In the commercial life of any country, the need for carrying

goods from one place to another cannot be overemphasised. Also,

goods are to be moved from one country to another. For these
purposes, a contract of carriage is to be entered into. The persons,
organizations or associations which carry goods are known as
carriers. Goods may be carried by land (including inland waterways),
sea or air. Accordingly, the law relating to carrying of goods is
contained in the following enactment.

1. In case of carriage of goods by land: (i)

The Carriers Act, 1865. (ii) The Railways Act, 1989.
2. In case of carriage of goods by sea: (i)
The (Indian) Bills of Landing Act, 1856. (ii) The Carriage of Goods
by Sea Act, 1925. (iii) The Merchant Shipping Act, 1958. (iv) The
Marine Insurance Act, 1963.
3. In the case of carriage of Goods by Air: The
Carriage by Air Act, 1972.
 The United Nations Convention on the Carriage of Goods by
Sea, 1978 (Hamburg) (hereinafter referred to as the "Hamburg
Rules") was adopted on 31 March 1978 by a diplomatic conference
convened by the General Assembly of the United Nations at
Hamburg, Federal Republic of Germany. The Convention is based
upon a draft prepared by the United Nations Commission on
International Trade Law (UNCITRAL).

The Hamburg Rules establish a uniform legal regime

governing the rights and obligations of spippers, carriers and
consignees under a contract of carriage of goods by sea. Their
central focus is the liability of a carrier for loss of and damage to the
goods and for delay in delivery.
 The Convention entered into force on 1 November 1992 for
the following twenty States: Barbados, Botswana, Burkina Faso,
Chile, Egypt, Guinea, Hungary, Kenya, Lebanon, Lesotho, Malawi,
Morocco, Nigeria, Romania, Senegal, Sierra
Leone, Tunisia, Uganda, United Republic of Tanzania, and Zambia.
As of 1 August 1994, an additional two States, Austria and
Cameroon, had become party to the Convention.

BACKGROUND TO THE HAMBURG RULES

The Hamburg Rules are the result of a movement to establish
a modem and uniform international legal regime to govern the
carriage of goods by sea. For many years, a large proportion of the
carriage of goods by sea has been governed by a legal regime centred
around the International Convention relating to the Unification of
Certain Rules relating to Bills of Lading, adopted on 25 August 1924
at Brussels, otherwise known as the "Hague Rules".
 The Hague Rules establish a mandatory legal regime
governing the liability of a carrier for loss of or damage to goods
carried under a bill of lading. They cover the period from the time
the goods are loaded onto the ship until the time they are discharged.

The Hague Rules have been amended twice since their

adoption, first in 1968 (by means of a protocol hereinafter referred to
as the "Visby Protocol") and again in 1979 (by means of a protocol
hereinafter referred to as the "1979 Additional Protocol"). These
amendments deal mainly with the financial limits of liability under
the Hague Rules. They do not alter the basic liability regime of the
Hague Rules or the allocation of risks effected by it.
 Dissatisfaction with the Hague Rules system
There emerged over the course of time increasing
dissatisfaction with the Hague Rules system. This dissatisfaction was
based in part upon the perception that the overall allocation of
responsibilities and risks achieved by the Hague Rules, which heavily
favoured carriers at the expense of shippers, was inequitable.

Several provisions of the Hague Rules were regarded as

ambiguous and uncertain, which was said to result in higher
transportation costs and to add further to the risks borne by shippers.
The dissatisfaction with the Hague Rules was also based upon the
perception that developments in conditions, technologies and
practices relating to shipping had rendered inappropriate many
features of the Hague Rules that may have been appropriate in 1924.
 Steps towards revising the law governing
the carriage of goods by sea
The question of revising the law governing the carriage of goods
by sea was first raised by the delegation of Chile at the first session of
UNCITRAL in 1968. Shortly afterwards, the General Assembly
recommended that UNCITRAL should consider including the question
among the priority topics in its programme of work. UNCITRAL did so at
its second session in 1969.

At about the same time, the law relating to bills of lading and the
carriage of goods by sea had come under study within a working group of
the United Nations Conference on Trade and Development (UNCTAD).
The Working Group concluded that the rules and practices concerning bills
of lading, including those contained in the Hague Rules and the Hague
Rules as amended by the Visby Protocol, should be examined and, where
appropriate, revised and amplified and that a new international convention
should be prepared.
 The objective of that work would be to remove the existing
uncertainties and ambiguities in the existing law and to establish a
balanced allocation of responsibilities and risks between cargo
interests and the carriers. The Working Group recommended that the
work be undertaken by UNCITRAL. In 1971, UNCITRAL decided
to proceed accordingly.

By 1976, UNCITRAL had finalized and approved the text of

a draft Convention on the Carriage of Goods by Sea. Thereafter, the
General Assembly convened the diplomatic conference at Hamburg,
which adopted the Hamburg Rules in 1978.
 SALIENT FEATURES OF THE HAMBURG RULES
Scope of Application
In order to achieve international uniformity in the law
relating to the carriage of goods by sea, the Hamburg Rules have
been given a relatively wide scope of application-substantially
wider than that of the Hague Rules.

The Hamburg Rules are applicable to all contracts for the

carriage of goods by sea between two different States if, according
to the contract, either the port of loading or the port of discharge is
located in a Contracting State, if the goods are discharged at an
optional port of discharge stipulated in the contract and that port is
located in a Contracting State, or if the bill of lading or other
document evidencing the contract is issued in a Contracting State.
 In addition to those cases, the Hamburg Rules apply if the bill
of lading or other document evidencing the contract of carriage
provides that the rules are to apply. The application of the Rules does
not depend upon the nationality of the ship, the carrier, the shipper,
the consignee or any other interested person.
The Hamburg Rules do not apply to charter-parties. However,
they apply to bills of lading issued pursuant to charter-parties if the
bill of lading governs the relation between the carrier and a holder of
the bill of lading who is not the charterer.
Unlike the Hague Rules, which apply only when a bill of
lading is issued by the carrier, the Hamburg Rules govern the rights
and obligations of the parties to a contract of carriage regardless of
whether or not a bill of lading has been issued. This is becoming
increasingly important as more and more goods are carried under
non-negotiable transport documents, rather than under bills of lading.
Period of Responsibility
The Hague Rules cover only the period from the time the
goods are loaded onto the ship until the time they are discharged
from it. They do not cover loss or damage occurring while the goods
are in the custody of the carrier prior to loading or after discharge.

In modem shipping practice carriers often take and retain

custody of goods in port before and after the actual sea carriage. It
has been estimated that most loss and damage to goods occurs while
the goods are in port. In order to ensure that such loss or damage is
the responsibility of the party who is in control of the goods and
thereby best able to guard against that loss or damage, the Hamburg
Rules apply to the entire period the carrier is in charge of the goods
at the port of loading, during the carriage and at the port of
discharge.
Basis of carrier's liability
The basis of the carrier's liability under the Hague Rules
system was one of the principal concerns of the movement for
reform that eventually resulted in the Hamburg Rules. While the
Hague Rules provide that the carrier is liable for loss or damage
resulting from his failure to exercise due diligence to make the ship
seaworthy, to properly man, equip and supply the ship or to make its
storage areas fit and safe for the carriage of goods, a long list of
circumstances exempts the carrier from this liability.
These provisions are based upon exemption clauses that
commonly appeared in bills of lading when the Hague Rules were
adopted in the early 1920's. Perhaps the most significant of these
exemptions frees the carrier from liability if the loss or damage
arises from the faulty navigation or management of the ship, the
socalled "nautical fault" exception. As a result of these exemptions,
the shipper bears a heavy portion of the risk of loss of or damage to
his goods.
 The original justifications for this liability scheme, and in
particular the nautical fault exception, were the inability of the
shipowner to communicate with and exercise effective control over
his vessel and crew during long voyages at sea, and the traditional
concept of an ocean voyage as a joint adventure of the carrier and the
owner of the goods.

The Hamburg Rules effect a more balanced & equitable

allocation of risks & responsibilities between carriers & shippers.
Liability is based on the principle of presumed fault or neglect. That
is, the carrier is liable if the occurrence that caused the loss, damage
or delay took place while the goods were in his charge, & be may
escape liability only if he proves that he, his servants or agents took
all measures that could reasonably be required to avoid the
occurrence and its consequences.
Deck Cargo
Sea cargo carried on deck was traditionally subject to high risk of
loss or damage from the elements or other causes. For this reason the
Hague Rules do not cover goods carried on deck by agreement of the
parties, permitting the carrier to disclaim all liability for such cargo.
The Hamburg Rules take these developments into account. Firstly,
they expressly permit the carrier to carry goods on deck not only if the
shipper so agrees, but also when such carriage is in accordance with the
usage of the particular trade or if it is required by law.
Secondly, they hold the carrier liable on the basis of presumed
fault or neglect for loss, damage or delay in respect of goods that he is
permitted to carry on deck. If he carries goods on deck without being
permitted to do so, he is made liable for loss, damage or delay resulting
solely from the carriage on deck, without being able to exclude that
liability by proving that reasonable measures were taken to avoid the loss,
damage or delay.
Liability for delay
Historically, sea voyages were subject to innumerable
uncontrollable hazards, which frequently resulted in delays and deviations.
Because of this unpredictability, the Hague Rules do not cover the liability
of the carrier for delay in delivery.
The Hamburg Rules govern the liability of the carrier for delay in
delivery in the same manner as liability for loss of or damage to the goods,
i.e., in accordance with the principle of presumed fault or neglect.

Financial limits of liability

The Hamburg Rules limit the liability of the carrier for loss of or
damage to the goods to an amount equal to 835 units of account per
package or other shipping unit, or 2.5 units of account per kilogram of
gross weight of the goods lost or damaged, whichever is the higher. The
carrier and the shipper can agree to limits higher than those, but not to
lower limits.
Rights of carrier's servants and agents
If a servant or agent of the carrier proves that he acted within
the scope of his employment, he is entitled to avail himself of the
defences and limits of liability that the carrier is entitled to invoke
under the Hamburg Rules.

Loss of benefit of limits of liability

A carrier loses the benefit of the limits of liability if it is
proved that the loss, damage or delay resulted from an act or
omission of the carrier done with intent to cause the loss, damage or
delay, or recklessly and with knowledge that the loss, damage or
delay would probably result. A servant or agent of the carrier loses
the benefit of the limits of liability in the event of such conduct on his
part.
 Liability of the carrier and actual carrier;
through carriage
A carrier may enter into a contract of carriage by sea with a
shipper but entrust the carriage, or a part of it, to another carrier. The
contracting carrier in such cases often includes in the bill of lading a
clause that exempts him from liability for loss or damage attributable
to the actual carrier.

Shippers face difficulties in legal systems that uphold those

exemption clauses because they have to seek compensation from the
actual carrier; that carrier might be unknown to the shipper, might
have effectively restricted or excluded his liability or might not be
subject to suit by the shipper in an appropriate jurisdiction. The
Hague Rules do not deal with the liability of the actual carrier.
 The Hamburg Rules balance the interests of shippers and carriers
in such cases. They enable the contracting carrier to exempt himself from
liability for loss, damage or delay attributable to an actual carrier only if
the contract of carriage specifies the part of carriage entrusted to the actual
carrier and names the actual carrier.

Liability of the shipper

Under the Hamburg Rules a shipper is liable for loss sustained by
the carrier or the actual carrier, or for damage sustained by the ship, only if
the loss or damage was caused by the fault or neglect of the shipper, his
servants or agents.

Particular obligations are imposed upon the shipper with respect to

dangerous goods. He is obligated to mark or label the goods in a suitable
manner and, where he hands over dangerous goods to a carrier, he must
inform the carrier of their dangerous character and, if necessary, of the
precautions to be taken.
 Transport documents
(a) Bills of Lading
Under both the Hague Rules and the Hamburg Rules, the
carrier must issue a bill of lading if the shipper requests one.
The Hamburg Rules itemize the types of information
required to be set forth in the bill of lading. Among other things,
these include the general nature of the goods, the number of
packages or pieces, their weight or quantity, and their apparent
condition.
Under the Hamburg Rules the absence of one of the required
particulars does not affect the legal character of the document as a
bill of lading.
Under the Hamburg Rules as well as the Hague Rules, the
information set forth in the bill of lading is prima facie evidence of
the taking over or loading by the carrier of the goods as so
described.
 If the carrier knows or reasonably suspects that information in the
bill of lading concerning the general nature of the goods, the number of
packages or pieces, or their weight or quantity, is not accurate, or if he had
no reasonable means of checking that information, he may, under the
Hamburg Rules, insert in the bill of lading a reservation specifying the
inaccuracies, grounds of suspicion or the absence of reasonable means of
checking.
The prima facie or conclusive evidentiary effect of the bill of
lading is not applicable in respect of such information. These provisions
are more explicit than comparable provisions of the Hague Rules.
Sometimes, a shipper asks the carrier to issue a "clean" bill of
lading (i.e., without inserting a reservation) even though the carrier may
have grounds to question the accuracy of information supplied by the
shipper for insertion in the bill of lading or may have no reasonable means
of checking the information, or may have discovered defects in the
condition of the goods.
(b) Other transport documents
There is a growing practice in maritime transport for carriers to
issue nonnegotiable transport documents, such as sea waybills, rather than
bills of lading. Although non-negotiable documents have been used in
certain trades for some time, the use of such documents is spreading to
other trades. Non-negotiable documents avoid certain problems that have
arisen in connection with the use of bills of lading, such as the arrival of
the goods at their destination before the bill of lading reaches the
consignee.

The Hamburg Rules accommodate these developments firstly, by

applying to contracts for carriage of goods by sea regardless of whether or
not a bill of lading is issued, and secondly, by providing that a transport
document issued by the carrier, which is not a bill of lading, is
nevertheless prima facie evidence of the conclusion of the contract of
carriage by sea and of the taking over of the goods by the carrier as
described in the document.
 Since the Hague Rules apply only when a bill of lading has
been issued, they do not deal with other types of transport
documents.

Claims and Actions

The Hamburg Rules contain provisions governing judicial as
well as arbitral proceedings brought under the Rules. They expressly
permit the parties to agree to submit their disputes under the
Convention to arbitration. This is important because some legal
systems preclude the settlement by arbitration of disputes relating to
the carriage of goods by sea.

(a) Limitation of actions

A claim under the Hamburg Rules must be brought in
judicial or arbitral proceedings within a two-year limitation period.
The period may be extended by the party against whom the claim is
made.
 Under the Hague Rules suit must be brought within one year.
The Hamburg Rules further provide that a party held liable under
the Hamburg Rules has an additional period of time after the
expiration of the two year period to institute an action for indemnity
against another party who may be liable to him. Comparable
provisions are not contained in the Hague Rules, but were added by
the Visby Protocol.

(b) Jurisdiction
The Hamburg Rules require judicial or arbitral proceedings
to be brought in one of the places specified in the Rules. The
specified places are broad enough to meet the practical needs of the
claimant.
Selected provisions
The Hamburg Rules are mandatory in the sense that the
parties to a contract of carriage by sea may not by agreement reduce
the carrier's responsibilities and obligations under the Rules.
However, those responsibilities and obligations may be increased.

Other provisions of the Hamburg Rules pertain to the

relationship between the Rules and the law of general average and
other international conventions. Upon becoming a party to the
Hamburg Rules, a State that is a party to the Hague Rules or the
Hague Rules as amended by the Visby Protocol must denounce
them. Under certain conditions the denunciation may be deferred for
a period of up to five years.
UNIFORMITY OF LAW
The Hamburg Rules offer the potential of achieving greater
uniformity in the law relating to the carriage of goods by sea than do
the Hague Rules. Firstly, since the Hague Rules apply only when a
bill of lading is issued, the significant and growing portion of
maritime transport in which bills of lading are not issued is not
covered by them.

Secondly, even when the Hague Rules do apply, many

aspects of the rights and obligations of the parties to a contract of
carriage are not dealt with. A question or issue that is not covered by
the Hague Rules will be resolved by rules of national law, which
often produce disparate solutions, or by clauses in bills of lading,
which may unfairly favour one of the parties and which may be
given effect to differing degrees in national legal systems.
 The Hamburg Rules, by comparison, deal much more
comprehensively with the rights and obligations of the parties to a
contract of carriage. In order to achieve their potential for
uniformity of law in this area, they must be adhered to by States
worldwide.