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Chapter7 Contract of Carriage of

Goods by Sea

Section 1 Introduction
Definition and Characteristics of Contract of
Carriage of Goods by Sea
( ) Definition
CMC Art.41 A contract of carriage of goods by sea is a contract
under which the carrier, against payment of freight, undertakes to
carry by sea the goods contracted for shipment by the shipper
from one port to another.

characterization

11
To set up
compulsary rules as
to minimum
obligations and
liabilities and
maximum of rights
and immunities of
carrier

22
Put restrictions on
freedom of contract
to secure the rights of
three party consignee
acting in good faith

1.contract in international carriage


The kinds of
contract
of carriage of
goods by sea

2. liner shipping/ tramp shipping

3.contract of affreightment
volume contract

The parties to the contract


Charter Party
ship-owner , charterer
Bill of Loading
carrier ,shipper

The Basic Rights and


Responsibilities of the Carrier

The
Basic
Rights
and
Responsi
bilities
of the
parties
2

The Basic Rights and


Responsibilities of the shipper

Responsibilities of the Carrier


1. to provide a ship and make it seaworthy
CMC Art.47 H.R. Art. 3(1) :
The carrier shall, before
and at the beginning of the
voyage, exercise due
diligence to make the ship
seaworthy, properly man,
equip and supply the ship and
to make the holds,
refrigerating and cool
chambers and all other parts
of the ship in which goods are
carried, fit and safe for their
reception, carriage and
preservation.

22
Responsibility
Responsibility to
to cargo
cargo
CMC Art.48 H.R. Art.3(2):
The carrier shall properly
and carefully load, handle,
stow, carry, keep, care for and
discharge the goods carried.

3.without
3.without unreasonable
unreasonable
deviation
deviation
CMC Art. 49
The carrier shall
carry the goods to
the port of discharge
on the agreed or
customary or
geographically
direct route.

Any deviation in
saving or attempting
to save life or property
at sea or any
reasonable deviation
shall not be
deemed to be an
act deviating
from the provisions of
the preceding
paragraph.

4 to reasonable dispatch 5 Liability to compensate damage


CMC Art.50 1

Delay in delivery
occurs when the
goods have
not been delivered
at the designated port
of discharge within
the time expressly
agreed upon.

CMCArt.46 1
During the period the
carrier is
in charge of the
goods, the carrier
shall be liable
for the loss
of or damage
to the goods, except
as otherwise provided
for in this Section.

Art.54

Where loss or damage or delay in delivery has occurred from causes


from which the carrier or his servant or agent is not entitled to
exoneration from liability, together with another cause, the carrier shall
be liable onlyto the extent that the loss, damage or delay in delivery is
attributable to the causes from which the carrier is not entitled to
exoneration from liability; however, the carrier shall bear the
burden of proof with respect to the loss, damage or delay
in delivery resulting from the other cause.

The basic rights of the


carrier
2

1
advance
freight/freight
prepaid

1.The right of
claims
for freight,
dead freight ,
demurrage and
other charges

freight to
collect/freight
payable at
destination

2.
2. Lien
Lien on
on cargo
cargo Art.87
Art.87 ,88
,88
If the freight, contribution in
general average, demurrage to be
paid to the carrier and other
necessary charges paid by the
carrier on behalf of the owner of
the goods as well as other
charges to be paid to the carrier
have not been paid in full, nor has
appropriate security been given,
the carrier may have a lien, to a
reasonable extent, on the goods.

IfIf the
fall short
such expenses,
theprovisions
carrier is entitled
to 87
claim
the
the proceeds
goods under
lien inofaccordance
with the
of Article
of this
The
proceeds
from theperishable
auction
salefrom
shallthe
beshipper,
used to pay
off thesuch
expenses
Where
thenot
goods
expenses
keeping
goods
difference
Code
have
beenare
taken
deliveryor
ofthe
within
60 daysforfrom
the next day
of the
for
the
storage
and
auction
sale
of
the
goods,
wouldarrival
exceedattheir
value,
the
carrier
may
apply
for
anapply
earlier
by auction.
ship's
the
port
of discharge,
the
carrier
may
to sale
the
court
for an
whereas
any
amount
in
surplus
shall
be
refunded
to
the
shipper.
the freight and other related charges to be paid to the carrier.
order on selling the goods by auction;

1 immunities
3. Rights of
CMC Art. 51
Hague Rules: Art.4(2).
The carrier shall not be liable for
the loss of or damage to the
goods occurred during the period
of carriers responsibility arising or
resulting from any of the following
causes:

(1)
Fault of the Master, crew members, pilot or servant of the carrier in
the navigation or management of the ship;

(2)
Fire, unless caused by the actual fault of the carrier;

(3)
Force majeure and perils, dangers and accidents of
the sea or other navigable waters;
(4)
War or armed conflict;

(5)
Act of the government or competent authorities, quarantine
restrictions or seizure under legal process;
(6)
Strikes, stoppages or restraint of labour;

(7)
Saving or attempting to save life or property at sea;
(8)
Act of the shipper, owner of the goods or their agents;

(9)
Nature or inherent vice of the goods;

(10)
Inadequacy of packing or insufficiency or illegibility of marks;

(11)
Latent defect of the ship not discoverable by due diligence;
(12)
Any other causes arising without the fault of the carrier
or his servant or agent.

4 Rights of Limitation of liability


1

CMC Art. 55
The amount of indemnity for the loss of the goods shall
CMC Art. 55
be calculated on the

basis ofCMC
the actual
Art. 55value of the goods
From the actual value referred to in the preceding paragraph, deduction shall
so
The
lost,
actual
while
value
that shall
for the
bedamage
the value
to of
thethe
goods
goods
shall
at
be made, at the time of compensation, of the expenses that had been reduced
be calculated
the time ofonshipment
the basisplus
of the
insurance
difference
andbetween
freight. the
or avoided as a result of the loss or damage occurred
values of the goods before and after the damage, or on the
basis of the expenses for the repair.

4 Rights of Limitation of liability

CMC
CMCArt.
Art.56
56
57
57
1.The
3.Where
2.Where
carrier's
the
a container,
article
liability
of transport
pallet
for theorloss
similar
is not
of orowned
article
damage
of
or transport
furnished
to the goods
isbyused
the
shall
carrier,
tobe
limited
such
4.The
5.Where
consolidate
article
liability
to the
anofgoods,
amount
loss
oftransport
the
of carrier
or
the
equivalent
damage
number
shall
forbe
the
to
to
of
deemed
the
economic
666.67
packages
goods
to
Units
be
losses
has
orone
of
other
occurred
Account
package
resulting
shipping
concurrently
per
or
from
units
package
onedelay
or
shipping
in
with
enumerated
delivery
other
the delay
shipping
unit.
of the
ininthe
delivery
goods
unit,
billor
ofshall
2thereof,
lading
Units
be as
limited
ofthe
Account
packed
limitation
to an
inper
amount
such
ofkilogramme
liability
article
equivalent
ofofthe
transport
of the
carrier
to gross
the
weight
freight
shall
shallbe
be
payable
ofthat
deemed
theas
goods
for
provided
to
the
lost
begoods
the
or
fordamaged,
number
insoparagraph
delayed.
of whichever
packages
1 of Article
is
or the
shipping
56higher,
of this
units.
except
Code.
If not
where
so enumerated,
the nature the
andgoods
value in
of such
the goods
articlehad
of transport
been declared
shall be
bydeemed
the
to
shipper
be one before
package
shipment
or one shipping
and inserted
unit. in the bill of lading, or where a
higher amount than the amount of limitation of liability set out in this
Article had been agreed upon between the carrier and the shipper.

( )Basic responsibilities of
shipper

(1)
Art.66
The shipper shall have the goods properly packed
The
carrier's
rightthe
to indemnification
as provided
and
shall
guarantee
accuracy of the description,
for
mark,
in the
number
preceding
of packages
paragraph
or pieces,
shall not
weight
affectorthe
quantity
of theofgoods
at theunder
time of
shipment
obligation
the carrier
the
contractand
of
Shall
indemnity
the towards
carrier against
any loss
carriage
of goods
those other
than
resulting from inadequacy of packing
shipper.
or inaccuracies in thethe
abovementioned
information.

(2)
Art.67
The shipper shall perform all necessary procedures
at
the
port, customs,
quarantine,
The
shipper
shall be liable
for anyinspection
damage toor
other
competent
authorities
with respect
the interest
of the
carrier resulting
from to
thethe
shipment of the goods and shall furnish to the
inadequacy or inaccuracy or delay in delivery
carrier all relevant documents concerning the
such
documents
.
proceduresofthe
shipper
has gone
through.

(3) Art.68
Art.307
Notwithstanding
thefails
carrier's
knowledge
of the
nature
Inthe
case
theofshipper
notify
the goods,
carrier
or
At
time
shipment
oftodangerous
thenotified
shipper
Him
inaccurately,
the
carrier
may
havetosuch
goods
ofshall,
the
dangerous
good
sand
his
consent
carry,
he may
in
compliance
with
the
regulations
governing
the
landed,
destroyed
or landed,
rendered
innocuous
when
and
still
have
such
goods
destroyed
or
rendered
carriage of such goods, have them properly packed,
Where circumstances so require, without
innocuous,
withoutand
compensation,
when
they
become
distinctly
marked
labeled
notify
the carrier
compensation.
The
shipperand
shall
be liable
to
the in
an actual
danger
toloss,
the ship,
the crew
and
other
persons
writing
of their
proper
description,
nature
and
the
carrier
for
any
damage
or expense
resulting
from such
shipment.
onprecautions
board
or to to
other
goods.
be taken.
..

(4) Art. 69
1

The shipper shall pay the


freight to the carrier as agreed.

The shipper and the carrier may


reach an agreement that the freight
shall be paid by the consignee.
However, such an agreement shall
be noted in the transport
documents.

(5)

Art. 70

Art.
66 67 68
.

The shipper shall not be liable for the


loss sustained by the carrier or the actual
carrier, or for the damage sustained by
the ship, unless such loss or damage was
caused by the fault of the shipper, his
servant or agent.
The servant or agent of the shipper shall
not be liable for the loss sustained by the
carrier or the actual carrier, or for the
damage sustained by the ship, unless the
loss or damage was caused by the fault of
the servant or agent of the shipper.

( )Cancellation of the contract of carriage of


goods by sea
1. /
(1)
(2)

CMC Art. 89
If the
goodsmay
have
alreadythe
been
loaded onofboard,
the
The
shipper
request
cancellation
the contract
shipper
shall
thebyexpenses
forthe
theship
loading
of carriage
of bear
goods
sea before
sailsand
from the
discharge
and other
related
charges.
port of loading.
However,
except
as otherwise provided for in
the contract, the shipper shall in this case pay half of the
agreed amount of freight;

2.
3. (frustration of contract) CMC Art.90 91
5

21
3

Either the carrier or the shipper may request the cancellation


If If
the
freight
hasthe
already
been of
paid,
shall be
refunded
deciding
discharge
theitissued,
goods,
Master
aIn
bill
of
lading
has
already
been
itthe
shall
be shall
of the
contract
and
neither
If,
due
to
force
majeure
or
any
other
causes
not
attributable
to theinform
shipper,
and,
if theorgoods
have
already
thethe
shipper
thethe
consignee
and been
shall take the
by
shipper
to
carrier.
shall bereturned
liable
to
the
other
if,
due
to
force
majeure
or ship
othercould
causes
to
the
fault
of
the
carrier
or
the
shipper,
the
not
loaded
on board,
theshipper
loading/discharge
expenses
interests
of the
or the consignee
into shall
notgoods
attributable
theoffault
discharge
at the to
port
destination as provided
be borne
by theitsshipper.
consideration.
of for
theincarrier
or the shipper,
the contract
could
not beprovides
the contract
of carriage,
unless the
contract
performed
to the to discharge the goods
otherwise, the Master
shallprior
be entitled
ship's
sailing
fromnear
its port
of loading.
at a safe
port
or place
the port
of destination and the
contract of carriage shall be deemed to have been fulfilled

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