CL Unit 06

Edition: 1.
1 January 2000
Distance Education Course SB–205.5

Carriage of Goods by Sea Law
Unit 6 Carriers’ rights,

obligations, and
defences
Carriers have obligations to perform as specified by custom and in

the terms of their contracts of carriage. They also have clearly
delineated rights and ways to legally defend themselves in the face of
claims made against them.
The three lessons in this unit will cover the topics of:
legal obligations of the carrier
rights and defences of the carrier under the bill of lading
other obligations and rights of the carrier.
Module C: Certificate in Shipping Business

Diploma in Shipping Logistics—Jamaica Maritime Institute 6 1
Unit 6: Carriers’ rights, obligations, & defences Carriage of Goods by Sea Law
Unit 6 ........... Activities and expectations

Agenda
To complete this unit, you will:
Read and study the text in this unit.
Apply the information by performing the Activities
Test yourself by doing the Practice Exercises and checking your
answers.
Resources
There is no textbook for this course. All the information you require
is in this Study Guide. In addition, your Student Manual lists some
books that you may wish to read to expand your knowledge.
Learning outcomes
When you have completed this unit you will be able to:
Identify carriers’ rights, obligations, and defences under
common law.
Identify carriers’ rights, obligations, and defences (exclusions)
under the Hague and Hague Visby Rules.
Explain what is meant by providing a seaworthy ship.
Identify specific requirements during loading, stowage, the
voyage, discharge, and delivery.
Discuss to what extent carriers may extend or limit their rights,
obligations, and defences under common law and under Hague
and Hague Visby Rules.
Describe how carriers may extend or limit certain rights,
obligations, and defences under common law and under Hague
and Hague Visby Rules.
Identify the limits of application of the Hague and Hague Visby
Rules.
Module C: Certificate in Shipping Business (Course SB-205.5)

6 2 Diploma in Shipping Logistics—Jamaica Maritime Institute
Carriage of Goods by Sea Law Unit 6: Carriers’ rights, obligations, & defences
Lesson 1 ...... Legal obligations of the

carrier
The carrier has certain recognized obligations, some of which derive
from common law and others that are regulated under national law
and international conventions such as the Hague Rules.
Obligations at common law

The basic undertaking of a carrier is to carry the goods from the port
of loading to the port of discharge, and there deliver the cargo in the
same condition as it was received. This undertaking can actually be
verbal or written. In this Unit we examine the common carrier’s
obligations as contained in a written contract, particularly the
conventional bill of lading.
In order to perform this basic undertaking, the carrier must fulfil a
number of obligations. Most of these obligations would be
expressed in the contract. Where they are not, they may be implied
by the courts as being essential to the performance of the main
undertaking.
The carrier must do the following:
provide a seaworthy ship
load and stow the goods on board the ship
take care of the goods
proceed with reasonable dispatch
proceed without unreasonable deviation
discharge the goods upon arrival of the ship at port of discharge
deliver the goods to the consignee.
Common law exclusions and specified exclusions

The carrier’s undertakings are subject to certain exclusions, which
may be expressed in the contract or merely, implied. From the
outset, the common law recognized that carriers might not be able to
fulfil their obligations due to causes beyond their control. As a
matter of course, common law implied two exclusions: “act of God”
and “act of King’s enemies”. This means that the carrier cannot be
held liable for losses caused by natural disasters and wars and so on.
Later, another was added, namely: “inherent vice of the goods”. For

example, certain foodstuffs are subject to ripening and may rot on a

long journey through natural processes that cannot be stopped.
In addition to these common law exclusions, the carrier and the
shipper could agree to any express exclusion because of the concept
of freedom of contract. The stronger bargaining strength of the
carrier gradually led to so many exclusion clauses in the contract,
they almost cancelled the carrier’s basic undertaking.
National laws and international conventions

National maritime legislation in the common law countries protects
the position of the shipper by restricting the carriers’ rights to reduce
their obligations with exclusion clauses. Most common law
countries have enacted national legislation in accordance with one or
more of the international conventions that regulate cargo carriage at
sea—that is, the Hague Rules and the Hague Visby Rules.
Where the international rules apply, the applicable obligations and
exclusions are automatically considered to be part of the bill of
lading. This is so even if they do not appear in print and even if
there is no clause in the bill of lading specifically incorporating the
Rules.
Obligations under the Hague and Hague Visby rules

The relevant provisions in the Hague Visby Rules are almost
identical to those of the Hague Rules. These impose on the carrier
minimum obligations which may not be contracted out of, and fix the
limits of exclusions. The minimum obligations set out in the Hague
Rules largely correspond to the obligations identified by the common
law.
The Hague Rules and charter parties

The scope of application of the Hague Rules is limited. According to
Article I (b) of the Hague Rule, the rules apply to any contract of
carriage covered by a bill of lading (B/L) or any similar document of
title in so far as such document relates to the carriage of goods by
sea. The Hague Rules would thus not apply to a charter party (C/P).
Although the charter party contains the contract of carriage between
the carrier and shipper, it is not a document of title. However, if a
B/L is issued under a C/P, the Hague Rules would apply to the B/L
from the moment it regulates the relationship of its holder and the
carrier.
Thus, although the carrier and the shipper can include any clause
they like regarding their obligations within the charter party, they
must ensure that any B/L issued under the C/P conforms to the

Hague Rules. If it does not, the terms that are contrary to the Rules
would be legally invalid and the appropriate provisions of the Rules
would be deemed incorporated instead.
The Hamburg Rules

The Hamburg Rules of 1992 were signed by 20 nations and
destroyed the previous uniformity of international rules. These rules
are seen as being more advantageous to the shippers, who make up
most of the developing world. However, the Hague Rules continue
to dominate the Caribbean region partly because the large
shipowning nations who make the B/Ls find the Hamburg Rules to
be to their disadvantage. The Hamburg Rules have been ratified in
this region only by Barbados.
Providing a seaworthy ship

Under common law and international convention, by undertaking to
carry goods by sea, the carrier implies that the vessel to be used is
seaworthy. Seaworthiness has two aspects to it:
the ship itself must be fit to encounter the perils of the voyage.
Courts generally have held that a vessel is seaworthy if the hull,
tackle, and machinery are in good repair, there is enough fuel
and ballast, and the ship has an efficient crew
the ship must be fit and ready to receive and carry the cargo
safely on the voyage.
Under common law

Under common law, the undertaking of seaworthiness requires not
only that the carrier has made every effort to make the ship fit, but
that the ship is in fact fit to carry the goods to the destination. That
is, it is an absolute undertaking. However, under common law, this
undertaking could be excluded by inserting in the contract a clearly
worded exclusion clause.
Under the Hague Rules

Under the Hague Rules, the common law absolute undertaking is
replaced by an undertaking that, before and at the beginning of the
voyage, the carrier will exercise due diligence to make the ship
seaworthy.

In the Caribbean
To give a Caribbean example, the Jamaica Carriage of Goods Act
and the Trinidad & Tobago Carriage of Goods Act have similar
provisions. These state that in any contract for the carriage of goods
by sea to which the rules apply, there shall not be implied any
absolute undertaking by the carrier of goods to provide a seaworthy
ship.
Elements of seaworthiness
The Hague Rules elaborate the different elements of the requirement
of seaworthiness. Article III (1) states as follows:
The carrier shall be bound before and at the
beginning of the voyage to exercise due diligence to:
1. Make the ship seaworthy;
2. Properly man, equip and supply the ship;
3. Make the holds, refrigerating and cool
chambers, and all other parts of the ship in which
goods are carried fit and safe for their reception,
carriage and preservation.
Although the Hague Rules requirement of seaworthiness may seem
less stringent than the common law requirement, this is not so in
practice for the following reasons.
Unlike in common law, the undertaking is one of the minimum
obligations under the rules, and it cannot be avoided or lessened
by the carrier.
The English courts have held that there must be “due diligence”
by the persons, whether servants, agents or independent
contractors that are engaged by the carrier to make the ship
seaworthy. Thus the negligence of a fitter employed by an
independent and competent firm of repairers could be attributed
to the carrier. This makes the burden of proving “due diligence”
quite difficult in practice.
Loading and stowing the goods on board

Under common law loading was a joint obligation of the carrier and
the shipper. The shipper lifted the goods up to the ship’s rail and the
carrier took it in and stowed it. Carriers had to ensure that their part
of the loading and stowing operation was performed properly and
carefully. The parties, of course, could agree that only one of them
would be responsible for the entire loading operation, or that the
carrier could perform it without being held responsible for any loss
or damage to the goods.

The Hague Rules indicate that loading is an obligation of the carrier,

although there is nothing in the Rules to say that it cannot be a joint
operation. The carrier however cannot exclude responsibility for
improper loading. Article II of the Hague Rules states:
The carrier shall properly and carefully load,
handle…
When does loading begin?

Loading is an important function because it is the starting point of
the application of the Hague rules to the carrier of goods by sea. The
carrier and the shipper are only bound to contract in accordance with
the rules from the loading of goods. They may insert into their
contract any exclusion clause dealing with responsibility for the
goods before loading.
It is important, then, to decide when exactly loading begins. Since
loading is a lengthy operation in which the shipper or shipper’s agent
too may play some part, it is not easy to decide exactly when loading
begins vis-à-vis the carrier. The point at which loading begins
depends on the custom of the port, the type of cargo to be loaded,
and method of loading. Concepts such as “passing the ship’s rails”
which had been developed prior to the Hague Rules are still in use
under the Rules.
Stowing
The carrier is responsible for the proper stowage of cargo even if the
task is physically performed by the shipper. It always takes place
under the supervision of the master or crew of ship.
Under the common law, the carrier could exclude liability for
stowage with a suitable exclusion clause. Under the Hague Rules
however, this is not possible. Stowage is indicated as one of the
obligations of the carrier.
Taking care of the goods

The carrier must take care of the goods, ensuring that they suffer no
loss or damage during the voyage. Thus, for example, the carrier
would provide adequate ventilation during any change of
temperature if the goods could be affected by it. The carrier must
also prevent any theft or pilferage of the goods at way ports. While
this obligation may be excluded under the common law, it may not
be excluded under the Hague Rules.

Proceeding with reasonable dispatch

Under common law, the carrier has an implied obligation to proceed
on the voyage with reasonable dispatch. What would amount to
reasonable dispatch depends on the facts of each case. Like other
common law obligations this too can be excluded by an appropriate
exclusion clause.
The Hague Rules make no reference to the undertaking of reasonable
dispatch, and it remains an implied obligation, which the parties can
exclude by a clause in the bill of lading. This is one of the reasons
why the carrier may not be held responsible for delay in the carriage
of goods.
Proceeding without unjustifiable deviation

At common law, it is implied that the carrier will not deviate from
the contract route unless such deviation is reasonable and justified.
A deviation is considered to be justified if at least one of the
following conditions applies:
it is in order to save human life
it is necessary to the safety of the voyage.
The carrier can, under common law, insert a clause excluding this
obligation.
Under the Hague Rules, too the carrier must proceed without
unjustifiable deviation. The Rules however improve the common
law position of the carrier, by expanding the situations where
deviation is justified. Article IV (4) allows deviation in the
following cases:
to save life
to save property
in reasonable response to circumstances.
Whether a particular deviation is considered reasonable depends on

the facts of each case.
The obligation not to deviate unjustifiably or unreasonably is
considered fundamental to the contract of carriage. Deviations have
far-reaching repercussions. The main one is the carrier’s
responsibility for losses that the shipper or receiver may suffer
because of the deviation. Also, deviation is said to displace the
contract to such an extent that the carrier is denied all rights and
exclusions under the contract from the point of deviation onward.

The carrier is then left only with the common law exclusions namely,
Act of God, King’s Enemies, and inherent vice.
Liberty clauses
The bill of lading often contains what is known as a liberty clause.
This gives the carrier the right to call at any port. The question arises
as to whether a liberty clause would amount to an exclusion clause
and thus be contrary to the Hague Rules. The answer appears to be
that liberty clauses are indeed contrary to the Rules.
Liberty clauses are used, for example, when a common carrier is
carrying cargo to a number of destinations and requires the flexibility
to call at any port. The carrier thus undertakes to carry the cargo
from the port of loading to the port of discharge calling at any other
port of his choice. The courts however tend to interpret liberty
clauses restrictively, as giving the right only to call at certain other
ports. These would be any ports in the course of the advertised
voyage or along its geographical route.
Discharging the goods

Under the common law, discharge is a joint obligation, like loading.
Under the Hague Rules, the shipowner has an obligation to discharge
the cargo. Article III (2) of the Hague Rules state that:
…the carrier shall properly and carefully load,
…and discharge the goods carried.
Discharge is the carrier’s final obligation under the Hague Rules.
Port of discharge and force majeure

The port of discharge is always agreed upon and included in the bill
of lading. Most bills of lading however make provision for the
carrier’s inability to discharge at the agreed port due to
circumstances beyond their control (called force majeure). These are
unpredictable events beyond the control of the carrier, such as
strikes, lock outs, blockage, ice, etc. If any of these types of events
prevent the carrier from discharging at the agreed port, the carrier is
entitled to discharge in another safe and convenient port. Force
majeure clauses are valid under the common law and the Hague
Rules.
Place (berth) of discharge

At the port of discharge the carrier must proceed to the place of
discharge indicated in the bill of lading, or, if no such place is
indicated, to the carrier’s place of choice. In practice, the place or

berth where the ship is discharged is usually decided by the port.

Special cargo such as dangerous goods or bulk cargo may have a
customary berth in the port.
Notice of discharge
The carrier has no obligation to give notice of arrival to the
receiver/consignee unless this was so agreed. If the name of the
consignee is indicated on the bill of lading under “party to be
notified”, this would amount to an agreement to notify. In this case,
the carrier would be obliged to inform that person.
Manner of discharge
In common law, the carrier’s obligation is to get the goods out of the
ship’s hold and put them on the ship’s deck or alongside, so that the
receiver could take the goods without difficulty. This however is
often altered by the custom of the port. In many ports today the
receiver is not present at the time the cargo is discharged and the
goods may have to be moved and possibly stored before being
received by the consignee/receiver. The total discharging operation
is carried out by the ship and the port.
The Hague Rules do not elaborate the manner of discharging the
goods. It would thus depend on the custom of the port and the type
of goods. Even if the receiver decides to perform the entire function
of discharge, it is unlikely that the carrier could avoid responsibility
for discharge.
End of discharge
The point at which discharge ends or, to be more precise, the point at
which the carrier’s part of discharge ends, is important. This is
because that is the point at which the Hague Rules cease to apply to
the contract of carriage of goods. Discharge is the final activity
regulated by the Rules. This does not mean that the carrier has no
further obligations towards the goods, but it means that the carrier is
free to contract further tasks in any manner. The carrier could
exclude all responsibility for the goods after they are discharged
from the ship.
There is no fixed rule regarding the end of the carrier’s function of
discharge. As in loading, it would depend on the intention of the
parties and the custom of the port. Many ports yet follow the
practise of the “ship’s rail” that is, responsibility of the carrier ceases
as the goods are lifted off board over the ship’s rail. The bill of
lading could stipulate when discharge is to end and it often contains
clauses that specify the end of discharge and the end of the carrier’s

responsibility towards the cargo. For example the bill of lading may
contain a clause which states:
… the goods are considered to be at the shipper’s
risk as soon as they are discharged over the ship’s
rails
or
…the goods to be at risk of consignee from ship’s
tackle.
These clauses do not appear to contravene the Hague Rules.
LOB certificates
As a result of these clauses, the carrier would not be held responsible
for any loss or damage to the goods after discharge from the ship,
even if the carrier continues to handle them. For example if the
goods were to fall overboard during the discharging operation, the
carrier could decline responsibility for such loss as they would have
passed the ship’s rails. This position is acknowledged in many ports.
These ports issue LOB (lost overboard) certificates. The carrier may
produce LOB certificates in legal defence in the event of a claim
from the consignee.
Delivering the cargo

At the time when discharge was a joint operation between the carrier
and the receiver, discharge and delivery would have amounted to one
function. This would be the position even today in the case of direct
delivery of cargo. Legally, however, they are two different
functions.
According to the common law, the carrier is obliged to give personal
delivery to the receiver or the receiver’s agent. The carrier remains
responsible for the goods till then. This could however be altered by
the customs of the port or the provisions in the contract of carriage.
As the Hague Rules do not apply to this part of the carriage, bills of
lading usually contain provisions regarding delivery. According to
the B/L provision, the carrier could simply discharge the cargo into
the custody of the port and leave without further responsibility. For
example a clause in the bill of lading could state:
… wherever it is compulsory or customary at any
port to deliver the cargo to the custom or port
authorities, delivery so made shall be considered
final delivery.

Although discharge of the cargo into the port releases the carrier
from taking care of the goods any further, the carrier is obliged to
authorize delivery to the proper consignee. The carrier’s obligation
is to deliver or authorize delivery to the first person who presents a
properly endorsed bill of lading.
Activity
1. Find out what national laws (if any) are in place in your country
to regulate the obligations of a cargo carrier.
2. When were they enacted?
3. Do they make reference to the Hague or Hague Visby Rules?

Practice Exercise for Lesson 1

Test your understanding of Lesson 1 by answering these questions.
Check your answers and read again any parts you found difficult.
The answer key is at the back of this unit.
1. What is the basic undertaking of the carrier?
_____________________________________________
_____________________________________________
2. List at least four of the things that the carrier must do to achieve
this basic undertaking.
a. _________________________________
b. _________________________________
c. _________________________________
d. _________________________________
3. What are the three common law exclusions?

a. _________________________________
b. _________________________________
c. _________________________________
4. Which of the following is true in most common law countries?

a. restrictions to carrier’s obligations are strictly limited to
common law exclusions
b. the right of carriers to reduce their common law obligations
is restricted by national law
c. common law exclusions are overturned by the carrier’s
obligations under Hague and Hague Visby Rules
d. no special laws are needed because the terms of carriage are
always expressed in the bill of lading
5. In a country that recognizes the Hague Rules, they apply to all

contracts of carriage. True or false? Explain.
a. true
b. false
_____________________________________________

6. What is the main difference in common law and Hague Rule

requirements regarding seaworthiness of the cargo vessel?
a. common law require seaworthiness, whereas the Hague
Rules do not
b. the Hague Rules require seaworthiness whereas the
common law does not
c. under common law, the ship must be seaworthy, whereas
under the Hague Rules, the carrier needs only to have made
a diligent effort to ensure seaworthiness
d. under the Hague Rules, the ship must be seaworthy,
whereas under common law, the carrier needs only to have
made a diligent effort to ensure seaworthiness
7. If a carrier wishes to exclude responsibility for damage caused

during loading, would it be better to operate under common law
or under the Hague Rules? Explain.
a. common law
b. Hague Rules
_____________________________________________
_____________________________________________
8. What do the Hague Rules say about responsibility for stowage?

a. nothing
b. that it is up to the shipper and carrier to decide
c. that it is the stevedore’s responsibility
d. that it is the carrier’s responsibility
9. What responsibilities (if any) does the carrier have to prevent

theft of goods?
a. none because it is not within the carrier’s control
b. under the Hague Rules this responsibility may be excluded,
but it is absolute under common law
c. under common law this responsibility may be excluded, but
it is absolute under the Hague Rules
d. it is voluntary because the common law and Hague Rules
both allow the carrier to exclude this responsibility

10. What do the Hague Rules say about the carrier acting with
reasonable dispatch?
a. nothing
b. that it depends on the facts of the case
c. that this obligation may be negotiated and/or excluded
d. that the carrier’s obligation is absolute in this regard
11. Under the Hague Rules, what three things might be regarded as a
justifiable deviation?
a. _________________________________
b. _________________________________
c. _________________________________
12. What is a liberty clause and is it acceptable under the Hague

Rules?
_____________________________________________
_____________________________________________
_____________________________________________
13. Under the Hague Rules, whose responsibility is discharge?

a. the shipper
b. the carrier
c. the shipper and carrier jointly
d. the stevedores
14. Are force majeure clauses considered legally valid?

a. no
b. yes, under common law
c. yes, under the Hague Rules
d. yes, under common law and the Hague Rules
15. Which of the following is true?

a. the carrier is legally obliged to notify the consignee that a
shipment has arrived
b. the carrier is not legally obliged to notify the consignee that
a shipment has arrived
c. the carrier is only legally obliged to notify the consignee
that a shipment has arrived if it has been so agreed

16. What is the chief determinant of the way in which goods are
discharged?
a. the bill of lading
b. common law
c. the Hague Rules
d. custom of the port
17. When do the Hague Rules cease to apply to a contract of

carriage?
a. when the ship arrives at the port of discharge
b. when discharge starts
c. when discharge ends
d. when the consignee receives the goods
18. When is an LOB certificate issued, and by whom?

_____________________________________________
_____________________________________________
19. From a legal point of view, what is the relationship between

discharge and delivery?
a. they are regarded as identical
b. they are regarded as separate functions
c. they are separate under the Hague Rules
d. they are identical under common law

Lesson 2 ...... Rights and defences of the

carrier under the B/L
The obligations of carriers must be viewed in the light of their rights
and defences against claims. The common law provides the carrier
with three defences whether they are included in the contract or not.
It also gives the carrier the right to include many more defences
against damage claims, with the agreement of the shipper. These
could be used to exclude the specific obligations listed.
The Hague and Hague Visby Rules take away the carrier’s right to
exclude any of the listed obligations. However, the Rules give
carriers seventeen strong defences against claims. They also limit
the carrier’s monetary liability for losses. The defences and rights
indicated in the Rules are available to the carrier even if they are not
expressed in the bill on lading. These defences correspond largely
with the defences that the carrier would include in the contract if it
were governed by the common law.
Exclusions in Article IV of the Hague Rules

According to Article III, paragraph 2 of the Hague Rules, the
carrier’s obligation to load, handle, carry, etc., is subject to the
provisions of Article IV, which contains the list of defences and
exclusions. Articles IV of the Hague Rules state that neither the
carrier nor the ship shall be responsible for loss or damage arising or
resulting from the following:
…act, neglect, or default of the master, mariner
pilot, or the servant of the carrier in the navigation
or in the management of the ship
This exclusion is not as wide as it seems because it helps the carrier
only if the cause of loss or damage is due to poor navigation or
management of the ship. Poor management of the cargo is not
covered by it. Still there was and is a perception that it offers a large
amount of protection to the carrier, possibly at the expense of the
shipper. The Hague Rules do not define “navigation” or
“management” but they have been subject to much judicial
discussion. The courts have tried to prevent shipowners from
avoiding the results of their own fault or negligence. In interpreting
the two terms, the courts have tried to distinguished between:

acts or defaults that are connected with the ship itself, which
would be within the exclusion
acts or defaults that are connected with the cargo, which would
not be within the exclusion.
Circumstances that can result in cargo damage

The first two groups in the following examples are acts of poor
navigation or ship management that might result in damaged or lost
cargo, but for which the carrier might not be held liable. The final
group is more directly connected with the cargo, so that the carrier is
more likely to be held accountable. These are:
acts connected with navigation
– ship negligently striking the quay
– ship negligently grounding on a reef
acts connected with ship management

– failure to take soundings of the water level of the hold
– allowing the ship to exceed the permitted draft
– failure to use locking bars on hatches in heavy seas
acts connected with cargo management, and not the ship

– allowing rain water to get into hatches by not protection
them with hatch covers while in port
– pilfering by stevedores
– failure to secure cargo.
In effect the Hague Visby Rules exonerate the carrier from damage
caused by negligent navigation and ship management.
Other Hague Visby exclusions
Damage due to fire

The Hague Visby Rules exonerate the carrier from cargo damage or
loss due to fire. This is so provided there was no fault or privity1 on
the carrier’s part.
1
Privity is a relation between parties that is recognized by law. In law, a person having an interest or part in
any action is said to be “privy to” that action.

Perils, dangers and accidents of the sea or other navigable waters

Damage due to “perils of the sea” covers all occurrences that are
connected or peculiar to the sea. It includes any damage to the goods
caused by sea water, storms, collision, and stranding, which could
not be foreseen and guarded against.
It does not cover incidents that occur on the sea but are not peculiar
to the sea. Examples of this are rats eating the cargo at sea, or
damage done by the bursting of a boiler in the ship.
Act of God
The exclusion of “Acts of God” refers to any accident due to natural
causes that could not have been prevented by human intervention.
Such accidents would include lightning, floods, frost, and sometimes
even wind.
Act of war
This exclusion covers all consequences of an act of war. It covers
the consequences of acts done in a civil war as well as hostilities
between separate countries.
Act of public enemies

This exclusion covers acts done by enemies of the state. Together
with the exclusion of act of war, it covers the action of any
belligerent state. It is unlikely to cover acts done by pirates and
traitorous subjects.
Arrest, restraint, or seizure under legal process

This covers any act done by the state or sovereign power. Such acts
would normally be seizure, arrests, embargoes, and blockages
affecting the goods. It would also cover government action resulting
in the detention of the goods and prohibitions of discharge.
Quarantine restrictions
This covers loss or damage to goods due to their being subject to
quarantine procedures. This could involve damage to cargo due to
fumigation or delay in discharging.
Act of omission by the shipper, or the owner of the goods, his agent or
his representative
This usually covers loss or damage arising out of the conduct of the
shipper. For example the shipper may give the carrier an inaccurate
description of the goods, which causes the carrier to stow the goods

in the wrong place. Acts or omissions falling under this exclusion

may also be covered by the last three listed below.
Strikes or lockouts or stoppages or restraints of labour from whatever

cause, whether partial or general
A strike is considered to be a general refusal by workers to work in
consequence of an alleged grievance. The strike may be a refusal to
work by the portside labour such as stevedores, or by the crew of the
ship. The carrier must use reasonable means to continue business
and obtain workers. The clause in the Hague Rules is quite wide and
covers more than simple strikes.
Riot and civil commotion

Riots amount to criminal activity. A civil commotion indicates
something between a riot and a civil war. The elements of
turbulence and tumult would have to be present.
Saving or attempting to save life or property at sea

This would cover loss/damage to goods arising out of any attempt to
provide assistance to passengers or cargo of other ships.
Wastage in bulk or weight

The carrier is not liable for wastage in bulk or weight or any other
loss or damage arising from inherent defect, quality or vice of the
goods. The exclusion covers loss or damage to the goods arising due
to its own character. For example, some goods, such as humid coal,
lose weight or volume over a long period. The wastage would result
in an apparent shortage of the goods.
Deterioration of perishables
Perishable cargo such as vegetables may decay; juice and fluids
undergo fermentation and acidity; grain may heat up and/or become
infested with weevils; cargo that has been packed into bags in damp
condition may develop mould. The carrier is not liable for these
developments. This assumes that the carrier continues to care for the
cargo in the normal manner, providing adequate ventilation.
Example:
Bananas were sent from a Caribbean Island to Dubai in a
general cargo vessel fitted with a manual ventilation system.
The carrier ventilated the holds whenever the weather permitted
it. As expected the voyage lasted several weeks. Upon arrival it
was found that the bananas had started to sprout, and hence the
consignment was useless for marketing.

The carrier was deemed to have carried the bananas in a

satisfactory manner and the damage was attributable to the
inherent vice of the goods. The shipper should have transported
them on a refrigerated vessel.
Sweat damage
Condensation may form on the sides of the ship’s holds and or on the
goods directly, due to the passage of the ship from cold to warm
climates or vice versa.
The carrier is expected to prevent the goods from touching the ship’s
sides and the bottom by placing adequate dunnage (wooden planks
under and around the goods. Adequate ventilation must be provided
also, depending on the weather. Some older vessels have only
manual ventilators. If the ship has taken all possible precautions and
sweat still forms on the goods, the carrier would not be held
responsible for any resultant loss.
Insufficiency of packing
This exclusion covers loss/damage to the goods that may arise
because of defective or inadequate packing by the shipper.
The carrier often attempts to rely on this exclusion when goods are
discharged in a damaged condition with the outer packing torn. This
is particularly so in the case of alcoholic drinks, for which the
customary packing is bottles inside cardboard boxes. However since
the carrier gives a bill of lading at the outset stating that the goods
are in good order, it would be difficult to later claim that the packing
was unsatisfactory. In practice, where defective packing could have
contributed to the damage, the carrier may agree to settle a claim at
50% of the loss.
Insufficiency or inadequacy of marks

This exclusion would help if the carrier can show that the goods have
been discharged but cannot be identified because of the insufficiency
of marks and identification labels of the shipment. It would also
cover a case where the marks have faded or cannot be distinguished
from the marks of other shipments.
The exclusion would not cover a case where the marks in the bill of
lading differ from the marks in the goods. This is particularly
relevant if the consignee demands goods with marks corresponding
to those in the bill of lading. The carrier has a duty to issue a bill of
lading indicating the correct marks.

Latent defects not discoverable by due diligence

This exclusion covers loss or damage to goods arising due to latent
defect of the ship. A defect is latent if it cannot be discovered by a
person of reasonable skill using ordinary care.
Example:
Bauxite was shipped from a Caricom Port to Rotterdam. The
ship was examined by the marine supervisor of the carrier and
confirmed to be in order. During the voyage, a pipe carrying
ballast water burst, flooding one of the holds where the cargo
was stowed, causing extensive damage.
In this case, the damage was attributed to a latent defect not
discoverable by due diligence.
Any other cause arising without the actual fault or privity of the carrier
The exclusion continues as
...or without the fault or neglect of the agent or
servant of the carrier, but the burden or proof shall
be on the person claiming the benefit of this
exception to show that neither the actual fault or
privity or the carrier nor the fault or neglect of the
agents or servants of the carrier contributed to the
loss or damage.
This is a “catch-all” exclusion that would help the carrier if the loss
does not fall within other listed exclusions, but there is no fault or
negligence on the carrier’s part. Although there is no need to
establish the cause of loss/damage in order to rely on this exclusion,
the carrier must show that there was no fault or negligence of carrier,
or carrier’s servants and agents. In practice, the only way to show
absence of fault or negligence would be to establish the actual cause
of damage. This exclusion cannot easily be relied upon.
Example—case not falling within this exclusion:
Bananas were shipped from a Caricom Port to Liverpool. At
Liverpool, the vessel was discharged by stevedores who were
independent contractors. Precautions were taken by the carrier
to guard the cargo at night, but some of the cargo was stolen in
the night by thieves.
It was held that the thieves were probably friends of the
stevedores and that the carrier had not established a contrary
position. It was also held that the stevedores were agents of the
carrier and the carrier had not established the lack of fault or
negligence on the part of the agent.

Activity
Talk to a carrier, a shipper, or a lawyer about any recent claim
against a carrier for lost or damaged cargo.
1. Find out if the claim or defence came under the Hague or Hague
Visby Rules.
2. What were the circumstances of the loss/damage?
3. What defence against the claim did the carrier use? Did a
recognized exclusion apply?
4. Was the claim successful?
5. How much money was involved in the claim?


Test your understanding of Lesson 2 by answering the following
questions. Check your answers and read over any parts you found
difficult. The answer key is at the back of this unit.
1. Which of the following best expresses carrier’s rights under the
Hague and Hague Visby Rules?
a. the carrier has three defences against claims whether they
are in the B/L or not, but they may be excluded
b. the carrier may not exclude any listed obligations
c. the carrier and shipper may agree between themselves to
exclude any obligations except the three listed ones
d. the carrier has unlimited liability for losses when the claim
is just
2. Under the Hague Rules, if courts wish to prevent carriers from

avoiding responsibility for damaging other people’s property,
what do courts strive to establish when settling claims?
_____________________________________________
_____________________________________________
3. For what three things do the Hague Visby Rules say that carriers
are not responsible?
a. _________________________________
b. _________________________________
c. _________________________________
4. If a shipment of iron parts goes rusty because of damage by sea

water during a storm, is that considered damage due to a peril of
the sea?
a. yes, because a storm is a peril of the sea
b. no, because iron always rusts when damp

5. Which four Hague Visby exclusions might be used by a carrier

to cover the following situations?
a. cargo is damaged because a terrorist group places a mine in
the ship’s path
b. the label on the cargo package says canned fruit when in
fact it is fresh fruit that subsequently goes rotten
c. unavoidable delay due to bad weather cause a cargo of
bananas to become overripe and rot
d. an apparently sturdy bulkhead structure collapses during the
voyage, causing one cargo to taint another
6. Whose fault is it if the marks or labels described on the bill of

lading do not match the marks and labels on the shipment?
_____________________________________________

Lesson 3 ...... Other obligations and rights

of the carrier
Hague and Hague Visby Rules do not deal with every possible
situation. Certain circumstances and periods of carriage are not
mentioned. The carrier may have various other rights and
obligations that are expressed through clauses in the bill of lading.
Clauses lessening the carrier’s liability

Under the common law, the carrier could include in the bill of lading
any clause lessening the carrier’s liability. However, under the
Hague and Hague Visby Rules, the bill of lading could contain only
clauses corresponding to the list of exclusions in the rules.
It would not be acceptable to put clauses into the B/L that allowed
the carrier to handle the cargo irresponsibly. For examples a clause
stating that the carrier is not responsible for damage arising out of
bad stowage would be considered legally invalid under the Hague
Rules.
Clauses increasing the carrier’s responsibility

The Hague Rules have no prohibition against the carrier surrendering
the available rights and defences or increasing the carrier’s
responsibility, provided they are expressed in the bill of lading.
Situations not covered by the Hague Rules
Before loading and after discharge

As already observed, the Hague Rules apply to the contract only
from the point of loading to the point of discharge. Thus, before
loading and after discharge, the carrier would be responsible for the
goods according to the common law. Common law gives the carrier
only three implied exclusions—far fewer than the Rules. Therefore,
to avoid liability for the goods completely or even to bring liability
to the standard set in the Hague Rules, the carrier would have to put
express exclusions into the bill of lading to cover this period.
Delay
The Hague Rules contain compulsory provisions only with regard to
loss or damage to cargo. They do not appear to impose any
responsibility on the carrier concerning delays.

Livestock and deck cargo

The Hague Rules exclude live animals and deck cargo from its
ambit. Such carriage would thus be governed by the common law
and the carrier could exclude responsibility in any manner. A bill of
lading issued for deck cargo would usually contain a clause stamped
on it stating,
Carried on deck at shipper’s risks.
Activity
There is no specific Activity for this lesson.


Test your understanding of Lesson 3 by answering the following
questions. Check your answers and read over any parts you found
difficult. The answer key is at the back of this unit.
1. What periods of carriage are not covered by the Hague Rules?
_____________________________________________
2. What legal regime covers these periods?

a. none
b. common law
c. national laws
d. this may be agreed between shipper and carrier
3. Can carriers limit their liability during these periods?

a. no, liability is unlimited under the common law
b. no, liability may not be limited when Hague and Hague
Visby do not apply
c. yes, by choosing to invoke Hague or Hague Visby
d. yes, by putting exclusion clauses in the bill of lading
4. What do Hague Rules say about delays that cause damage to

cargo?
_____________________________________________
5. What type of cargo is not covered by Hague or Hague Visby

Rules?
_____________________________________________

Answer keys
Lesson 1
1. The carrier undertakes to carry goods from the port of loading to
the port of discharge, and there deliver the cargo in the same
condition as it was received.
2. Any four of the following:

provide a seaworthy ship
load and stow the goods
take good care of the goods
proceed with reasonable dispatch
discharge the goods on arrival at the destination port
deliver the goods to the consignee
3. act of God
act of the King’s enemies
inherent vice of the goods
4. b. the right of carriers to reduce their common law obligations

is restricted by national law
5. b. false
The Hague Rules do not apply to charter parties unless a bill
of lading is also issued under the C/P, in which case the
Hague Rules apply to the B/L’s terms.
6. c. under common law, the ship must be seaworthy, whereas
under the Hague Rules, the carrier needs only to have made
a diligent effort to ensure seaworthiness
7. a. common law
Under common law, the carrier and shipper may agree
between themselves to waive or take on such
responsibilities. Under the Hague Rules, the carrier may
not waive responsibility for improper loading.
8. d. that it is the carrier’s responsibility

9. c. under common law this responsibility may be excluded, but

it is absolute under the Hague Rules
10. a. nothing
11. to save life

to save property
to respond reasonably to circumstances
12. A liberty clause is a clause in the bill of lading that gives carriers
the right to call at any port. It is contrary to the Hague Rules—
courts usually restrict the right to certain ports.
13. b. the carrier
14. d. yes, under common law and the Hague Rules
15. c. the carrier is only legally obliged to notify the consignee

that a shipment has arrived if it has been so agreed
16. d. custom of the port
17. c. when discharge ends
18. The certificate may be issued by the port if cargo is lost

overboard after passing the ship’s rail during discharge.
19. b. they are regarded as separate functions.
Lesson 2
1. b. the carrier may not exclude any listed obligations
2. Courts try to differentiate between acts or defaults connected

with the ship and acts or defaults connected with the cargo.
3. damage due to negligent navigation

damage due to poor ship management
damage due to fire
4. a. yes, because a storm is a peril of the sea

5. a. act of public enemies

b. act of omission by shipper (wrong labelling)
c. deterioration of perishables (inherent vice of the goods)
d. latent defect not discoverable by due diligence
6. It is the carrier’s fault. It is the carrier’s duty to issue an accurate

bill of lading even though the shipper may fill it out.
Lesson 3
1. Hague Rules do not cover the period before loading on board
and after discharge.
2. b. common law
3. d. yes, by putting exclusion clauses in the bill of lading
4. nothing
5. livestock and deck cargo.



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Distance Education Course SB–205.5

Unit 6 Carriers’ rights,

Carriers have obligations to perform as specified by custom and in

Module C: Certificate in Shipping Business

Unit 6 ........... Activities and expectations

Module C: Certificate in Shipping Business (Course SB-205.5)

Lesson 1 ...... Legal obligations of the

Obligations at common law

Common law exclusions and specified exclusions

Module C: Certificate in Shipping Business (Course SB-205.5)

example, certain foodstuffs are subject to ripening and may rot on a

National laws and international conventions

Obligations under the Hague and Hague Visby rules

The Hague Rules and charter parties

Module C: Certificate in Shipping Business (Course SB-205.5)

The Hamburg Rules

Providing a seaworthy ship

Under common law

Under the Hague Rules

Module C: Certificate in Shipping Business (Course SB-205.5)

Loading and stowing the goods on board

Module C: Certificate in Shipping Business (Course SB-205.5)

The Hague Rules indicate that loading is an obligation of the carrier,

When does loading begin?

Taking care of the goods

Module C: Certificate in Shipping Business (Course SB-205.5)

Proceeding with reasonable dispatch

Proceeding without unjustifiable deviation

Whether a particular deviation is considered reasonable depends on

Module C: Certificate in Shipping Business (Course SB-205.5)

Discharging the goods

Port of discharge and force majeure

Place (berth) of discharge

Module C: Certificate in Shipping Business (Course SB-205.5)

berth where the ship is discharged is usually decided by the port.

Module C: Certificate in Shipping Business (Course SB-205.5)

Delivering the cargo

Module C: Certificate in Shipping Business (Course SB-205.5)

Module C: Certificate in Shipping Business (Course SB-205.5)

Practice Exercise for Lesson 1

3. What are the three common law exclusions?

4. Which of the following is true in most common law countries?

5. In a country that recognizes the Hague Rules, they apply to all

Module C: Certificate in Shipping Business (Course SB-205.5)

6. What is the main difference in common law and Hague Rule

7. If a carrier wishes to exclude responsibility for damage caused

8. What do the Hague Rules say about responsibility for stowage?

9. What responsibilities (if any) does the carrier have to prevent

Module C: Certificate in Shipping Business (Course SB-205.5)

12. What is a liberty clause and is it acceptable under the Hague

13. Under the Hague Rules, whose responsibility is discharge?

14. Are force majeure clauses considered legally valid?

15. Which of the following is true?

Module C: Certificate in Shipping Business (Course SB-205.5)

17. When do the Hague Rules cease to apply to a contract of

18. When is an LOB certificate issued, and by whom?

19. From a legal point of view, what is the relationship between

Module C: Certificate in Shipping Business (Course SB-205.5)

Lesson 2 ...... Rights and defences of the

Exclusions in Article IV of the Hague Rules

Module C: Certificate in Shipping Business (Course SB-205.5)

Circumstances that can result in cargo damage