Professional Documents
Culture Documents
Historical background
Contract of carriage by sea
Liability Scheme - Ship owner's liability in
contract of carriage of goods
Liability of seaworthiness & cargo worthiness
Liability of non deviation
Historical background
The 19th century witnessed the rise of the
laissez faire philosophy which promoted
unrestricted freedom in commercial
agreement.
The court were reluctant to intervene in the
contract made between parties & this led to
the situation whereby those in a better
bargaining position (the ship owner; i.e.
carrier) were able to strike extremely
beneficial deals.
…
In the context of contracts of carriage of
goods by sea, the ship owners, the
stronger of the contracting parties, inserted
all-embracing exclusion clauses whereby
the entire risk of carrying the cargo was borne
by cargo owners.
The clauses in BOL exempting the carriers
from liability became so complex & diffuse the
usefulnes of BOL as “currency of trade”
…
This inevitably led to growing
resentment among the cargo owners(as
well the holders of the BOL who
were not the original parties to the
contract, i.e the Buyer or the Bank).
…
It was felt that an international convention
was required to redress the
imbalance/inequities caused by the laissez
faire philosophy ; the Hague Rules were
drafted & signed by major trading nations in
1924.
The Hague Rules 1924 set a minimum level
of liability that could not be contracted out of
by the carriers. (the Rules was the first
attempt made with the purpose of creating a
standard set of contract terms in the
carriage of goods by sea.)
..
The UK implemented the Hague Rules 1924
with the Carriage of Goods by Sea Act
1971) (COGSA 1971).
Previously, it was COGSA 1924 but it has
been repealed by COGSA 1971.
Failing of the Hague Rules 1924 surfaced
over time; e.g the defences & limitation of
liability afforded by the Rules did not extend
to the carriers’ servants or agents etc.
…
Later, the Hague-Visby Rules 1968 were
drafted.
The Hague-Visby Rules 1968 & its
predecessor, the Hague Rules 1924 (still in
force), were to redress the imbalance caused
by the extensive use of exclusion clauses
operating in favour of ship owning interests in
bill of lading.
…
Both sets of Rules are said to operate in
favour of cargo interests.
The Hague-Visby Rules 1968 introduce a
few amendments to the Hague Rules 1924.
This include availability of liability limits to
servants & agents of carrier & increase in
liability amounts.
Recently, Hamburg Rules came into force on
1 Nov 1992 which exists along side with the
other two well established Conventions:
Hague Rules 1924 & Hague-Visby Rules
1968.
….
Further development to the British
COGSA was also subsequently made
by the British Parliament vide the
COGSA, 1992 in order to remedy the
many inequities caused by the existing
laws at that point of time as well as to
keep abreast with fast motion of
international trade.
Malaysian position
The present Malaysian Carriage of Goods
by Sea Act, 1950 (COGSA) applies
throughout Malaysia.
Malaysian COGSA has never been amended
(except in 1994 with minor changes), altho’
the British COGSA 1971 has undergone
major development pursuant to Visby
Protocol of 1968.
Malaysian Carriage of Goods by Sea
Ordinance, 1950, which was initially
applicable only in West M’sia, adopted the
Hague Rules 1924 as it schedule.
…..
The Ordinance & it’s content remained in tact
until it was later revised (1994) whereby very
minor changes to the wordings were made.
Comment:
Efforts to adopt the Hague-Visby Rules is
timely for our benefit since in maritime law,
conformity with the international conventions
& practices is deemed pertinent.
Contract of carriage of goods by
sea
Introduction:-
The cont. is governed by: COGSA, Hague
Rules 1924, Hague Visby-Rules 1968 &
Hamburg Rules 1992.
The statutes were to redress the imbalance
caused by the extensive use of exclusion
clauses operating in favour of ship owning
interests in bill of lading.
…
Parties in a Contract of carriage:-
i. Shipper – a party who is shipping the goods
ii. Carrier – a party who is prepare to carry & convey
goods on behalf of some person for a fee (he can be
the owner / charterer). The carrier is the person who
enters the contract of carriage with the shipper.