INSIGHT 149, 1998
01 APR 1998
The Norwegian Maritime Code of 24th June 1994 entered into force on 1st October 1994. Chapter 13 of the new Code deals with carriage of goods by sea. Chapter 13 incorporates the provision of the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading as Amended by the Brussels Protocol 1968 (the Hague-Visby Rules) in the light of Norway being a state party to the Convention. Thus, no changes were made with regard to the shipowners liability for damage to or loss of cargo insofar as the Hague-Visby Rules are applicable. On the other hand, changes were made in certain areas where the Convention does not apply. In particular changes were introduced with regard to the carriers liability for damage to or loss of cargo carried on deck (deck-cargo) which is not governed by the Hague-Visby Rules (see Srt. 1.C).
THE OLD LEGISLATION FREEDOM TO CONTRACT
Under the former Maritime Code of 1893 there was freedom to contract with regard to cargo which by the contract of carriage was stated as being carried on deck and was so carried. In theory, the carrier could transfer the special risk relating to carriage of cargo on deck to the cargo owner provided the contract of carriage clearly stated that the cargo should be carried on deck. If the terms of the contract of carriage were sufficiently clear, the carrier could avoid liability for loss of deck cargo even if the vessel was unseaworthy at the commencement of the voyage as a result of, for example, defects with the cargo securing equipment.
THE NEW LEGISLATION COMPULSORY PROVISIONS
(l) Liability for deck cargo
The Maritime Code of 1994 introduced compulsory liability provisions for carriage of cargo on deck. If the cargo is carried on deck pursuant to the contract of carriage, the carriers liability is determined pursuant to the same provisions as for goods carried under deck. The carrier is liable for loss of or damage to the cargo carried on deck unless he can prove that such loss is not due to his personal fault or neglect or that of anyone for whom he is responsible. We refer to section 275 of the Maritime Code. The error in navigation and fire defences are also available for deck cargo. See section 276 of the Maritime Code. Likewise the carrier has a right to limit his liability pursuant to the same provisions as are applicable for cargo carried under deck, i.e. SDR 6871 for each package or unit or SDR 2 for each kilogram. See section 280 of the Maritime Code. (In domestic trade in Norway the limit has been increased to SDR 17 per kilogram and the error in navigation and fire defences have been removed with effect from 1st January 1997.)
(II) When is carriage of cargo on deck permitted?
Cargo can only be carried on deck if (a) it is agreed in the contract of carriage; (b) it follows from custom of the trade; or (c) it is required by statutory rules of law or regulation. We refer to section 263 of the Maritime Code. This section codifies the principle that cargo cannot be carried on deck unless it has been expressly agreed between the carrier and the cargo owner or it follows from statutory rules and regulations. An established practice in a particular trade may substitute for an express agreement. Pursuant to such a custom or practice the parties to the contract of carriage will be deemed to have agreed deck stowage.
Section 263, second paragraph, emphasises that if the carrier has an option to carry the goods on deck, the transport document must show whether the option has been exercised, and that the cargo is stowed on deck. Whoever acquires a bill of lading in good faith shall be able to read out of the document how the cargo is carried. This is relevant with regard to so-called "liberty clauses".
(III) Carriage of cargo on deck in breach of contract
If goods are carried on deck in breach of section 263 of the Maritime Code, the carrier is liable for any loss of or damage to the goods, irrespective of the provisions in sections 275 to 278 of the Maritime Code, if such loss or damage is exclusively the result of the carriage of the cargo on deck. For example, if the deck cargo is damagedby seawater, the shipowner will be liable pursuant to section 284 because such damage would not have occurred if the cargo had not been carried on deck. On the other hand, if the vessel sinks and all cargo is lost, including cargo stowed on deck, the carriers liability for loss of the deck cargo will be determined by the same provisions as for cargo carried under deck. The fact that cargo was carried on deck has not in itself had any impact on the loss of the deck cargo.
As a starting point, a carrier may limit his liability for damage to or loss of cargo carried on deck in breach of section 263, pursuant to section 280 of the Maritime Code, which is described above. If the cargo is carried on deck contrary to an express agreement for carriage under deck, the shipowner, however, has no right to limit liability. See in particular section 284, second paragraph, of the Maritime Code.
The main difference between the old and the new regime is that compulsory provisions determining the carriers liability for damage to and loss of cargo carried on deck have been introduced. The compulsory provisions are similar to those which apply for carriage of cargo under deck, save that special provisions are made with a view to regulating the carriage of cargo on deck in breach of the contract of carriage. The consequence of such a breach is broadly the same as the consequence of an unlawful deviation. The carrier has a strict - and in certain circumstances unlimited - liability for any loss of or damage to cargo arising out of the breach (i.e. the unlawful carriage on deck).
1SDR 1 = USD 1.3480 as at March 1998.