8 October 2021
In July 2021 the Carriage of Goods by Sea (Amendment) Act (2020) (the "Amendment Act") and its supplementary Carriage of Goods by Sea (Amendment of First Schedule) Order 2021 (the "Order") officially came into force.
The Amendment Act and the Order brought into effect the long-awaited changes to the Carriage of Goods by Sea Act 1950 (the "Principal Act"), which has been in force since 23 May 1950.
- the "Visby Rules" – the Protocol to Amend the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading of 23 February 1968; and
- the "The Hague-Visby Rules" – the Protocol (SDR Protocol) Amending the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading of 25 August 1924 (The Hague Rules), as amended by the Protocol of 23 February 1968 (Visby Rules).
- The scope of documents relating to shipping transactions, which was limited to bills of lading, has been expanded to keep up with the rapid evolution of international maritime industry practices.
- The First Schedule of the Principal Act has been amended in accordance with the The Hague-Visby Rules.
II. clearly states that no liability for any loss of, damage to or delay of the goods will be accepted by the carrier of the goods; and
III. is clearly marked as being non-negotiable.
(ii) a negotiable document of title that is similar to a negotiable bill of lading and that contains or evidences a contract of carriage of goods by sea;
(ii) a negotiable document of title that is similar to a bill of lading and that contains or evidences a contract of carriage of goods by sea;
(iii) a bill of lading that, by law, is not negotiable; or
(iv) a non-negotiable document including a consignment note and a document of the kind known as a sea waybill or the kind known as a ship's delivery order which either contains or evidences a contract of carriage of goods by sea . . .
The Order has not changed the substance of article III but it has amended the original article 4 to afford a negotiable sea carriage document (which has substituted the bill of lading) greater evidential value in the event of a dispute.
Under the original provision, it was declared that a bill of lading was prima facie evidence of the receipt of the goods by the carrier, as described in accordance with:
- paragraph 3(a) (marks necessary for the identification of the goods);
- paragraph 3(b) (number of packages, price or the quantity or weight of the goods); and
- paragraph 3(c) (apparent order and condition of the goods).
The wording of paragraph 6 of the Principal Act has been amended. The former wording was as follows:
In the case of any actual or apprehended loss or damage the carrier and the receiver shall give all reasonable facilities to each other for inspecting and tallying the goods.
The new wording is as follows:
Subject to paragraph 6bis, the carrier and the ship shall in any event be discharged from all liability whatsoever in respect of the goods, unless suit is brought within one year of their delivery or of the date when they should have been delivered. This period may, however, be extended if the parties so agree after the cause of action has arisen.
Further, a new paragraph, 6bis, has been inserted to allow for an action for indemnity against a third party. Paragraph 6bis reads as follows:
6bis. An action for indemnity against a third person may be brought even after the expiration of the year provided for in the preceding paragraph if brought within the time allowed by the law of the court seized of the case. However, the time allowed shall be not less than three months, commencing from the day when the person bringing such action for indemnity has settled the claim or has been served with process in the action against himself.
Amendments to article IV – rights and immunities
The Order overhauled this approach and inserted a more commercially practical approach by calculating the amount for which the shipper or carrier will be liable if the goods have been damaged or lost and the value was not declared in the sea carriage document.
The Order has removed the cap of £100 per package or unit for damages. The new system calculates damages using:
- the unit of account per package or unit; or
- the unit of account per kilogram of gross weight of the goods that have been lost or damaged.
Article IVbis – defence and limit of liability
This article provides that the defences and limits of liability provided in the amended Principal Act, as a whole, will be applicable to "a servant or agent of the carrier", notwithstanding any potential actions resulting from the contract or in tort. However, article IVbis expressly prohibits the carrier or its servant and/or agent from relying on the defences or limits of liability stipulated under the amended Principal Act "if it is proved that the damage resulted from an act or omission of the servant or agent done with intent to cause damage or recklessly and with knowledge that damage would probably result".
Amendments to article VI – special condition
- care; and
b. the receipt or consignment note must be, and must be marked as being, non-negotiable; and
c. the receipt or note must state that no other sea carriage document has been, or will be, issued for the carriage.
Article VI, as amended, stipulates that any agreement entered into will have full legal effect. However, article VI does not apply to ordinary commercial shipments made in the ordinary course of trade; it applies only to other shipments where the character or condition of the property to be carried or the circumstances, terms and conditions under which the carriage is to be performed are such that would reasonably justify a special agreement.
Amendment to article IX
The amendment to article IX removed much of the original content. The original paragraph provided that "the monetary units mentioned in these Rules are to be taken to be gold value". However, it has been replaced with a paragraph that reads as follows:
These Rules shall not affect the provisions of any international Convention or national law governing liability for nuclear damage.
Comment The Carriage of Goods by Sea Amendment Bill was introduced in Parliament in 2019 to amend the Carriage of Goods by Sea Act 1950, which contained procedures that were no longer in line with global practice in the maritime trade industry. The provisions of the The Hague Rules, as provided for in the First Schedule to the Carriage of Goods by Sea Act 1950, were inadequate to meet the current conditions and practices of carrying goods by sea. The amendments to the Principal Act have occasioned changes that have been welcomed by stakeholders in the maritime trading industry.
For further information, please contact:
Rajasingam Gothandapani, Partner, Shearn Delamore & Co