International Law - Nano Ltd

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SEMESTER 2, 2016/2017

Question No: 1

We hereby confirm that the work contained in this assignment is solely our own, except for reliance on material that is identified and cited according to accepted academic practice.

Nano Ltd (NL) arranges with the owners of “The Bloom” for the carriage of a consignment of steel coils from Malaysia to France. A bill of lading is issued to Nano Ltd which is incorporated in the UK. The bill expressly provides that it is subject to English law. However, a clause is inserted to the effect that the bill of lading is not subject to The Hague-Visby rules. On its previous voyage, The Bloom Vessel carried a cargo of salts. On 5 January 2017, the vessel had arrived in Malaysia. It discharged the salts five days later. The holds were flushed in an attempt to cleanse them. The steel was loaded on board the vessel on 11 and 12 January 2017. The vessel sailed the next day. During the voyage, The Bloom ran into storm and sea water entered into the holds because the cargo holds had been left open. When the cargo was unloaded, it was found to be severely corroded. Upon investigation. It was revealed that the possible causes of the corrosion were the failure of the crew to pump out water that collected in the bottom of the ship. Advise the relevant parties.

The first issue is which rules should be applied in this case. According to Art 2(1)(e) Hamburg Rules, it mentioned that the provisions of Hamburg Rules are applicable to all contracts of carriage by sea between two different States, if the bill of lading or other document evidencing the contract of carriage by sea provides that the provisions of this Convention or the legislation of any State giving effect to them are to govern the contract. Therefore, Hamburg Rules can be applied since port of issuing the bill of lading is in UK and the bill expressly provides that it is subject to English law.

The second issue is whether “The Bloom” is liable for the damage of goods. According to Art 1(1) Hamburg Rules 1978, “carrier” means any person by whom or in whose name a contract of carriage of goods by sea has been concluded with a shipper. While Art 1(2) Hamburg Rules 1978 claims that “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. Therefore, The Bloom is considered as the real carrier. Also in Art. 5(1) Hamburg Rules 1978, the carrier is liable for loss resulting from loss of or damage to the goods, as well as from delay in delivery, 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. Since “The Bloom” is act as the “actual carrier”, therefore, “The Bloom” is not liable for the damage of goods.