CHAPTER ONE: GENERAL INTRODUCTION

This chapter is the introductory chapter. It treats the background to the study, research problems, research questions, objectives and methodology. It equally attempts an exploration of literature, treats the theoretical framework and goes ahead to justify the importance of the subject as well as the significance. The scope of the study, limitation, definition of key terms and synopsis of chapter are also treated.

• BACKGROUND TO THE STUDY

In 1924, the Brussels Convention for the unification of certain Rules Relating to Bills of Lading (commonly known as the Hague Rules) was adopted in an attempt to establish a balance between commercial risks and legal responsibilities between carriers and cargo-owners. These international rules were designed to provide a definite measure of protection to cargo-owners. In return they gave carriers some valuable exemptions from liability in certain circumstances. The Hague Rules served their purpose reasonably well, but in the course of time, with changes in vessel design and communication technology, together with the increase in trade, certain weaknesses became apparent. These were dealt with by the introduction of an amended set of rules under a Protocol signed in 1968.[1] These rules are known as the Visby Rules and have been in force since June 1977. The amendments contained in the Visby Rules were few and not very significant, and have not gained universal approval. They have been regarded by many cargo owning countries as constituting merely a temporary expedient and there was a growing demand for a thorough reappraisal of carrier liability designed to produce a comprehensive code covering all aspects of the contract of carriage. This culminated in the drafting of a new convention, which was adopted at an international conference sponsored by the United Nations in Hamburg, in March 1978. The Convention, known as the “Hamburg Rules”, came into force on November 1, 1992. In respect of the carrier’s liability the Hamburg Rules make some radical changes in international maritime law.

The past two decades have witnessed an explosion in demand for multimodal transportation. This has coincided with a technical revolution in the transport industry. A great volume of goods are moved by different modes of transport and by increasingly sophisticated cargo handling techniques. Transportation has become more complex and legal regimes within which it operates have become less predictable when the existing unimodal conventions are applied in cases where the goods are carried by more than one mode of transport and involve more than one carrier. Parallel to these developments in multimodal transport operations, a need was felt for a convention governing the multimodal transport of goods. This was why for many years there have been efforts by different bodies to provide such a Convention.

It is to be noted that the crux of any international convention on the contract of carriage is the liability system. It will therefore be necessary to consider the main features of the carrier’s liability under the Hague/Visby Rules and the Hamburg Rules with reference to relevant experience of the Carriage of Goods by Sea Acts (COGSA) of the United Kingdom and the United States.

Before discussing the scope and application of the Rules, it is useful to refer briefly to the historical background of the Hague Rules and Visby Rules in order to follow the evolution of what are known as the “Hamburg Rules”.

Historically, maritime law held the carrier absolutely liable for loss or damage to cargo during the voyage, whether or not such loss or damage resulted from the negligence of the carrier. He could only escape from this liability if the loss or damage was caused by an act of God[2], the Queen’s enemies,[3] the inherent vice of the goods themselves,[4] the fault of the shipper, or losses suffered by a general average sacrifice. Even where the loss was caused by one of these “common law exceptions” the carrier remained liable if he had been negligent or otherwise at fault.[5] Therefore, in order to recover the value of the cargo loss or damage, the cargo owner would only need to prove that the carrier received the goods on board the vessel in good order and condition and prove either no delivery or delivery in bad order at the place of discharge.[6]

The carrier’s liability under the common law and civil law codes is in theory strict liability, and the carrier and cargo owners interests generally seem to have been in agreement that it was the responsibility of the carrier to carry and deliver the goods to the port of discharge in the same apparent order in which they were shipped or otherwise make good any loss suffered by the cargo owner by reason of any loss or damage that the goods had sustained.[7]  And so, it can be seen that a code of rules governing the carriage of goods by sea was being formed.

It is necessary here to refer briefly to the events leading to the development of the bill of lading. For so long as merchants travelled with the goods, their particulars would be entered in a book or register which was part of the ship’s papers. But as trade developed, the merchant ceased to accompany his goods, and the necessity then arose for a separate document which was at first in the nature of a receipt for the goods and later became a document which embodied the terms on which the carrier would carry and deliver the goods at the port of destination.[8] At first these were customary terms, which came in time to be incorporated into the common law of England and the commercial codes of continental Europe. Thus was born the bill of lading which, in future years, was to develop into the document of the present time with its special legal features. The bill of lading became, in the course of time, the basic shipping document, embodying or evidencing the contractual relationship between the carrier and the shipper.[9] But with the growth of seaborne commerce and the increasing complexity of business and in consequence of the concern for speed, the need was felt for a means of transferring the title in the goods before they arrived at their destination. From this in turn arose the practice of transferring the ownership of the goods by endorsing the bill of lading to the buyer, and so by the eighteenth century, this practice was established and the transferable bill of lading as a document of title was in common use .[10] These early bills of lading did not contain any clauses exempting the ship-owner or carrier from liability for loss or damage to cargo occurring during the voyage[11].

 However, as a result of eighteenth century judicial decisions, when the cargo owners began to take action against the ship-owners for recovery of loss or damage to cargo occurring during the voyage, and to obtain legal rulings establishing ship-owners liability for such loss or damage to their goods, ship-owners generally began seeking to counter this by including in their bills of lading clauses exonerating them from liability for cargo loss or damage and so limiting contractually the strict liability imposed upon them by maritime law.[12]

Carriers were entitled to do this by reason of the freedom of contract principles expressed in both the common law and civil law, whereby the carrier was enjoined on the one hand to strict liability by maritime law, but could, on the other, contract out of almost all liability by appropriately framing the clauses in the bill of lading.[13] These rights were generally exercised, so that from a position where the carrier of goods by sea under contracts of carriage evidenced by bills of lading was virtually the insurer of the goods and responsible for any loss or damage sustained by the cargo, the situation under general maritime law was reversed . Instead of being absolutely liable irrespective of negligence, the carrier enjoyed a contractual exemption from liability regardless of negligence, and this contractual exemption became as wide as the carrier’s bargaining position would allow.[14]

The manner in which this right of freedom of contract was being exercised caused serious concern among trading nations, because overseas commerce was developing upon credit and bills of lading were the medium through which credits financing overseas commerce were arranged. Thus, as a result of the growing dissatisfaction of cargo and banking interests about the manner in which ship-owners were (in their opinion) abusing the right of freedom of contract, legislation was demanded to remove the perceived abuse thus produced.[15] After considerable negotiation, the demands of shippers for legislation were acceded to in the form of a compromise between the shippers and carriers. The Harter Act was enacted in the United States in 1893.[16] Differing standards then existed in other countries. In the nineteenth century, with the growth of international trade, accelerated by the development of steamships, the need for further reform was generally felt, but ship owning countries.

• STATEMENT OF THE PROBLEM

Domestic carriage of passengers and their luggage within Cameroon and in the CEMAC sub-region is covered by the sub-region’s Marine Merchant Code of 3 rd August 2012[17]. Carriers who carry passengers on board ships are confronted with different risks as compared to their counterparts involved in carriage of goods. Passenger risks, being third party liability, are covered by Protection and Indemnity (P&I) insurance but the role of insurance here as it is the case with all maritime risks, is to indemnify the parties as the case may be, for losses that occur. Obtaining insurance cover is not a way of managing risks in the sense of preventing them. from occurring by complying with international Conventions and regulations concerning the safe operation of vessels[18]. Managing risks involved with passengers’ vessels is more complex, especially with regards to modern and large cruise ships which carry people across the seas[19].

• RESEARCH QUESTIONS

The research questions are divided into the general research question and specific research questions.

• Main Research Question.

How does fault constitute the basis of the liabilities of the carrier in a contract of carriage of goods under the CEMAC Merchant shipping code?

• Specific Research Questions.

• What are the grounds for the carrier’s liability?
• What are the limits of the liability of the carrier in a contract of carriage of goods by sea under the CEMAC shipping code?
• How does the various conventions regulate settlement of disputes based on the extend of the fault?
• What policy recommendations can be proposed to address the issues raised?

[1] There was another Protocol which followed the 1968 Visby amendments usually called the “Special Drawing Right ‘S.D.R.’Protocol”, 1979, which came into force in 1984.

[2] Nugent V. Smith, (1876) 1 C.P.D.423 at p.444 (per James L.J); see also (per Cockburn C.J) at pp. 437, 438; Nichols V. Marsland. (1876) 2 Ex. D. 1.

[3] Russell V. Niemann. (1864) 17 C.B.(N.S). 163.

[4] Blower V. G.W.R.Co (1872) L.R.7 C.P. 655; Bradley V. Federal Steam Navigation Co. (1927) 27 Ll. L.R. 395; Albacora S.R .L . V. Westcott & Laurance Line Ltd, [1966] 2 Lloyd’s Rep. 53.

[5] United Nations Conference on Trade and Development/Geneva, Report by the Secretariat of UNCTAD,New York,Doc.TD/B/C.4/ISL/6 /Rev.1,(1971)par.49,p.11,hereinafter cited as “UNCTAD, TD/B/C.4/ISL/6/Rev. 1”; John D. Kimball, Ship owner’s liability and the proposed revision of the Hague Rules (1975-76)7 J.M.L.C, 217 at p.220, hereinafter cited as “Kimball”; Malcolm A. Clarke, Aspects of the Hague Rules, 1976, pp.118-19, hereinafter cited as “Clarke”; Benjamin W. Yancey, The carriage of Goods: Hague, COGSA, Visby and Hamburg, (1983) 57 Tul.L.R.pp.1238-1239, hereinafter cited as “Yancey”; Scrutton on Charter Parties and Bills of Lading, 19th ed, 1984, p.201, hereinafter cited as “Scrutton”,19th ed; G. Gilmore & C.L. Black, The Law of Admiralty, 2nd ed, 1975, p.139.

[6] UNCTAD, TD/B/C.4/ISL/6/Rev.1, par. 50, p.12.

[7] Paul Todd, Modern Bills of Lading, 1986, p.102.

[8] United Nations Conference on Trade and Development/Geneva, Report by the Secretariat of UNCTAD,New York,Doc.TD/B/C.4/ISL/6 /Rev.1,(1971)par.49,p.12.

[9] Ibid

[10] G. Gilmore & C.L. Black, The Law of Admiralty, 2nd ed, 1975, p.140.

[11] Ibid

[12] “Kimball”; Malcolm A. Clarke, Aspects of the Hague Rules, 1976, p.221.

[13] Ibid pg 222.

[14] Gilmore & Black note 10, p.142.

[15] A simultaneous development took place in the United States and the British Dominions, whose ocean trade depended heavily on United Kingdom ship-owners.

[16] Ocean Bills of Lading, 4th ed, 1953, p.121; Several Commonwealth countries followed the model of the Harter Act. Australia passed an Act, the Sea Carriage of Goods Act, 1904; the Canadian Water Carriage of Goods Act, 1910, and series of acts in New Zealand in 1908, 1911 and 1912 leading to the New Zealand Carriage of Goods by Sea Act 1922, which gave way eventually to the countries giving effect to legislation incorporating the Hague Rules.

[17] See Article 587 of this Code

[18] Aleka Mandaraka-Sheppard; opt cit, 923

[19] Ibid