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Carriage of goods

Carriage of goods

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Carriage of goods

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  1. Carriage of goods Lectures by: Researcher Dr. juris Ellen Eftestøl-Wilhelmsson Scandinavian Institute of Maritime Law/Oslo Intsitute of International Econmic Law/Katti

  2. The lectures • International carriage of goods by sea, air, road or rail; contract law • An overview of the different international transport regimes and their implementation in Finnish law • Four conventions • Implementation, focus on maritime law • Chapter 13 of the Finnish Maritime Code • The book: An outline of transport law – International rules in Swedish Context • Scandinavian law

  3. Structure of the lectures • Based on the book • Monday • Transport law context • Judicial framework • Tuesday • The contract of carriage • The transport documents and their function • Wednesday • Carriers liability • Custody liability • Liability for performing the voyage • Liability for delay

  4. Structure of the lectures (2) • Thursday • MS Matilde – practical assignment • Friday • Assessing the compensation • Carriage of goods performed by more than one carrier • Successive carriage • Multimodal carriage • Procedure in case of mishape

  5. Transport law context • Transport industry crucial for trade • Complex, involving different modes of transport • Political sensitive • Major player on the market • Important to other parts of industry

  6. Transport industry recognized as complex • The industry offers undertakings of different character • The transport services are sensitive to changes in commodity and goods flows • Historically factors can not be ignored • The international charcter of the transport

  7. The common market transport policy • A common market for transport services or a common transport policy? • Art 70 EC – refers to a common transport policy • Art 80.2 Excluded air and sea transports, but ECJ ruled that general rules of the EC-Treaty are applicable • 1985 ruling condemned the Counsil for lack of action on the area of a common transport policy • Inceasing activity since the1990-ies

  8. Towards a green european transport policy? • The development of a new sustainable and competitive European Transport Policy • Problem: How to provide, in the most efficient manner, the services that are necessary for the contiued success for the single market while at the same time reduce the inefficiencies and imbalances of the system and safeguarding against the harmful effects that increased transport acitivity generates

  9. What is transport law all about? • Transport law • Broad: law conserning different modes of transport • Narrow; the relationship between the carrier and the transport customer/cargo owner • Contracting • Transport documents • Carrier liability

  10. Important questions in transport law • The transport transaction is part of a complicated pattern • Who are the parties to the contract? Transport is international in its character • Legal basis in conventions • Central parts are mandatory • What legal regime is appblicable (choice of law/mode of transport) • Regarding the liability • The period of liability • The base of liability • The limitation of liability • The procedure of claiming damages

  11. Principles of transport law ? • Different conventions • Different modes of transport • Is there a common ground? • A factual view (Svante Johansson) • Common principles • Custody liability • The goods are paying the freight • Valuable goods not indemnified unless declared • The carrier is not liable for the packing

  12. Judicial framework • Interntional conventions • Nordic cooperation since 1876 • Maritime law • CMI • UNCITRAL • Rail • COTIF 1999, Appendix B on carriage of goods • Air • Warsaw convention 1929 • Monteral convention 1999 • Road • CMR 1956

  13. The European Effort • Working on a regional legal regime on intermodal transport • Opt out • Strict liability with exceptions • Avaiting the Rotterdam Rules

  14. Finnish/Nordic legislation based on international conventions • How to implement a convention • Signature/ratification not always enough • Automatic standing incorporation or legislative incorporation • Finland (and Nordic countries) legislative incorporation

  15. The most important conventions • Maritime law • Hague Rules 1924 • Hague Visby Rles 1968 • Hamburg rules 1978 • Rail - CIM (COTIF 1999, Appendix B) • Air - MC (Montreal Convention) 1999 • Road - CMR 1956

  16. The Finnish legislation • International carriage is convention based • Road/Rail/Air – not transelated • Maritime law • The Finnish Maritime code, chapter 13 • ”The convention”: The Hague Visby-convention • Section 13-1, number 6 • But: also the Hamburg convention, when not divergin in substanse

  17. The application of mandatory rules • Why we have mandatory rules • Harmonising effect • Minimum standard of carrier`s liability • Applicable for rules on liability, notice of claim, limitation of action and jurisdiction • Interpreting conventional based legislation

  18. Contracts of carriage • A contract to perform transportation services by ship or other modes of transport • Sea transport: • Liner trade, general cargo carriage • Carriage of goods from one port to another. Often contracts with several cargo owners • The contracts: Bill of lading or sea way bill • Maritime Code ”Contracts of carriage”, Chapter 13 • Voyage charters, quantity contracts and time charters • A ship is contracted out on a voyage or time charter. The charterer takes care of the commercial management. • The contracts: Voyage or time charterpary • Maritime Code ”Chartering of vessels”, Chapter 14 • Other modes of transport • All conventions regulate transport of goods

  19. The parties in the contract of carriage • The parties: • Contracts of Affreightment, FMC 13-1§ • Carrier • Contracting shipper/Sender • Shipper/Actual shipper • The underlying sale • INCOTERMS • Road: Carrier/Sender (implied in CMR) • Rail: Carrier/Consignor CMI art 3 • Air:Carrier/Consignor (implied in MC)

  20. The parties and others • The actual shipper; not part of the contract of affrightment • The FMC code establishes a quasi-contractual relationship • Has certain liabilities in relation to the carrier • May claim Bill of Lading, FMC 13-44§ • Responsible for the accuracy of the statements relating to the goods entered in the bill of lading, FMC 13-51§ • The receiver, not party to the contract • Not mentioned in FMC 13-1§ • Might step into the contract depending of the wording of the Bill of Lading • The sub contractor (actual carrier) • Is liable for the transport performed by him FMC 13-36§ • contracting carrier is still liable (vicarious liability)

  21. The parties and others • Rail carriage - CIM art 26; • Successive carriage • Every carrier liable for the entire route • Air carriage – MC art 30-40 • Contracting carrier is liable for the carriage which it performs • Road carriage – CMR art 34 • Principle of collective responsibility for carriers is recognised

  22. The freight documents • Issued as evidence of the contract of carriage and a receipt of receiving the cargo • Sea • Bill of lading (negotiable) FMC 13-42 • Sea way bill (not negotiable) FMC 13-58 • Road • Consignment note CMR art. 4. • Rail • Consignment note CIM art 6-7 • Air • Airway bill MC art 5 and 7 • The freight documents: • Acknowledgement that goods of a certain nature and quantity have been received (receipt) • A promise to transport the goods • A document of title (only the person in possession of the bill of lading can obtain delivery)

  23. The Bill of Lading - negotiable • Signed by the carrier • Evidence of transport agreement between the line and the cargo owner • Booking note • Delivered without any formal preliminary contact • Document of title • Gives the holder • A right to dispose over the goods during transit • A right to take delivery at destination • The buyer can pay the purchased price in exchange

  24. The Bill of Lading • Hamburg ruels and in FMC 13-42§§ • Used in sea carriage • Issued on demand of the actual shipper FMC 13-44§ • The content is regulated in FMC 13-46§ • The nature of the goods, marks for identification, nubmer of packages etc – all as furnished by the shopper • The back of the BoL might contain the terms of the carriage

  25. Other modes of transport: Consignments notes and air waybills • Evidence that the carrier has received the goods • Evidence of a contract carrige – including a promise to deliver the goods at their destination • Not negotiable – No document of title • The document is not a symbol of the goods • Rail – CIM art 7 • Road - CMR art 5 and 6 • Air – MC art 7

  26. To what extent are the rules mandatory? • The rules are mandatory, but the carrier can take on more stringent liability • FMC 13-4, second para • Same for other modes, except road • CMR art 2

  27. Contractual liability for damage, loss or delay Contract of affrightment Sender Carrier Damaged, lost, delayed goods Sales Contract Receiver SjSJø FMC 13-24§§

  28. The main rule on liability; FMC 13-25 § • FMC 13-25 § : Negligence with a reversed burden of proof • FMC 13-26 § : Exemptions (only in maritime law) • 1) Fault or negclect in the navigation of the ship or • 2) Fire FMC 13-25 §, second paragraph: not if ”initial unseaworthiness”

  29. Non-maritime carriage • Road/Rail • Strict liability CMR art 18.1/CIM art 23 §1 • Relieved in particular situations CMR art 18. 2-3 and CIMart 23 §2- • Presumption of non-liability if special risks • (open conveyances, loading by consignor, unloading by consignee, carriage of live animals) • CIM 24.2 and CMR 18.4-5 • Air • Strict liability MC art 18 • Exception for a very few force majeure events

  30. Liability for loss, damaged or delayed goods: FMC 13-25 § • The cargo owner must prove; • That the goods have been damaged while in the carrier´s custody • That he has suffered economic loss • The carrier must prove himself innocent • That the damage is not a result of his own or any of his servants or representatives fault or negligence • In practical terms: • How the damage actually occurred • That neither he nor his servants were negligent NOTE! A burden of proof assumes the availability of evidence.

  31. What must the carrier or his servants do to avoid being branded as negligent? • Breach of public regulations? • Has the carrier enough knowledge? • Not perfect – but reasonable fitness • The cargo owner must give the carrier necessary information • Not only the particular goods but also the type of voyage • Previous experience

  32. The period of care, FMC 13-24 § • While the goods are in his or her custody instead of ”tackle to tackle” • At the port of loading (2. para) • From the carrier receives the goods • At the port of discharge (3. para) until the goods are : • Delivered to the receiver/consignee • Warehoused on the account of the receiver/consignee • Delivered to any authority according to law

  33. Vicarious liability • Identification or privity • The neglect of servants is considered the fault of the carrier. • Vicarious liability is only presupposed in the code FMC 13-25 § • Establishes pre-conditions for identification • Includes more than those directly employed by the carrier • Harbour workers? Yes • Shipyard employees and inspectors ? • see FMC 13-26§

  34. Exemption from liability, FMC 13-26 § Who's fault or neglect? • Haag/Visby – Hamburg • Exemptions a & b kept, • ” Fault or neglect in the navigation or management of the ship” • Who's fault or neglect is exempted? • Only fault/neglect committed by master, crew pilot or any other person performing work in the vessels service. • No need to be employed by the owner • Not owners own fault, or the fault of senior management • What if the ship owner and the master are the same person?

  35. Exemption for navigational errors. What is included? • Navigation of the vessel • Steering and manoeuvring, response to signals etc. • Management of the ship • The ship's condition, manning and equipment • Borderline cases • Was the act or omission primarily in the interest of the cargo or the ship?

  36. Exemption for fire FMC 13-26 (2) § • What fires are included in the exemption? • Fires caused by persons for whom the carrier is responsible • fires caused by negligent smoking by the crew (not liable) • Not fires caused by owner own fault, or the fault of senior management personnel (owner´s privity) • Fires due to inadequate fire procedures (liable) • What is a fire? • Open flame • Smouldering? Possible

  37. Unseaworhtiness and the exemptions in 13-26 first para no. (1) and no. (2) • The exemptions do not apply when the damage, loss or delay is connected with initial unseaworthiness. • The ship being unseaworthy at the commencement of the voyage • The carrier, or someone for whom he is responsible, has not exercised due diligence to make the ship seaworthy

  38. Seaworthiness • What is seaworthiness? • Narrow sense; technical • Must be able to perform the voyage without endangering human life • Broad sense; in relation to the cargo/ cargoworthyness • The cargo can be expected to reach its destination undamaged. • The rule is only applicable to initial unseaworthiness • Gorgonzola & chocolate

  39. Special risks in sea transportDeck cargo FMC 13-13§ • Must be in accordance with a particular right • Contract of carriage, custom of the trade, statutory rules • Loss or damage; ordinary rules on liability (Negligence with a reversed burden of proof FMC 13-25§§) • Unit limitations applicable • Unlawful loading on deck (no legal base) • Special rules on liability in FMC 13-34§, • Strict liability • Unit limitations applicable • Loading on deck despite otherwise agreed • FMC 13-34§ second para: • Unit limitation rules can not be invoked

  40. Special risks in sea transportLive animals FMC 13-27§ • Liable under the ordinary rules (§275) • Not liable for special risks associated with such carriage FMC 13-27§

  41. Dangerous cargo – regulated in all modes • Cargo, inherently dangerous • Definition is difficult • More than everyday risk • The International Maritime Dangerous Goods (IMDG) Code • Developed as a uniform international code for the transport of dangerous goods by sea covering such matters as packing, container traffic and stowage, with particular reference to the segregation of incompatible substances. • Lists of dangerous cargoes issued by United Nations Committee of Experts on the Transport of dangerous goods • Explosives • Gases • Flammable liquids • etc

  42. Senders duty of disclosure FMC 13-7 • The sender/contracting shipper has a duty of disclosure; The sender will be liable if the actual shipper fails to mark the goods and inform the carrier • The goods must be marked as dangerous • Reasonable notice must be given to the carrier • All relevant information must be given • FMC, 13-7§ • Rail, CIM art 7 h and art 9 • Road, CMR art 22 • Air, document relating to the nature of the cargo MC art 6. dangerous cargo not allowed

  43. The contracting shippers liability in damages • FMC 13-40§ • General rule: not liable for damages unless fault or neglect • FMC 13-41 • Dangerous goods

  44. When the sender has not fulfilled his duty to inform FMC 13-41§ • The carrier may refuse to take dangerous goods on board (breach of contract) • If on board: may discharge the goods or destroy them or render them innocuous • Not applicable when the carrier knows the cargo is dangerous • Except: Special rule on saving life and property – no obligation to pay damages; • An imminent risk which is about to materialise itself in damage

  45. Strict liability on the contracting shipper/sender • FMC 13-41§ imposes strict liability on the sender • When the cargo is delivered • without information about dangerous characteristics or • Without information about necessary safety measures • Pre-condition: The carrier must not have had actual knowledge • Covers both (and only) carrier and sub-carrier

  46. Liability for delay • The loss: • The goods are damaged or destroyed • Liability is regulated in FMC 13-25§ • The goods are ok, but market conditions have changed (Christmas decoration in January) • Liability is regulated in FMC 13-28§ • When is there a delay? • Starting point: FMC 13-12§ ”carried out with due despatch” (care) • FMC 13-28§ gives further guidelines: • Agreed delivery • Within the time which is reasonable to demand of a prudent carrier in the circumstances • No delivery? 60 days – total loss

  47. Deviation • Traditionally; serious breach of contract • Today; • has the carrier chosen a reasonable voyage plan FMC 13-12§ and • is the cargo at destination within a reasonable time • FMC 13-25§ second paragraph: the carrier has a right to take measures to save human life or reasonable measures to save ships or other property at sea.

  48. Calculation of damages • The ordinary starting point (economic loss) does not apply • Standardised loss rule in FMC 13-29§ • Value of the goods • Exchange price, market price or current value of same goods • What about indirect or consequential damages? has been accepted in arbitration practice, but no general rule

  49. The unit limitation rules FMC 13-30§ • FMC 13-30§ • 667 SDR for each lost or damaged unit or • 2 SDR per kilogram damaged or lost goods • SDR – Special Drawing Right (Chp 23 sec 2) • What is a unit ? FMC 13-31; container, pallet or other transport device • The text of the bill of lading is determinative The limit of liability which results in the highest liability shall be applied • NOTE! The rules on liability does not apply where the carrier himself caused damage wilfully or through gross negligence FMC 13-33§

  50. Notice and period of limitation • Notice of damage or loss FMC 13-38§ • When the cargo is delivered • Immediately and written (1. sentence) • Or, if not apparent, three days after delivery (2.sentence) • Joint Inspection • No written notice needed (13-28§ sec. para) • Notice of loss in consequence of delay • 60 days 13-28§, 3. para • Period of limitation- one year