RULES GOVERNING SHIPMENT BY SEA:
HAGUE RULES, HAGUE-VISBY RULES AND HAMBURG RULES
The nature of the Hague-Visby Rules was discussed by the House of Lords in The Hollandia  AC 565 (HL). The plaintiffs (shippers) shipped a piece of road-finishing machinery on board a Dutch vessel, ‘The Morviken’, belonging to the defendant carriers to Bonaire in the Dutch West Indies. The bill of lading issued in England limited the carriers liability to Dutch Florins 1,250 ($250) which was less than the 10,000 Francs per package prescribed under Article IV rule (5)(a) of the Hague-Visby Rules. The 10,000 Francs is an increase from the 100pound fixed under the Hague Rules. In addition, the bill of lading carried an express clause submitting the contract of carriage to the Dutch law and for adjudication before a Dutch court in Amsterdam. The $250 limitation was void under the Hague-Visby Rules. At that time, Netherlands had not adopted the Hague-Visby Rules, but United Kingdom had. Holland, at that time was still under the Hague Rules which permitted such a limitation of liability. The Hague-Visby Rules by Article IV rule 5(a) limited the liability to 10,000 Francs per package or unit or 30 Francs per kilo of the gross weight of the goods whichever was the higher. The defendants had the machinery transhipped in Holland upon a Norwegian vessel. Upon discharge of the cargo in Bonaire, and due to negligence of the carrier, the cargo was dropped and sustained damage amounting to about 22,000pounds. The plaintiff had ‘The Hollandia’, another one of the defendant’s vessels, seized in a United Kingdom port upon a writ in rem for this damage. The defendant upon a preliminary point of law sought to have the action stayed on the ground that the express jurisdictional clause choosing the court of Amsterdam and the express jurisdictional of the Dutch law left the English court without jurisdiction. It was clear that under the Dutch law then available, the limitation of liability clause was valid although it was void under the English law. The defendant was therefore interested in moving the dispute to be litigated in Holland. The House of Lords in the course of its judgment stated to a number of differences between the amended Hague Rules (Hague-Visby Rules), and the Hague Rules. First, under the Hague Rules, unless the bill of lading contained an express clause subjecting the contract of affreightment to those Rules, the Hague Rules do not apply to the contract except by implication. The mere fact that the goods were shipped out of a port from within a jurisdiction subject to the Hague Rules would not suffice to trigger the application of the Rules. This distinguishes Vita Food Products Inc v Unus Shipping Co Ltd  AC 277, which has decided under the Hague Rules. In the former, by omitting to expressly adopt the Hague Rules that were found in the schedule to the Newfoundland Carriage of Goods by Water Act, the ship owner was by implication able to avoid them. But in The Hollandia, which fell to be decided under the Hague-Visby Rules, the bill of lading became irretrievably bound by the Hague-Visby Rules which by then had become a part of English law. The difference between the Hague Rules and the Hague-Visby Rules in this aspect therefore has far reaching consequences. Under the new Rules the carriers cannot exclude them and they become incorporated by implication into all bills of lading when issued from a port situated in a jurisdiction which has adopted the Hague-Visby Rules. Second, the limitation of liability under the Hague Rules was 100pounds per package. Under the Hague-Visby Rules this limitation of liability was increased by introducing a somewhat complicated formula. As for the United Kingdom, the liability was fixed at 10,000 Francs per package or unit or 30 Francs per kilo, whichever is the higher value. Besides, there are general matters that require mention. Where goods are parcelled in separate parcels, each parcel is...
Please join StudyMode to read the full document