Main Aim(s) of the Unit

This unit will establish a clear understanding of the key national and international legal issues as they relate to the operations of shipping companies

Main Topics of Study

Introduction

• The charterparty
• The bill of lading contract
• Charterers’ bills of lading
• The demise charterparty

Implied obligations in a contract of affreightment

The undertaking as to seaworthiness

• Nature of the obligation
• Incidence of obligation
• Burden of proof
• Effect of breach

Obligation for reasonable dispatch

• Effect of breach

Obligation not to deviate from the agreed route

• Justifiable deviations
• Liberty clauses
• The effect of breach

The obligation to nominate a safe port

• The period covered by the warranty
• The nature of the risks covered
• The nature of the undertaking-remedies available for breach
• The scope of the undertaking

The obligation not to ship dangerous goods

• Meaning of dangerous goods
• Nature of liability
• Liability under the Hague/Visby Rules
• Statutory regulation

The effect of frustration

• Types of frustration
• Factors to be taken into consideration
• Effect of frustration

 

The voyage charterparty

An overview of the charter

• Introductory clauses
• Cargo clauses
• Freight clauses
• Laytime provisions
• Other clauses
• Performance of the charterparty

The arrived ship

• Charterparty provisions shifting risk of delay
• Readiness to load or discharge

The preliminary voyage

• Nomination of port of lading
• Or so near there to as she may safely get
• The voyage to the loading port

The loading operation

• Division of responsibility
• Provision of cargo
• Laytime
• Demurrage and damages for detention

The carrying voyage

The discharging operation

• Delivery

 

The time charterparty

General legal overview

• Clause describing vessel
• The charter period
• Off-hire
• Payment of hire -right to withdraw for non-payment
• Employment and indemnity clause
• Return to the vessel

Description of the vessel

Period of hire

• Specific clauses
• Effect of overlap

Payment for hire

• Payment in cash
• Payment in advance

The off-hire clause

• Period of off-hire
• Effects of the operation of the off-hire clause

 Deductions from hire

Right to withdraw vessel for non-payment of hire

• Requirements for exercise of right of withdrawal
• Waiver of right to withdraw
• Possible bars to exercise of the right of withdrawal
• Effect of exercise of right to withdraw

Employment and agency clause

Redelivery of the vessel

 

Bills of lading and their functions 

Historical introduction

Functions of a bill of lading

• As receipt for goods shipped
• As evidence of the contract of carriage
• As a document of title

Bills of lading and third parties

• Liability in tort
• Third party reliance on bill of lading terms

Presentation of a bill of lading

Problems in presentation

• Short form bill of lading
• The waybill
• The straight bill of lading
• The registry system
• A possible practical solution

Electronic bills of lading

• Atlantic Container Line datafreight system
• Electronic data exchange systems
• Bolero

Switch bills

 

Application of the Hague/Visby Rules

Application of the Rules

• Types of carriage covered by the Rules
• The cargoes excluded
• Period of coverage of the Rules

Legal effect of the Rules

Basic provisions of the Hague/Visby Rules

• Duties of the carrier
• Rights and immunities of the carrier
• Other provisions

Incorporation of the Hague /Visby Rules in charterparties

• Effect of incorporation

 

Bills of lading – Hamburg Rules

• Introduction
• Scope of application of the Rules
• Basic carrier liability
• Limitation of liability
• Loss of right to limit liability
• Other provisions
• Prospects for adoption of the Hamburg Rules
• Later developments
• The CMI/UNCITRAL project

 

Bills of lading issued under charterparties

• Where bill of lading issued to charterer
• Where bill issued to third- party shipper
• Who is the carrier?
• What are the terms of the contract?
• Where bills indorsed by charterer to a third party
• Shipowner’s recourse against charterer

 

Problems of combined transport  

The liability of the carrier

• Locating damage or loss
• Limitation of liability
• Claims in tort
• Combined transport and documentary and credits
• Effect of transhipment
• Transhipment and documentary credits
• Multimodal Convention 1980

 

Exceptions

Common law exceptions  

• Act of god
• Act of the Queen’s enemies
• Inherent vice

Contractual exceptions

• Perils of the sea
• Restraint of princes
• Strikes or lockouts
• Defective packing

The Hague/Visby exceptions

• Act, neglect, or default of the master, mariner, pilot or the servants of the carrier in the navigation or in the management of the ship
• Fire, unless caused by the actual fault or privity of the carrier
• The catch -all exception

Bars to the exceptions

• Negligence
• Unseaworthiness
• Fundamental breach

 

Limitation of liability

Merchant Shipping Act 1995

• Parties covered
• Types of claim covered
• Limitation amount
• Breaking the limits

 

Freight

The basic obligation

• Calculation of freight
• Deductions from freight
• The effect of deviation

Advance freight

Specialised types of freight

• Lump sum freight
• Pro rata freight
• Back freight
• Dead freight

Payment of freight

• Party from whom freight due
• Party from whom freight payable

 

Shipowners’s liens

Liens at common law

• Requirements for the exercise of the common law lien for freight

Express contractual liens

• Characteristic of contractual lien

 

Dispute settlement

Problems of conflicts of laws

• Jurisdiction of the English courts
• Choice of forum
• Choice of law clause

Security for claims

• The action in rem
• The freezing injunction

Arbitration

• The Arbitration Act 1996
• Basic principles
• Types of arbitration
• Commencement of arbitration
• Appeal from arbitration award
• Other challenges to an award
• Control by the court of arbitration proceedings
• Enforcement of arbitration awards

 

Breach of contract

Forms of breach

• Anticipatory breach

The effects of breach

• Conditions and warranties
• Intermediate terms
• The effects of a repudiatory breach

The action for damages

• Remoteness of damage
• Measure of damages
• Other relevant considerations in assessing damages

Remedies other than remedies

• Specific performance
• Injunction

 

Learning Outcomes for the Unit

 Upon successful completion of the course students will be able to:

1. Understand the key principles of law as they apply to shipping operations
2. Explain the type of contracts used in the transport of goods
3. Discuss how breaches of contract can be handled and how disputes may be  settled
4. Understand the role of agents and advise on the different type of agency agreements
5. Appreciate the legal issues associated with time charterparties and voyage charterparties         

Learning and teaching methods/strategies used to enable the achievement of learning outcomes:

Learning takes place on a number of levels through lectures, class discussion including problem review and analysis.  Formal lectures provide a foundation of information on which the student builds through directed learning and self managed learning outside of the class.  The students are actively encouraged to form study groups to discuss course material which fosters a greater depth learning experience.

Assessment methods which enable student to demonstrate the learning outcomes for the Unit:

Examination                100%

Indicative Reading for this Unit:

Main Text:

Carriage of Goods by Sea – J F Wilson (Pitman)

Alternative Text and further reading:  

Shipping Law – S. Baughen (Cavendish)

Business and Law for the Mariner – Capt. I. Salter Master Mariner (Brown, Son and Ferguson)

 

Guideline for Teaching and learning time (10 hours per credit)

50 hours Lectures / Seminars / Tutorials / Workshops:
Tutorial support includes feedback on assignments and may vary by college according to local needs and wishes.

50 hours Directed learning:
Advance reading and preparation / Class preparation / Background reading / Group study / Portfolio / Diary etc

100 hours Self managed learning:
Working through the course text and completing assignments as required will take up the bulk of the learning time. In addition students are expected to engage with the tutor and other students and to undertake further reading using the web and/or libraries.