The statutory charter party liability for damaged or delayed goods- Chapter 14 of the maritime code

Abstract

The industry of shipping reaches far back in time but the traditional view with a shipowner offering his services is a mere memory. Developing from one actor offering all services more and more players have taken a role in shipping and the new industry that we have seen develop over the last 150 years consists of several parties carrying out different functions. Someone does of course own the ship but this is no longer equal to being the party carrying out the transport. More likely, the shipowner is only a name on a paper unaware of the actual shipping involvements on a specific level. Irrespective of which one of these two extremes we are faced with one thing is sure; the functions relevant for shipping today differ from the traditional arrangements. A changing industry requires new tools in order to function efficiently. This concerns everything from communication, financial setups to legal solutions that are in line with the structure we see today. In this thesis the focus is on how the legal solutions can help the market or the industry to work as efficiently as possible and in order to do so it is important that the content is desirable seen from a practical perspective. Furthermore it is important that the desirable position is unambiguously expressed. This will be the main focus in the following discussion. Concerning trade in bulk, chartering is the reality of today. A carrier enters into a chartering agreement with a charterer. This chartering agreement can be based on transport between destinations, on a specific time or on another basis the parties find appropriate to fulfil their requirements. The point being that there are many different ways to organize your trade today but common to all of them is that they will in almost every case start with a charter party. There are numerous interesting legal issues in regard of charter parties and in this thesis only one of them will be assessed. This is the question of liability. When we have a chain of charter party relationships governed by different terms and transport document between the charterer and a receiver in the end, it follows from the very nature of these contractual relationships that the issue of liability is central and complex. Who are the liable parties in this structure? The starting point for chartering is that this is an area of freedom of contract . The rational for this being that the parties involved are professionals with insight in the industry . With this said the position evaluated in this thesis is the legal position under the maritime code. Apart from the contracts this is the main legal source and it supplements all different contracts when they are silent or unclear. Furthermore it stipulates mandatory rules for some transport . The liability under the maritime code concerning charter parties is regulated in chapter 14. Either the liability derives from the charter party or from a tramp bill of lading . These are the two main documents governing this kind of transport. The carrier can be liable as contractual carrier or as performing carrier depending on whether or not the relationship to the contractual party is directly contractual or based on performance. When the document governing the transport of goods is a charter party the liability of the carrier concerning damaged or delayed goods is regulated in section 347 and section 383. The rules relating to charter parties are materially the same for both time- and voyage chartering in the code. In the first subparagraph the carrier s liability towards the charterer is regulated. The carrier is defined as the person who, through a contract, charters out a ship to another (the charterer) . If the performing carrier is someone else than the carrier this party is caught by the reference to section 286 made in section 347 and 383 first subparagraph second sentence . The effect of the first section is in conclusion that the charterer has a claim for damaged or delayed cargo towards the carrier and the performing carrier, if this is not the same party. In the second subparagraph the carrier s and the performing carrier s liability towards a receiver who is not the charterer is regu-lated. When we have a bill of lading issued under a charter party, a tramp bill of lading, and this is endorsed to someone else than the charterer, this party s rights towards the issuer follow from the bill of lading. This is stipulated in section 325 in the maritime code. In order to establish the liability under a tramp bill of lading there are two main questions that has to be answered. First, when the carrier is bound by a tramp bill of lading. In this concern it is the distinction from liner trade that is important as the rules of presumption might result in different parties being bound by the master s signature. The evaluation depends on whether it is liner trade or chartering. Secondly, it is a question about the consequences when the carrier is bound. Or expressed in another way, the substance of the liability. In this thesis these rules will be evaluated from a practical basis according to the commercial patterns in the shipping industry. Who is the carrier under different aspects and more importantly, is the legal position of today also the desirable one seen from a practical perspective? By this I mean that if eth liability following from statute is in line with the structure we see under different charter parties. Is it reasonable that the targeted party under the code is held liable when looking at the contractual or actual functions undertaken?