Hague Visby Rules Article IV Rule 2: Commercial Law and Case Analysis

This essay provides a critical analysis of Hague Visby Rules Article IV Rule 2, focusing on its implications for commercial law and the perceived unfair burden it places on cargo interests. It examines the rule's exclusion of liability for the master or crew's defects in ship management, deemed an anachr...Read More

Component A Oral
presentation

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Understanding Hague Visby Rules article IV rule 2 and commercial law........................3
Analysing relevant cases.........................................................................................................4
How courts have curtailed the use of excepted peril by carrier.........................................7
Discussion..................................................................................................................................7
CONCLUSION...............................................................................................................................8

INTRODUCTION
Law has been determined as the system of rules that is aligned with the set of
protocols and has to be followed by the people. The present study revolves around the
commercial law. This law regulates behaviour of people who are engaged in trade
activities. Also, this law is entitled with the contracts, consumer protection and
employment contract elements. 1 This PPT will shed a light over critically analysing the
statement “There is the surprising exclusion of liability for defects of the master or
crew in management of the ship [in Hague Visby Rules Article IV rule 2] The
exception is generally considered to be an anachronism which tilts the burden
unfairly against cargo” with reference to Ewan McKendrick, Goode and McKendrick
on Commercial Law. Also, the role of court in imposing restriction in terms of using the
law by the carrier will be highlighted in report. The relevant cases will be described in
the report.
MAIN BODY
Understanding Hague Visby Rules article IV rule 2 and commercial law
The subject provision of article (Mentioned in Hague Visby Rules article IV rule 2)
states that, the carrier should properly & carefully assure focus over loading, handling,
carrying and keeping the goods. Also, in context of discharging the goods same
attributes needs to be applied. However, the article IV rule 2 often depicts that, the
carrier or ship is not accountable if the loss or damage has been created due to default
or mistake of pilot, servant and mariner of the ship 2 Thus, the loss that has been
created by the member of the ship does not bear by the carrier or while company. Also,
if the damage has been developed due to Act of god, Act of war, Act of public enemies,
Accidental cases at sea, insufficiency of packing, and any other cause that is arriving
without the cause of ship has not been bear by the carrier Thus, in this manner the
exception protects the carrier.
1 Cheng, Jess. "How to build a stablecoin: certainty, finality, and stability through commercial law
principles." Berkeley Bus. LJ 17 (2020): 320
2 Kasi, Arun. "Hague/Hague-Visby Rules: Application." In The Law of Carriage of Goods by Sea, pp. 247-
269. Springer, Singapore, 2021.

However, the sixth edition of the Goode and Mckendrick on commercial law says
that, the carrier is liable for the loss and damage of the goods if the danger has not
been discussed before assuring the transportation of the goods. The amount that has
been mentioned in the contract has been bear up by the carrier if the loss takes place.
Thus, the saying of article IV rule 2 in Hague Visby rules is different in accordance with
the commercial law 3 Commercial law protects consumer within the implemented legal
terms. Also, works on the basis of the contract and the judgement has been made on
the basis of the information provided in contract. There are numerous cases happened
in relation of this context where contract was missing and the carriers does not faced
loss due to this 4 However, the liability was not bear by the company due to the absence
of contract. Here is the description of some of the cases in relation of the explained
context.
Analysing relevant cases
Belae v Markwarth shipping company Ltd [1991] SBHC 10 is associated with the
scenario in which the appellant dispatched the goods on a vessel that has been
operated by himself. The goods has been given to the respondent and the cargo receipt
has been received in context if this. However, when the goods arrived some of the
goods were missing. The appellant has issues the writ of summons. At the time of
hearing the decision has been taken in the favour of appellant as the Cargo receipt
which has been provided is not a contract of carriage in relation of the purpose of the
carriage of goods by sea act. Thus, the cargo receipt was not the form of contract
therefore, the appeal has been allowed. The carriage of the goods by sea act does not
considered cargo receipt as the contract. Therefore, the defence of the limitation did not
available to the company. Cargo has not been considered as the bill of lading or
document in the context of goods.
3 Ceil, Chenoy. "Limit Liability under Hague-Visby, Hamburg and Rotterdam Rules." Hamburg and
Rotterdam Rules (December 4, 2018) (2018).
4 Liew, Ying Khai. "Making Sense of Agreement-Based Constructive Trusts in the
Commercial Context." Journal of Business Law, Forthcoming, U of Melbourne
Legal Studies Research Paper 931 (2020).?

Wani v Consort express lines [2003] the plantiff has made commitment against the
defendant that applied for damage has been arrived in goods due to unknown cause.
However, the case has been made after the 2 years of delivery and the suit must be
brought within the one year of the delivery of the goods. Therefore, application to the
dismiss has been granted in this case, the claim has not been made over the carrier. In
this case, the judgement was sensible. As the limitation period was vanished.
Finch v Seafreight pty Ltd[1976] PNGLR 440 (6 October 1976)
In the case two crates of some individual possessions were shipped from Loloho to
Moresby port on the ship of the defendant. The shipped item were lost on the way and
did not reach its destination. Here the plaintiff raised his concern pertain to fulfilment of
damages since it was lost after shipping and the entire responsibility of protecting the
items and ensuring its proper delivery lies in the jurisdiction of the shipping organization.
But the defendant has shown its logic that the liability of the company was limited due to
provision of article 4 r 5 in the schedule 2 of Sea Carriage of goods act 1951.
As the Hague-Visby rules suggested its range of provisions where the arguments
are laid down to favour such shipping companies. Neither the ship not the career is
responsible for such damage or loss which is arising due to unseaworthiness. The
shipping company has shown their concern about such claims and also extended their
side by saying that their role or responsibility is very limited with this regard, and they
must be relieved.
The judgement of the court has been in favour of the plaintiff that as per the
commercial law, here it is Sea carriage of goods act 1951, as per the low the period
when the goods were damaged, it was in the possession of the shipping company. The
company was responsible from the time of loading to the discharging of the goods, The
judgement of the court has clarified that as commercial low of the nation is guiding and
also protecting the rights of such parties who are getting their goods shipped.
Hague-Visby rules are somehow not aligning with the legitimation of the commercial
laws where at once if such parties came into contract then the fulfilment of their
respective duties are compulsory for them. Bill of loading is also considered such piece
of document which is being taken as proof of their contract and as per the deeds such

shipping companies are responsible for any loss or damage is occurred during they
carry the goods.
The concerns raised by the plaintiff where he soughed areas such as breach of
duty pertain to storage, delivery and carriage of the goods and these all arguments had
been considered by the court which shows that as per commercial laws these all
predicaments are falling in the legal jurisdiction of such shipping organization.
As in the second schedule, which has been used by the shipping company in order to
safe their position that any act of negligence and default by such mariner, master, pilot
would not be concern of the company and would not be responsible for any mishap. But
the judgement of the court nullified this argument with the logic that at once if the goods
are taken from such customers and are boarded then until their delivery the entire
responsibility is on the company since by the course of action they are part of the
contract, so abiding with the laws they have to take care of all responsibilities
associated with the rules of commercial laws.
Hauhaea v Laurabada shipping services ltd[2005] PGDC 31; DC200 (13 July
2005)
In the case the goods were supposed to be shipped on the ship on two different
occasions. In the event on both occasion it was reported that some portion of the goods
was missing. The plaintiff raised concern and argued that this is responsibility of the
company to fulfil the losses. On the other side the complainant claimed that the items
were not lost from the ship before or after discharge.
The judgement of the court has been in favour of the complainant and court said that
now the onus to prove of losing the goods in lying in the jurisdiction of the plaintiff so the
claim of loss has been dismissed. Here it can be seen as per the provisions of Hague-
visby that the damages occurred due to Latent defects which were not traced by
keeping proper diligence. So the court considered this argument and in absence of
proper contract and following of legitimation the advantage has been droved to the
plaintiff.

How courts have curtailed the use of excepted peril by carrier
Over the time the supreme court also felt the jeopardies by the carriers. Some of
excepted perils they often used in order to take advantages of such cases and ultimate
loss was bared by the plaintiffs 5.
SC has focused on the article 4 of Hague Rules, on the appeal made by Andrew
Nicholas. Mr Donaldson QC, justice found that it would be breach of article 3.2 so the
onus would be on the carrier company to present their side to counter allegation. So by
these ways supreme court of the nations curtailed use of excepted perils by such
carriers 6.
In various cases as court has given preference to the commercial laws over other
things and also supported notion, if the contract between two parties is well-structured
then any losses take place so ultimate bearer would be such shipping company.
Discussion
Hague Visby Rules article IV rule 2 provides protection to the carrier within not
blaming them for the loss of goods. However, the major issue is that in such case, who
will take liability. The major elements of commercial law in UK is aligned with, contract,
consumer protection, insurance tax and the partnership. Thus, if everything has been
mentioned in contract then, it has to be followed and in such case, the loss and damage
has been bear by the carrier itself 7 The above explained cases has shown that, in
some case, the favour has been assured to shipping company and the major reason
behind this is concerned with the absence of contract. Also, the decision of the court
has clarify the article IV rule 2. That the blame will not be assured towards the
company. However, commercial law often works on contract and on the basis of that,
the actions has been taken. Thus, at the time of performing trade activities in cargo the
major focus needed to be assure over implementation of contract that has been agreed
5 Nwaobi, Ezinwanne Anastasia. "An analysis of the carrier’s liability regime under the Hague-Visby,
Hamburg and Rotterdam rules."
6 Mahafzah, Qais Ali. "The Legal and Economic Impact of the Caspiana Clause under Bills of Lading and
Charterparties." Austl. & NZ Mar. LJ 32 (2018): 25
7 Kasi, Arun. "Hague/Hague-Visby Rules: Application." In The Law of Carriage of Goods by Sea, pp. 247-
269. Springer, Singapore, 2021.

by both the parties. In such situation, the decision can be taken easily 8 Thus, the
contract needs to be prepared that delivers the roles and responsibilities in terms of
delivering goods. Along with this, the contract must contain necessary information in
relation of the loss and damage obligations.
CONCLUSION
From the report above it can be concluded that the Article 4 rule 2 of Hague-Visby
was giving a number of such exceptions to the shipping companies to reduce their
liability pertain to the carried goods. In the report the arguments of The Hague-Visby
and Commercial laws of the nation were compared in order to trace the anachronism of
the rules. For substantiating the logics some cases were presented where court had
refuted the logics taken form the rules and given priority to the commercial laws and the
provisions laid down there for the purpose of securing the rights of the customers 9
Report also depicted the actions and some steps taken by the supreme court in order to
curtain such exceptions used for avoiding perils and taking upper hand in such
calamities. As the rules suggested a range of such predicaments where responsibilities
of the shipping companies was limited.
8 Abid, Adeel, and Yusra Khalid. "Rule of Prescription Under Article III, Rule 6 of Hague/Hague-Visby
Rules: When Does the Clock of Limitation Start Ticking?." The Open Transportation Journal 14, no. 1
(2020).
9 Naidoo, Livashnee. "From the book of lading to blockchain bills of lading: dynamic merchant tradition
and private ordering." In Research Handbook on International Commercial Contracts. Edward Elgar
Publishing, 2020.