Ship: Refers to any vessel used for the transport of goods by sea.
Carriage of goods: Cover period between on loading of goods into the ship till the time of offloading.
According to Hague-Visby Rules; Brussels protocols amended in 1968, in any of the contracts involving the transportation of goods, by sea, the carrier about the processes of carriage of goods is liable and entitled to rights and immunities herein set forth (Hague-Visby Rules, Article II). It is the obligation of the carrier, therefore, to exercise diligence to make the ship as trustworthy as possible, properly equip and supply the ship and lastly, make all the positions of the ship on which the goods are placed fit and safe for preservation and reception. In agreement with the provisions of article IV of the Hague-Visby Rules, the carrier is obligated to carefully load, handle, keep, care for and discharge the goods on arrival to the destination.
It is essential that one understands therefore what a bill of lading is and its multifaceted nature so as to ensure the correct understanding of the information to be presented. The Bill of Lading (B/L) is a document showing the terms of the contract between a consignor and a transport company (carrier). The bill serves both as a document of title or as a contract of carriage and receipt for goods carried. Since concerns about how the shipments are to be tracked may arise, jotting the process with the assistance of the bill of lading used to indicate who or where the package is coming from, and who and where it is destined to. Even though Hague-Visby Rules gives only two provisions regarding shipper's duties, it does not mean that the shipper has any other functions. Duties arise from the law in general or from natural implicit found in the contract. In agreement with the rule:
No provisions available impose any burden on the shipper to pack sufficiently but instead relieves the carrier from liability. It states that Neither will the carrier, nor the ship be responsible for loss or damage resulting from insufficiency of packing."
The Shipper should mark goods or indicate leading scores required for identification of the goods in case the shipper would wish the carrier to issue a bill of lading (Art. III.3). The bill shall be conclusive evidence of shipment in good order plus condition of many goods also identified by leading marks.
In agreement with the International Maritime Dangerous Goods rules:
The shipper is charged with determining the class of substances as shown in the criteria and also stowing and lashing of the cargo as part of operations of loading. In plain language, this means placing of goods in a ships spot. Stuffing plus sealing of containers for shipment is the sole responsibility of the shipper.
It is the obligation of the carrier to pay the freight the amount agreed on. The carrier is then lien on the cargo in case of unpaid freight. The shipper also has the obligation of not shipping dangerous goods without getting warned.
The shipper is also responsible for giving notifications to the carrier in case of any dangerous goods and is liable for the outcome in case he fails to do so.
Finally, the three major characters in the shipping business include the shipper, the carrier and the consignee with each actor having exclusive duties to fulfill so as to appease contracts agreed on. The carrier's responsibilities include delivery of goods for carriage, provision of information, production of instructions and documentation, provision of information for compilation of contract particulars and lastly, provision of information regarding dangerous nature of the goods.
The Hague rules are a representation of several efforts made by the International community to help achieve secure international transactions and ferrying of goods majorly by water. However, this rule has a lot of weaknesses concerning the scope of application, the liability of carrier being tiny, the law not being compatible with container transport and the period of responsibility of carrier being short.
Article II of the rules quote that " In subject to Article VI, any agreement concerning the carriage of goods via sea, the carrier, concerning all the processes of handling goods on and off the ship, is subjected to liabilities and entitled to the rights and immunities brought in." This term, carriage of goods refers to the period from when the goods get loaded to the time they get offloaded. However, the carrier is not always liable if he loses or damage happens prior or after the shipping.
It is worth taking note that transportation of goods gets done through containers which are not always owned by the carriers but by companies. Though the vessel undergoes ferrying under the ordinary bill, Hague Rules is silent on the interpretation of package that gets stored in the containers. Rule 5 in Article IV states that neither carrier nor the ship shall be liable for any loss or damage in connection with goods exceeding 100pounds per unit unless the shipper declares the nature of the products. Notice then that the Rules limit liability.
The area of application of these laws is stated in the 10th Article which states that; provision of the covenant shall be applied to every bill of landing as issued in any of the states in the contract. " Therefore notifying that Hague-Visby Rules shall only apply to the outward shipment. It is also worth noting that the clause paramount technique creates a loophole allowing parties to contract out of the Visby regulations by choosing any law of their interest other than the law governing where it issues the landing bill. Also take into the fact that there is no liability in the in the delay of delivery of goods. The carrier is only liable for losing or damaging goods in case it is proved that the vessel is unseaworthy or unable to transport and preserve the cargo safely. The rule is a hiatus in the Visby Rules with regards to the modern international trade since financial loss due to the delay in delivery of goods is quite detrimental since time is a major factor in many business dealings.
The Hague rules are not compatible with the current trend of e-commerce. IT has tremendous effects on commercial transactions. With the approach of Internet, international trade has moved towards electronic commerce. The rules enacted in early 1924 did not correspond to computer involvement in international business transactions. They, therefore, are no longer suitable to use in the current form of international trade and shipping in the modern industry. Later, a movement arose to change the rules. A diplomatic approach towards changing Hague Rules conducted in Brussels at a conference adopted to amend the law by 1968. Reforms that made include:
Extension of the territory of application which applies through force of law either inwards or outwards during shipment.
It also increased the maximum level of limitations of liability of a carrier by introducing a new weight-based criterion. In case goods have been containerized then limits must apply to each package
The rules are now compatible with container transport since a new clause was incorporated recognizing new cargo techniques adopted throughout the shipping industry.
Even after the reforms were made, only three aspects are for the ship owner. The new rules still don't solve weaknesses of the old Hague-Visby Rules. They don't show compatibility with the steady evolving aspects of international trade in the modern world. It still does not address issues like:
Limitation of the period of liability of the carrier.
Deck cargo exclusion from reasons of which carrier may be liable.
Not giving a provision of differentiating terms of carrier and actual carrier as they should apparently give definitions of these two words with regards to the contract of carriage.
In summary, the summit in Brussels changed three aspects of the old law which include, package limitation, application of rules by force of law either inwards or outwards and lastly the uniformity of limitations of package and kilo.
An international commercial arbitration is a method of solving international business feuds arising from commercial agreements. It bases on an agreement between two parties or more and of which if any form of dispute happen. They are liable to:
Submit dispute to arbitral tribunal
Arbitrators' way of resolving the issue in agreement with the parameters of the arbitration process.
The final decision of the arbitration process.
Mediation differs from litigation in a sense that:
Claims submitted are filled in agreement with the rules and procedures of a court in a country.
The process, unlike arbitration, is not consensual but some matters can be pleasing both parties.
Decisions are made by the court and should bind the parties in agreement with the law of the nation.
The jury sometimes decides on facts.
There is also right to appeal in the jurisdiction.
How then is arbitration used to solve disputes about international trade?
International business agreements have laws governing conflicts and of which states that:
All disputes under a deal will refer to arbitration.
Arbitration is the final binding with no subject to appeal.
A mandatory requirement is made for the pre-arbitration process.
The governing law of contract must be considered.
The rules of procedure will govern arbitration process.
There shall be no rights of appeal during the arbitration process.
The whole process must adjudicate, bind and be consensual. For parties to enter into the arbitration process, they must agree on the matter. The agreement would either be in the form of a series of the clause when a dispute arises or agreement as per the scope or rules and presentation of documents upon hearing of evidence from a witness.
The parties conflicting can modify the conflict resolution process to save time and expense. Since arbitration has become popular, numerous national and international bodies have confined in it as a general method of solving business feuds. The ICC court, for instance, has provided international arbitration services for a very long time. Many of the cases submitted to ICC involve infrastructural projects, foreign trade, shipping and oil disputes. Disputants can either conform to arbitration before the occurrence of conflict or after. In an ad hoc arbitration, parties select who to arbitrate without any assistance from an arbitral body. All documents will be filled directly by the chair of the panel of referees. The head of the group of arbitrators will determine procedural rules. The whole process does not involve any payment of fees and may be held in a neutral location. It is noticed that most of the commercial arbitrations between private cooperations are ad hoc. A three body arbitration panel is always very typical in such...
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