Hague Rules. (See Appendix IX for text of the Hague Rules and Hague-Visby Rules amendments as implemented by the United Kingdom Carriage of Goods by Sea Act 1971.)
When cargo was received by a carrier, a bill of lading would be issued as a receipt for the goods. In the very early days of commerce and carriage of goods by sea, the document gradually began to include statements of the terms and conditions of the contract of carriage between the carrier/shipowner and the user of the ship. Originally the carrier was a “common carrier” and subject to very strict liability. There was no formal contract under which he could protect himself and exclude or limit his liability for loss or damage to or delay in delivery of the goods.
Gradually, however, parties to a contract began to enter into formal contracts and were being permitted to insert clauses benefiting one or other of the parties, depending on their bargaining strength. In contracts of carriage of goods by sea, the shipowners (usually in Europe) were generally more powerful than the cargo interests (especially in the newer countries, such as the United States, Australia and Canada) and eventually clauses appeared in the contracts for carriage of goods by sea which removed the carrier’s “common carrier” status and strict liability. Some carriers even attempted to exclude liability for their own negligence or that of their servants or agents. Bills of lading in which liability was excluded were also in danger of losing their value as transferable documents of title in international trade.
The legislators in some ship-using countries began to legislate to protect their own shippers’ interests. An early example was the United States Harter Act 1893 which was followed, in different ways, in other countries. The Harter Act 1893 possessed two main purposes: to prevent clauses in bills of lading relieving ship-owners from liability for consequences of negligence and to allow shipowners to exclude liability for errors in navigation or management of the vessel.
The Hague Rules were an attempt to reach agreement at an international level and followed the Harter Act closely. They were drafted by the Maritime Law Committee of the International Law Association at a meeting held in The Hague (Netherlands) in 1921 and were finally approved in Brussels (Belgium) in 1924. These rules define the minimum responsibilities and liabilities as well as the maximum tights and immunities of carriers.
The correct title of the “Hague Rules” is: “The International Convention for the Unification of Certain Rules of Law relating to Bills of Lading 1924” but the traditional, short name is used.
The principal obligations of carriers are to exercise due diligence before and at the beginning of the voyage to make the ship seaworthy, to properly man, equip and supply the ship and to make the ship fit and safe to receive, carry and take care of the cargo. Other obligations are to handle the cargo with care and to issue bills of lading showing the leading marks, the quantity of the goods and the apparent order and condition of the goods. The maximum rights and immunities are clearly defined in the Rules.
The main considerations which led to the introduction of the Rules and their incorporation into various national legislation, into bills of lading and also into charterparties, included the desirability of stopping the increasing tendency of carriers to contract out of their obligations by inclusion of unfair protective clauses. Another important consideration was that it was important to base conditions in contracts of carriage of goods by sea upon a code of rules adopted internationally having regard to the fact that parties interested in the carriage and transaction (shipowners, shippers, consignees, bankers, underwriters) may be of different nationalities. A uniform interpretation of the bill of lading terms in various countries is therefore essential.
The Hague Rules still applies, by domestic legislation, to bills of lading issued in some countries. However, the paramount clause in many charterparties and bills of lading incorporates the Hague Rules and also the later Hague-Visby Rules, depending on where the carriage takes place and where disputes are heard.