Authored By: Bello Ololade Taofeekat
1.0 Introduction
The Hague-Visby Rules constitute one of the most influential legal regimes governing the carriage of goods by sea, yet their approach to carrier liability continues to generate controversy. While the Rules purport to balance the competing interests of carriers and cargo owners, their extensive defences and limitations of liability raise important questions regarding the adequacy of cargo protection in modern maritime commerce. Judicial interpretation has further shaped this balance, often determining the practical reach of carrier obligations.
This paper critically analyses the scope of a carrier’s liability for loss or damage to goods under the Hague-Visby Rules. It examines the core duties imposed upon carriers, the principal exceptions and defences available under Article IV, and the operation of liability limitation provisions. Particular attention is given to the allocation of the burden of proof and the judicial treatment of key defences, as these factors significantly influence the effectiveness of the liability regime. By evaluating leading judicial decisions and academic commentary, this paper argues that although the Hague-Visby Rules provide a structured framework for carrier liability, their continued emphasis on carrier protection undermines the equitable treatment of cargo interests. The analysis ultimately questions whether the Rules remain fit for purpose in contemporary shipping practice.
2.0 Legal Framework of the Hague-Visby Rules
The Hague-Visby Rules represent a pivotal shift from the absolute liability of the common law “common carrier” to a regulated statutory regime. Historically, carriers used expansive “negligence clauses” in bills of lading to exonerate themselves from almost all liability, leading to the International Convention for the Unification of Certain Rules of Law relating to Bills of Lading 1924 (the ‘Hague Rules’). These were later updated by the 1968 Brussels Protocol to become the Hague-Visby Rules.
In the United Kingdom, these Rules are given the force of law by the Carriage of Goods by Sea Act 1971. Under section 1(2) of the Act, the Rules apply to any contract of carriage of goods by sea where the port of shipment is in the UK and the contract provides for the issue of a bill of lading. The Rules establish a “minimum standard” of carrier obligations that cannot be lessened by contract; any clause attempting to do so is rendered null and void under Article III Rule 8.
3.0 Carrier’s Duties and Obligations
The carrier’s primary responsibilities are bifurcated into the duty to provide a seaworthy ship and the duty to care for the cargo.
3.1 Duty of Seaworthiness
Article III Rule 1 requires the carrier “before and at the beginning of the voyage” to exercise “due diligence” to make the ship seaworthy. Unlike the absolute common law warranty of seaworthiness, this is a duty of reasonable care. However, in Riverstone Meat Co Pty Ltd v Lancashire Shipping Co Ltd (The Muncaster Castle),¹ the House of Lords held that this duty is non-delegable. The carrier remains liable for a lack of due diligence by a ship-repairer’s employee, even if the carrier was not personally negligent.
3.2 Proper Care of Cargo
Under Article III Rule 2, the carrier must “properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried.” The interpretation of “properly” was settled in Albacora SRL v Westcott & Laurance Line Ltd,² where it was held to mean in accordance with a sound system, taking into account the specific nature of the cargo.
4.0 Defences and Exceptions Available to the Carrier
Article IV Rule 2 provides a “catalogue” of 17 exceptions that exonerate the carrier if the loss or damage results from specified causes.
4.1 Nautical Fault and Perils of the Sea
Perhaps the most controversial is Article IV Rule 2(a), which exempts the carrier from liability for 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.” This “nautical fault” exception allows a carrier to
escape liability for its employees’ negligence, a protection rarely seen in other modes of transport.
4.2 Burden of Proof
The Supreme Court in Volcafe Ltd v Compania Sud Americana de Vapores SA³ clarified the burden of proof. Once the cargo owner proves the goods were shipped in good condition but discharged damaged, the carrier bears the legal burden of proving that the loss was caused by an Article IV Rule 2 exception and that they exercised reasonable care (or that the loss would have occurred regardless of their care).
5.0 Limitation of Liability
Where a carrier is liable, Article IV Rule 5 allows them to limit their financial exposure. 5.1 Monetary Limits
Liability is limited to 666.67 Special Drawing Rights (SDR) per package or unit, or 2 SDR per kilogram of gross weight of the goods lost or damaged, whichever is higher.
5.2 Breaking the Limit
Breaking these limits is difficult. Under Article IV Rule 5(e), the cargo owner must prove that the damage resulted from an act or omission of the carrier done with “intent to cause damage, or recklessly and with knowledge that damage would probably result.” This subjective test makes the limit virtually unbreakable for simple negligence, as seen in MSC Mediterranean Shipping Co SA v Alianca Navegacao e Logistica Ltda (The MSC Rosa M).⁴
6.0 Critical Analysis and Challenges
The Hague-Visby Rules reflect a 20th-century compromise that struggles with 21st-century technology. The “nautical fault” exception is widely criticized as an archaic relic, as modern communications and GPS make carrier oversight of navigation more feasible. Furthermore, the restriction of seaworthiness to the period “before and at the beginning of the voyage” (the ‘doctrine of stages’) fails to address the carrier’s ability to remedy defects during modern, multi port voyages. While the Rules provide uniformity, they arguably place an unfair financial burden on cargo interests who must often insure against risks created by the carrier’s own servants.
7.0 Conclusion
The Hague-Visby Rules remain the dominant framework for maritime liability, but their protective stance toward carriers is increasingly out of step with modern transport law. While the Rules ensure a minimum level of protection for cargo owners, the hurdle of Article IV defences and the high bar for breaking liability limits suggest that the balance of power remains tilted toward the carrier. Future adoption of more modern regimes, such as the Rotterdam Rules, may be necessary to ensure an equitable distribution of maritime risk.
Reference(S):
Primary Sources
Cases
• Albacora SRL v Westcott & Laurance Line Ltd [1966] 2 Lloyd’s Rep 53 (HL)
• MSC Mediterranean Shipping Co SA v Alianca Navegacao e Logistica Ltda (The MSC Rosa M) [2000] 2 Lloyd’s Rep 399 (QB)
• Riverstone Meat Co Pty Ltd v Lancashire Shipping Co Ltd (The Muncaster Castle) [1961] AC 807 (HL)
• Volcafe Ltd v Compania Sud Americana de Vapores SA [2018] UKSC 61, [2019] AC 358 Statutes and International Conventions
• Carriage of Goods by Sea Act 1971
• International Convention for the Unification of Certain Rules of Law relating to Bills of Lading (Brussels, 25 August 1924) (Hague Rules)
• Protocol to Amend the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading (Brussels, 23 February 1968) (Hague-Visby Rules)
¹ Riverstone Meat Co Pty Ltd v Lancashire Shipping Co Ltd (The Muncaster Castle) [1961] AC 807.
² Albacora SRL v Westcott & Laurance Line Ltd [1966] 2 Lloyd’s Rep 53.
³ Volcafe Ltd v Compania Sud Americana de Vapores SA [2018] UKSC 61.
⁴ MSC Mediterranean Shipping Co SA v Alianca Navegacao e Logistica Ltda (The MSC Rosa M) [2000] 2 Lloyd’s Rep 399.
