Period Coverage of the Hague/Visby Rules

Even though the Rules are applicable to a particular contract of carriage covered by a bill of lading, they do not necessarily govern performance of the contract in its entirety, but are merely relevant to that part of the contract relating to sea transport. Thus, for the purpose of the Rules, the term ‘contract of carriage’ is defined as constituting ‘the period from the time when the goods are loaded on to the time they are discharged from the ship’. This is normally construed as covering the ‘tackle to tackle’ period in circumstances where the carrier is responsible for loading and discharge, that is, from the time when the ship’s tackle is hooked onto the cargo at the port of loading until the hook of the tackle is released at the port of dis- charge. It is therefore clear that carrier liability is subject to the Rules, not only during the actual carriage, but also during the loading and discharging operations as, for example, where the cargo falls back on the dockside while being lifted aboard with the ship’s tackle, or where it falls into the sea while being discharged into lighters. On the other hand, the Rules do not apply to any additional time during which the goods are under the control of the carrier outside the tackle-to-tackle period. Under modern trading conditions such periods of time may be extensive since cargo for shipment, delivered to shipping agents nominated by the carrier, will frequently be discharged into a designated warehouse at its destination. Since Art VII provides that the parties are free to negotiate their own terms in respect of care of cargo before loading and after discharge, the carrier will seek, where possible, to exclude responsibility during this period. This has come to be known as the ‘before and after problem’ and is an obvious weakness in the Rules which cargo interests now seek to rectify. A further problem arises where goods are shipped under a through bill of lading or a combined transport document which envisages that they will be transhipped at an intermediate port. In such circumstances will the Rules govern the operation throughout, or only until the goods reach the port of transhipment? One factor to be taken into consideration in answering this question is the wording of Art I(c) which, in defining the term ‘contract of carriage’ for the purpose of the Rules, specifies contracts of carriage covered by bills of lading ‘in so far as such document relates to the carriage of goods by sea’. There can accordingly be little doubt that the Rules will be inapplicable to any segment of the through transport which involves carriage by land or air, but a Canadian court has given a wider construction to this clause by holding that, even where sea carriage is envisaged throughout the transit, the Rules will not cover any period during which the cargo is lying on the dockside awaiting transhipment. Thus in Captain v Far Eastern Steamship Co goods were shipped from Madras to Vancouver under a contract which envisaged that the cargo would be transhipped at some point on the route. The bill of lading contained a term providing that the responsibility of the carrier should be limited to that part of the transport performed by him on vessels under his management. When the cargo was eventually transhipped at Singapore, the container vans were stored in the open for three weeks during which time they suffered rainwater damage amounting to some $32,000. The court held that the carrier was entitled to rely on the contractual clause excluding liability during this period since the Hague Rules did not apply to the period during which the goods were stored on the dock, ‘because it does not relate to the carriage of goods by water’. This decision, however, has since been distinguished by Bingham J in Mayhew Foods v OCL, a case where the contract provided for the carriage of a consignment of frozen poultry from Sussex to Jeddah. The intention was that the poultry would be transported by road from Uckfield to a south coast port and there shipped on one of the defendant’s vessels for Jeddah. The bill which was eventually issued provided for the carrier to accept liability for loss or damage to the goods from the time of receipt in Sussex to the time of delivery in Jeddah, although such liability was limited to US $2 per kilo of the gross weight of the goods – an amount significantly below the Hague/Visby limit. In the event the goods were shipped from Shoreham, and not Southampton as originally intended, and the carrier subsequently took advantage of a liberty in the combined transport document to tranship the goods in Le Havre. The poultry eventually arrived in Jeddah in a putrefied state due to the fact that the temperature control on the container had been set at plus 2 to 4 degrees centigrade instead of the required temperature of minus 18 degrees centigrade. On the basis that the evidence suggested that the damage had occurred while the cargo was lying ashore at Le Havre awaiting transhipment, the carrier contended, on the basis of Captain v Far Eastern Steamship Co, that the Hague/Visby Rules were not applicable during this period and that he could therefore limit his liability to the contractual figure of US $2 per kilo. In rejecting this argument Bingham J distinguished Captain v Far Eastern Steamship Co on the grounds that ‘the shipper there was told when the contract was made that there would be transhipment and there were separate bills of lading for the two legs of the journey’. In Mayhew Foods v OCL on the other hand the bill of lading when issued covered the entire jour- ney from Shoreham to Jeddah and the shipper had no knowledge of the carrier’s intention to invoke the liberty to tranship the container in Le Havre. Moreover, if the carrier decided to exercise his contractual right to discharge, store and tranship the goods en route, these were still operations ‘in relation to and in connection with the carriage of goods by sea’ within the meaning of the Hague/Visby Rules definition.
The result of the decision in Mayhew Foods v OCL would therefore appear to be that, when- ever goods are shipped from a contracting state under a bill of lading which covers the entire sea-carriage through to the ultimate destination then, despite any intermediate transhipment, the requirements of Art X will be satisfied and the Hague/Visby Rules will control the opera- tion throughout.