Differences Between the Hague Rules, the Visby Rules, and the Hamburg Rules

From the Hague Rules to the Hamburg Rules, international conventions concerning bills of lading have undergone substantial changes in content, making the protection of the interests of the parties involved more reasonable and adapting to the demands of evolving shipping technology. Generally speaking, the substantive differences among these three international conventions are mainly in the following aspects:

1. Different Basis of Carrier Liability

The Hague Rules, due to the dominant power of shipowners and the limitations of shipping technology at the time, did not impose very strict requirements on carriers. Therefore, the Hague Rules adopted the principle of "incomplete fault liability" as the basis for carrier liability. The Visby Rules did not amend this point. The Hamburg Rules changed it to the "presumed complete fault liability" principle.

The "fault liability principle" means that liability arises when there is fault, and no liability when there is no fault; most civil law systems in general national laws adopt this principle as a basis. The general provisions of the Hague Rules also require carriers to bear liability for their own faults, but at the same time stipulate that "the 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" can be exempted from liability (also the most criticized clause of the Hague Rules). This means liability is not borne even if there is fault. Therefore, the Hague Rules are considered to have adopted the incomplete fault liability principle. Compared with the fault liability principle, although this liability system was lenient towards carriers, it still represented significant progress under the historical conditions at the time.

The stance of the Hamburg Rules is much stricter. It not only determines carrier liability based on the existence of fault but also stipulates that the burden of proof lies with the carrier. This is stated in Article 5: "The carrier is liable for loss resulting from loss of or damage to the goods, as well as from delay in delivery, if the occurrence which caused the loss, damage or delay took place while the goods were in his charge ... unless the carrier proves that he, his servants or agents took all measures that could reasonably be required to avoid the occurrence and its consequences." Thus, the liability of the carrier is significantly increased.

2. Different Maximum Liability Limits

First, from the Hague Rules to the Hamburg Rules, the maximum compensation amount per unit of goods has been progressively increased. The Hague Rules stipulates that the compensation amount payable by the shipowner or carrier for loss of or damage to goods or related matters shall not exceed 100 pounds sterling per package or unit, or the equivalent in other currency. The Visby Rules raised the maximum compensation amount to 10,000 gold francs per package or unit, or 30 gold francs per kilogram of gross weight of the goods lost or damaged, whichever is higher. It also clarifies that one gold franc consists of 65.5 milligrams of gold with a fineness of 900 thousandths. The Hamburg Rules increased the carrier's maximum liability to 835 Special Drawing Rights (SDR) per package or other shipping unit, or 2.5 SDR per kilogram, to be calculated based on the higher amount.

Second, the methods of measuring lost or damaged goods have become increasingly reasonable. The Hague Rules measured goods on a per-package or per-unit basis. With the development of unitized transport methods like pallets and containers, the drawbacks of this measurement method became apparent. Consequently, both the Visby Rules and the Hague Rules stipulate that if goods are shipped in containers, pallets, or similar transport equipment, and the number of packages or units contained therein is stated in the bill of lading, each package or unit within the container or pallet is treated as a unit of compensation. If the bill of lading does not specify the specific number of packages or units, then each container or pallet as a whole is considered one package or unit for compensation.

3. Different Definitions of Goods

The Hague Rules had a narrow definition of goods, excluding live animals and deck cargo. The Hamburg Rules expanded the definition. It not only includes live animals and deck cargo but also includes packaging conveying equipment such as containers and pallets. "When goods have been consolidated in a container, pallet, or similar article of transport, or when they are packaged, and such article of transport or packaging is supplied by the consignor, the term 'goods' also includes inside this article or packaging.

4. Different Scope of Application of the Conventions

The Hague Rules only applies to bills of lading issued in contracting states. Thus, without prior agreement between the parties, the strange phenomenon might occur where some shipments by the same shipping company on the same route are subject to the Hague Rules while others are not. The Hamburg Rules avoids this defect. It not only stipulates that the Convention applies to all maritime transport contracts between two different contracting states, but also specifies that if any of the following five locations is in a contracting state, the Hamburg Rules may apply: ① the defendant's principal place of business; ② the place where the bill of lading is issued; ③ the port of loading; ④ the port of discharge; ⑤ the place designated in the transport contract.

5. Different Periods of Carrier Liability

The Hague Rules stipulates that the period of carrier's liability is "...from the time when the goods are loaded on to the time when they are discharged from the ship," referred to as "tackle to tackle." The Hamburg Rules extends this period to the time during which the carrier or his agent is in charge of the goods, from the point of receiving them from the consignor or his agent until delivery to the consignee or his agent. This includes the entire time the goods are in the custody of the carrier at the port of loading, during transit, at the port of discharge, in container yards, or container freight stations, and is br>ey referred to as "port to port."

6. Different Limitation of Actions (Statute of Limitations)

The limitation period for legal proceedings under the Hague Rules is one year. After one year, "...in any event, the carrier and the ship shall be discharged from all liability for loss or damage." One year is undoubtedly too short for parties involved in ocean shipping, especially for insurers who must undergo complex claim and settlement procedures before pursuing recovery against carriers. The Visby Rules stipulate that the limitation period can be extended by agreement of the parties. Furthermore, "...an action for indemnity by a person held liable may be instituted even after the expiration of the one-year period provided for in this paragraph if such action is brought within the time allowed by the lex fori of the court seised of the case..." but the time limit is subject to a three-month period. This partially alleviated the practical difficulties caused by the short statute of limitations. The Hamburg Rules extends the basic limitation period directly to two years while retaining the 90-day limitation period for recourse actions from the Visby Rules.

7. Different Provisions on Carrier Liability for Delay in Delivery

Due to historical constraints, the Hague-Visby Rules did not include any provisions regarding delay in delivery. The Hamburg Rules, in Article 2, defines delay as: "Delay in delivery occurs when the goods are not delivered at the port of discharge provided for in the contract of carriage by sea within the time expressly agreed upon or, in the absence of such agreement, within the time which it would be reasonable to require of a diligent carrier, having regard to the circumstances of the case." The carrier is liable for compensation for the loss caused by delay. The scope of compensation includes: ① Loss of market, and loss caused by interest; ② cessation of production loss. The compensation amount is limited to an amount equivalent to two and a half times the freight payable for the delayed goods, but shall not exceed the total freight payable under the contract of carriage.

In addition to the above points, the Hamburg Rules differs from the Hague-Visby Rules in aspects such as the definition of the contract of carriage by sea and the burden of proof, further increasing the scope of carrier liability.