• Sunday, February 17, 2019

On-deck containers overboard: Can the carrier rely on Hague-Visby limitations? - Subscriber Access Only

By BCShippingNews 29 March 2017

Somewhat in keeping with the theme of this month’s issue, namely vessel safety, the Federal Court released a decision in January dealing with a loss of containers at sea and questions regarding application of the Hague-Visby Rules to on-deck carriage. The Hague-Visby Rules are enforced in Canada by virtue of the Marine Liability Act and establish a regime for the distribution of risks and responsibilities in the carriage of goods by sea between cargo owners and ocean carriers, and their servants and agents.

The Hague-Visby Rules apply to goods “of every kind whatsoever, except live animals and cargo which by the contract of carriage is stated as being carried on-deck and is so carried.” The allocation of risks set out by the Hague-Visby Rules did not seem appropriate to deck cargo and live animals reflecting their greater risks of damage at sea. However, it has been recognized in recent times that the exponential growth in the containerization of cargo and the use of modern container ships, where containers are stowed above and below deck, makes the exclusion of deck cargo under the Rules less appropriate.

A clean bill of lading implies a situation where the cargo owner is entitled to assume the goods are being carried under deck, and therefore protected with the Rules applying to them. In order for the Rules to be excluded from operation, two criteria are required: carriage on deck and contractual statement of this fact. Older cases — and the late professor William Tetley — asserted that the carrier cannot avail itself of the limitation of liability contained in the Rules if the carrier omitted to declare the on-deck stowage. More recently, English cases have held that, indeed, while on-deck carriage is a breach of the Rules, the defaulting carrier was nevertheless entitled to limit liability in accordance with the Rules.