The contract of carriage by sea: importance and rules

We have seen the importance of carrying goods by sea for the global economy. It is therefore necessary to understand what the contract of carriage by sea involves. In this article we will look at the rules under which it is concluded and how it works in our country too.

The United Nations Convention on the Carriage of Goods (the Hamburg Rules)

The United Nations Convention on the Carriage of Goods by Sea of 1978 was ratified by our country by Decree No 343/1981. It establishes the international contract of
carriage by sea, with the rights and obligations of the participating parties. At the same time, standard-form documents are issued to facilitate negotiations.

Under this convention, a contract of carriage by sea means any contract whereby the carrier undertakes, against payment of freight/a rate, to carry goods by sea from one port to another.

The term “goods” also includes live animals. Where the goods are grouped in a container or are packed, this term includes the transport units or packaging.

Types of document for the contract of carriage by sea

There are two types of document (the Charter Party and the Bill of Lading) that embody the contract of carriage by sea. They differ in the subject matter and the relationships they govern within the transport, as follows:

• The Charter Party governs the relationship between the shipowner and the charterer as regards the conditions for hiring space on the vessel. The bill of lading contains provisions about the goods taken on board the vessel. It is a document of evidence vis-à-vis the charterer (shipper), the shipowner, the consignee and other persons involved in performing the contract of carriage by sea.
• The conclusion of a Charter Party concerns tramp vessels only. Issuing a bill of lading is mandatory for all types of carriage by sea.
• Every Charter Party provides for a bill of lading to be drawn up as a mandatory requirement. A bill of lading can also be issued without a Charter Party having been concluded. This is what happens for carriage performed by liner vessels.
• The particulars in a bill of lading issued on the basis of the provisions of a Charter Party must be identical to those contained in that Charter Party. The bill of lading is proof that the goods have been taken over and that the actual performance of the contract of carriage has begun.
• The Charter Party is signed by the parties before its provisions are performed. The bill of lading is signed, as a rule, after the goods have been handed over to the vessel (the carrier).
• Chartering (engaging) a vessel can be done in several variants: Time Charter, Voyage Charter and Bareboat Charter, for tramp vessels. Booking Note and/or Bill of Lading, for liner vessels.

Application of the provisions of the Convention

The provisions of the convention apply to all contracts of carriage by sea between two different states, if:
a) the port of loading in the contract of carriage by sea is located in a contracting state;
b) the port of discharge in the contract of carriage by sea is located in a contracting state;
c) one of the optional ports of discharge in the contract of carriage by sea is the actual port of discharge. It is located in a contracting state;
d) the bill of lading or other document evidencing the contract of carriage by sea is issued in a contracting state;
e) the bill of lading or other document evidencing the contract of carriage by sea stipulates that the provisions of this convention or the legislation of any state applying them govern the contract.

They apply irrespective of the nationality of the ship, of the carrier or of any interested person. They do not apply to charter parties. Where a bill of lading is issued pursuant to a charter party, the provisions of the convention apply if it governs the relationship between the carrier and the holder of the bill of lading.

The parties appearing in the contract of carriage by sea

Under the Convention, we find the following parties in the contract of carriage by sea:

• Carrier – any person by whom (or in whose name) a contract of carriage of goods by sea has been concluded with a shipper.
• Actual carrier – any person to whom the carrier has entrusted the performance, in part or in full, of a carriage of goods, and it includes any other person to whom such a task has been entrusted.
• Shipper – any person by whom, or in whose name, or on whose authority a contract of carriage of goods by sea has been concluded with the carrier, or any person
  by whom, or in whose name, or on whose authority the goods are actually delivered to the carrier in relation to the contract of carriage by sea.
• Consignee – the person entitled to take delivery of the goods.

The liability of the contracting parties

The carrier's liability for the goods under this convention covers the period during which the goods are in its charge at the port of loading, during the carriage and at the port of discharge.

The carrier is liable:

• for loss of or damage to the goods or for delay in delivery caused by fire, if the claimant proves that the fire resulted from a fault or from neglect on the part of the carrier, its servants or its agents;
• for loss, damage or delay in the delivery of the goods which the claimant proves to be a result of the fault or neglect of the carrier, its servants or its agents
• where a fire on board the ship affects the goods, a survey report will be drawn up if the claimant or the carrier so wishes. It is carried out in accordance with shipping practice. Its purpose is to determine the causes and circumstances that led to the fire. A copy of the report drawn up by the surveyor will be made available, on request, to the carrier and to the claimant.

The carrier is not liable where the loss, damage or delay in delivery arose as a result of measures taken to save human life or from reasonable measures.

The shipper is not liable for the loss sustained by the carrier or the actual carrier, nor for damage to the ship. It is responsible if the loss or damage was caused by the fault or neglect of the shipper, its servants or its agents. Nor are the shipper's servants or agents liable unless the loss or damage resulted from their fault or through their neglect.

Honexpres offers complete sea freight services. From the shipper’s door to your door, including inland transport and customs procedures.

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