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Journal of Business Law

1991

The Hamburg Rules - a boondoggle for lawyers?

A.J. Waldron
Subject: Shipping. Other related subjects: Sale of goods
Keywords: Carriage by sea; Hamburg Rules
*J.B.L. 305 The Hamburg Rules are now 13 years old and seem finally to be about to receive the full
complement of accessions, or ratifications necessary to bring them into force. It is therefore timely to
re-examine them, and their likely impact on the regulation of liability for the carriage of goods by sea.

1. Introduction
A recent paper prepared by a United States law firm referred to the possible adoption of the Hamburg
Rules by the United States as a boondoggle for certain circles of maritime lawyers. 1 This
immediately raises an important question of definition for an English lawyer, or this English lawyer at
least, i.e. what is a boondoggle. Guidance is offered by the Oxford English Dictionary which reveals
that the word is American slang, meaning, trivial, useless, frivolous, or an unnecessary undertaking.
This exercise in definition is however easy when compared with the problems of interpretation
inherent in the Hamburg Rules.
Despite a very mixed response to its birth 13 years ago at Hamburg, the United Nations Convention
on the Carriage of Goods by Sea has now been acceded to, or ratified, by 19 nations and as a result
is likely to come of age in the near future. The Hamburg Rules will come into force at the beginning of
the month following the anniversary of the deposit of the twentieth instrument of ratification,
acceptance, approval or accession.2 With its application to the tangled web of sea carrier's liability
now an immediate prospect it seems a useful juncture to review its principal provisions.

2. General
Pressure had been exerted long before 1978 for a revision of the Hague Rules of 1924, particularly
from nations without a significant merchant fleet who perceived the Rules as too carrier orientated.
This bias in favour of shipowning interests was illustrated by the lengthy catalogue of exemptions
from the obligation to properly and carefully carry goods.3 Partly in response to this concern the
Hague Rules were amended by a Protocol in Sweden in 1968 and *J.B.L. 306 took on a new lease
of life as the Hague/Visby Rules. However, this piecemeal reform did little to meet the demands of
shippers and perpetuated the bias inherent in the original Rules. As a result of continuing pressure,
the Hamburg Rules were concluded after years of negotiation under the aegis of UNCITRAL, with the
representatives of over 70 nations reaching a somewhat fraught eleventh hour compromise in 1978.4
The progeny of the conference was for long seen as an ugly child with few countries rushing to act as
godparents, and by 1988, 10 years after its birth, only 12 nations had become parties to the
Convention. There has, however, been a rush of enthusiasm over the past three years as six more
countries have become parties.5 The operation of the Convention is triggered by the ratification or
accession of the requisite number of states regardless of the proportion of world trade which they
account for. The current parties are not significant shipping or trade nations but international interest
has been maintained over the past decade by rumours surrounding the continuing debate in the
United States as to whether it should ratify the Visby Protocol or abandon the Hague Rules altogether
and adopt the Hamburg Rules.6 It is interesting to note that the U.N. Convention on International
Multimodal Transport of Goods concluded in 1980 which extends the Hamburg Rules conception of
carrier liability beyond carriage by sea (and is therefore in a sense dependant upon the prior
operation of the Hamburg Rules) requires 30 ratifications to become effective, 50 per cent. more than
the 1978 Convention.7
The dominant philosophy of the Hamburg Rules is revealed by the Common Understanding of the
Final Conference which forms Annex II of the Convention and which provides; it is the common
understanding that the liability of the carrier under this Convention is based on the principle of

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presumed fault or neglect. This means that, as a rule, the burden of proof rests on the carrier but, with
respect to certain cases, the provisions of the Convention modify this rule. This equivocal principle,
the fruit of compromise, displays prescience on the part of the draftsmen that the scope of a carrier's
liability would be left uncertain by the Convention definitions. The annexing of a further definition
disguised as a Common Understanding, however, does little to promote clarity and is of
questionable effect.
The precise scope of a carrier's liability under the Hamburg Rules will now be considered,
emphasising the differences between it and the regime under the Hague and Hague/Visby Rules.

*J.B.L. 307 3. Principal provisions of the Hamburg Rules

(1) When does the Convention apply?

The Hague and Hague/Visby Rules apply to contracts of carriage covered by a bill of lading, or any
similar document of title,8 (it is not necessary for such a document to be issued provided the contract
of carriage calls for this9 ). The mere fact that a receipt is a document of title will not bring it within this
definition, it must also share the character of a bill of lading.10 The Hamburg Rules are much less
restrictive and apply to sea carriage under, any contract whereby the carrier undertakes against
payment of freight to carry goods by sea from one port to another. 11 No mention is made of bills of
lading or documents of title, and therefore it is unnecessary to carry out any detailed forensic analysis
of the document in the hands of the shipper or consignee. However, freedom of contract is still
permitted as between parties to a charter as the Hamburg Rules are expressly denied application to a
charterparty or a bill of lading issued direct to a charterer.12 The Rules apply to marine container
transport and anticipate the U.N. International Convention on Multimodal Transport of Goods. Art. 10
makes the initial carrier responsible for the whole carriage, even where it is actually performed by
subsequent carriers. This is broadly in line with other international conventions such as the CMR, and
also the ICC recommended Uniform Rules for a Combined Transport Document. Predictably this
innovation was not welcomed by carriers, but is in reality fairly unobjectionable as it relieves a
cargo-owner from the unenviable task of establishing the precise nature of the relationship between a
series of carriers, and does not bar recovery against the culpable carrier by the contracting carrier to
recoup any award made against him. An exception to this principle of contracting carrier liability is
provided by Art. 11, so that an on-carrier can be named in the bill of lading issued to the shipper and
is thereby rendered the principal defendant in an action by a cargo owner arising out of the period of
carriage actually undertaken by the identified carrier. As Tetley has pointed out this is of dubious
value to a carrier who will often not possess such information in time to notify the shipper.13
The geographical application of the Hamburg Rules is also not so circumscribed as is the case under
the Hague Rules. The old tackle to tackle limitation of carriers' liability is replaced by a port to port
criteria which imposes a duty of care on the carrier14 while in charge of goods, from receipt to
delivery. However, by Art. 4.2(b)(ii) a carrier may be deemed not to be in charge where contract, or
law or usage of the particular trade applicable at the port of *J.B.L. 308 discharge prescribes.
Similarly on loading, the carrier will not be interpreted as being in charge of goods until received from
a port authority or other person if there is a mandatory local practice to this effect. For an international
Convention designed to introduce a uniform regime the Rules permit local laws a surprising degree of
freedom to operate at the periphery of the Convention's application, at loading and discharge.15
One of the most important advances over the system of carrier liability based upon the Hague Rules
is the mandatory application of the Convention to both inbound and outbound cargo traffic16 from
contracting states.17 This ubiquity of operation is welcome. The Hamburg Rules also apply where the
document evidencing the contract of carriage is issued in a contracting state. In addition the parties
may expressly provide for their operation. The Rules do not apply to domestic carriage (unless, of
course, they are incorporated into the contract).
Before considering in detail the substance of the duty of care imposed by the Convention upon the
carrier it is necessary to consider the way in which a carrier is defined. It has already been observed
that the Rules apply to through carriage by means of the expedient of making the original carrier, the
party with whom the shipper contracts, principally liable. The Hamburg Rules, following the example
of the Warsaw Convention and the CMR, distinguish between actual and contracting carriers. Art.
1.1 defines a carrier as, any person by whom or in whose name a contract of carriage of goods by

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sea has been concluded with the shipper. This then equates carrier with contracting carrier. Such a
carrier need not physically transport the goods. The contracting carrier is liable whether or not he has
delegated the practical performance of the contract of carriage to the actual carrier, i.e. any person
to whom the performance of the carriage of goods, or of part of the carriage, has been entrusted by
the [contracting] carrier and includes any other person to whom such performance has been
entrusted. 18 Thus, there can be more than one actual carrier. It should be a relatively easy task,
whether or not through carriage is involved for a cargo owner to identify the defendant, removing a
prime cause of panic induced insomnia for cargo claim litigators. The use of a demise clause in a bill
of lading is rendered ineffective introducing a much needed degree of international uniformity
following the uneven approach adopted by national courts to demise clauses under the Hague and
Hague/Visby Rules.19

*J.B.L. 309 (2) When is the carrier liable?

(a) General Liability. Perhaps the most obvious difference between the Hague and Hamburg Rules
is the replacement of the dual standard of care owed by the carrier for ensuring, (i) the seaworthiness
of the carrying vessel, and (ii) that goods are loaded, handled, stowed, carried, kept, cared for, and
discharged, properly and carefully. Instead a single test of carrier liability is laid down.
The Common Understanding quoted above reveals that liability is to be based upon the fault or
neglect of the carrier which will usually be presumed. Art. 5.1 adds a gloss to this expression of
principle by providing:
Basis of liability
The carrier is liable for loss resulting from loss of or damage to the goods, as well as from delay in
delivery, if the occurrence which caused the loss, damage or delay took place while the goods were in
his charge as defined , unless the carrier proves that he, his servants or agents took all measures that
could reasonably be required to avoid the occurrence and it's consequences.
This definition should be contrasted with that applied to passenger carriers' liability by the Athens
Convention which makes a carrier liable where the act causing the loss was due to the fault or
neglect of the carrier,20 such fault to be presumed in defined circumstances. The test promulgated by
the Hamburg Rules is more akin to that employed by the Warsaw Convention,21 and its wording has
been followed by the U.N. Convention on International Multimodal Transport of Goods. By way of
contrast the CMR22 which has limited application to sea carriage, adopts a rather different approach
allowing a carrier a closely defined battery of defences including fault on the part of the consignor,
inherent vice of the goods, and proof by the carrier that the loss could not have been avoided or
prevented.
The Hamburg Rules when viewed against the background of the other Conventions relating to carrier
liability can thus be seen to represent part of an evolving trend towards carrier liability based upon
what would in common law jurisdictions be seen as basically negligence with the burden of proof
upon the carrier to demonstrate that reasonable care was exercised. However, the attempt by the
draftsmen of the Convention to have their cake and eat it by referring in the Common Understanding
to fault or neglect and in the body of the Rules to the taking of all measures that could reasonably
be required can only lead to confusion when questions of liability come before the courts.
A distinction is no longer drawn between the carrier's duty to ensure that the ship is seaworthy (i.e.
exercise due diligence), before and at the beginning of *J.B.L. 310 the voyage,23 and the continuing
obligation to ensure that the cargo is properly and carefully loaded, handled, stowed, carried, kept,
cared for, and discharged.24 The lengthy list of defences available to a carrier under Art. IV(2) where
the claim is based upon an alleged breach of the duty of care under Art. III(2), is discarded. The
practical effect of this is questionable in England at least, as the scope of the Art. IV(2) defences has
been held in close check by the courts. The loss of the navigation and management defence under
Art. IV(2)(a) will perhaps be the change felt most keenly by carriers. Actions against servants and
agents of the carrier are governed by the same test. Areas of doubt as to carriers' liability under the
Hague rules such as barratry will now be decided by the ubiquitous test, i.e. to exculpate himself the
carrier must show that all measures that could reasonably be required to avoid the occurrence and its
consequences, were taken.
A cargo owner will be unable to frame an action in tort as opposed to contract to avoid the application
of Art. 5.1.25 An attempt to reduce a carrier's liability below the standards specified by the Convention

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is prohibited by Art. 23.1.

The carrier is made expressly liable for acts on the part of his servants and agents by Art. 5.1. It is not
however clear whether this extends to the negligence of independent contractors engaged by the
carrier, for example, as was decided to be the case in Riverstone Meat and Property Co. v.
Lancashire Shipping Co., 26 under the Hague Rules, where refits are concerned.
The universality of the new standard of carriers' liability and burden of proof is undercut by special
rules which operate where loss is caused by fire. Art. 5.4(a) provides that the carrier is only liable for
the loss of, or damage caused to, goods, or delay in their delivery, caused by fire if the claimant
proves that the fire arose from the fault or neglect of the carrier or his servants or agents. The failure
to employ the formula all measures that could reasonably be taken and specifying instead fault or
neglect as the criteria for liability begs the question of whether the effect of Art. 5.4(a) is purely to
reverse the burden of proof or has a more substantive effect upon the standard of carriers' care. It is
submitted that this was not the intention of the Final Conference.
Although it is certainly true that in many cases a fire will start in the cargo as the result of a failure by
the shipper to take preventative measures, it is not altogether clear why fire damage should be
singled out for such special treatment. This is one way at least in which the Hamburg Rules are more
carrier friendly than the Hague Rules. By Art. III(1) it was always incumbent upon a carrier to exercise
due diligence to ensure the seaworthiness of his vessel. This was an absolute duty, and a carrier
could only rely upon the defences in Art. IV(2) including, fire unless caused by the actual fault or
privity of the car *J.B.L. 311 rier 27 in an action brought for breach of the carrier's duty of care under
Art. III(2). Under the Hamburg Rules the same duty applies whether the cause of the fire is
unseaworthiness of the vessel or inherently combustible cargo. The cargo owner is however entitled
to insist upon a survey being conducted into the source and handling of the fire which would assist in
the preparation of his case. The survey is to be conducted in accordance with shipping practices, an
unnecessary qualification which can only give rise to disputes.
A carrier is not to be liable for damage or loss or delay which results from attempts to save life, or
reasonable measures taken to preserve property.28 The Convention also recognises third party
contributory negligence where damage is caused partially by another party,29 for example, by collision
contributed to by the negligence of another vessel's master. The burden of establishing such third
party negligence, and the amount of loss attributable to this cause, is upon the carrier.
The Hamburg Rules make express reference to delay as a head of damage recoverable where the
carrier fails to take all measures that could reasonably be required to avoid the delaying event or its
consequences. Goods are to be treated as delayed if they are not delivered by the time fixed by the
contract of carriage or in the absence of such specification, within a reasonable time.30 Damages for
delay are recoverable under the Hague Rules provided they are not too remote to be recovered under
the usual principles of English (contract) law. The Hamburg Rules offer no express guidance as to the
test of foreseeability that should apply and it seems likely that English courts would continue to apply
the common law approach. However, under the Convention damages for delay are subjected to a
unique limitation.31 The Hamburg Rules single out delay for special treatment by limiting the amount
recoverable to an amount equivalent to two and a half times the freight payable for the goods
delayed, but not exceeding the total freight payable under the contract of carriage of goods by sea.
There seems no real logical reason why delay should be accorded different treatment from other
species of loss, it is likely to be as damaging as physical loss so far as the owner is concerned. It will
also inevitably produce fine distinctions as to whether perishable goods have merely been delayed
and so are subject to lower levels of limitation, or have suffered damage (consequent on delay)
covered by higher limits. This reform favours carriers.
The Convention also regulates a shipper's liability to a carrier where damage is caused to the vessel
through the fault or neglect of the shipper, or his servants or agents.32
*J.B.L. 312 It is very doubtful whether this new and (mostly) uniform definition of carrier liability will
give rise, at least in the short term, to any greater degree of certainty in the minds of carriers or
cargo-owners as to whether liability exists. Decisions in the United Kingdom, United States, and major
Commonwealth countries represent a fairly thorough exploration of the Hague and Hague/Visby
Rules even if they have not produced international homogeneity in approach. It is perhaps easier for
parties to a claim to resolve their differences without recourse to law if they can accommodate their
dispute within one of the two categories recognised by the Hague Rules, i.e. Art. III(1), or III(2), or one
of the defences in Art. IV(2), if they apply. Phrases such as reasonable are indicative of an

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admirable compromise at Hamburg but will inevitably give rise to years of international litigation.
(b) Exceptional Liability. Art. VI of the Hague Rules permits a carrier, in a very limited set of
circumstances, to reduce his liability below the standards prescribed by the Rules. This is possible
where the extraordinary character of the shipment justifies it and agreement is recorded in a
non-negotiable receipt. This liberty is not perpetuated by the Hamburg Rules and all shipments
regardless of their nature, unless falling within the limited classes listed below, are subject to the
general standard of carriers' liability.
Certain cargoes, or means of transporting cargoes have traditionally been afforded special treatment
in recognition of the exceptional problems inherent in their transportation. This treatment was
endorsed by the Hague and Hague/Visby Rules with special provisions governing dangerous goods.33
Live animals and deck cargo are excluded from the definition of goods to which the Hague and
Hague/Visby Rules have application.34 So far as fauna is concerned the Hamburg Rules adopt a
different approach preferring to prescribe modified liability rather than leaving the regulation of such
carriage to the discretion of the parties.35 Live animals, although within the scope of the Convention
and therefore beneficiaries of the general duty of care, are not protected from damage resulting from
any special risks inherent in that kind of carriage. 36 If the shipper's instructions as to the care of the
animals are followed by the carrier, the burden of proof falls upon the shipper to show fault or neglect.
Deck cargo is treated to an Article of its own, Art. 9, which permits such carriage if agreed between
carrier and shipper, or if it accords with the usage of the particular trade or is required by statutory
rules or regulations. The inclusion of trade usage is regrettable as it begs the question of whether
the almost universal conduct of container transport on deck is properly described as such. Similarly,
agreement is left undefined and a consignee may be left with a bill *J.B.L. 313 of lading containing
a permissive provision37 allowing deck carriage but with no certainty of whether or not the goods will
be carried on deck.
The consequences of illegitimate deck carriage under the Hamburg Rules provide another example of
how a supposedly cargo-owner oriented Convention often favours carriers. The equation of deck
carriage with deviation is abandoned and the carrier is only liable for damage, loss, or delay,
resulting solely from the carriage on deck, and the extent of liability is to be determined in
accordance, with the limitation provisions of the Rules. So in cases of deck carriage, even if
unagreed, it is possible that the carrier will be able to limit liability. Art. 9.4 provides however that,
carriage of goods on deck contrary to the express agreement for carriage under deck is deemed to
be an act or omission of the carrier resulting in the loss of the carrier's right to limit liability under Art.
8.
Dangerous cargoes were regulated by special common law and statutory rules38 before Convention
intervened in 1924 to lay down special rules covering the carriage of noxious substances, and protect
carriers who were either ignorant of the true nature of the cargo, or whose ships were actually
endangered by such cargo. The Hamburg Rules basically follow the formula of the Hague Rules so
that the carrier is entitled, without liability, to discharge, destroy, or take steps to render the goods
harmless if they are either undisclosed or present a danger to life or property.39 The shipper is obliged
to label the goods in a suitable manner.

(3) When can the carrier limit liability?

The retention by the Hamburg Rules of limitations on the levels of a carrier's liability are a further,
(and perhaps the clearest), illustration of the fact that the Convention does not represent a radical
shift towards cargo-owning interests. In fact the very modest levels set for limitation are suggestive of
a shift in the other direction. The Hamburg Rules continue the use of the Special Drawing Rights of
the I.M.F. as the basic unit of account, as was the case under the Hague/Visby Rules in the United
Kingdom (by virtue of the S.D.R. Protocol of 1979). A dual system of limitation for loss and damage is
maintained, based upon individual packages (i.e. shipping units), and weight.40 The new limits are 835
units of account per shipping unit, and 2.5 units of account per kg. This represents a 25 per cent.
increase over the 1968 limits, an increase which could hardly be interpreted as generous to
cargo-owners, representing as it does a substantial reduc *J.B.L. 314 tion in the limits of a carrier's
liability in real terms, taking into account inflation.41 The Convention, however, offers some valuable
clarity so far as the limitation of liability for container transport is concerned. Package is defined as
referring to named articles in the bill of lading, with the container itself being treated as a single
shipping unit.

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For no particularly clear reason delay was treated by the Final Conference at Hamburg as a special
category of loss so far as limitation is concerned. A multiplier of 2.5 is to be applied to the freight
payable on the goods delayed, so long as the total obtained by this exercise does not exceed the total
freight, (or the amount that would be awarded if the delayed goods were not merely held up but lost).
This novel and peculiar formula can only be welcomed by carriers and as observed above could
result in artificial distinctions being drawn between damage caused by delay, and delay per se.
Under the Hague Rules it is always possible for the parties to the contract of carriage to agree to
higher limits of liability by means of a declaration before shipment of the value of the goods which is
then incorporated into the bill of lading.42 Higher limitation is permitted by the Hamburg Rules
provided agreement is reached between the carrier and the shipper, but whether this should take
the same form as under the Hague, or Hague/Visby, Rules is left unnecessarily obscure.
Art. 8 is headed loss of the right to limit responsibility and follows the form of similar articles in the
Athens43 and Limitation44 Conventions, by providing that the carrier will be deprived of the right to
enjoy the limitation provided by Art. 6 if he intended to cause the loss, or was reckless knowing that
such loss would probably result. The article is silent as regards a carrier's liability for the intentional or
reckless acts of his servants or agents, so national courts would be left to ascertain when an act by a
servant or agent is properly seen as an act of the carrier. In such a situation the servant or agent
would lose the right to limit in an action brought by the cargo-owner.
As observed above, deck carriage in breach of an express agreement prohibiting this is prima facie
evidence of intentionality or recklessness, but it is less clear whether deviation should be treated in
the same way. The omission of any express provision in the Convention relating to deviation, set
against the express prescription of the consequences of prohibited deck carriage, could be
interpreted as advocating a less strict approach to deviation. This would mean that the fundamental
breach character of deviation would be superseded, a situation that could hardly be seen as a
triumph for cargo-owners. Tetley even argues that it favours fraud.45

*J.B.L. 315 (4) What if the carrier deviates?

Deviation, which for long has been the primadonna of the maritime legal stage, is kept behind the
safety curtain by the Hamburg Rules. Unlike the Hague Rules,46 there is no specific measure in the
Hamburg Rules devoted to deviation, instead it is subsumed into the general liability, so that a
deviating carrier will be liable for loss, damage, or delay, only if the deviation is the cause of the loss
and he failed to take all measures that could reasonably be required to avoid the deviation and the
loss, damage, or delay, consequent upon it. If he is unable to establish this he will not be prevented
from enjoying the limitation of liability imposed by Art. 6 which will only be sacrificed if he intended to
cause the loss or was reckless, knowing that such loss would probably result. This would be difficult
to demonstrate in most cases. Reasonable deviation protected by the Hague Rules is clearly within
the scope of Art. 5.1 but is not expressly mentioned by the Convention. However, Art. 5.6 provides a
carrier with an express defence where loss results from measures taken to preserve life, or where
reasonable measures are employed to save property. This would apply to deviation as much as any
other cause of loss. Deviation provides a further illustration of how in many ways a carrier's life would
be made easier under the Hamburg Rules.

(5) What can the carrier demand as a shipping document?

As has already been observed the Rules are not restricted in their application to carriage under bills
of lading, or for that matter, documents of title. It remains to be seen, however, what a shipper is
entitled to demand as a shipping document when loading. Here the Hamburg Rules are strict and
require that a bill of lading containing prescribed and detailed particulars be issued once the carrier
takes over the goods.47 Consequently the position of the bill of lading as the leading shipping
document which has recently been seriously challenged, is bolstered. The list of matters which must
be listed in the bill is considerably more extensive than the trinitarian requirements of Art. III(3) of the
Hague Rules, and include in addition to those:
(i) the name of the shipper;
(ii) the name and principal place of business of the carrier;
(iii) any consignee named by the shipper;

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(iv) the port and date of loading, the date of discharge and the date on which the goods were taken
over;
(v) the number of original bills, and their place of issue;
(vi) freight payable by the consignee if any;
(vii) a statement that the Convention applies48 (where a bill of lading or other document of title
evidencing the contract is issued).
A subtle but significant change from the Hague Rules should also be noted. *J.B.L. 316 Art. 15.1(a)
demands that the number of packages or pieces, and the weight of the goods or their quantity be
specified, whereas Art. III(3)(a) of the Hague Rules gives the carrier the option of specifying either the
number of packages, or the quantity, or the weight. Upon loading the carrier can demand a shipped
bill which must contain further prescribed information. A carrier is permitted to omit statements known,
or suspected on reasonable grounds, to be inaccurate, or which he has no reasonable means of
checking, provided that such omissions are declared expressly, together with the reason for the
failure to furnish such details.
So far as the evidential value of statements in the bill of lading is concerned, the Hamburg Rules
basically follow the Visby amendments to the Hague Rules.49 Thus, as a rule, the bill in the hands of a
shipper is prima facie evidence of the matters stated therein, but in the hands of a consignee or other
bona fide transferee who relies on the information, it is conclusive. This is the general rule and a
failure to specify in the bill that freight is payable by a consignee has quite different consequences, it
constitutes prima facie evidence that no freight is payable by the consignee. Apart from freight
payable by a consignee, it is not completely clear what the consequences of failing to specify the
other prescribed data would be.
An indemnity issued for a carrier in exchange for a clean bill of lading when the carrier is certain that
clausing is appropriate, is declared void by Art. 17.3,50 nor is the carrier entitled to enjoy the limitation
on liability, for any loss occasioned by reliance upon the false statement.

(6) Miscellaneous provisions relating to a carrier's liability

(a) Notification of damage or delay. The Hamburg Rules effect a relaxation of the strict time limits
laid down by the Hague Rules for notifying the carrier of goods which are delivered damaged.51
Written notice of apparent damage must be given on the day after delivery (as opposed to the day of
delivery), and latent damage must be notified within 15 days (instead of three). Failure to do so
constitutes prima facie evidence of delivery in good condition. The Hamburg Rules are more
restrictive than their predecessors in that they require the consignee to give notice, whereas the
Hague Rules do not specify who must give such notice.
Delay is again treated differently and the change in emphasis is puzzling. A failure to give notice of
delay within 60 days of delivery means not that the presumption of timely delivery is raised but that,
no compensation shall be payable for the loss resulting from delay.52 This creates yet more pressure
for the drawing of artificial distinctions between delay, and deterioration of goods delayed.
*J.B.L. 317 (b) Limitation of actions. Proceedings (litigation or arbitration53 ) must be commenced
within two years of delivery, or the time at which delivery should have taken place.54 This represents a
doubling of the Hague limit. Indemnity proceedings are allowed a more generous timescale.
(c) Jurisdiction. Clear drafting exists at least in the Convention's choice of jurisdiction provisions
contained in Art. 21. These allow a claimant to choose from up to six potential fora in which to
commence proceedings:
in a court which, according to the law of the State where the court is situated, is competent and within
the jurisdiction of which is situated one of the following places: (a) the principal place of business or,
in the absence thereof, the habitual residence of the defendant; or
(b) the place where the contract was made provided that the defendant has there a place of business,
branch or agency through which the contract was made; or
(c) the port of loading or the port of discharge; or

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(d) any additional place designated for the purpose in the contract of carriage by sea.
Notwithstanding the preceding provisions of this article, an action may be instituted in the courts of
any port or place in a Contracting State at which the carrying vessel or any other vessel of the same
ownership may have been arrested in accordance with applicable rules of the law of that state and
international law.
Submission to the jurisdiction of the vessel's arrest is not necessarily final. If the carrier is willing to
provide adequate security to meet a judgment in one of the five jurisdictions specified in (a) to (d), he
can force the claimant to choose one of these instead. Art. 21.5 gives the parties the option to agree
to another jurisdiction once the claim has arisen.
(d) Arbitration. Art. 22 provides that in order for a clause in a bill of lading purportedly incorporating a
charterparty arbitration clause to be effective against a consignee without notice, it must be referred
to as a special annotation in the bill of lading. This may help to clarify the confusing state of the law
arising from recent decisions55 considering the incorporation of charterparty clauses into bills of
lading. Arbitration can also be agreed to after a dispute has arisen.
(e) General Average. The Hamburg Rules contain a further innovation in the form of Art. 24 which is
devoted to general average. The Hague Rules only contain a bald statement that nothing in these
Rules shall be held to prevent the insertion in a bill of lading of any lawful provisions relating to
general aver *J.B.L. 318 age. 56 The Hamburg Rules go further and provide that, the provisions of
this Convention relating to the liability of the carrier for loss of or damage to the goods also determine
whether the consignee may refuse contribution in general average and the liability of the carrier to
indemnify the consignee in respect of any such contribution made or any salvage paid. This would
seem to involve the application of not only Art. 5 as it dictates the conditions of liability, but also the
limitation of liability principles introduced by the Convention.
(f) Other Conventions. The limitation of liability Conventions are expressly safeguarded in their
application by Art. 25, and other earlier Conventions, (later Conventions are not mentioned) are not
prevented from applying.

4. Overall effect
The Hamburg Rules have certainly generated significant opposition among shipowning interests and
little active enthusiasm as is shown by the very sluggish rate at which states have become parties.
However, if the Hague Rules had used the same machinery governing their entry into force, it would
have taken over 30 years before they became effective.
There has also been some rather churlish criticism of the status of the current parties to the
Convention as playing an insignificant part in World trade. In a recent BIMCO Bulletin,57 members of
the organisation are given the unequivocal advice that, the current pro Hamburg Rules campaign by
shippers and their organisations must be resisted at every opportunity and any moves by government
administrations towards ratification of the Hamburg Rules [must] be discouraged. In advancing this
case the following potent observation is made, it is clear that the Hamburg Rules would cast aside
the results of half a century of expensive litigation and pave the way for another half century of legal
debate on a new and different regime uniformity and certainty would be lost and litigation lawyers
would be the sole beneficiaries. 58 This point has much force, but it has at its core a reaction to
change and reform of the system based on the Hague Rules, an ageing and imperfect regime whose
need for reform is testified to by the widespread acceptance of the Visby Protocol. The adoption of a
new system of carrier liability has much to commend it, over piecemeal reforms which countries can
either accept or reject.
The claim that the Hamburg Rules overly favour cargo owners is predictable, and suggested by the
Common Understanding of the Final Conference, but so far as the effect of the Rules is concerned it
does not bear close scrutiny. This is no system of strict carrier liability, it has at its core, the principle
of liability based on carrier fault. It is true that in general carrier fault is presumed but this is subject to
important exceptions. The imposition of the burden of proof upon carriers, (except in the case of fire,
an important exception) is hardly an unbearable burden as they will be in a position to control the
carriage and ascertain the cause of any loss. They need only show that they were not negligent.
Carrier *J.B.L. 319 liability is subject to very modest limitation levels which will only be lost in the
most exceptional of circumstances. Deviation is deprived of its singular effect, and deck cargo is
treated more tolerantly than was previously the case. From a purely legal viewpoint the forecast of

Page9

radically increased freight rates when the Hamburg Rules become operative is unjustified, and seems
a little alarmist. In any event the costs would inevitably be passed on to the long-suffering consumer.
The single test of carrier liability should be welcomed in principle, as should its application to both
inbound and outbound voyages. However the test lacks clarity, and uniformity of definition in the
Convention. This is a serious weakness and can only generate litigation. There is some force in the
argument that the abolition of the battery of defences in Art. IV(2) of the Hague Rules will deprive
those involved in shipping of a useful guide to liability, but most of the defences would be covered by
the reasonable measures defence to liability under the Hamburg Rules, and therefore the case law
generated by Art. IV(2) would not be entirely redundant. It is a great shame that the lucidity of drafting
which characterises provisions relating, for example, to the question of forum, is not applied evenly
throughout the Convention, but considering the fact that the Rules were necessarily a compromise
measure, this is perhaps inevitable. Despite its weaknesses, an international momentum now seems
to be developing which will lead to the Convention's operation in the near future and it is quite
possible that its acceptance by a major trading nation would give it the critical mass it needs to
overthrow the ancien regime based on the Hague Rules.
J.B.L. 1991, Jul, 305-319

1.

Lane, Powell, Moss and Miller, P & I International, July 1988, at p. 4.

2.

Art. 30.

3.

Hague Rules, Arts. III(2), IV(2).

4.

For an excellent account of the proceedings of the Final Conference and critique of the Rules see Tetley, Lloyd's
Maritime and Commercial Law Quarterly, 1979, p. 1.

5.

The parties as at the beginning of April 1991 are; Barbados, Botswana, Burkina Faso, Chile, Egypt, Guinea, Hungary,
Kenya, Lebanon, Lesotho, Malawi, Morocco, Nigeria, Romania, Senegal, Sierra Leone, Tanzania, Tunisia, Uganda. It is
interesting to note that no fewer than six of these nations are landlocked.

6.

See, for example, P & I International, July 1988, p. 4.

7.

Only five countries had become parties at the beginning of March 1991.

8.

Art. I(b). The Rules will also apply if there is an express provision to this effect even if this agreement is evidenced by a
non-negotiable receipt, Carriage of Goods by Sea Act 1971, s.1(6)(b ).

9.

Carriage of Goods by Sea Act 1971, s.1(6).

10.

Hugh Mack & Co. Ltd. v. Burns & Laird Lines Ltd. (1944) 77 Ll.L.Rep. 377.

11.

Art. 1.6.

12.

Art. 2.3.

13.

See n. 4 above, at pp. 8, 11.

14.

Art. 4.1.

15.

Tetley has observed that this may allow Himalaya clauses continuing application, for example, to stevedores liability
before loading and after discharge (see n. 4 above).

16.

Art. 2.1.

17.

In the U.S.A., of course, the Hague Rules are given statutory effect to carriage to and from the country, by the Carriage
of Goods by Sea Act 1936.

18.

Art. 1.2. Shipper is also defined by Art. 1.3 and the definition is wide enough to cover not only the party who contracts
with the carrier or the actual deliverer of the goods, but also any person on whose behalf the contract is concluded or
the goods are delivered.

19.

The English courts seem to tolerate such clauses, see, for example, The Vikfrost [1980] 1 Lloyd's Rep. 560. They have
however been rejected by courts elsewhere, for example, Canada on the basis that they offend against Art. III(8) of the
Hague Rules, The Mica [1973] 2 Lloyd's Rep. 478.

20.

Convention Relating to the Carriage of Passengers and their Luggage by Sea 1974, Art. 3.1, 3.2.

Page10
21.

The Warsaw Convention 1929 provides that all necessary steps must be taken by the carrier which has been
construed by the English courts as meaning reasonably necessary, Grein v. Imperial Airways Ltd. [1937] 1 K.B. 50.

22.

Convention on the Contract of the International Carriage of Goods by Road 1956, Art. 17.

23.

Hague, Hague/Visby Rules, Art. III(1).

24.

Hague, Hague/Visby Rules, Art. III(2).

25.

Art. 7. The English courts prevented such actions under the Hague Rules, Elder Dempster & Co. v. Paterson Zochonis
& Co. Ltd. [1924] A.C. 522. Hague/Visby Art. IV (Bis) allows a carrier to plead defences and limit liability whether the
action is in contract or tort.

26.

[1961] A.C. 807. See J. Wilson, Carriage of Goods by Sea, p. 204.

27.

Art. IV(2)(b).

28.

Art. 5.6.

29.

Art. 5.7.

30.

i.e. the time in which it would be reasonable to require a diligent carrier to perform the contract, Art. 5.2. If the goods are
not delivered within 60 days of these deadlines they can be treated as lost by the claimant.

31.

Art. 6.1(b). This limit is itself subject to the overall (per unit or per weight) ceiling limitation which would apply under Art.
6.1(a) for the total loss of the goods delayed, see section (3) below.

32.

Art. 12.

33.

Art. IV(6).

34.

Art. I(c). Carriage of Goods by Sea Act 1971, s.1(7) allow the parties to the contract of carriage to agree to apply the
Rules to live animals and deck cargo, provided such agreement is recorded in the bill of lading.

35.

Art. 5.5.

36.

cf. Nugent v. Smith (1876) 1 C.P.D. 423, where the common law defence of inherent vice was applied a horse carried
by a common carrier.

37.

Art. 9.2 requires a statement of the agreement that cargo can be carried on deck to be included in the document
evidencing the contract of carriage.

38.

See, for example, Bamfield v. Goole & Sheffield Transport Co. Ltd. [1910] 2 K.B. 94, and Merchant Shipping Act 1894,
ss.446-450.

39.

Art. 13, cf. Art. IV(6) Hague, Hague/Visby Rules. The new rules closely resemble U.S. law, see G. F. Chandler, Journal
of Maritime Law and Commerce, Vol. 15, p. 233.

40.

Art. 6, cf. the similar approach provided for by Art. IV(5) Hague/Visby Rules. The use of the Poincare franc as the
measure of limitation by the Visby Protocol is not followed by the Hamburg Rules. As at April 4, 1991, the SDR =
0.693.

41.

This should be contrasted with the much more generous levels fixed by the other Conventions, for example, the CMR,
which provides, by Art. 23, for a limit of 8.33 SDRs per kg, (together with all the costs of carriage).

42.

Arts. IV(5), Art. V.

43.

Art. 13.

44.

Convention on Limitation of Liability for Maritime Claims 1976, Art. 4.

45.

See n. 4 above, at p. 10.

46.

Art. IV(4).

47.

Art. 14.

48.

Art. 23.3.

49.

Art. III(4).

50.

cf. Brown Jenkinson & Co. Ltd. v. Percy Dalton (London) Ltd. [1957] 2 Q.B. 621, Pomere Act in U.S.A.

Page11
51.

Art. 19, cf. Hague, Hague/Visby Rules, Art. III(6).

52.

Art. 19(5).

53.

Express mention of arbitration is probably included in the Convention to overcome a decision in the U.S. that arbitration
is not covered by suit in the Hague Rules, Son Shipping Co. v. De Fosse & Tanghe 199 2d 687.

54.

Art. 20.

55.

See, for example, The Emmanuel Colocotronis [1982] 1 All E.R. 823, The Varenna [1983] 2 All E.R. 645, The Miramir
[1984] 2 Lloyd's Rep. 129.

56.

Art. V.

57.

BIMCO Bulletin 1/88, p. 9024 at p. 9026.

58.

At p. 9025.
2014 Sweet & Maxwell and its Contributors