To what extent do the international carriage regimes facilitate modern international carriage relationships?
A) Regulation of contracts by the three frameworks of liabilities and defenses; B) Historical justification for internationally recognized regulation – starting with the Harter Act 1893 and concerns about freedom of contract impact on cargo interests;
At the end of the 19th century shipping started to develop more and more and during the first years of the 20th century international trade was increasing. (Stopford, 2009) In short there was more demand than ship’s tonnage and ship-owners had a very strong negotiation position when it came down to signing the contract of carriage. International carriage regimes have attempted to bring back equality between parties of a contract of carriage at the negotiation table. There was a perceived need by lawmakers, pushed by cargo interests, to level the playing field even if common law did not see this need. Case law had the chance to do this in Norman v. Binnington (1890) 25 QBD but the ship-owner was held not liable for damage to a cargo caused by negligence of the crew. Case law had the opportunity but upheld the laissez-faire principle under which commercial law is viewed by common law. There was an attempt in 1880 to introduce model bills of lading with fixed rules by the International Law Association but this idea did not catch on at the time. American cargo owners being constantly confronted by British carriers abusing their position by negating extreme clauses freeing themselves of any risk at all pushed politicians to make an end to this by introducing legislation. Starting in the USA by the Harters Act in 1890 but followed by other countries all around the world. Eventually the three frameworks one by one, Hague/Hague-Visby and the Hamburg rules came out of the turmoil after many years of discussions and amendments. Under the Hague rules, 1924, the carriers ability to reduce their liability endlessly by clever clauses was severely reduced and minimum rules were put in place that mandated the carrier to take care of the cargo. On the other hand the carrier was given 17 different ways to defend itself against claims. For example the carrier was only liable for damage caused by fire if it was actually caused by them. Even if the carrier/shipowner was held liable there was set a limit to which height the cargo interests could claim. The maximum was 100 Pounds per package except if the value of the cargo was declared in the Bill of Lading, which almost never happened. No wonder that this framework found little support as it was considered far too little to please the cargo interests. Many countries continued to use their own systems. Only in 1968 after discussions at an international level did the world decide on an amendment to the Hague rules known as The Hague Visby rules. In 1977 these rules came into force after the agreed number of countries had ratified the new framework. The Visby amendments increased the amounts that could be claimed and introduced special rules for container transport. The Hague Visby rules were further modernized by the SDR amendments in 1979 and have been in use by the major trading powers since that time. Although later the Hamburg rules also became into existence they have not made great impact as not any of the major trading countries have adopted them. However they do make it more complicated if one does come across them.
The very existence of the infamous shipping cycles in the shipping business gives rise to situations that either of the two parties in a contract of carriage has the upper hand. In a downward cycle ship-owners are pressurized by cargo interests and in an upward cycle it is the other way round and ship-owners are able to pressurize cargo owners. So I think that in view of the above the introduction of rules regulating liability and defenses for a contract of carriage was necessary...