third party regulation applies only in relation to a bill of lading. Thus, where the contract is evidenced by another transport document, the document constitutes prima facie only, although a third party holder in such a case may be just as ignorant of any implied or oral terms between the shipper and carrier. The stricter attitude towards contracts governed by a bill of lading is warranted by the bill of lading’s long-recognised status as exclusive evidence of the contract (in relation to third party holders in good faith).57

The carrier presumably is unable to fulfil the obligation in 13:13 (263) paragraph 2 through a standard term.58 This is supported, first, by the wording of the provision itself, reading that the carriage on deck “shall be stated59 (Swedish “ska anges”; Norwegian “skal angis”; Danish “skal anføres”) and, second, by the travaux préparatoires, stating that the carrier (vis-à-vis the shipper) has to prove the existence of an agreement in the absence of a “notation” (Swedish “en anteckning”). A literal reading of the first sentence in 13:13 (263) paragraph 2 thus provides the somewhat peculiar result that whereas a mere standard term liberty clause would not authorise deck stowage vis-à-vis a third party holder, a notation, stamp or alike on the bill of lading of a liberty to stow on deck would.

5.2.2 English Law

The state of law in England on agreement as an authorising ground is not very different from that under Nordic law. After a period of uncertainty as to the legal status of a bill of lading, it now seems clear that (in the relationship between the carrier and shipper) the bill of lading does not contain but merely evidences the contract of carriage. In practice, however, the parties often give terms in the bill of lading contractual force through an express or implied agreement. As in Nordic law, an option or liberty to stow on deck generally authorises deck carriage. The most significant difference between the two legal systems apparently lies in the rules on third party protection. Vis-á-vis a third party, the bill of lading (as well as a sea waybill) does contain the contract under English law. Consequently, not only the carrier but also the third party is estopped from invoking evidence against such a transport document. The Bill of Lading: Containing or Evidencing the Contract?

The state of law in England as to whether the bill of lading contains or merely evidences the contract of carriage has been debated.60 If the bill contains the contract, no extrinsic evidence can be brought against it, including the contract itself. If not, the bill of lading is merely one piece of evidence among others (albeit an excellent one)61 of the content of the contract.62 The issue becomes of relevance not least where the bill of lading contains terms contradictory to the initial contract of carriage.63

Whereas early case law points in different directions,64 more recent decisions support the position that the bill of lading is only prima facie evidence of the contract of carriage.65 This does not change the fact that a shipper who has accepted a bill of lading without objection will generally be bound by it since the bill of lading in practice is often given contractual force through the parties’ express or implied agreement, as shall be further developed in the following. In theory, also the carrier may bring evidence against the bill of lading, although this ought to be a more unusual situation.66 How Can the Parties Agree on Deck Stowage?

It should be emphasised, again, that although in some cases a separate agreement on deck carriage may be concluded with the intention to change the terms of the initial contract of carriage, the question as to whether there is an agreement on deck stowage is more likely to evolve around the content of an already concluded contract, i.e. whether the contract of carriage can be held to comprise such a term, including not least the question to which extent standard terms in the bill of lading can be considered to form part of the initial contract of carriage.67

An implied agreement on deck stowage seems not to authorise deck stowage under English law because standardised implied terms, such as the undertaking to stow under deck as established in “Dixon”,68 are held to be subject to custom or express provision to the contrary (emphasis added).69 The English law thus, presumably deviates from Nordic law in this aspect, where the parties’ prior dealings or trade practice has been held sufficient to authorise deck stowage.70

Indeed, as a starting point, where the bill of lading contains relative to the contract of carriage contradictory terms, the initial contract will take priority according to the main rule that the bill of lading is merely evidence of the contract of carriage.71 A superseding agreement on deck carriage may arise, however, where the shipper accepts the bill of lading without protest. His failure to object may in other words, depending on the circumstances of the individual case, act as a tacit acceptance of the deviating terms.72 In “Armour v Walford”, McCardie J. held: “Whatever the prior express bargain has been, a shipper is free to accept any bills of lading he chooses. If therefore he has chosen to receive without protest a bill of lading in a certain form he should ordinarily be bound by it”.73 Although there ought to be situations in which the shipper cannot be held to have tacitly agreed to certain contradictory terms in the bill of lading,74 the general statement made by Hodge and Glass that “it does not appear that the shipper’s acceptance of the bill of lading in such a case [of contradictory terms] would defeat the right to sue the carrier for the breach” is erroneous pursuant to the author’s understanding.75 In practice, as recognised by Scrutton and Eder, there will be many cases where the parties’ subsequence performance of the contract varies or supersedes the terms of the initial contract.76 The matter, seemingly, must ultimately be settled on a case-to-case basis under general principles of interpretation, including not least the “red hand principle”, given account of below. Standard Terms in a Bill of Lading: Part of the Contract of Carriage?

The situation discussed above – to which extent terms which are de facto not included in the initial contract of carriage (whether appearing in the bill of lading or in another context) can be held to supersede the terms of that contract – must be separated from the question that shall be dealt with here, being to which extent standard terms in a bill of lading can be held incorporated into the initial contract of carriage. Indeed, the line between the two situations may sometimes be hard to draw.77

Although the bill of lading as a starting point merely evidences the agreement, as already mentioned above, it can (and often will be) given contractual force through agreement. The initial contract may contain an express term, making it subject to the printed conditions in the bill of lading. Such a term may also, and in many cases will, be implied.78 The bill of lading standard terms then form part of the contract of carriage because it was the presumed common understanding of the contracting parties that it would do so.79

It has even been held, however, that there is a “universal knowledge and recognition, in commercial and shipping circles, that bills of lading are issued in connection with such carriage [carriage under a contract of carriage] and that they contain contractual terms”.80 This is a statement which indicates that there may be a custom of supplementing the initial contract of carriage with general terms in the bill of lading.81

Not any standard terms will be incorporated, however. English law, as Nordic law,82 contains the general principle of interpretation that the more onerous or unusual a term, the higher is the requirement on a clear notification of its existence in order for it to be incorporated into the contract. This is sometimes referred to as “the red hand principle”.83 Thus, although the shipper may reasonably have to expect that the carriage will be subject to the carrier’s usual conditions or trade where the circumstances do not indicate elsewise, an onerous or unexpected clause among those terms is unlikely to be impliedly incorporated without sufficient notice.84 It is however, another matter that the shipper may in any case tacitly accept any such terms at a later stage, by accepting the bill of lading, as given account of above.

On the specific topic of deck stowage, it must be emphasised that although a term in a bill of lading giving the carrier the liberty to stow on deck can today hardly in itself be held to be either onerous or unexpected (at least not in relation to container trade), if the carrier avails himself of the possibility under such a clause to exclude the application of the Hague Rules regime pursuant to Art. I(c) in order to be able to rely on a far-reaching liability exclusion clause, this may well be held an unexpected or onerous (or both) way to proceed.85 Liberty to Stow on Deck

As under Nordic law, an option or liberty to stow on deck authorises deck stowage under English law. In the frequently cited case “Svenska Traktor”,86 although the carrier could not exclude the contract from the scope of the Hague-Visby Rules through a liberty clause, the clause entitled him to stow the cargo on deck. The clause stated: “Steamer has liberty to carry goods on deck and shipowners will not be responsible for any loss, damage or claim arising therefrom.” Lord Pilcher divided the clause into two parts.87 The optional right to stow on deck in the first part was held not to exclude the application of the 1924 COGSA because such a clause was not a statement of deck cargo as required by Art. I(c).88 As a consequence, the second part was null and void under Art. III.8, for it deprived the consignee of his rights under the Hague Rules. The optional right to stow on deck in the first part, however, did authorise the carrier to stow on deck.89

As to the question of whether a liberty clause authorises the carrier to stow any type of goods on deck, the answer ought to be yes. The issue was put to test in “Armour v Walford”,90 where the carrier, relying on a liberty clause, placed a shipment of candles on deck. McCardie J. held that the authorisation to stow goods on deck under a liberty clause was not restricted to goods which by their usual practice were stowed on deck. To the contrary, he stated, the main purpose of a liberty clause was to authorise cargo which ordinarily would be placed below deck.91 McCardie J. rejected finally also an argument made by the shipper that the carrier was under an implied obligation to inform the shipper of the stowage on deck when making use of a liberty clause, so as thereby to enable the shipper to obtain a valid insurance.92

The decision in “Armour v Walford” should be compared with the position taken in the New Zealand case “Pembroke”,93 where a clause giving the carrier the optional right to stow “containers, trailers, transportable tanks and any other cargo” on deck was held not to include an open top container containing (weather-sensitive) roller chain: “In my view ‘containers, trailers, transportable tanks’ describe cargo which is weatherproof and “any other cargo” refers only to weatherproof or impervious cargo”, Ellis J. stated.94

Despite the admittedly strict interpretation in “Pembroke”, the case can be distinguished from “Svenska Traktor” and “Armour v Walford”, because whereas in the former the applicability of the liberty clause was restricted to certain types of cargo, the liberty clause in the latter cases was of general character and thus applicable to the cargo named in the bill of lading.95 Ultimately, where the words are broad and clear, there ought to be “no method of cutting down their operation, save in such a way as to defeat the very object of the clause itself”.96

This is not to say, however, that the cargo characteristics are irrelevant for the liability issue. As indicated above, one has to differentiate the question of contractual incorporation dealt with here from that of negligence, dealt with in Chap. 6 of this study. A shipper having given the carrier a liberty to carry goods on deck is considered also to have agreed to carry the risk for damage caused by the special perils involved in the stowage on deck.97 As the contract of carriage remains subject to the 1971 COGSA, however, the carrier cannot escape damage arising from a breach of Art. III.1 or 2 of the Hague-Visby Rules, such as lack of care for the cargo or the failure to provide a seaworthy vessel.98 In “Svenska Traktor”, for example, although the liberty clause was given contractual effect, the carrier was held liable for not having fulfilled his duty under Art. III.2 of the 1971 COGSA to care for the cargo.99 Third Party Protection

Unlike under Nordic law,100 a third party holder of a bill or another person to whom delivery is to be made is not a contractual party to the contract of carriage under common law. In relation to such a person, hence, the rights and duties under the contract of carriage have to be transferred under the 1992 COGSA (repealing the 1855 COGSA).101 Pursuant to Section 2(1) of the Act, a third party holder of a bill of lading or another person to whom delivery is to be made shall (by virtue of becoming the holder of the bill or, as the case may be, the person to whom delivery is to be made) have transferred to and vested in him all rights of suit under the contract of carriage as if he had been a party to that contract.

Despite the reference in Section 5(1)(a) of the 1992 COGSA to the contract contained in or evidenced by the bill of lading or sea waybill (emphasis added), in the relation between the carrier and a third party holder the bill of lading (but not a sea waybill) does not evidence the contract of carriage; it contains it.102 This rule was established in 1888 in “Leduc and Ward”.103 The position originates in the bill of lading’s status as a transferable document. It would be “commercially unsound”104 to allow the relationship between the carrier and a third party to be affected by terms of which a third party might not be aware. Moreover, the reasons that justify the shipper and carrier being allowed to deviate internally from the terms of the bill of lading are generally not valid in relation to third parties.105

This means in practice that the carrier cannot invoke an agreement on deck stowage against a third party holder of a bill of lading unless it is inserted in the bill of lading.106 Conversely however, this also entails that the third party is estopped from relying on an agreement on under-deck stowage concluded between carrier and shipper, unless the agreement is also reflected in the bill of lading.107 A different circumstance naturally arises where the shipper concludes a contract on deck stowage with the carrier outside of the contract of carriage.108 In the absence of a formal requirement on the agreement on deck stowage in relation to a third party holder (as that in 13:13 (263) paragraph 2 of the 1994 NMCs),109 the carrier can invoke a standard term liberty clause also against a third party under English law.110

5.3 Custom

The second authorisation ground for deck stowage is custom. Certain types of goods have a tradition of being carried on deck based on custom. These have typically been goods of particular resistance towards weather and wind, such as timber and coal. Since the introduction of the container, it has been argued also that the practice of stowing containers on deck amounts to a custom. The circumstances pointing towards the existence of a custom in this area are increasing each year as the practice becomes more and more widespread and the stowage on deck safer and safer. Nevertheless, one must conclude that there is surprisingly little case law on the matter.111 To this comes the fact that case law concerning custom has in general a limited value as authority: first, as the rejection of a claim on the existence of a particular custom may be due to the absence of sufficient evidence and not the fact that there is no such custom,112 and, second, because custom is generally established in relation to a particular, often quite narrowly defined trade (e.g. the waterway Fredrikstad-Moss-Oslo)113 and may as such be easily distinguishable from subsequent cases.

5.3.1 Nordic Law

Custom acknowledged by statutory law is itself a common feature in Nordic private law.114 A custom, where established, forms a rule of law overruling any dispositive provisions, such as the general prohibition to stow cargo on deck without the parties having so agreed. What Is Custom?

13:13 (263) paragraph 1 of the 1994 NMCs states that the carrier is entitled to stow cargo on deck in accordance with a “custom or practice of the trade”. The Codes provide no definition of the phraseology, and the travaux préparatoires contain no further guidance. As seen above, under the 1891 SMC (and its Nordic equivalents), “practice” was left out.115 This was done in order to avoid the misinterpretation that any practice of the trade would authorise deck carriage. The legislator recognised that in order for a practice to authorise deck carriage, it had to be so established and recognised that it ultimately had the character of a custom in any case.116 Nothing indicates that the law would be different under the 1994 Code. To the contrary, 13:13 paragraph 1 is emphasised in the travaux préparatoires as corresponding with the 1891 Code.117 The change of wording possibly originates in a wish to remain faithful to the phraseology of the Hamburg Rules,118 stating in Art. 9.1 that the carrier is entitled to stow cargo on deck when it is in accordance with the “usage of the particular trade”.119

In what follows, the term custom shall be used to designate a practice which authorises deck stowage on an objective basis.120 Custom, thus, must be contrasted to a mere usage or practice which authorises deck cargo only where it can be established that the parties’ express or implied intention was that it would form part of the agreement.121 If such a practice was reasonably intended to be incorporated, deck cargo would be authorised not on the basis of a “custom or practice of the trade” under 13:13 (263), but on the basis of an agreement.122 Even where a practice or usage is neither a custom nor an implied term, the courts may use it as a means of interpretation.123

Pursuant to 13:13 (263) paragraph 1 the custom is to be established in relation to “the trade” (Norwegian/Swedish/Danish “fart”), a phraseology indicating that the custom is to be established in relation to a certain geographical route, as opposed, for instance, to the custom of a particular harbour.124 This is supported by the cases ND 1918:241 “Juno”,125 where custom was established in cabbotage (Norwegian “kystfart”), and ND 1943:430 “Juliane”,126 where custom was established in the waterway (Norwegian “farvattnet”) Fredrikstad-Moss-Oslo. Deck stowage as a custom, moreover, in practice will often relate to a certain type of cargo. In “Juliane”, the custom defined by the court related to the carriage of paper bags in the waterway Fredrikstad-Moss-Oslo. It may however also relate to goods packed in a certain way, as in “Juno” where the custom defined by the court related to the carriage of cargo in barrels in cabbotage. Cargo packed in containers, moreover, is a prominent example from modern trade, relating not only to the way in which the goods are packed but also to the vessel’s fitness to carry the cargo in question.127

Falkanger et al. emphasise that the existence of a custom for deck cargo is generally hard to establish.128 This ought to be true, however, for the establishment of any custom, which will inevitably be based on a discretionary overall assessment of the circumstances of the individual case.129 An important factor is how established the practice is. This includes how widespread it is, for how long, how consequently and how frequently it has been carried out, as well as the reason for its being adhered to; the fact that people adhere to the practice because they feel obliged to do so points towards the existence of a custom as opposed to a mere practice. The above mentioned criteria must be seen together. Even a newly developed practice can be deemed established if it is sufficiently widespread, sufficiently frequent, etc.130

Other circumstances that may affect the evaluation are whether both parties were aware of the practice’s existence (even though they did not intend it to form part of the agreement),131 and whether the decision maker considers the practice positive or negative. It has been presumed, however, that a rejection of a custom will often conceal behind objective arguments the negative position held towards the practice which may in fact be the primary grounds for the decision, e.g. by tacitly raising the degree of how widespread the practice must be.132

A third party holder of a bill of lading does not enjoy the same protection under 13:13 (263) when cargo is stowed on deck based on custom as when it is stowed on deck based on an agreement (cf. 13:13 paragraph 2 providing a third party protection in relation to deck cargo based on an agreement under a contract covered by a bill of lading).133 The carrier thus, is entitled to invoke a custom as authorisation ground also against a third party holder in good faith even where the bill of lading does not contain a statement on the deck stowage. This has been criticised by Tiberg on the grounds that a third party acquiring a clean bill of lading cannot be expected to be aware of the existence of a custom.134 His criticism, pursuant to the author’s understanding however, seems contradictory to the very essence of a custom, as in theory none of the parties must be aware of the custom in order for it to be binding upon them. Why should the consignee or third party holder be put in a better position than the shipper in this aspect?135

In ND 1918:241 “Juno”,136 a number of barrels of salted meat were washed overboard in heavy seas and others jettisoned in an attempt to lighten the vessel, which had started to take on water. A standard clause on the back of the contract of carriage authorised the carrier to stow cargo on deck if was in accordance with (1) the captain’s judgment and (2) custom.137 The court held, first, that it was obvious that the decision to stow the barrels on deck had been taken at the captain’s discretion and that his decision had been justified and, second, that the captain had acted in accordance with custom when stowing the cargo on deck. To carry salted meat on deck in cabbotage was a recognised custom of the trade; in particular at the colder times of the year, when the cargo did not face the risk of becoming spoilt by heat.138 Salted meat was particularly suitable for deck carriage, since it would not be damaged by rain or salt water. Moreover, the carriage of such cargo under deck would expose other goods to the risk of becoming damaged by moisture, if the barrels were to spring a leak in heavy seas. The court’s finding was strengthened by “no less than six witnesses” (the court’s words translated by the author) who all were or had been qualified masters in cabbotage.

In ND 1943:430 “Juliane”,139 nine packages of paper bags carried on deck went overboard. Based on the information available to the court, in particular explanations given by witnesses and the carrier, the court established that it was custom to carry shipments of paper bags on deck in the waters of Fredrikstad-Moss-Oslo at any time of the year.

In ND 1956:526 “Seine”,140 iron drums of vaseline were lost in heavy seas on a voyage from Hamburg to Gdynia. The bill of lading contained no insertion on deck carriage. Two expert witnesses stated that they did not know whether it was custom to carry drums of vaseline on deck but that it was to a large extent generally custom to carry on deck drums filled with substances such as gas or oil. The court, seemingly, accepted the existence of a custom because the carrier’s liability was discussed without reference to any breach of contract.

In can be concluded from the cases above that the course of actions leading up to a decision on a possible custom have in practice scarcely been given account of by the courts. Statements made by expert witnesses as to the alleged custom’s existence ought to carry essential weight. Containerised Deck Cargo

Seen in the light of the vast amount of containerised cargo carried on deck today, there is reason to discuss deck stowage based on custom also from this particular perspective. The term custom, as seen above, is vague, and a finding of its existence (or non-existence) necessarily involves certain elements of discretion. In the absence of Nordic case law in particular but of international case law in general,141 one is essentially left to informed speculation on whether the Nordic courts would hold this practice sufficiently established and reasonable to form a custom in modern trade.

Several indications point, however, towards the conclusion that they would, including not least a statement in the 2012 Norwegian Official Government Report on the occasion of the proposed amendment to the 1994 NMCs given account of above.142 There the drafter recognises how Art. 25.1(b) and (c) of the Rotterdam Rules partly overlap, as a container ship is both especially designed for the carriage of containers on deck and operates in a trade where it is custom to stow the goods on deck (emphasis added).143 Indeed, the courts are not bound by the travaux préparatoires, even where the legislative process has been completed and resulted in an adoption of the suggested legislation,144 which is not yet the case here; but such a statement regarding a term, not intended to change under the suggested amendment, which has been made by an expert committee in maritime law cannot, it is presumed, be easily dismissed.

Auren, accordingly, held already in 1995, with reservation for local variations, that one must generally be able to conclude that it is custom to stow containerised cargo on deck on container vessels. The conclusion was based on a combination of three facts: (1) the practical need in container trade to stow cargo on deck, (2) the fact that the parties must generally be presumed to be aware of the practice and (3) the fact that containerised cargo is far better protected than conventional general cargo as it is not only containerised but also carried on a vessel designed to safely carry such cargo.145

Indeed – to come back to Eckhoff’s criteria for there to be a custom given account of above – the practice to stow containerised cargo on deck ought to be sufficiently established; it is as well widespread as it is frequently and consequently adhered to.146 What may be put into question is the reasonableness in allowing the carrier to stow cargo on deck without the shipper’s consent. A practice cannot be a custom where it serves exclusively the interest of one party, no matter how established it is; Like the statutory provisions themselves, a custom acknowledged by them has to be reasonably fair.147 As given account of above, it cannot be denied that the deck unavoidably exposes the cargo to certain additional risks. However, the advantages emanating out of containerisation at large ultimately avails also the cargo interest, who benefits from considerably lower freight rates than would be the result of mandatory under-deck stowage of any container in the absence of an agreement.148 The fact that the “container exception” in Art. 25.1(b) of the Rotterdam Rules was adopted as a statutory provision indicates that upon a weighing of all interests, at least the drafters held such a practise reasonable.

The state of law is less clear for containerised cargo stowed on vessels not especially equipped to carry containers (although the number of such vessels is steadily decreasing). The fact that the containerised cargo will be less protected on deck than on a container vessel and that the carrier will have a greater influence on the stowage point towards the non-existence of a custom. The fact remains, however, that the method of stowing goods in containers provides a far better protection than conventionally carried general cargo. Additionally, the parties must normally be presumed to be aware of the practice to stow cargo on deck also on these types of vessels. Auren in 1995 concluded with some hesitation that it was presumably custom to stow containers on deck also on vessels not specially equipped to carry cargo.149

There is reason, finally, to distinguish the carriage of cargo in enclosed containers on deck and such carriage in non-enclosed units, such as flatracks and open top containers. Not all types of containers in the term’s broader meaning are fit (read: makes the cargo fit) to be carried on deck.150 No guidance is found in relation to the 1994 NMCs. The willingness in foreign jurisdictions to accept the practice of stowing goods in or on non-enclosed containers on deck varies. Whereas US courts151 seem quite willing to consider it at least a reasonable deviation152 to stow open top containers and flatracks on deck, clauses permitting deck stowage have been construed153

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