TRANSPORTATION OF GOODS Introduction –Conventions Hague Rules Air Carriage Marine Insurance

HAUGE RULES Approach –Differences Between the Rules –Elements of the Rules Coverage Under the Rules Seaworthiness Per Package Limitation Material Deviation Exemptions Misdelivery

Hague Rules Differences Among the Rules –Harter Act of 1893-prohibited carriers from eliminating liability for negligence. –Applies in US-port to port –Hague Rules-1924-basic rules under Carriage of Goods by Sea Convention –Hague Visby-limited liability significantly increased –Hamburg Rules-pro-shipper-broader exculpatory clauses and carrier limited liability automatically extended to servants and third party contractors

HAGUE RULES Coverage-COGSA only applies to shipments evidenced by bill of lading –Common Carrier or Charter Party –Bill of Lading must specify time-warehouse or marine extension –Himalaya Clause-extends protection third parties-servant, stevedores and marine terminal operators. Any Company working in conjunction with the common carrier hired to supervise the storage of the cargo. COGSA extends per package limitation of common carrier for $500 (Hague) to $1000 (Hague Visby) Limited Liability does not extend to losses due to no due diligence, material deviation or no fair opportunity to raise value above per package limitation

HAGUE RULES-COSGA Due Diligence in preparation and inspection of the ship in making ship seaworthy Ship used must be appropriate for the type of carriage Ship must be properly equipped for the reception, carriage and preservation of the goods. Common carrier must man the vessel with a competent crew properly trained to operate vessel Carrier must properly and carefully load, handle and stow goods

HAGUE RULES-COGSA Per Package Limitation-$500 per package or customary freight unit (cfu) –What is “package”? –Where mode of packaging conceals the identity of the goods being shipped »Open Goods-designation of the goods »Quantification-number of goods-each unit described on bill of lading »Must be clear is describing goods on bill of lading- ambiguity in favor of shipper »Hamburg Rule from warehouse to warehouse

HAGUE RULES-COGSA Per Package Limitation –Determination of Value Commodity Exchange Price Current Market Price Normal Value of Goods of the Same Kind and Quality

HAGUE RULES-COGSA Material Deviation –Above Deck Carriage Containerization permitted Bill of lading has incorporated clause paramount to address above deck containers –Unreasonable Route Change-carrier does not use customary route Defense is change due to emergencies

HAGUE RULES-COGSA COGSA EXEMPTIONS (17) –Neither the carrier nor the ship shall be responsible for loss or damage arising from: Neglect or default of master or employees in the navigation or in management of ship FireSeizures Perils of SeaQuarantine Act of GodAct or Omission by shipper Act of Public EnemiesStrikes

HAGUE RULES-COGSA EXEMPTIONS CONTINUED: Riots Saving Lives Defect in Goods Insufficiency of Packing Insufficiency of Marking Latent Defects Cause arising without actual fault or negligence of carrier

HAGUE RULES-COGSA EXEMPTIONS-CONTINUED –Q-Clause-grants the carrier a general exemption for any damages that arise from a cause that was not the “actual fault” of the carrier or those of the agents or servants of the carrier. –If the loss of damage was not cause by one of the enumerated exemption and is not susceptible to Q-clause the per package liability limitation applies.

HAGUE RULES Fair Opportunity to Raise Value of Shipment –Must give shipper opportunity to raise per package limitation –Insert provision on bill of lading Containerization –Multimodal Transportation-containers are not package. Units in Containers are package

HAGUE RULES Misdelivery of Goods –Presumption in favor of Shipper –Fraud in Documents Use International Chamber of Commerce- International Maritime Bureau Party delivering bill of lading provide a letter of indemnity or guarantee from commercial bank

WARSAW CONVENTION Freight Forwarders and Multi-modal Transportation Through Bill of Lading Air Way Transportation- Warsaw Convention –Similar to Hague Convention for Sea Transportation-due diligence, material deviation and per package limitation Two Year Statute of Limitation

MARINE INSURANCE Comprehensive Liability Coverage Provides Legal Services to Defend Comprehensive Marine Cargo Insurance –Causes of Loss-all risks clauses or perils only clauses –Amount of Coverage-percentage –Duration of Coverage-marine extension clauses

MARINE INSURANCE Marine Insurance –General Averages-when a portion of a ship’s cargo is sacrificed to save the rest from real or substantial peril, each owner of property saved contributes ratably to make up the loss of those whose property is sacrificed