By Ms. Tanya Singla, Batch of 2023, UILS, Panjab University
Since aeons the oceans of the Earth accounting for more than 70% of its surface have been facilitating the worldwide trade and hence the concomitant world prosperity. With the oceans being the cheapest mode of transportation, the world’s seaborne trade today stands at 80% of the volume and 70% of the value of total world trade. The pecuniary estimates of the total world trade through oceans rest at $25,000 billion. 
India has a coastline of 7516.6 km with nine of its states and four of the union territories sharing frontiers with the Arabian Sea on the west, the Lakshadweep Sea to the southwest, the Bay of Bengal on the east and the Indian Ocean on the south. Consequently, the cornucopia of Indian trade is done through at least 13 major seaports in the country- in particular, 90% of the volume and 70% of the value of total Indian trade is done by sea routes.
The import and export of goods at such a large scale in terms of quantum and distance require the diligence of those involved in these practices from the top to the bottom echelons. However, the utmost sense of responsibility of not being negligent rests with the sea carriers who undertake a voyage to distant places, because there lies the maximum probability of harm being done to the goods loaded in the vessels. All these desiderata necessitate the regulation of maritime trade and that of conduct of humans involved in it.
REGULATION OF SEABORNE TRADE: LEGISLATIONS & CONVENTIONS
To ensure the smooth transaction of business on water waves, the legions of legislations and covenants have been worked upon both at the national and international dais. The International Convention for the Unification of Certain Rules of Law relating to Bills of Lading, and Protocol of Signature held in Brussels on August 25, 1924 is a quintessential endeavor in this direction. Simply termed as The Hague Rules, this convention intended to articulate the fundamental norms governing the ‘carriage of goods by the sea’. To keep The Hague Rules in sync with the newer technology and developments, Protocol to Amend the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading was adopted in 1968 and the fresh rules came to be known as The Hague-Visby Rules. The Hamburg Rules, the genesis of which can be traced to the United Nations International Convention on the Carriage of Goods by Sea adopted on 31 March, 1978, is another example of the international regulations. There is yet another important development in this field in the form of the UN Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea adopted in December 2008. Known to be the Rotterdam Rules, the convention on its enforcement will serve as a ‘modern successor’ to all the aforementioned conventions.
In India, the earliest attempts made at regulating the maritime trade can be traced back to the Vedic Period where the reference of the rules of seaborne trade is found in Manusmriti and those of shipping in Kautilya’s Arthashastra. In modern times, we have a set of specific legislations which exclusively deal with the seaborne trade of goods. These include the Indian Carriage of Goods by Sea Act, 1925; the Bill of Lading Act, 1856; the Merchant Shipping Act, 1958; the Marine Insurance Act, 1963. Besides, the Indian Contract Act, the Indian Penal Code, the Indian Evidence Act, the Code of Civil Procedure, the Code of Criminal Procedure, etc. are also applicable as and when required as general legislations.
CARRIER, NEGLIGENCE AND LIABILITY
Article I (a) of the Schedule appended to the Indian Carriage of Goods by Sea Act, 1925 (ICGSA) defines a carrier to be including ‘the owner or the charterer who enters into a contract of carriage with a shipper.’ In simple words, a carrier is the owner of vessel or charterer who undertakes to transport goods from one place to another under a contract of carriage with the shipper. Article III (1) of the Schedule of the ICGSA obliges the carrier to make the following three arrangements before or at the beginning of the voyage:
Make the ship seaworthy,
Properly man, equip and supply the ship,
Make the holds, refrigerating and cool chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation.
Clause 2 of the same article further obliges the carrier to “properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried.” The carrier is duty-bound not to be negligent and exercise due care and diligence while handling the cargo failing which he attracts liability. In Papera Traders Co. Ltd. And Others v. Hyundai Merchant Marine Co. Ltd. And Another, the Queen’s Bench Division (Commercial Court) zeroed in on the exercise of due diligence by the carrier and laid down the various components of the carrier’s duty.
Negligence, on the other hand, is defined by Winfield and Jolowicz as “the breach of a legal duty to take care which results in damage, undesirable by the defendant to the plaintiff.” The first and foremost condition of inviting the liability for negligence is, therefore, the ‘infringement of a legal duty’. This simply implies that a carrier is being negligent and hence liable to pay compensation if he comes a cropper in exercising due diligence in making the above-mentioned arrangements. And Article III (8) of the Schedule of ICGSA prohibits the carrier from evading liability arising out of negligence by adding a clause, covenant or agreement to the contract of carriage.
Article III (8) of the Schedule of Indian Carriage of Goods by Sea Act, 1925
Any clause, covenant or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to or in connection with goods arising from negligence, fault or failure in the duties and obligations provided in this Article or lessening such liability otherwise than as provided in these Rules, shall be null and void and of no effect.
However, Article IV (5) of the Schedule of ICGSA limits the amount of liability of the carrier “for any loss or damage to or in connection with goods” to 666.67 Special Drawing Rights (SDRs) per package or unit or to the equivalent of that amount in other currency, which accounts for 70121.10 Indian Rupees, unless the shipper has declared before shipment the nature and value of lost or damaged goods. But the carrier will not be able to take advantage of this limitation of liability if it is proved that the damage has been knowingly or intentionally done by him. Also, the limitation can be defenestrated by the agreement between the shipper and the carrier provided that the maximum amount hence fixed is not lower than the figure mentioned above.
Furthermore, the carrier will be able to eschew all liability if the suit for loss or damage of goods is not filed within one year of the delivery of the goods or the date when such delivery should have been done. This period may be extended for a further period of 3 months if allowed by the court.
Article IV of the Schedule of ICGSA provides for a laundry- list of defences available to the carrier to abscond the liability which inter alia includes “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.” This implies that the ‘principle of vicarious liability’ is not yet recognized in Indian admiralty law. Other defences include the act of God, the act of war, the act of public enemies, quarantine restrictions, etc. All these aberrations serve en masse as an easy escape for the carrier. Ergo, there’s a need for the more stringent principles of liabilities to minimize the loss or damage done to the goods during the voyage.
[Disclaimer- The views expressed in the article are personal views of the author]
The author may be reached at email@example.com.
[Edited by Mr. Shubham Gurav(Student Editor), Adv. Rajnandini Muduli (Senior Editor)]
Vice Admiral MP Muralidharan, Economic and Strategic Importance of Sea in Modern Indian Context, Indian Defence Review
The 12 Major Seaports of India, WalkThroughIndia http://www.walkthroughindia.com/walkthroughs/the-12-major-sea-ports-of-india/
India’s Coastline! Some Amazing Facts & Figures, The Free Press Journal https://www.freepressjournal.in/cmcm/indias-coastline-some-amazing-facts-and-figures
International Conventions, Admiralty and Maritime Law Guide http://www.admiraltylawguide.com/conven/haguerules1924.html
The Rotterdam Rules, United Nations Conference on Trade and Development https://unctad.org/en/Pages/DTL/TTL/Legal/Rotterdam-Rules.aspx#:~:text=The%20new%20Convention%2C%20to%20be,Hague%20Rules%201924%2C%20the%20Hague%2D
Carrier’s Liability in Carriage of Goods by Sea in India, Legal Service India http://www.legalserviceindia.com/legal/article-2487-carrier-s-liability-in-carriages-of-goods-by-sea-in-india.html
The Law of Liability for Maritime Accidents in India, Shodhganga
8. The Indian Carriage Of Goods By Sea Act, 1925