NEW DIRECTIONS UP-DATE

\J ill i am Te t 1 e y, Q. C. Dalhousie University

t~ c Gill Un i ve r s i ty Halifax, N.S.
(Oist. Visiting Prof., Tulane)
3644 Peel Street
i-1 0 n t rea 1 II 3 A l\~ 9

I. Introduction
The purpose of these notes is to give in outline form a
general view of major developments in maritime law in the last two
or three years in Canada, the U.S., the U.K. and internationally.
II. In te rna t ion a 1
1)
The UN Convention on a Code of Conduct for Liner
Conferences. See UNCTAD Document TO/Code 2/7, Jan. 5,
1989 of a Conference at Geneva from Oct. 31 to Nov. 18, 1988
reviewing the Convention. One gathers that the Code is honoured
when it is convenient to do so and that there are sufficient
loopholes to avoid its meaningful implementation in most nations
of the world.
For example (European Community) E.C. Regulation 4056
facilitates such opting out although the member states have
presumably opted in. (See also a book review. (1989) 20 JMLC 99)
2) The Hamburg Rules, 1978
The following nations have now ratified the Hamburg
Rules: Barbados, Botswana, Chile, Egypt; Hungary, Lebanon,
Morocco, Nigeria, Romania, Senegal, Sierra Leone, Tanzania,
Tunisia, Uganda.
A total of 20 nations is required to put the Rules into
force. France has adopted a law giving the government authority
to ratify the Rules and put them into force at the appropriate
time.
UNCITRAL and UNCTAD are campaigning to put the Rules into
for c e. wh i 1 e the 01 lis con sid e r i n g the It a mbur g Ru1 e san d per hap s
a compromise of Hamburg and Hague/Visby. (The subject will be
discussed at the CMI conference in Paris in June 1990.)
The major changes which the ilamburg Rules would bring about
are:

TETLEY.13/89.05.10 - 1 -
 i) Elimination of the defence of error in navigation or
management.
ii) Responsibility lJort to port, not tackle to tackle.
iii) The actual carrier and contracting carrier, (e.g. the
owner and charterer) are now clearly responsible,
jointly ann severally.
iv) Sliglltly increased package limitation.
v) A two year delay for suit provision.
vi) The word "ship" is not specifically mentioned in the
Hamburg Rules as a "party", unlike the Hague and
Hague/Visby Rules.
vi;) Due diligence to make the stlip seaworthy is for the
whole voyage under Hamburg.
viii) A convention compatible with the Multimodal
Convention 1980
ix) Consternation to some maritime lawyers who would have
to learn some slightly new law.
x) Consternation to some persons because much useful and
known jurisprudence may have to be discarded.
xi) Joy to text book autilOrs wllo would sell new books on
the subject.
For a commentary on the avantages and disadvantages of
the Hamburg Rules see Tetley, "The Hamburg Rules - A commentary",
[1979] LMCLQ 1. See also Tetley MCC. III, 1988 for a commentary
on the Hamburg Rules at the end oT"iiiost chapters.
3) Waybills - A new Waybills Convention
A CMI Committee under the Rt. Hon. Anthony Lloyd L.J.
continues to search for the golden fleece when it has been present
in the form of the U.S. Pomerene Act since 1916. See Tetley,
M.e.C.III, 1988 at pp. 995-997 and 1002. See also Waybills: The
Modern Contract of Carriage by Sea (1983) 14 JMLC 465 and (1984)
15 JMLC 41. See an interesting comment on the Pomerene Act by
Ke i t h W. He a r d (1989) 20 J 1·1 LC 37.

4) Recognition of Maritime Liens

The on-going debate between the Supreme Court of Canada,
as seen in The Ioannis Uaskalelis [1974J S.C.R. 1248, 1973 AMC
176, [1974J 1 Lloyd's Rep. 174, and the Privy Council, as seen in

TETLEY.13/89.05.15 - 2 -
The Halcyon Isle [1980J 2 Lloyd's Rep. 325. 1980 AMC 1221 (P.C.)
on the recognition of foreign maritime liens continues.
It will be remembered that the,Supreme Court of Canada
recognized a foreign lien (a U.S. repairman's lien) because it
was a substantive right but ranked it in accordance with Canadian
law (because ranking is procedural). The Privy Council considered
the foreign lien (a U.S. repairman's lien from the sa~e shipyard
in Brooklyn) as a remedy and therefore procedural. Thus, it
applied the law of the forum, i.e. English law.
In support of the Ioannis Daskalelis is Ocean Ship Supply
v. Lea h 7 29 F 2d. 19 7 1. 198 4 Af.l C 2 08 9 ( 4 Ci r . 19 8 4 ); For s y the
Intern'l v Ruth Venture 1986 M1C621 (D. Ore 1985); r1arlex
Petroleum v Har Rai (1984) 53, N.R. 1. (Fed. Ct. of Canada in
Appeal), [1987J 1 S.C.R. 57 (Supreme Court of Canada). See Tetley
tHe 1985 at pp. 522-525. Southern S.S. Agency v. Khalij Skt
1T986 ) (1) S. A. 48 5, 198 5 Ali C 2794 (S 0 U t h Af ric a). See art 1 c 1e by
Paul Myburgh [1989J South African Law Journal 1. Perez & Co. v.
The Mexico I 826 F.2d 1449; 1988 AMC 1930 (5 Cir.1987).
In support of The Halcyon Isle have been the following
r e c e n t dec i s ion san dar tic 1e s . 1,1 • 11 • Co hen "I n 0 e fen ceo f tile
Halcyon Isle" (1987) LMCLQ. 152; but see Tetley, "Comment" (1989)
2 0 Ll1 CLQ 11; Pet e rD. Low r y "E n for c e men tin Can a d a 0 f Lie nsf 0 r
Necessaries Furnished in the United States" (1987) 18 JMLC 561;
but see Tetley, "Comment" (1989) 20 J.M.L.C.75; The Kalantiao
(1987) 4 S.A. 250; The Andrico Unity (1987) 3 S.A. 794(c};
Transol Bunbrar B.V. and M/V Andrico Unity Supreme Court of South
Africa. March 29. 1989.
It is noteworthy that the law of tile flag of the ship as a
solution is also alive and well. See Hof Van Beroep te Gent,
October 10, 1986, [1987J E.T.L. 561.
III. Canada
1) Buenos Aires Naru (ITO - Int'l Terminal Operators v.
Miida Electronics) [1986J 1 S.C.R. 752. For a very critical
commen t see Tetl ey, (1988) 10 Supreme Court L. R. 399.
The Canadian Supreme Court decision in the Buenos Aires
Maru would seem to be the most important Canadian
Admiralty/maritime law judgment of all time. Herewith are six
major findings.
(i) Jurisdiction of the Federal Court - The Court has
jurisdiction in admiralty for at least four days after discharge.
(This finding is not astounding but is surprising and
i n te res tin 9 . ) .
(i1) "Canadian t1aritime Law" is defined as follows:

TETLEY.13/89.05.15 - 3 -
 a) "the first category":
"includes all that body of law which was
administered in England by the High Court on its
Admiralty side in 1934 as such law may, from
time to time, have been amended by the federal
Parliament, and as it has developed through
judicial precedent to date" (at pp.771).
(This is useful although 1391 may be the correct departure date.)
The "second part" of Canadian maritime law:
"would include an unlimited jurisdiction in
relation to maritime and admiralty matters. As
such, it constitutes a statutory recognition of
Canadian maritime law as a body of federal law
dealing with all claims in respect of maritime
and admiralty matters. Those matters are not
to be considered as having been frozen by The
Admiral ty Act, 1934. On the contrary, the
words "maritime" and "admiralty" should be
interpreted within the modern context of
commerce and shipping". (at pp. 774).
(This is also useful in extending the jurisdiction of the court.)
b) "It is my view, as set out above, that Canadian
maritime law is a body of federal law
encompassing the common law principles of tort,
contract and bailment. I am also of the
opinion that Canadian maritime law is uniform
throughout Canada, a view also expressed by Le
Dain J. in the Court of Appeal who applied the
common law principles of bailment to resolve
Miida's claim against ITO. Canadian maritime
law is that body of law defined in s.2 of the
Federal Court Act. That law was the maritime
law of England as it has been incorporated into
Canadian law and it is not the law of any
province of Canada". (at pp. 779.). (Emphasis
added) .
(The foregoing definition is astounding as it ignores the
historical civilian nature of maritime law in England. Canada and
the U.S., let alone Europe and the rest of the world. See Tetley.
r~L&C 1985 at pp. 18 to 25. See al so a superb master's thesi s
dated March, 1989 by Peter D. Darling. McGill Law Faculty.
Institute of Comparative Law entitled: Canadian Maritime and
Admiralty Law: From Piracy to Pilferage.

TETLEY.13/89.05.15 - 4 -
 (iii) Himalaya Clause is Valid
The Himalaya clause has been declared valid. The
conclusion arrived at by the Supreme Court is useful in practice
in most cases, but "wrong in theory" and will cause problems in
practice when the facts will have to be extended beyond reality.
The Himalaya clause for example does not work well before loading
(i.e. before issue of the bill of lading.). It is also unfair
when joined to a non-responsibility clause in countries which do
not have good after discharge legislation such as the venerable
but still useful U.S. Harter Act, 1893. It would be preferable to
change the law rather than stretch the common law out of all
shape.
(iv) Negligence Need Not be Mentioned in an Exculpatory
Clause
The Privy Council in C.S.L. v The King [1952] A.C.
192, [1952] 1 Lloyd's Rep. 1, [1952] 2 D.L.R. 786 had ruled that
non-responsibility clauses were to be strictly construed. The
non-responsibility clduse in the Buenos Aires Maru, however, did
not specifically exempt for "negligence" and yet the court stated
"this was in the reasonable contemplation of the parties".
"Reasonable contemplation of the parties" is therefore
pr~sented as a new criterion or rule of interpretation of
importance. That the Court should permit a non-responsibility
clause which does not use the word "negligence" to relieve the
stipulator from his negligence goes much too far, in my view.
(v) No Fault Marine Insurance
In deciding what was "within the reasonable
contemplation of the parties", McIntyre J. enunciated and relied
on what I consider to be a very dangerous principle:
"I think it is important, in determining what was
within reasonable contemplation, to recognize that
this is a commercial contract between two parties
who, in essence, are determining which of them is
to bear the res onsibilit for insurance at the
various stages of the contract at pp. 800 .
(Emphasis added - ugh!)
The dictum of McIntyre J. seems to impose a "no
fault" maritime law (or no fault marine insurance) to replace
negligence and the obligation of the courts to determine who is at
fault. It is similar to the "commercial reality" reasoning in
respect of the Himalaya clause. In my view this is an erroneous,
dangerous and very regrettable dictum as I explained in (1988) 10
Supt'eme Court L.R. 399 at pp. 411-412.

TETLEY.13/89.05.15 - 5 -
 "When contracts are made in commerce, it is important
that the law be clear as to who is responsible for negligence. It
is also important that persons who are careless be penalized for
their negligence; otherwise, they will continue to be careless and
losses will accordingly rise. A few years ago Lord Diplock
expressed the view that "in the world of maritime commerce ... it
is not the actual sinner who pays for the consequences of his
sin." This indeed may well be commercial reality; it is however a
pattern that should not be condoned, let alone encouraged by the
courts."
"Is the Supreme Court suggesting "no fault" maritime
law? If so, the experience, practices and rules of no fault
automobile insurance are useful for comparison. No fault
automobile insurance, whereby insurance companies pay the expenses
of their insureds in small claims, is joined with rules that
decide which insured was at fault (who was on the right, who was
struck in the rear, etc.), so that penalties in the form of
increased premiums are imposed. Governmental plans also impose
loss of drivers' points and loss of drivers' permits. Civil and
often penal sanctions are also imposed."
"But is the foregoing dictum (that it is only one or
other insurance company which pays) correct? Party "X", when
negotiating a contract of carriage with Party "V", does not plan
to have the insurers of Party "V" responsible for his own
negligence. Nor do the insurers so agree; in fact they would
never accept such an arrangement."
"It is an abdication of the Supreme Court's authority
and duty to suggest that it makes no difference who is at fault in
a question of maritime transport. Even assuming that the parties
to a dispute are equally and properly insured, does this mean that
the courts should refuse to decide responsibility in negligence
cases properly brought before them? Does it also mean that the
parties to every court action must declare whether they are
insured and to what extent? What is the consequence of not being
insured or of being partially insured? Does the Supreme Court
distinguish between insurance that insures against negligence and
fault and policies that indemnify insureds only when they are held
responsible for their fault?"
"And what of the insurance companies and insurance
mutuals? Insurance is a means of distributing the risks of many
consenting persons among themselves. Have the insureds of one
insurance company or mutual or P & I Club (shipowners' mutual
protection association), which screens its members and insureds
and risks, agreed to be responsible for the negligence of other
persons not insured by it? No fault automobile insurance is an
example of this, but it is imposed by legislative enactment under
very specific circumstances and conditions and with very specific
sanctions and consequences." Until there is detailed legislation

TETLEV.13/89.0S.15 - 6 -
expressly recognlzlng no fault in marltlme law, then the courts
tI "

should refrain from "legislating judicially".

(vi) The Quebec Dissent
The Quebec dissent given by Chouinard J. and
concurred in by Beetz and Lamer J.J. is that as against the
terminal operator/stevedore there is no jurisdiction of the
Federal Court because Quebec law of delict is involved. (He
really meant deposit or contract). The single paragraph of the
dissent judgment says only enough to be confusing or in error.
(liTo err is human, to get paid for it, devine.")
2) Arbitration
The Federal and Provincial governments of Canada and the
two territories have together adopted the same two international
conventions - the Uncitral Model Law 1985 and the New York
Convention 1958. This is both astounding and astonishing (see
Dr. S. Johnson).
a) Federal or yrOVinCial - Constitution Act 1867
sect. 91(10 or sect. 92(13), (14) or (15)
b) Commercial Arbitration Act S.C. 1986 c. 22 (Uncitral
Model Law 1985) (Also adopted by the ten provinces & the
Yukon & the N.W. Territories)
a) Sect. 5(2)
" ... matters where at least one of the parties to the
arbitration is a department or a Crown corporation or
in relation to maritime or admiralty matters."
(Emphasis added.)
c) Federal Court or Superior Court (S.C. 1986 c. 22 sect. 6
- "court means Federal Court or any superior county or
district court ... ")
- Navigation Sonomar v. Algoma [1987J R.J.Q. 1346
- Raymond Desbois v. Les Industries Davie A.C.
unreported as yet, Nov. II, 1987 C.S.
No 200-05-002581-861 DeBlais J.
d) United Nations Foreign Arbitral Awards Convention Act
S.C. 1986, c. 21 (New York Convention 1958) (Also adopted
by the ten provinces and the Yukon and the N.W.
Terri tori es)
In consequence Canada has superb, arbitration law!!
3) Kruger Inc. v. Baltic Shipping Co. [1988J 1 F.C. 262
(Fed. Ct. of Canada).

TETLEY.13/89.05.15 - 7 -
 A Russian ship carrying newsprint from Canada sank during a
very severe but not unexpected storm in the North Atlantic in 1982
which storm had sunk the Ocean Ranger (a giant oil rig) the
previous day.
In the claim for lost cargo, the carrier's defence was peril
of the sea (the Hague Rules art. 4(2)(c) rather than latent
defects (art. 4(2)(p)). It was held there was no peril and that
due diligence had not been exercised to make the ship seaworthy (a
ventilator through which the sea probably entered was badly
designed). The ship had been built in Finland for a Soviet
state-owned corporation (Sudoimport) and the vessel had been
assigned by the SoViet Ministry of Merchant Marine to the
Defendant carrier Baltic Shipping Co. The ship had passed her
four year inspection in 1980 and her annual inspection in 1981,
but it was held that complying with the USSR Register of Shipping
requirements was not sufficient.
at p. 292 " . . . because of the way in which the Soviet Ministry
of Merchant, Sudoimport and Baltic were all involved in
the purchase of the (ship from the Finnish Builder), it
was incumbent upon Baltic to show what, if anything, was
done by the relevant parties, and to show what due
diligence was exercised by them".
"There is no evidence that Baltic exercised any diligence
in relation to the construction and design of the
ventilators except, apparently to assume that any
deficiencies would be detected by the Register".
(It is not known if the Defendant exercised a recourse in contract
against the builder or designer.)
(The decision was unanimously upheld in appeal on
~1 arc h 3 1. 1 9 8 9 . )
IV. United States
1) Territorial Sea of the U.S.A. (12 mile limit)
A unilateral proclamation was signed by "Ronald Reagan"
on December 27, 1988 extending the U.S. territorial sea 12 miles
and in v 0 kin gin te rna t ion all a wan d " the 1982 Un i te dNa t ion s
Convention on the Law-of-the-Sea". See (1989) 20 JMLC;102 and
104.
It will be remembered that in the very first days of his
first term in 1981, Mr. Reagan had suddenly withdrawn U.S.
support of the Convention which had been in good part drafted to
U.S. specifications.

TETLEY.13/89.05.15 - 8 -
 2) The Fifty Mile .Rule - Containers
The fifty mile rule that containers proceeding outside of
a 50 mile area of some U.S. ports (Eastern Seaboard and Gulf of
Mexico) under a labour agreement with the International
Longshoremen's Association (I.L.A.) must be unpacked and
restuffed, has been declared invalid. N.Y. Shipping Assoc. v.
F.M.C. 1988 AMC 2409 (D.C. Cir. 1988). Certiorari was denied by
the U.S. Supreme Court on January 23, 1989.
Suits before the FMC against 51 shipping associations and
others for damages and double damages have now been undertaken by
NVOCC's (non vessel operating common carriers).
The voidance of the rule will affect container traffic
diverted in the past from the U.S. to Canadian ports.
3) Schiffahrts, Leonhardt & Co. V. A. Bottacchi 732 F.2d
1543, 1984 AMC 2113 (11 Cir. 1984). Affirmed 773 F.2d 1528, 1986
AMC 1 (11 Cir. en banc 1985).
The Eleventh Circuit recognized the civil law orlglns and
present day civil law nature of U.S. maritime law. The decision
is therefore very important. (See the unfortunate decisions by
the Supreme Court of Canada in the Buenos Aires Maru (supra) and
the House of Lords in The Goring (infra) on the origins and nature
of maritime law.)
The Eleventh Circuit noted that maritime attachment did
not derive its authority solely from Supplemental Rule B but also
from the early civil (maritime) law. The Court relied on Manro v.
Almeida 23 U.S. 473 (1825) and An Act of Congress in 1792 (1984
AMC at p. 2118).
The early influence of the civil law (as opposed to the
common law) on the admiralty law of the United States can be seen
in An Act to re~ulate Processes in the Courts of the United States
adopted by the irst Congress of the United States in 1789. Sect.
2 of the Act reads in part:
"And the forms and modes of proceedings in causes of
equity, and of admiralty and maritime jurisdiction, (a)
shall be according to the course of the civil law ... "
(Emphasis added).
The foregoing was altered in its text but not in its
meaning in the second Congress in 1792 by An Act for re~ulating
Processes in the Courts of the United States and providlng
Com ensations for the Officers of the said ourts, and for Jurors
and Wltnesses, at sect. , WhlCh reads as 0 ows:

TETLEY.13/89.05.15 - 9 -
 "That the forms, executions and other processes ...
shall be the same as are now used in the said courts
in those of equity and in those of admiralty and maritime
jurisdiction, according to the principles, rules and
usages which belong to courts of equity and to courts of
admiralty respectively as contra-distinguished from
courts of common law;"
See Tetley, MLC 1985 at p. 27.
4) Daval Steel v. Acadia Forest 1988 Ar~C 1669 (S.D. N.Y.
1988). In a shipment from Belgium to New Orleans the U.S.
District Court incorporated by reference into the b/l contract,
the higher Visby package and kilo limitation. This is a
breakthrough. See Sunds Defibrator v. Atlantic Star 1986 AMC 368
(S.D. N.Y. 1983). See also Tetley, MCC III, 1988 at pp. 22 and
858-859.
5) Liens for Supplying Containers
a) Containers are necessaries. See Nautilus Leasing
Services, Inc. v. M/V Cosmos 1983 AMC 1483 (S.D. N.Y.
1983 ); Tran s a me ric a I. C. S., Inc. v. M/ V Pan a t 1 ant i c
1984 Ar~C 489 (S.D. Fla. 1983).
b) Foss Launch v. Char Ching Shpg. 808 F. 2d 697, 1987
AMC 913 (9 Cir. 1987)
Held (i) The leasing of containers is maritime.
(ii) No maritime lien arises where containers are
leased in bulk to a ship operator for its
fleet, even if one of the containers was
onboard the ship against which the lien was
claimed.
(ii;) The Court's reasoning in Foss Launch is as
follows:
"The furnishing question has recently been
faced in two other circuits. Apparently in an
effort to accommodate the professed
expectations and needs of the shipping
industry, each court applied a broad
construction of furnishing. In the most
recent decision, the Fifth Circuit noted the
closeness of the question but nevertheless
concluded: We find no persuasive reason to
read the term 'furnishing' .•• narrowly .•.
The statute was intended to encourage private
investment in the maritime industry. We will
not begin now to defeat the purpose of the Act

TETLEY.13/89.05.15 - 10 -
 by layering technicalities onto its
interpretation. Eguilease, 1986 AMC at
1833-34, 793 F. 2d at 603. Similarly, a
Florida district court noted that for purposes
of creating a valid maritime lien, it may not
be essential, and indeed may not be desirable,
that the container be delivered directly to
the vessel, be sold rather than leased, or be
earmarked for a particular vessel.
11
Transamerica ICS, 1984 AMC at 490.
IIWe respect the reasoning of these courts.
But we are reluctant to subject the heretofore
relatively certain law of maritime liens to
the uncertainty and flux of developing
shipping industry practices when the
controlling precedents governing
interpretation of the Act favor a narrow
construction of the IIfurnishing
ll

1I
requirement.
(iv) The 2-1 decision has a strong dissent of
Anderson J. who, in my view, correctly
interprets the U.S. Supreme Court in Piedmont
v. Seaboard Fisheries 254 U.S. 1 (1920). See
also James E. Urmin, Commentary (1988) 19
JMLC 425.
6) East River S.S. Corp. v. Transamerica Celaval Inc. 476
U. S. 8 58 , 198 6 AM C 2 027 (198 6) .
Four tankers were constructed for owner Seatrain by a
wholly owned subsidiary which had contracted with Defendant
Delaval to design, manufacture and install turbines in the ships.
When completed, ownership in each ship was transferred to a trust
company as owner trustee who in turn bareboated each ship to
subsidiaries of Seatrain.
The turbines were defective and it was held by the U.S.
Supreme Court:
1) IIWhether a tort committed on the high seas, as opposed to
U.S. navigable waters, must be significantly related to
activity, to be within admiralty jurisdiction, not
ll
decided (Headnote 1986 AMC at pp. 2027).
•

2) IIAlthough the products liability doctrine has been

incorporated into general mari time law, a buyer has no
cause of action in tort on either a negligence or
products liability theory to recover from the
manufacturer for purely economic loss resulting from
defects in a product, purchased in a commercial
transaction, which malfunctions and injures only the

TETLEY.13/89.05.15 - 11 -
 product itself; the sale remedy lies in a non-admiralty
contract action for breach of warranty. Held: aff'g
(3rd Cir.): Turbine manufacturer is not liable in tort to
vessels' bareboat charterers for cost of repairing
vessels' propulsion systems and for lost income while
vessels were out of service due to design and
man u fa c t uri n g de f e c t s II . ( He ad not e 19 8 6 AM Cat p p . 2 027 ) .
(Emphasis added).
(This strange result or refinement of a combination of
American economic loss and products liability judge-made law is an
example of the common law unsuccessfully trying to grapple with
new and quickly changing commercial problems. The various Circuit
Courts (Appeal Courts) of the United States are struggling with
the meaning of this U.S. Supreme Court decision (and others) and
arriving at different conclusions. See The Oxy Producer (5 Cir.
1989 not yet reported).
See also an excellent article on IIMaritime Products Liability
i nth e U. S . II by Pro f. Rob e rtF arc e. (198 6) 11 The 11 a r i time Law y e r
1 to 48.

V. United Kingdom Law

1) The River Rima [1987J 2 Lloyd's 106 (C.A.).
The leasing of containers does not give rise to a
maritime lien because the containers were supplied to the
shipowner and not to a particular ship. Upheld by [1988J 2
Lloyd's Rep. 193 (H.L.). I believe. however. that Sheen J. was
was right at trial. See a1 so David C. Jackson. Comment on The
River Rima at [1988J LMCLQ 423.
2) The Mineral Transporter [1985J 2 Lloyd's Rep. 303 (Privy
Council).
A ship, the Ibaraki Maru, was damaged by the fault of the
Mineral Transporter. The Mineral Transporter had been bareboat
chartered and then the bareboat charterer had time Chartered the
ship back to the owner.
Under the charterparty, the bareboat charterer was
responsible for repairs caused by collision .•
It was held that the bareboat charterer could recover the
cost of repairs as well as its economic loss from the Mineral
Transporter. The time charterer, however, who suffered no
physical damage. although owner, had no proprietary or possessory
right because of the bareboat charter. Therefore, the time
charterer could not recover economic loss.

TETLEY.13/89.05.15 - 12 -
 3) The Goring [1988J 1 Lloyd's Reps. 397 (H.L.).
The ancient common law/Admiralty Court debate over
jurisdiction was revived when the House of Lords agreed with the
Court of Appeal that there was no right in England to salvage in
non-tidal waters. The Court in my view confused the jurisdiction
of the Admiralty Court with the substantive law of salvage which
is civilian in origin. (Again Sheen J. was right and everyone
el se out of step in my view.).
See an excellent and devastating criticism of the House
of Lords decision by W.K. Hastings in (1988) 19 JMLC 473. See
also Sir T. Scrutton in 1 Select Essays in Anglo American Legal
His to r y 208 at p.233 (1907).
"The foundations of Admiralty are thus to be found in: (1)
the Civil Law, (a) as embodied in the Law Merchant,
especially in the Laws of Oleron, (b) as introduced by
subsequent clerical judges, mainly in procedure; (2) in
subsequent written and customary rules, adopted in view of
the developments of commerce". See also Tetley MLC 1985 at
p.25. -
4) The Aliakmon (Lei h and Sullivan Ltd. v. Aliakmon
1
Shipping Co. Ltd. [1986J 2 Lloyd's Rep. 1.
The House of Lords followed the rule in The Wear Breeze
[1967J 2 Lloyd's Rep. 315. (as opposed to the better rule in my
view in The Irene's Success [1981] 2 Lloyd's Rep. 635) that a
plaintiff may only sue in tort for loss or damage to goods if he
had either the legal ownership or a possessory title to the goods
at the time the loss or damage occurred.
It was not sufficient that the person had contractual
rights in the goods or was at risk.
Thus the common law (as defined in the U.K.) is going
backwards in one narrow direction while the rest of the world
considers being at risk a sufficient right to take suit in tort as
in delict. (See Tetley, MCC III, 1988 at pp. 208-209).
Modern sale of goods acts, inCidentally, ignore ownership
and only refer to when risk passes. See Uniform Commercial Code
and the U.N. Sale of Goods Act, 1980.
5) The Delfini [1988] 2 Lloyd's Rep. 599 follows The
A1iakmon supra. It was held that endorsement of the bi~of
lading after the delivery of the goods did not satisfy the U.K.
Bills of Lading Act, 1855 so that the consignee could not sue in
contract.
The U.K. Bills of Lading Act 1855 at sect. 1 reads:

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 "Every Consignee of Goods named in a Bill of Lading, and
every Endorsee of a Bill of Lading to whom the Property
in the Goods therein mentioned shall pass, upon or by
reason of such Consignment or Endorsement, shall have
transferred to and vested in him all Rights of Suit, and
be subject to the same Liabilities in respect of such
Goods as if the Contract contained in the Bill of Lading
had been made with himselfll. (Sect.2 of the Canadian
Bills of Lading Act R.S.C. 1985 c.B-5 is almost
identical. )
Phillips J. decided that pro~erty in the cargo passed by
virtue of a sale contract independent y of the physical transfer
or endorsement of the bill of lading and the receivers could not
therefore claim to have acquired property by reason of the
endorsement. The receivers in consequence could not sue in
con tr act. Ugh!
See also The Sirina [1988J 2 Lloyd's Rep. 613 (to the
same effect as The Delfini):
a) A cargo of oil was purchased F.O.B. by third
plaintiffs.
b) The bill of lading was issued October 5, 1985.
c) The third plaintiffs sold the cargo C.I.F. to the
first plaintiffs on October 10, 1985 while the
"Sirina" was at sea with her cargo.
d) The vessel discharged to the first plaintiffs
without presentation of bills of lading but under
a letter of guarantee on October 14 to 16, 1985.
e) The first plaintiffs received the bill of lading
on November 7, 1985. It was held that:
"the first plaintiffs never became a party to a
contract of carriage with the defendants, nor did
they acquire title to the cargo prior to discharge
from the Sirina ship. It follows that they
establish no title to sue in contract or in
to rt.
II

See also The Aramis (1989) 1 Lloyd's Rep. 213 (C.A.) Ugh!
See harsh comments on The Aliakmon by Lloyd L.J. in a comment
in [1989J LMCLQ 47 at p. 54.
Conclusion: The Aliakmon and its progeny and the extreme rigidity
of the U.K. courts on suing in tort or contract (even under the
Bills of Lading Act, 1855) is making litigation difficult if not
dangerous in the U.K.

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Further Conclusion: So much better than the U.K. Bills of Lading
1855 (or the Canadian Bills of Lading Act R.S.C. 1985 c. B-S) is
the U.S. Pomerene Act 1916, 49 U.S. Code 81-124.
6) Direct Action
When an assured is declared bankrupt, the right of a
third party to claim directly against the underwriter of the
assured has become more and more prevalent.
The direct action right, not too dissimilar from the right
granted by the Himalaya clause to a third party stevedore,
nevertheless requires specific legislation which has been granted
in such states as Louisiana and Florida and in the Province of
Quebec and in Puerto Rico.
Thus in Steel met v. Caribe Towing 779 F.2d 1485 it was held
that under Florida law cargo owners may directly sue the
underwriters of ocean carriers. See also Cour .de Cassation
February 3, 1987, DMF 1986, 306 where a direct action is permitted
against underwriters under art. 173.8 of the Insurance Code and
under art. 2102.8 of the Civil Code.
Interesting questions arise, however, when direct action is
invoked.
a) Does direct action apply against the P & I Club, even
when the assured has not paid the claim which it must do before
the P & I Club is liable under its rules?
Answer - Yes under U.K. law. See The Fanti [1987J 2
Lloyd's Rep. 299. (Upheld in appeal (1989) 1 Lloyd's Rep 329
(C.A.).
b) Does direct action apply in indemnity P & I insurance
(Protection & Indemnity Club Insurance)?
Answer - No, under Florida law. See Weeks v. Beryl
Shipping 845 F.2d 304, 1988 AMC, 2187 (11 Cir. 1988). The facts
are similar to The Fanti.
Answer - Yes, under U.K. law - The Padre Island No.2
(1989) 1 Lloyd's Rep. 329 (C.A.) The Third Parties (Rights
Against Insurers) Act, 1930 was invoked.
c ) r·1 a y the u nd e r wr i t err a i sea 1 1 the d e fen c e s 0 f the
assured, such as limitation of liability?
Answer - Yes under the Louisiana Civil Code - Crown
Zellerbach v. Ingram 783 F.2d 129, 1986 AMC 1471 (5 Cir. en
bane), reversing Olympic Towing v. Nebel Towing 419 F.2d 230,
1969 AMC 1571 (5 Cir. 1969). See Nicholas J. Healy Comment
(1986) 17 JMLC 271.

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 In Crown Zellerbach the P & I Club in its rules
particularly invoked the right to claim the benefit of the
assured's right to limitation of liability. Thus the Club was not
invoking a right merely "personal" to the assured but was a right
of its own. Thus Crown Zellerbach was distillguished from Olympic
Towi ng v. Nebel.

VI. Conclusion
It is now fitting to summarize what has been said up to this
point or at least to attempt to draw conclusions even if the
foregoing case"comments were only a few decisions drawn almost at
random from the whole field of maritime law.
1. The first conclusion is that, if there is no lex
mercatoria or uniform world maritime law, there is someuniformity
and considerable interplay and comparison between the law of the
different national jurisdictions. Examples of uniformity and
cross-fertilization can be seen in the similar attitudes of the
U.S. and U.K., courts towards liens "for supplying containers" and
the rights of underwriters faced with the "direct action"
s ta tute .
Uniformity is of course necessary if merchants are to be able
to carry out business quickly and efficiently throughout the world
- nor can there be justice if the law is not certain and not known
to merchants. For that reason it would be very beneficial if only
one regime - Hague or Hdgue/Visby or Hamburg - were fixed upon and
adopted universally.
2. My second conclusion is that if we cannot arrive at
uniform international maritime law we would be closer to our
ultimate goal if we were at least able to adopt uniform rules of
conflict of law. The Halcyon Isle and The Ioannis Daskalelis
confrontation is a useful explanation of two points of view but
the conflicting positions of two national supreme courts on a
single question of international law is unfortunate. Can there be
justice when law is not uniform and predictable? The resolution
of the dispute may require an international convention on conflict
of laws, but that is a long way in the future.
In the interim, I offer you the solution of the Supreme Court
of Canada in The Ioannis Daska1elis as being less chauvinistic,
less attuned to forum shopping and closer to the spirit of the lex
mercatoria. Recognition of the civil law origin of maritime laW--
would be a giant step forward. as well.

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