Principles of the Carriage of Goods by Sea Principles of the Carriage of Goods by Sea offers students studying this topic as part of their LLM or LLB course an accessible, comprehensive overview of the subject from a leading expert in the field. Writ ten specifically with students in mind, concentrating on principles, and tailored to common law coverage, this title presents all the essential topics and is supported by the following useful pedagogy: • Line Diagrams: illustrating the relationships between parties so that this may be understood at a glance; also, where appropriate, time lines • Case Studies: looking at topical matters such as piracy, and problematic areas of law such as reachable on arrival clauses and the carriage of bulk oil by sea • Sample Problem Questions: problem questions and suggestions to help students to prepare for assessment • Annotated Appendices: concise appendix of the most important legislation and international conventions, with useful annotation from the author that explains these and puts them in con text Paul Todd is Professor of Commercial and Maritime Law at the University of Southampton. He has been teaching law for almost 40 years, and has written a wide range of publications in international trade law and carriage of goods by sea. This page intentionally left blank Principles of the Carriage of Goods by Sea Paul Todd First published 2016 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an Informa business © 2016 Paul Todd The right of Paul Todd to be identified as author of this work has been asserted by him in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Todd, Paul, 1954– Principles of the carriage of goods by sea / Paul Todd.
pages cm Includes bibliographical references and index.09'62—dc23 2015016220 ISBN: 978-0-415-74374-7 (hbk) ISBN: 978-0-415-74373-0 (pbk) ISBN: 978-1-315-81349-3 (ebk) Typeset in Joanna by Apex CoVantage, LLC Outline Contents Prefacexvii Acknowledgments xix Table of Cases xxi Part 1 Introduction to carriage of goods by sea 1 1 Introduction, bills of lading and charterparties 3 2 Carriage and the general law of contract 22 3 Other legal principles underpinning carriage of goods by sea 45 4 Obligations implied into contracts for the carriage of goods by sea 59 Part 2 Voyage charterparties 83 5 Nature of voyage charterparties 85 6 The approach voyage and the voyage 92 7 Freight 101 8 Loading and discharge (1): introduction and laytime 116 9 Loading and discharge (2): demurrage 131 Part 3 Time charterparties 145 10 Nature of time charterparties 147 11 Period of charter: delivery and redelivery 161 12 Time charterparty hire 179 13 Time charters: employment and indemnity 204 Part 4 Carriage (other than charterparties) 235 14 Introduction: bills of lading and similar documents 237 15 Bill of lading contract terms 248 16 Carriage of Goods by Sea Act 1992 (and related issues) 269 17 Other privity of contract issues 293 18 Hague and Hague-Visby Rules 309 vi | Outline Contents 19 Representations in bills of lading 337 20 The bill of lading as a document of title 347 21 Carriage by sea in the modern world 359 Part 5 Supporting material 371 22 Case studies 373 23 Further reading 390 Appendices393 Appendix A: Carriage of Goods by Sea Act 1971 (Hague-Visby Rules) 395 Appendix B: Carriage of Goods by Sea Act 1992 405 Appendix C: Hamburg Rules 411 Appendix D: Rotterdam Rules (selected Articles) 423 Index439 Detailed Contents Prefacexvii Acknowledgments xix Table of Cases xxi Part 1 Introduction to carriage of goods by sea 1 1 Introduction, bills of lading and charterparties 3 1.1 Layout of the book 4 1.2 Introduction: distinction between charterparties and bills of lading 4 1.3 Types of charterparty 5 1.4 More on voyage charter terms 6 1.5 More on time charterparty terms 8 1.6 Terms that are common to both types of charterparty 9 1.7 Erosion of the distinction? 10 1.8 Does the distinction matter? 10 1.1 Standard form charters: dry cargo 13 1.2 Standard form charters: tankers 15 1.11 Charterparties and markets 16 1.12 Following chapters 17 2 Carriage and the general law of contract 22 2.3 Terms and their construction 25 2.4 Privity of contract 25 2.5 Market variations and remedies 26 2.6 Conditions, warranties and innominate terms 28 2.1 Categories of term, and relevance of seriousness of breach 28 2.2 Conditions after Hongkong Fir 30 2.3 Effect of repudiation 32 2.8 Affirmation by the innocent party 33 2.3 Other limits to damages 37 2.10 Repudiation and exemption clauses 38 viii | Detailed Contents 2.11 Construction and serious breaches 39 2.12 Frustration of a contract of carriage 39 2.1 Law Reform (Frustrated Contracts) Act 1943 41 2.2 Requisition and entrapment 41 2.3 Frustration and delay 42 3 Other legal principles underpinning carriage of goods by sea 45 3.1 Principles of bailment 46 3.2 Burden of proof 48 3.3 Rights of common carriers and bailees for reward 49 3.4 Bailment on terms 49 3.4 Law and equity in carriage 50 3.2 Equitable notice doctrine 51 3.3 Notice doctrine in maritime commerce 52 3.4 Reluctance elsewhere to extend equitable principles 53 3.5 Good faith in carriage of goods by sea 54 3.6 Risk in carriage of goods by sea 56 4 Obligations implied into contracts for the carriage of goods by sea 59 4.2 Duty to provide seaworthy vessel 60 4.2 Substance of obligation 61 4.4 When obligation attaches 64 4.7 Contracting out of obligation 68 4.8 Seaworthiness and causation 68 4.10 Burden of proof 69 4.11 Effect of breach 69 4.3 Duties in respect of the cargo 70 4.1 Duty of shipowner not to deviate 71 4.2 Consequences of unjustified deviation 71 4.4 Deviation liberty clauses 75 4.5 Obligation to proceed with reasonable despatch 76 4.6 Obligation not to ship dangerous cargo 77 4.1 What is dangerous cargo? 77 4.3 Who bears the risk? 78 Detailed Contents | ix Part 2 Voyage charterparties 83 5 Nature of voyage charterparties 85 5.2 Terms of voyage charterparties 86 5.3 FIO and gross terms 87 5.4 Classification of terms 87 5.5 Consecutive voyage charters 88 5.6 Terms common to the consecutive voyage charterparty 89 5.7 Contracts of affreightment 90 6 The approach voyage and the voyage 92 6.1 Approach voyage: introduction 93 6.3 Expected readiness to load 95 6.5 Present position and other clauses 97 6.6 Reasonable despatch 98 7 Freight 101 7.3 Lumpsum freight, freight pro rata itineris and back freight 105 7.5 The standard forms 107 7.6 Setting off damages against freight 109 7.7 Cargo retention and similar clauses 111 7.9 Lien and cesser 112 8 Loading and discharge (1): introduction and laytime 116 8.1 Time for loading and discharge: an overview 117 8.2 Stages of a voyage 118 8.3 Commencement of laytime 118 8.4 Traditional allocation of delay risks 119 8.5 Definition of arrived ship 119 8.1 The Johanna Oldendorff and precedent 121 8.2 The Johanna Oldendorff itself 121 8.6 Validity of notice of readiness (NOR) 123 8.7 Breach before NOR 126 8.8 Achieving traditional allocation of risk 128 8.1 Late arrival, and earlier tendering of NOR 128 8.2 Early arrival, but with exceptions 128 8.9 Laytime and standard forms 129 x | Detailed Contents 9 Loading and discharge (2): demurrage 131 9.1 Nature of demurrage 132 9.2 Length of time on demurrage 133 9.4 Avoidance of demurrage regime by repudiating 135 9.6 Different type of loss and/or breach of different obligation 137 9.7 Repudiating the charterparty 138 9.8 Must elect to repudiate 140 9.9 Application to consecutive voyages 140 9.10 Once on demurrage always on demurrage 142 Part 3 Time charterparties 145 10 Nature of time charterparties 147 10.1 Main features of time charters 148 10.2 Use of time and demise charters 149 10.3 Some time charterparty clauses 151 10.4 Trip-time charters 152 10.5 Distinction between time and demise charters 153 10.6 Time charterparties and third parties 154 10.7 Property and tort actions 158 10.8 Test for demise charterparty 159 11 Period of charter: delivery and redelivery 161 11.1 Margins for the term 162 11.1 Hire for remainder of term 164 11.4 Redelivery to wrong port 168 11.1 Late redelivery as a breach? 170 11.2 Damages for late redelivery 172 11.3 Last voyage orders 173 11.5 Last voyage orders after The Gregos 176 11.6 Final voyage clauses 176 12 Time charterparty hire 179 12.1 Punctual payment of hire 180 12.2 Withdrawal for late payment 181 12.3 Withdrawal for deduction from hire 184 12.4 Anti-technicality clauses 185 12.5 Other remedies for late payment 186 12.6 Punctual payment term condition? 187 12.7 The Astra and the penalty clause argument 189 12.8 Lien 189 Detailed Contents | xi 12.2 Equitable set-off 191 12.2 Different off-hire clauses in the standard forms 194 12.3 Net loss of time and period off-hire 195 12.4 Cases on the types of clause 196 12.5 Some off-hire events 197 12.6 Off-hire events: some cases 198 12.7 Some general requirements: requirement of fortuity 199 12.8 Some general requirements: “preventing the full working of the vessel” 200 12.9 Full working for what? 200 12.10 Additional to other remedies 201 13 Time charters: employment and indemnity 204 13.2 Time charters, employment and indemnity 206 13.3 What is employment? 207 13.4 Limits to indemnity: risk and causation 209 13.5 Relationship between express and implied terms 211 13.6 Relationship between damages and indemnity 211 13.7 Bills of lading 212 13.1 Presentation in breach of contract 212 13.8 Indemnities on delivery 217 13.2 What is an unsafe port? 220 13.4 When does the obligation attach? 222 13.5 Evia second ratio 223 13.6 Evia – other points 223 13.7 Causation and consent issues 224 13.8 Standard of seamanship required 226 13.11 Implied safe port terms 228 13.1 Evia second ratio again 230 13.11 Ice clauses 231 Part 4 Carriage (other than charterparties) 235 14 Introduction: bills of lading and similar documents 237 14.2 Outline of bill of lading functions 238 14.3 Negotiable and non-negotiable bills 239 14.4 Negotiable bills of lading 239 14.1 Bearer bills, indorsement in blank and personal indorsements 240 xii | Detailed Contents 14.6 Straight bills of lading 242 14.2 How do you distinguish a straight bill from a waybill? 244 14.7 Through bills of lading 245 14.8 Some problems with bills of lading 246 15 Bill of lading contract terms 248 15.1 Relationship between bill of lading and carriage contract terms 249 15.1 Charterparties and bills of lading 249 15.2 Transfer of contracts 250 15.3 The bill of lading and the carriage contract 250 15.4 Orally agreed terms (or otherwise agreed outside the bill of lading) between carrier and bill of lading holder 251 15.5 Where charterer also has bill of lading 253 15.6 Where the only relationship is on the terms of the bill of lading 255 15.2 Incorporation of charterparty terms into bills of lading 255 15.1 Why incorporate charterparty terms into bills of lading? 256 15.2 Widening general words of incorporation 257 15.3 From which charterparty 257 15.1 Charterparty not identified 258 15.4 Which terms incorporated? 260 15.2 Arbitration and other ancillary clauses 262 15.3 What is germane? 263 15.5 Manipulation 264 16 Carriage of Goods by Sea Act 1992 (and related issues) 269 16.2 Was legislation really necessary? 272 16.3 History prior to 1992 272 16.4 1992 Act in outline 274 16.