Hague-Visby Rules are applicable to a particular contract of carriage covered by a Bill of Lading (B/L). Hague-Visby Rules do not necessarily govern entire transportation, but merely govern the part of the contract relating to sea transport.
Therefore, the term contract of carriage in Hague-Visby Rules is defined as constituting the period from the time when the cargo is loaded on to the time cargo is discharged from the ship.
In other words, tackle to tackle period, 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 discharge, if the carrier is responsible for loading and discharge.
According to Hague-Visby Rules, if the carrier is responsible for loading and discharge, carrier liability is not only during the actual carriage, but also during the loading and discharging operations. For example:
- cargo falls back on the dockside while being lifted aboard with the ship’s tackle
- cargo falls into the sea while being discharged into lighters
Hague-Visby 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.
Today, 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. Hague-Visby Rules 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 is known as the before and after problem and is an obvious weakness in Hague-Visby Rules.
Another problem arises where cargo is shipped under a Through Bill of Lading or a combined transport document which envisages that cargoes will be transshipped at an intermediate port.
Hague-Visby Rules applicable to the contracts of carriage which are covered by bills of lading. In other word, such document relates to the carriage of goods by sea. Hague-Visby Rules will be inapplicable to any segment of the through transport which involves carriage by land or air.
According to Canadian court, even where sea carriage is envisaged throughout the transit, Hague-Visby Rules will not cover any period during which the cargo is lying on the dockside awaiting transshipment. Therefore, in Captain v Far Eastern Steamship Co case, cargo was shipped from Madras to Vancouver under a contract which envisaged that the cargo would be transshipped at some point on the route. Bill of Lading (B/L) contained a term providing that the responsibility of the carrier should be limited to that part of the transport performed by carrier on ship. Eventually, when cargo was transshipped at Singapore, the container vans were stored in the open for three weeks during which time cargo suffered rainwater damage amounting to some $32,000. Court held that the carrier was entitled to rely on the contractual clause excluding liability during this period since the Hague-Visby Rules did not apply to the period during which the cargo was stored on the dock, that period does not relate to the carriage of goods by sea.
In another case this decision has since been distinguished by Bingham J, in Mayhew Foods v OCL case, where the contract provided for the carriage of frozen poultry from Sussex to Jeddah. Poultry would be transported by road from Uckfield to a south coast port and there shipped on one of the defendant’s ship for Jeddah. Bill of Lading (B/L) which was eventually issued provided for the carrier to accept liability for loss or damage to the cargo from the time of receipt in Sussex to the time of delivery in Jeddah, although such liability was limited to $2 per kilo of the gross weight of the goods, that amount significantly below the Hague-Visby Rules’ 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 transship the goods in Le Havre. 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 (+) 4 degrees centigrade instead of the required temperature of minus (-) 18 degrees centigrade. Evidence suggested that the damage had occurred while the cargo was lying ashore at Le Havre awaiting transshipment, 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 $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 transshipment and there were separate Bills of Lading (B/L) for the two legs of the voyage. On the other hand, in Mayhew Foods v OCL case, issued Bill of Lading (B/L) covered the entire voyage from Shoreham to Jeddah and the shipper had no knowledge of the carrier’s intention to invoke the liberty to transship the container in Le Havre. If the carrier decided to exercise contractual right to discharge, store and transship the cargoes 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.
Whenever cargoes are shipped from a contracting state under a Bill of Lading (B/L) which covers the entire sea-carriage through to the ultimate destination then, despite any intermediate transshipment, Hague-Visby Rules will cover the operation throughout the entire voyage.