Hague-Visby Rules Package Limitation

Hague-Visby rules are incorporated into a charterparty, unless the nature and value of the goods have been declared by the shipper before shipment and inserted in the bill of lading, then neither the carrier nor the ship shall be liable for any loss or damage to or in connection with the goods for any amount exceeding 666.67 units of account per package or 2 units of account per kilogram of gross weight of the goods lost or damaged, whichever is the higher. So, this right entitles the owner to limit liability, to an extent, under the terms of the charterparty by reference to the cargo carried and the specific limitation provisions. In the context of the limitation amounts the reference to ‘units of account’ is to the published value of a standard drawing right (SDR) at the date of the delivery of the goods or time when the goods should have been delivered if they are lost. The calculation in relation to weight of cargo is straightforward. The declared weight of the cargo as inserted into the bill of lading is taken and multiplied by two units of account per kilogram in weight. In relation to packages or units and the limitation of 666.67 units per count per package then where a container, pallet or similar article of transport is used to consolidate goods, the number of packages or units enumerated in the bill of lading as packed in such article of transport is deemed to be the number of packages or units in calculating the amount beyond which the carrier is not liable. So, if the bill of lading records the package or unit has ‘one container’ the package limit should apply to one container. Commonly, therefore, the declaration will be ‘one container containing X packages or cartons’. In this instance the packages or cartons declared in the bill of lading will be the applicable ‘package’ for the determination of the limitation amount. The parties are of course free to make specific reference to the value of the cargo in which case the limitation provisions will not apply.