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									                  Chapter 5
International Carriage of Goods by Sea

 §1 General Introduction of International
           Carriage of Goods

1. Definition of International Carriage of
The transportation of goods from one place of
one country to another place of another country
by one or more means is called international
carriage of goods.
2. Characteristics of International Carriage of

(1). The goods shall cross the border;

(2). Generally speaking, this kind of
transportation is done through contract of
international carriage of goods;
(3). A lot of risk accompanied;
(4). International treaties and conventions and
international trade customs are often applied to
regulate this kind of act;

The Hague Rules; The Hamburg Rules;

3. Varieties of international carriage of

Transportation by air; Transportation by sea;
Transportation by railroad;
Multi-modal transportation;
  §2 International Carriage of Goods
               by Sea
1. Definition and classification of international
carriage of goods by sea
1.1 definition:
The transportation of goods by sea from one port
of one country to another port of another country
is called international carriage of goods by sea.
1.2 classification:
Liner transport (carrier and shipper) and charter
transport (shipowner and charterer)
2. Two types of contract of carriage by sea:

contracts contained in a charterparty; and
contracts evidenced by a bill of lading.

2.1 Classification of the charterparty:

What is a charterparty? (charterer and shipowner)

the voyage charterparty,
The time charterparty,
and the charterparty by demise.
2.1.1 the voyage charterparty
Under the terms of voyage charterparty, the
shipowner will agrees to provide the ship and it
crew to the charter, and the charter will use the
ship and its crew to transport goods one or many
times within named ports according to agreement
between the charter and the shipowner.
So, in the voyage charterparty both the port of
loading and the port of discharge must be
mentioned clearly in the contract.
The Implied Terms of Voyage Charterparty:
The law implies the following term into every
voyage charter:

(1 ) that the ship is seaworthy;

(2) that it shall proceed with reasonable dispatch;

(3) and that there should be no unjustifiable
2.1.2 Time Charterparties

Under a time charterparty the charterer engages
the use of a vessel for a stated period of time. The
charterer normally pays "hire" monthly, and the
shipowner will be entitled to withdraw the ship
from the charterer's use if a monthly installment
is not paid promptly.

    The charterer has the right to direct the ship
to proceed to wherever it is needed. The only
limitation on this right is the charterer's promise
to engage only in lawful trades, to carry only
lawful goods, and to only direct the vessel to safe
2.1.3 Charterparties by Demise (Bare Boat

    Under this type of charterparty, the charterer

obtains possession and control of the ship and

puts in his own master and crew, who are his

2.2 Liner Transport
      The carrier transports the goods to the
agreed destination from the place of dispatch
port, and the shipper or the consignee pays the
fare or the freight. Under liner transport, the
carriage contract is evidenced by bill of lading, so
it is also called B/L transport.
Under Liner Transport:
The ship has regular sea route;
The ship sets off at regular time and stops at the
ports fixed in advance;
The shipper or the consignee has no right to
interfere things mentioned above;
Some definitions:
“carrier” means any person by whom or in whose
name a contract of carriage of goods by sea has
been concluded with a shipper.
“shipper” means any person by whom or in whose
name or on whose behalf a contract of carriage of
goods by sea has been concluded with a carrier,
or any person by whom or in whose name or on
whose behalf the goods are actually delivered to
the carrier in the relation to the contract of
carriage by sea.
“Consignee” means the person entitled to take
delivery of the goods.
3. Bills of Lading
According to Hamburg Rules:
Bill of lading means a document which evidences
a contract of carriage by sea and the taking over
or loading of the goods by the carrier, and by
which the carrier undertakes to deliver the goods
against surrender of the document.
Functions of bill of lading:

(a), Bill of lading is a document which evidences a
contract of carriage by sea between the carrier
and the shipper;

(b), Bill of lading" is a document which evidences
the taking over or loading of the goods by the

(c) Bill of lading is a document which represents
the possession of goods shipped;
3.1 Laws Concerning Bills of Lading

A. The Hague Rules

The Hague Rules (the International Convention
for the Unification of Certain Rules of Law
Relating to Bills of Lading). This is an
international regulation which aimed at
reconciling the interests of the shipowners, cargo
owners and insurers.

The Hague Rules attaches its importance on the
protection of the carriers’ interests.
B. The Hague-Visby Rules

Ever since the Hague Rules came into force, many
shippers especially smaller shippers from
developing countries began to complain the
Hague Rules about its excessive limitations to
carrier's liability. This resulted extensive revision
on the Hague Rules in l968, known as the Hague-
Visby Rules. Up till now, only a few countries
have adopted the Hague-Visby Rules.
C. The Hamburg Rules
The United Nations in 1978 completed drafting a
new Convention on the Carriage of the goods by
Sea, known as the Hamburg Rules. These rules
are different from the Hague Rules. They do not
relieve the carrier for errors in navigation or in
the management of the ship, and they make
ocean carriers liable for losses resulting from
negligence. They also make it easier for cargo
owners to win their cases against carriers.

The Hamburg Rules serve the interests of cargo
owners and shippers in developing countries that
do not have large carrier fleets. So many large
maritime states have not adopted the rules.
D. Maritime Code of the People's Republic
of China

     Maritime Code of the People's Republic of
China came into force on July 1, 1997. China
maritime code has transplanted into it a number
of important international conventions. Such as
Chapter IV (Contract of Carriage of Goods by Sea)
is based on the Hague-Visby Rules and the
Hamburg Rules, and Chapter X (General
Average) has adopted some rules from the York-
Antwerp Rules. Thus, China maritime code is one
of the best maritime laws in the world.
3.2 Characteristics of the Bills Of Lading

A. The Receipt Character

    The receipt which the carrier gives the
shipper may either acknowledge that he has
"shipped" the goods in a named ship, or it may
acknowledge that he has "received the goods for
shipment." The carrier can issue a "shipped" bill
only if he has actually loaded the goods on board
the vessel. Bills certifying that the goods have
been properly
loaded on board are known as clean bills.
If there is a discrepancy between the goods
loaded and the goods listed, the statement on the
bill is considered the most important evidence
that the goods were received in the condition
shown in any dispute between the shipper and
the carrier. Nevertheless, the carrier can rebut
this evidence by showing that the bill of lading is
false of has been altered.

From the point of view of the buyer, a "shipped"
bill of lading is more valuable than a "received for
shipment" bill of lading because, if he receives
the former type of bill, he knows that the goods is
in transit to their destination.
B. Evidence of the Contract of Carriage by

The contract of carriage by sea is normally
concluded before the carrier issues the bill of
lading. The contract is made when the goods are
accepted by agents of the carrier for loading. The
bill of lading, especially a shipped bill of lading is
issued only when the ship leaves port.
C. The Bill of Lading as a Document of Title

This is the most important characteristic of the
bill of lading. Its significance is that the carrier
need deliver the goods only if an original bill Of
lading is presented to him. The bill of lading is
thus "the key to the goods."

Exact meaning of “document of title"
According to Benjamin in his “Sale of Goods” that
there is no authoritative definition of "document
of title to goods" at common law, but it is
submitted that it means a document relating to
goods the transfer of which operates as a transfer
of the constructive possession of the goods.
3.3 Transfer of Property under A Bill of Lading
The transfer of the bill of lading does not mean
the transfer of the property in the goods in transit.
There are usually two ways to transfer the
property in the goods under a bill of lading.

1 The Intention of the Parties
The transfer of property is very important in
international trade, different nations have
different stipulations about this issue. Almost all
the unified international business laws have no
stipulations about this issue.

2. The Law of the Place Where the Goods Are
3.4 essential terms of B/L:
Article 73 of Maritime Code of the P.R.C.

A bill of lading shall contain the following

(1) Description of the goods, mark, number of
packages or pieces, weight or quantity, and a
statement, if applicable, as to the dangerous
nature of the goods;
(2) Name and principal place of business of the
(3) Name of the ship;
(4) Name of the shipper;
(5) Name of the consignee;
(6) Port of loading and the date on which the
goods were taken over by the carrier at the port
of loading;
(7) Port of discharge;

(8) Place where the goods were taken over and
the place where the goods are to be delivered in
case of a multimodal transport bill of lading;

(9) Date and place of issue of the bill of lading
and the number of originals issued;
(10) Payment of freight;

(11) Signature of the carrier or of a person acting
on his behalf.
3.5 the issuance of B/L:

3.5.1 the man who issue the B/L;

The carrier; his agent and the master;

3.5.2 place and date of issue of B/L;
Place: port where goods was loaded on the
Date: date when the good was loaded;

3.5.3 numbers of B/L issued;
3.6 classification of B/L:

3.6.1, shipped B/L and received for shipment B/L;

3.6.2, named B/L、open B/L and order B/L;

3.6.3, clean B/L and unclean B/L;

3.7 Carrier's Duties under A Bill of Lading

3.7.1 period of responsibility:
The responsibility of the carrier for the goods
covers the period during which the carrier is in
charge of the goods at the port of loading, during
the carriage and at the port of discharge.
In the following circumstances, the carrier is
deemed to be in charge of the goods:
(a) From the time he has taken over the goods;
(b) Until the time he has delivered the goods;

(1) By handing over the goods to the consignee;

(2) In cases where the consignee does not
receive the goods from the carrier, by placing
them at the disposal of the consignee in
accordance with the contract or with the law or
with the usage of the particular trade, applicable
at the port of discharge;

(3) By handing over the goods to an authority or
other third party to whom, pursuant to law or
regulations applicable at the port of discharge,
the goods must be handed over.
3.7.2 basis of liability
(1) The carrier is liable for loss resulting from loss
of or damage to the goods, as well as from delay
in delivery, if the occurrence which caused the
loss, damage or delay took place while the goods
were in his charge, unless the carrier proves that
he, his servants or agents took all measures that
could reasonably be required to avoid the
occurrence and its consequences.
(2) Delay in delivery occurs

(a) when the goods have not been delivered at
the port of discharge provided for in the contract
of carriage by sea within the time expressly
agreed upon or,

(b) in the absence of such agreement, within the
time which it would be reasonable to require of a
diligent carrier, having regard to the
circumstances of the case.
(3) The carrier is liable

(a) For loss of or damage to the goods or delay in
delivery caused by fire, if the claimant proves
that the fire arose from fault or neglect on the
part of the carrier, his servants or agents;

(b) For such loss, damage or delay in delivery
which is proved by the claimant to have resulted
from the fault or neglect of the carrier, his
servants or agents, in taking all measures that
could reasonably be required to put out the fire
and avoid or mitigate its consequence.
(4) The carrier is not liable, except in general
average, where loss, damage or delay in delivery
resulted from measures to save life or from
reasonable measures to save property at sea.

(5) Where fault or neglect on the part of the
carrier, his servants or agent combines with
another cause to produce loss, damage or delay
in delivery the carrier is liable only to the extent
that the loss, damage or delay in delivery is
attributable to such fault or neglect.
3.8 Carrier’s Immunities

See Page 165-166 for details.
4. Marine Cargo Insurance.

4.1 definition:

A contract of marine insurance is a contract
whereby the insurer undertakes, as agreed, to
indemnify the loss to the subject matter insured
and the liability of the insured caused by perils
covered by the insurance against the payment of
an insurance premium by the insured.
What is perils?
The covered perils mean any maritime perils
agreed upon between the insurer and the insured,
including perils occurring in inland rivers or on
land which is related to a maritime adventure.

4.2 essential terms of such contract:

A contract of marine insurance mainly includes:
(1)    Name of the insurer;

(2)   Name of the insured;

(3)   Subject matter insured;
(4)   Insured value;

(5)   Insured amount;

(6)   Perils insured against and perils excepted;

(7)   Duration of insurance coverage;

(8)   Insurance premium.
4.3 coverage of the marine cargo insurance:
Perils and losses
4.3.1 perils
In marine insurance, perils are generally of two

(1 ) Perils of the sea. This include natural
calamities and fortuitous accidents, such as
weather, thunder and lightning, tidal wave
earthquake, etc.
(2 ) Extraneous risks. This cover theft, rain,
shortage, leakage, breakage, dampness, etc. they
may include special risks, such as war risks,
strikes, non-delivery of cargo, refusal to receive
cargo, etc.
2. Losses
losses fall into two main classes: total loss and
partial loss.

(1 ) Total loss. This loss can either be actual total
loss where vessel or cargo are totally and
irretrievably lost, or constructive total loss in a
case where the ship or the goods have been
abandoned because the cost of salvage or
recovery would have been out of proportion to
the value.
(2) Partial loss. This means the loss to the goods
is on1y partial. In case of partial loss a fine
distinction is drawn between particular average
and general average.
What is General Average?
General average means the extraordinary
sacrifice or expenditure intentionally and
reasonably made or incurred for the common
safety for the purpose of preserving from peril
the ship, goods or other property involved in a
common maritime adventure.
What is particular average?

Particular average is a partial loss to the insured
cargo and the loss must be borne by the one who
was suffered.
4.4 insurance cover:

According to the stipulations of the People's
Insurance Company of China, the
following basic insurance covers are available in
marine insurance:

4.4.1. Free From Particular Average Insurance
Under FPA the insurance company will be
responsible to pay claims for:
(1) total losses during transportation suffered by
natural calamities;
(2) total or partial losses due to fortuitous
2. With Particular Average Insurance (WPA)

The cover of this insurance is more extensive. The
insurer is liable for:

(1) All FPA insurance;

(2) The partial losses of the insured goods due to
natural calamities mentioned under FPA
3. Ail Risks Insurance

under an "all risks" policy the goods are insured
against all risks, e. g. from natural calamities,
fortuitous accidents at Sea, or general extraneous
risks, irrespective of percentage of loss, total or

The following things are not covered:
(1) A natural deterioration of perishable goods,
delay, loss or damage caused by
inherent vice or nature of the subject matter;
(2) Exemptible issues expressly stipulated in the
insurance contract;

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