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INTRODUCTION TO CARRIAGE OF
GOODS: BILLS OF LADING
PRESENTED ON 29 JUNE 2011
AT A MARITIME LAW SEMINAR ORGANIZED BY
THE NIGERIAN MARITIME LAW ASSOCIATION
BY
MRS. MFON EKONG USORO, OOM
2
Outline
• Introduction
• Contract of carriage
– International Coventions on Carriage of Goods by Sea
– Implied Obligations in a Contract of Carriage
• Bill of Lading
– Features of Bill of Lading
– Effect of erroneous detail in a Bill of Lading
– Duties and Liabilities of the Carrier under the contract of carriage
– Demise or Identity Carrier Clause
– Arguments for Invalidating the Demise and Identity of Carrier Clauses
• Codification and Application of the Liabilities Regime of the Conventions in Nigeria
• Dispute Settlement
• Conclusion
Mfon Ekong Usoro
Introduction
• Carriage is the transportation of goods from one place to
another. This may be by land, air or sea and involves the
loading, stowage, unloading and delivery of cargo.
• Under the Carriage of Goods Act C2 LFN 2004 (COGSA),
carriage of goods covers the period from the time when the
goods are loaded on to the time when they are discharged from
the ship.
• In this paper, we will examine the bill of lading vis-à-vis its
functions and the major role it plays in the carriage of goods by
sea in Nigeria and international trade as a whole.
• We will also consider the liability regimes of the various
international conventions which govern carriage of goods by
sea alongside its application in Nigeria.
3Mfon Ekong Usoro
CONTRACT OF CARRIAGE
• A contract of carriage is an arrangement between a shipowner
and a shipper by which the shipowner agrees to carry goods of
the shipper in his ship for a consideration of a payment known
as freight.
• The contract of carriage under the COGSA applies only to
contracts covered by a bill of lading or any similar document of
title in so far as such documents relate to the carriage of goods
by sea including any bill of lading or similar document.
• Where the shipowner gives the party the use of the whole or
part of the ship for the carriage of his goods, such a party is
known as a charterer and the contract is called a charterparty.
On the other hand, where the shipowner agrees to ship the
goods of a party as a carrying service, such a party will be
known as the shipper and the terms of the contract will be
evidenced by a bill of lading.
4
Mfon Ekong Usoro
International Conventions on
Carriage of Goods by Sea
There are four major legal regimes which govern
the carriage of goods by sea:
The Hague Rules (1924)
The Hague-Visby Rules (1968)
The Hamburg Rules (1978)
The Rotterdam Rules (2009)
5Mfon Ekong Usoro
International Conventions on n
Carriage of Goods by Sea
HAGUE RULES
• The Hague Rules was the first attempt made at unifying
rules relating to carriage of goods by sea. It aimed
specifically at the unification of rules relating to obligations,
liabilities, rights and immunities attaching to carriers under
the bills of lading.
• The main objective of the Hague Rules was to protect cargo
owners from excessive exclusion of liability by carriers which
was prevalent in that period.
6Mfon Ekong Usoro
International Conventions on
Carriage of Goods by Sea
THE HAGUE-VISBY RULES
The changing mechanics of International trade (emergence of
containerization, political independence, judicial
pronouncements) necessitated a review of the Hague Rules.
•The Hague-Visby Rules, unlike its Hague counterpart,
mandatorily applies to any contract for carriage of goods by sea
falling under the specified circumstances, no matter the
applicable rule of contract. Its scope covers both inward and
outward shipment of goods
Mfon Ekong Usoro 7
8
International Conventions on
Carriage of Goods by Sea
THE HAMBURG RULES
• The modifications to the Hague Rules effected by the Brussels
Protocol in 1968 did not gain universal approval. Some
interests principally in developing countries were not satisfied
with the reform of the Hague Rules by Visby Amendments
and thought a new comprehensive approach.
• The United Nations Commission on International Trade Law
(“UNCITRAL”) thus initiated the re-examination of the rules
regulating carriage of goods by sea. The Convention known as
the „Hamburg Rules‟, became effective on 1 November 1992.
Mfon Ekong Usoro
9
International Conventions on
Carriage of Goods by Sea
THE ROTTERDAM RULES
• The development of faster ships, quicker port turn-arounds, the use of
e-commerce and other developments led to the negotiation of a new
Convention- International Convention on Contracts for the
International Carriage of Goods Wholly or Partly by Sea which is
referred to as the Rotterdam Rules.
• The aim of the Rules is two-fold-
• modernize the regime generally for the traditional “tackle-to-tackle”
and “port-to-port” carriage of goods.
• introduce innovative solutions to meet the demands of carriage of
goods on “door-to-door” terms by which the carrier undertakes
responsibility for not only the maritime leg but also the
intermediate and final land, inland waterway or air leg, from receipt
of the goods from the shipper until final delivery to the receiver.
Mfon Ekong Usoro
10
Implied obligations in a
Contract of Carriage
• Certain implied obligations which derive from the common law are
incorporated into the contract in the absence of any contrary
agreement. Some of the implied obligations are:
Implied obligation as seaworthiness
• Under the Common Law, the shipowner has the obligation to make
available a seaworthy vessel which means to provide a vessel that is fit
to meet and undergo the perils of the sea and other incidental risks.
• This obligation extends beyond the physical condition of the vessel
and includes the competence of the crew, adequacy of the facilities
and the cargo worthiness of the vessel.
• This point was emphasised in The Framlington Court [1934] A.M.C.
272 at 277, where the court held that:
Mfon Ekong Usoro
“Seaworthiness is a relative term depending for its application upon the type of
vessel and the character of the voyage. The general rule is that the ship must be
staunch and strong and well equipped for the intended voyage. And she must
also be provided with a crew, adequate in number and competent for the voyage
with reference to its length and other particulars, and have a competent and
skilled master of sound judgment and discretion”.
• In situations where the Hague-Visby Rules apply, the obligation
of the ship owner under Article III (1) is limited to a duty to
exercise due diligence.
Implied obligation of reasonable dispatch
• The shipowner or carrier has a duty to complete the contract
timeously. This means proceeding on the voyage, loading and
discharging the cargo within the agreed timelines. Where there
is no express indication as to time, the law implies that the
contract should be performed within reasonable time.
Implied obligations in a Contract
of Carriage
Mfon Ekong Usoro
11
Implied obligations in a Contract
of Carriage
• Where the contract is not performed within the agreed time or
reasonable time, the injured party is entitled to compensation
for any unreasonable delay.
Implied obligation not to deviate from the agreed route
• The shipowner or carrier are required to undertake that while
performing its obligations under the contract of carriage, it
will not deviate from the contract of voyage or deviate to any
other route which may materially increase the risks of
damage or loss to the cargo.
• Where this is not expressly provided, it is implied that the
proper route is the direct geographical route between the
ports of loading and discharge.
12Mfon Ekong Usoro
Implied obligations in a Contract of
Carriage
Implied obligation not to deviate from the agreed route
• The shipowner or carrier are required to undertake that while
performing its obligations under the contract of carriage, it will not
deviate from the contract of voyage or deviate to any other route which
may materially increase the risks of damage or loss to the cargo.
• It is the usual custom for the parties to expressly state in the contract
the specific route of the voyage. Where this is not expressly provided, it
is implied that the proper route is the direct geographical route
between the ports of loading and discharge.
• In the case of Reardon Smith Line v. Black Sea and Baltic General
Insurance [1939] A.C. 562 Lord Porter stated
“it is the duty of the ship, at any rate when sailing upon an ocean voyage from
one port to another, to take the usual route between those two ports. If no
evidence be given, that route is presumed to be the direct geographical route but it
may be modified in many cases, for navigational reasons, evidence may always
be given to show what the usual route is, unless a specific route be prescribed by
the charterparty or bill of lading”.
13Mfon Ekong Usoro
Implied obligations in a Contract of
Carriage
Implied obligation to nominate a Safe Port
• Where a charterer has the right to nominate a port, he is under an
obligation to nominate a safe port. A port is considered safe if the
particular ship can use it within the relevant period without being
exposed to danger which cannot be avoided by good navigation and
seamanship.
• The shipowner has a duty to refuse a nomination where he is aware
that a particular port is unsafe. Where he enters into the nominated
port with the full knowledge that the port is unsafe, he will be
estopped from recovering compensation for any damage
subsequently suffered by his vessel.
Implied obligation not to ship dangerous goods
• The charterer has an implied obligation under Common law not to
ship dangerous goods without notifying the carrier or shipowner of
the nature of the goods.
14Mfon Ekong Usoro
Implied obligations in a Contract of
Carriage Implied obligation not to ship dangerous goods
• The charterer has an implied obligation under Common law
not to ship dangerous goods without notifying the carrier or
shipowner of the nature of the goods.
• Under the Rules, where the dangerous goods are shipped
without the consent of the carrier, the carrier can land and
destroy the goods without paying compensation to the
shipowner and the shipper will be liable for all damages and
expenses arising from such shipment
15Mfon Ekong Usoro
Bill of Lading
What is a Bill of Lading?
• A bill of lading is a written evidence of a contract for the carriage
and delivery of goods transported by sea for freight.
• It is issued by the carrier to the shipper to acknowledge that the
goods have been received for carriage or shipped, and enables the
shipper to sell the goods though not in his custody at the material
point in time.
• In the case of B.M. Ltd. v. Woermann- Line (2009) 13 NWLR
(Pt.1157) 149 at 178 pars E-G, S.C the Court defined a bill of
lading as
“A writing signed on behalf of the owner of the ship in which goods are
embarked, acknowledging the receipt of the goods, and undertaking to
deliver them at the end of the voyage subject to such conditions as may
be mentioned in the bill of lading. The bill of lading is therefore a written
contract between those who are expressed to be parties to it.
Mfon Ekong Usoro
16
Bill of Lading
A Bill of lading has three major functions. It serves as:
• A receipt for the goods shipped;
• As evidence of the contract of carriage; and
• A document of title
Receipt For The Goods Shipped
• As a receipt, it contains statements as to quantity and
description of the goods as well as the condition in which the
goods were received.
• In the case of Ogwuru v. Co-op Bank, of E/N Ltd. (1994) 8
NWLR (Pt. 365) 685 at 687, pars. E-F, C.A, the Court stated
with regards to a bill of lading that:
Mfon Ekong Usoro
17
Bill of Lading
“it serves as receipt and that the goods therein have been taken on
board. Needless to say that bill of lading in its role as a “receipt” is
prima facie evidence of the truth of the statement contained in it. And
where a party disputes the content of the bill of lading the burden is
on that person to prove the error in the bill of lading.”
Receipt as to Quantity
• At common law, a bill of lading is prima facie evidence of the weight
or quantity of goods shipped. Where the quantity of goods shipped
is in question, the carrier has to establish that the goods were not
shipped as described in the bill of lading.
Receipt as to condition
• A bill of lading states the condition of the cargo at the point of
shipment. It usually contains the words “shipped in apparent good
order and condition…”.
Mfon Ekong Usoro
18
Bill of Lading
• In Compania Naviera Vascongada v. Churchill & Sim [1906] 1 K.B.
237, where a „clean‟ bill of lading was issued to the shipper who
indorsed it to a third party. The carrier was estopped by the statement
in the bill of lading from saying that the timber was in bad condition
when loaded and was therefore liable to the indorsee for the damage.
Receipt as to leading marks
• The bill of lading will usually record any identification or quality
marks appearing on the goods shipped. The shipowner will not be
estopped from denying that the goods were shipped under the marks
as described in the bill unless such marks are not essential to their
identity or description.
• The shipper can demand that the shipowner acknowledge such marks
and where the marks are not essential to their description, the
shipowner is under no obligation to acknowledge the quality marks
attached to the goods.
Mfon Ekong Usoro
Bill of Lading
As evidence of the contract of carriage
• On a standard bill of lading, the contractual terms
• between the shipper and carrier are set out on the reverse side of
the bill and constitute evidence of the contract of carriage between
the parties.
• The contractual terms are usually agreed orally by the parties before
the issuance of the bill of lading. It is the general view that the bill of
lading is not the contract but merely provides evidence of the
contract.
• The burden of proof lies with the party that alleges that the bill does
not represent the contract between the parties and in most cases the
burden is difficult to discharge. But once the bill is indorsed for value
to a bonafide third party, the bill becomes conclusive evidence of the
terms of the contract.
20Mfon Ekong Usoro
Bill of Lading
As a document of title
• A bill of lading will function as a document of title where it is
drafted as an order bill. In such instances, the bill is written „to
order‟ of the consignee and the shipowner or carrier agrees to
deliver the goods to a named consignee.
• It is also sometimes serves as a document of transfer and governs
all the legal aspects of physical carriage, and like a cheque or other
negotiable instrument, it may be endorsed to effect the ownership
of the goods actually being carried.
• In Sanders v. Maclean (1883) 11 QBD 327, it was stated by
Bowen LJ that a “Bill of lading is a key which in the hands of a
rightful owner is intended to unlock the doors of the warehouse,
floating or fixed, in which the goods may chance to be and its
endorsement and delivery is a symbolical delivery of the cargo”.
Mfon Ekong Usoro
Features of Bill of Lading
22
• A bill of Lading is usually addressed to the Consignee and may
be consigned to the order of the shipper.
• In general, the importer's name is not shown as consignee. The
bill of lading has also a provision for incorporating notifying
party. This is the person whom the shipping company will
notify on arrival of the goods at destination.
• The bill of lading also contains other details such as the name
of the carrying vessel and its flag of nationality, the marks and
numbers on the packages in which the goods are packed, a
brief description of the goods, the number of packages, their
weight and measurement.
Mfon Ekong Usoro
Effect of erroneous details in a bill
of Lading
23
• A bill of lading may be amended or corrected after it has been
issued, where it contains a significant error.
• In making the correction, the carrier cannot substitute another
bill of lading with terms inconsistent with the terms of the
original bill. A surrender and cancellation of the initial bill of
lading must be procured before the issuance of a further
original bill of lading.
• The carrier can make the necessary correction on the face of the
bill of lading and sign the correction. In some cases, a separate
document is issued containing the necessary correction.
Mfon Ekong Usoro
Duties And Liabilities Of The Carrier
Under The Contract Of Carriage
24
• The carrier or the master or agent upon receipt of goods is
required on demand of the shipper, to issue a bill of lading
which will show among other things, the leading marks
necessary for the identification of the goods as furnished by the
shipper before loading starts, together with either the number of
the packages or pieces of the quantity or weight.
• This obligation is mandatory and important to the shipper,
consignees and indorsees, for it lays the foundation for
statements in the bill of lading which may subsequently estop
the carrier from disputing receipt of the designated articles in
the apparent condition stated.
Mfon Ekong Usoro
Demise or identity of Carrier
Clause
25
• A Demise clause in a bill of lading for carriage of goods by sea simply
states that where a ship is not owned or chartered by demise to the
company issuing the bill of lading, then the contract evidenced by the
bill is solely with the owner or demised charterer.
• The demise clause states that the voyage/time charterer who issues
the bill of lading is not a party to the contract of carriage and is thus
not a carrier.
• It restricts the rights of suit of the shipper or consignee of lost or
damaged cargo, merely permitting them to take an action in contract
against shipowner, even though it is the charterer who has concluded
the contract of carriage, collected the freight, and performed most of
the duties of a carrier.
• An alternative method by which the charterer can avoid liability is to
insert an identity of carrier clause in the bill of lading.
• The above clause makes the shipowner personally liable in order to
arrest the ship.
• However these clauses restrict the rights of suit of the shipper or
consignee for lost or damaged cargo.
Mfon Ekong Usoro
Arguments for Invalidating the Demise and
Identity of Carrier Clauses
26
The Demise and Identity of Carrier Clauses are inconsistent with the
UCP 500 as they do not conform with the requirement to identify the
name of the carrier.
They breach Article III Rule 8 of the Hague-Visby Rules (or Similar
Provisions) which specifically prohibits a party from limiting or
excluding its liability under a contract of carriage beyond the
limitation regime found within the Rules themselves.
Joint and Several Contractual Liability
• In most cases, the shipowner and the charterer share the duties of a
carrier; the charterer is usually responsible for loading, discharging
at the ports visited (and any deviations), while the shipowner is
responsible for care of the cargo during the voyage.
• This in effect means that the carriage of goods by sea is in reality a
joint venture between shipowners and charterers, and that they are
thus jointly and severally liable to third parties.
Mfon Ekong Usoro
Comparative Analysis of the Liability
Regime of the International Conventions
S/
N
SUBJECT HAGUE
RULES
HAGUE-VISBY
RULES
HAMBURG
RULES
ROTTERDAM
RULES
1 Scope of
Application
limits the application
of the to bills of
lading issued in any
of the contracting
states.
Article 5 extends the
scope to apply to bills of
lading issued between
ports in two different
states if:
issued in a contracting
state, or
he carriage is from a
port in a contracting
state, or
the contract contained
in or evidenced by the
bill of lading provides
that the rules of this
Convention shall
apply.
Much wider scope
and departs from the
tackle-to-tackle scope
of the previous rules
to port-to-port scope.
extends to cover
any contract of
carriage evidenced by
a bill of lading or other
documents evidencing
the contract of
carriage by sea.
extended the
scope to include
other modes of
transport, such as
air and land.
27
Mfon Ekong Usoro
Comparative Analysis of the Liability
Regime of the International Conventions
S/
N
SUBJECT HAGUE RULES HAGUE-VISBY
RULES
HAMBURG
RULES
ROTTERDAM
RULES
2. Goods and
Deck Cargo
Article 1 defines
“Goods” to exclude
live animals and deck
cargo.
Does not extend the
meaning of goods to
include livestock and
deck cargo.
Extends the
definition of goods to
include live animals
and goods
consolidated in a
container.
Deck cargo was not
excluded.
Article 25 (a-c)
allows for the
carriage of goods on
the deck of a ship.
limits the liability
of the carrier for loss
of or damage to
such goods, or delay
in delivery caused
by special risks.
3. Dangerous
Goods
Article 4 rule 6
defines “Dangerous
Goods” as “goods of
an inflammable or
explosive nature…”
No amendment to the
provision of the Hague
Rules with respect to
dangerous goods.
Places an obligation
on the shipper in Article
13 to label dangerous
goods and inform the
carrier of the
dangerous nature of
the goods.
Where the shipper
fails to do so, he will be
liable to the carrier.
The provisions
under the Hamburg
Rules were adopted
by Article 32.
28Mfon Ekong Usoro
Comparative Analysis of the Liability
Regime of the International Conventions
S/
N
SUBJECT HAGUE
RULES
HAGUE-VISBY
RULES
HAMBURG
RULES
ROTTERDAM
RULES
4. Content of a
bill of lading
Bill of lading shallbe prima facieevidence of thereceipt of the goodsby the carrier. Carrier is notbound to state anyinaccuracy as tonumber, weight,mark or quantity ofgoods received ofwhich he has noreasonable means ofchecking.
Bill of lading shall be
conclusive evidence of the
terms when transferred to
a third party acting in good
faith.
The Carrier or his
agent must insert a
reservation of any
inaccuracy in the bill of
lading.
Article 36 adopts
the provision under
the Hamburg Rules
though with some
modification.
Inaccuracy does
not affect the legal
character or validity
of the document.
5. Period of
liability
Article 1(e) limits
the period of liability
from the loading to
the discharge of the
goods from the
ships.
The Rule is silent on
this provision. This period was
extended by Article
4(2) from the time the
shipper has taken
control of the goods to
the time the goods are
actually delivered at
the port of discharge.
The period of
liability is the same
as is applicable
under the Hamburg
Rules.
29Mfon Ekong Usoro
Comparative Analysis of the Liability
Regime of the International Conventions
S/
N
SUBJECT HAGUE
RULES
HAGUE-VISBY
RULES
HAMBURG
RULES
ROTTERDAM
RULES
6. Limitation of
liability
Article 4(5) limits
the liability of the
carrier to £100 per
package or unit or
the equivalent of
that sum in other
currency based on
the gold standard.
The only
exception is the
declaration of value
by the shipper
before shipment.
Article 2 introduced a
weight-based criterion for
the determination of
liability.
The monetary value to
be claimed shall not
exceed the equivalent of
10,000 francs per
package or unit or 30
francs per kilo of gross
weight of the goods lost or
damages whichever is
higher.
Article 6(1)(a)
extended the
provision by limiting
the liability of the
carrier from loss of or
damage to goods.
Liability limited to
the equivalent to 835
units of account per
package or other
shipping unit or 2.5
units of account per
kg of gross weight of
the goods lost or
damaged, whichever
is higher.
Carrier ’s liability
is limited to 875
Special Drawing
Right (SDR)units per
package or 3 SDR
units per kilogram of
the gross weight of
the cargo, whichever
is the higher.
30Mfon Ekong Usoro
Comparative Analysis of the Liability
Regime of the International Conventions
S/
N
SUBJECT HAGUE
RULES
HAGUE-VISBY
RULES
HAMBURG
RULES
ROTTERDAM
RULES
7. Liability of
carrier
(basis)
Carrier liability
limited to voyage
and discharge with
exemptions which
are specified under
Article 4(2) and (3).
No significant
modification of this
provision under this
Rule.
Article 5 of the
Rules extended
carrier liability to
loss or damage of
the goods while in
his custody and
also to delay in the
delivery.
Economic loss
due to delay in
delivery is
recoverable and is
limited to a
multiple of 2.5
times the freight
payable on the
goods delayed.
8. Nautical
Fault
Defence
A carrier or his
agent may escape
liability by claiming
the myriads of
defences under
Article 4 Rule 2(a).
Article 3 provides
for the defences and
limits of liability of
the carrier by
extending it to apply
in actions for claims
in tort or contract.
Removal of
nautical fault
defence.
Removal of
nautical fault
defence.
31Mfon Ekong Usoro
Comparative Analysis of the Liability
Regime of the International Conventions
S/N SUBJECT HAGUE
RULES
HAGUE-
VISBY RULES
HAMBURG
RULES
ROTTERDAM
RULES
9. Applicability to
e-commerce
• No provision
for e-commerce•No provision for e-
commerce.
• Extended application
to paperless and
electronic means of
communication such as
telegraph and telex.
•Recognised other
transport documents
such as way bills and
electronic trading
systems.
10 Arbitration •No provision for
Arbitration or
dispute
resolution.
•No provision for
Arbitration or dispute
resolution
• Provides for the
Arbitration as a means of
settling disputes arising
under the convention.
• Article 75 includes the
right of parties to agree
after a dispute has
arisen to resolve it by
arbitration in any place.
32Mfon Ekong Usoro
Comparative Analysis of the Liability
Regime of the International Conventions
S/N SUBJECT HAGUE
RULES
HAGUE-VISBY
RULES
HAMBURG
RULES
ROTTERDAM
RULES
11 Jurisdiction No provision for
jurisdiction. No provision for
jurisdiction.
The Rules provided
for institution of
action.
Gives parties wide
discretion on choice
of court.
Article 21 of the
Rules adopted the
provisions of the
Hamburg Rules.
12 Limitation of
action
Limitation
period is one year
of delivery or
within one year
from the date
delivery should
have taken place.
Adopted the one year
limitation period with a
slight variation in respect
of indemnity claims.
Claimant must
commence his action for
indemnity within 15
months after its discharge.
Extended the time
bar for instituting a suit
from one year to 2
years from date of
delivery or when cargo
ought to have been
delivered.
Adopted the
Hamburg provision.
The time starts
running from the
date of delivery or
in cases where the
only part of the
goods is delivered,
on the last day on
which the goods
should have been
delivered.
33Mfon Ekong Usoro
Codification And Application Of
Liability Regimes In Nigeria.
34
The Hague Rules
• The Hague Rules became part of our National Legislation on the 18
March 1926.
• If the carrier was held liable for cargo loss or damage the amount
payable under the Rules was not to exceed 100 pounds sterling.
• The relevant provision under the Nigerian Carriage of Goods by Sea
Act is Article IV Rule 5 which provides that,
“Neither the carrier nor the ship shall in any event be or become
liable for any loss or damage to or in connection with goods in an
amount exceeding N200 per package or unit, or the equivalent of
that sum in other currency, unless the nature and value of such
goods have been declared by the shipper before shipment and
inserted in the bill of lading…”
Mfon Ekong Usoro
Codification And Application Of Liability
Regimes In Nigeria
35
• However, by way of exception to this general rule, the liability of the
carrier or ship may exceed N200.00 (Two Hundred Naira) per package
where the value of the goods were declared prior to shipment and
stated on the bill of lading.
• The Hague Rule talks about “per package” or “per unit”. The meaning
of this came up for consideration in the Court of Appeal case of
Nigerian Shipping Line v. Gilbert Emenike (1987-1990) 3 N.S.C.
163 where it was held that package consisted of unit of carriage as
distinct from unit of existence.
• However, this position of law was departed from by the same Court in
the M/V “Caroline Mearsil” & Ors. V. Nokoy Investment Ltd.
(2007) 7 NWLR (Pt. 666) 587 C.A,
The Limitation Figure as domesticated from the Hague Rules
• The existence of the limitation figure of N200.00 (Two Hundred Naira)
in Nigeria‟s statute books has resulted in uproar amongst the cargo
interest lobby. The amount is considered too meager to qualify as
compensation for loss of any magnitude whatsoever.
Mfon Ekong Usoro
Codification And Application Of Liability
Regimes In Nigeria
36
The Limitation Figure as domesticated from the Hague Rules
• The existence of the limitation figure of N200.00 (Two Hundred Naira)
in Nigeria‟s statute books has resulted in uproar amongst the cargo
interest lobby. The amount is considered too meager to qualify as
compensation for loss of any magnitude whatsoever.
The application of COGSA
• It is important to note that it is not in every case brought before the
Nigerian Courts that the Nigerian Carriage of Goods by Sea Act will
apply. This is clearly stated in Section 2 of the Nigerian Carriage of
Goods by Sea Act.
• The Carriage of Goods by Sea Act is applicable only to contracts of
carriage where the port of loading is Nigeria without reference to the
port of discharge.
• However, where parties have by their express contract chosen Nigerian
Law, then the courts have been favourably disposed towards applying
Nigerian Law.
Mfon Ekong Usoro
Codification And Application Of Liability
Regimes In Nigeria
37
Limit of liability for claims in the Merchant Shipping Act, 2007
• The Merchant Shipping Act No. 25 of 2007 (“MSA”) is one of the
principal legislations that govern the shipping industry in Nigeria.
• The MSA in its section 356 makes provisions for the computation of
limits of the liability of the Carrier/shipowners for damage or loss to
good, personal injury and loss of life at sea.
• The provision was incorporated from Article 6 of the Convention on
Limitation of Liability for Maritime Claims, 1976 as amended by
Article 3 the Protocol of 1996.
Mfon Ekong Usoro
Codification And Application Of Liability
Regimes In Nigeria
38
Other Liability Regimes.
• Nigeria did not ratify the Hague - Visby Rules and the Hamburg Rules
so the need to codify the provisions into our legislation did not arise.
• However, Nigeria signed the Rotterdam Rules on 25 of September
2009 with 15 other countries. International treaties ratified by Nigeria
only become part of her municipal legislation when incorporated by an
enabling legislation.
• This requirement is clearly stated in Section 12 of the Constitution of
the Federal Republic of Nigeria 1999 which provides in subsection (1)
that no treaty between the Federation and any other country shall
have the force of law except to the extent to which any such treaty has
been enacted into law by the National Assembly.
• Thus, for the Rotterdam Rules to take effect in Nigeria, it must be
enacted into law by the National Assembly just as it was done with the
Hague Rules.
Mfon Ekong Usoro
Dispute Settlement
39
• Most contracts of affreightment include a clause providing that any
dispute arising thereunder shall be referred to arbitration. The
settlement of dispute through the means of arbitration as an
alternative to resolution by litigation is an obvious innovation of the
Hamburg Rules and equally followed by the Rotterdam Rules.
• The Hague Rules and the Hague-Visby Rules are silent on the means
of Arbitration settlement. However, the Hamburg Rules introduced
arbitration for settlement of dispute, for as long as an incorporating
charter party arbitration clause must be comprised in the bill of
lading as “special annotation.”
• The Rotterdam Rules further included the right of the parties after a
dispute has arisen, to agree to resolve it by arbitration in any place.
• The Rotterdam Rule gives a wide choice of forum in which a claimant
can institute a judicial or arbitral proceeding, provided such a law
court is competent in terms of its own domestic law.
Mfon Ekong Usoro
Conclusion
40
• An attempt has been made in this paper to examine the role of a bill
of lading in the carriage of goods by sea.
• The importance of the bill of lading is underscored by the number of
International Conventions that has been enacted to regulate its use
in international trade.
• The Nigerian COGSA does not represent the present state of affairs
in international trade on carriage of goods. There is a need to
overhaul the legislation in Nigeria as regards the Carriage of goods
by sea to embrace the recent trends in International Trade.
Mfon Ekong Usoro
41
THANK YOU
Mfon Ekong Usoro
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