Peter Jiang, C&M Law Offices, Beijing, China

Hague Rules 1924 is my favourite international convention on shipping that I have devoted my time ever since 1979 when I was a student at the Shanghai Maritime College, which is renamed Shanghai Maritime University. I only knew the name and main points of the rules at that time but not in detail in its nice wording and deep thinking behind it. I began studying on it when I was assigned in 1983 to the China Maritime Arbitration Commission to take care of arbitration procedures and drafting the arbitration awards for arbitrators, and since, especially, the China Maritime Code was promulgated in 1992 and with effect on the 1st July 1993.

I began joyful reading it only since 2012, 4 years after Rotterdam Rules were published in 2008, which had caused a huge criticism from around the world, especially from Professor William Tetley, Canada, who wrote a number of articles against it that impressed me deeply and encouraged me to start a thorough study on all international rules concerning international carriage of goods, especially on the bill of lading, including the English laws, the US laws and the China Maritime Code, of course. Those international rules are: the Hague Rules and the Hague Wisby Rules, the Hamburger Rules, the United Nations Convention on International Multimodal Transport of Goods, 1980, and the Rotterdam Rules. By comparison, I quote those following wordings for international studies on the drafting skills behind it, which is self-explanatory:

Hague Rules:

Article 1

In this Convention the following words are employed with the meanings set out below:

(a) "Carrier" includes the owner or the charterer who enters into a contract of carriage with a shipper.

(b) "Contract of carriage" applies only to contracts of carriage covered by a bill of lading or any similar document of title, in so far as such document relates to the carriage of goods by sea, including any bill of lading or any similar document as aforesaid issued under or pursuant to a charter party from the moment at which such bill of lading or similar document of title regulates the relations between a carrier and a holder of the same.

PJ’s note: “Covered” means to contain or evidence of a contract according to the English law interpretation.

The Hamberg Rules:

Article 1

Definitions

In this Convention:

1. "Carrier" means any person by whom or in whose name a contract of carriage of goods by sea has been concluded with a shipper.

2. "Actual carrier" means any person to whom the performance of the carriage of the goods, or of part of the carriage, has been entrusted by the carrier, and includes any other person to whom such performance has been entrusted.

…

6. "Contract of carriage by sea" means any contract whereby the carrier undertakes against payment of freight to carry goods by sea from one port to another; however, a contract which involves carriage by sea and also carriage by some other means is deemed to be a contract of carriage by sea for the purposes of this Convention only in so far as it relates to the carriage by sea.

7. "Bill of lading" means a document which evidences a contract of carriage by sea and the taking over or loading of the goods by the carrier, and by which the carrier undertakes to deliver the goods against surrender of the document. A provision in the document that the goods are to be delivered to the order of a named person, or to order, or to bearer, constitutes such an undertaking.

The Rotterdam Rules:

Article 1

Definitions

For the purposes of this Convention:

1. “Contract of carriage” means a contract in which a carrier, against the payment of freight, undertakes to carry goods from one place to another. The contract shall provide for carriage by sea and may provide for carriage by other modes of transport in addition to the sea carriage.

2. “Volume contract” means a contract of carriage that provides for the carriage of a specified quantity of goods in a series of shipments during an agreed period of time. The specification of the quantity may include a minimum, a maximum or a certain range.

3. “Liner transportation” means a transportation service that is offered to the public through publication or similar means and includes transportation by ships operating on a regular schedule between pecified ports in accordance with publicly available timetables of sailing dates.

4. “Non-liner transportation” means any transportation that is not liner transportation.

5. “Carrier” means a person that enters into a contract of carriage with a shipper.

6. (a) “Performing party” means a person other than the carrier that performs or undertakes to perform any of the carrier’s obligations under a contract of carriage with respect to the receipt, loading, handling, stowage, carriage, care, unloading or delivery of the goods, to the extent that such person acts, either directly or indirectly, at the carrier’s request or under the carrier’s supervision or control.

(b) “Performing party” does not include any person that is retained, directly or indirectly, by a shipper, by a documentary shipper, by the controlling party or by the consignee instead of by the carrier.

7. “Maritime performing party” means a performing party to the extent that it performs or undertakes to perform any of the carrier’s obligations during the period between the arrival of the goods at the port of loading of a ship and their departure from the port of discharge of a ship. An inland carrier is a maritime performing party only if it performs or undertakes to perform its services exclusively within a port area.

8. “Shipper” means a person that enters into a contract of carriage with a carrier.

9. “Documentary shipper” means a person, other than the shipper, that accepts to be named as “shipper” in the transport document or electronic transport record.

10. “Holder” means:

(a) A person that is in possession of a negotiable transport document; and (i) if the document is an order document, is identified in it as the shipper or the consignee, or is the person to which the document is duly endorsed; or (ii) if the document is a blank endorsed order document or bearer document, is the bearer thereof; or

(b) The person to which a negotiable electronic transport record has been issued or transferred in accordance with the procedures referred to in article 9, paragraph 1.

11. “Consignee” means a person entitled to delivery of the goods under a contract of carriage or a transport document or electronic transport record.

12. “Right of control” of the goods means the right under the contract of carriage to give the carrier instructions in respect of the goods in accordance with chapter 10.

13. “Controlling party” means the person that pursuant to article 51 is entitled to exercise the right of control.

14. “Transport document” means a document issued under a contract of carriage by the carrier that:

(a) Evidences the carrier’s or a performing party’s receipt of goods under a contract of carriage; and

(b) Evidences or contains a contract of carriage.

15. “Negotiable transport document” means a transport document that indicates, by wording such as “to order” or “negotiable” or other appropriate wording recognized as having the same effect by the law applicable to the document, that the goods have been consigned to the order of the shipper, to the order of the consignee, or to bearer, and is not explicitly stated as being “non-negotiable” or “not negotiable”.

16. “Non-negotiable transport document” means a transport document that is not a negotiable transport document.

17. “Electronic communication” means information generated, sent, received or stored by electronic, optical, digital or similar means with the result that the information communicated is accessible so as to be usable for subsequent reference.

18. “Electronic transport record” means information in one or more messages issued by electronic communication under a contract of carriage by a carrier, including information logically associated with the electronic transport record by attachments or otherwise linked to the electronic transport record contemporaneously with or subsequent to its issue by the carrier, so as to become part of the electronic transport record, that:

(a) Evidences the carrier’s or a performing party’s receipt of goods under a contract of carriage; and

(b) Evidences or contains a contract of carriage.

19. “Negotiable electronic transport record” means an electronic transport record:

(a) That indicates, by wording such as “to order”, or “negotiable”, or other appropriate wording recognized as having the same effect by the law applicable to the record, that the goods have been consigned to the order of the shipper or to the order of the consignee, and is not explicitly stated as being “non-negotiable” or “not negotiable”; and

(b) The use of which meets the requirements of article 9, paragraph 1.

20. “Non-negotiable electronic transport record” means an electronic transport record that is not a negotiable electronic transport record.

21. The “issuance” of a negotiable electronic transport record means the issuance of the record in accordance with procedures that ensure that the record is subject to exclusive control from its creation until it ceases to have any effect or validity.

22. The “transfer” of a negotiable electronic transport record means the transfer of exclusive control over the record.

23. “Contract particulars” means any information relating to the contract of carriage or to the goods (including terms, notations, signatures and endorsements) that is in a transport document or an electronic transport record.

24. “Goods” means the wares, merchandise, and articles of every kind whatsoever that a carrier undertakes to carry under a contract of carriage and includes the packing and any equipment and container not supplied by or on behalf of the carrier.

25. “Ship” means any vessel used to carry goods by sea.

26. “Container” means any type of container, transportable tank or flat, swapbody, or any similar unit load used to consolidate goods, and any equipment ancillary to such unit load.

27. “Vehicle” means a road or railroad cargo vehicle.

28. “Freight” means the remuneration payable to the carrier for the carriage of goods under a contract of carriage.

29. “Domicile” means (a) a place where a company or other legal person or association of natural or legal persons has its (i) statutory seat or place of incorporation or central registered office, whichever is applicable, (ii) central administration or (iii) principal place of business, and (b) the habitual residence of a natural person.

30. “Competent court” means a court in a Contracting State that, according to the rules on the internal allocation of jurisdiction among the courts of that State, may exercise jurisdiction over the dispute.

The long list shows it more likely an academic list to study other than a practical guide rules for business. Also, from the above quotations the definition on the contract of carriage and the carrier thereunder goes vastly into great difference and its diversities seem unforeseeable one after another the three similar rules from Hague Rules, Hamberger Rules and Rotterdam Rules for the same purpose. Needless to say, the terms on the liabilities for the carrier, performing party, maritime performing party, and the shipper, are becoming much more complicated in understanding in order to get the correct meaning. For businessmen who are busy in their daily life, they would kick away all those uncertainties under the rules which are no better than a choice of law. Say, the shipowners would never know whether he is a carrier or a Performing party or both, and what is the difference in situations under the Rotterdam Rules since they would choose to keep away from it in its entity and from the very beginning, from my point of view, due to its uncertainty in meaning in many ways. To the cargo owners, they will get lost in those wording-concept before the court in telling the judges who is who the carrier or a performing party and why and why not?

On Hamberg Rules, the only affected country that I knew would be no others but China since it adopted the definition quoted above on the carrier and the actual carrier under either the Contract of carriage or the Bill of lading or both, such confusion induced a Rule No. 16 issued by the Supreme People’s Court of the PRC in 2021, to the effect that the actual carrier is not a party as carrier under the bill of lading in that the claim raised according to the Bill of lading against the actual carrier but was rejected by basing on a contract either a Charterparty or a Contract of carriage. That means, in essence, the actual carrier is the carrier under the Charterparty only. The Rule No. 16 is currently disputed heavily in China and efforts are underway to overturn it. One confusion in law may cause more confusions in practice, including judiciary processes.

Another purpose of this letter is to remind those in power not to draft vague wording-concept conventions for the international communities which will force them to get rid of them by inserting in their contracts such as:

GOVERNING LAW:

THE CONTRACT SHALL BE GOVERNED BY ENGLISH LAW. THE RELEVANT PROVISIONS OF THE EDITION OF INCOTERMS CURRENT AT THE DATE OF THE CONTRACT ARE EXPRESSLY INCORPORATED INTO THE CONTRACT, INSOFAR AS THOSE PROVISIONS ARE NOT INCONSISTENT WITH THESE GENERAL TERMS AND CONDITIONS OR ANY OTHER TERMS OF THE CONTRACT. THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 1980 SHALL NOT APPLY TO THE CONTRACT.

CISG seemingly is the worst of such. The above on the Governing law clause is quoted from one of my cases. CISG wasted a lot of my time and I hope no more time to be wasted, if possible.

Turning back to the wording of the Hague Rules, the definition is so precise and tightly binding the limit of the bill of lading for the purpose of trading for safe in that the bill of lading is the contract of carriage from the moment at which it regulates the relations between a carrier and a holder of the same. Should we celebrate it for another 100 years anniversary?

30th March, 2024