International Carriage of Goods by Sea: Legal Regulation

 

March 8, 2025

BRACE Law Firm ©

 

Sea transport accounts for a significant volume of global freight traffic, as no other mode of transport can move such large quantities of cargo within reasonable timeframes and at competitive prices. Furthermore, maritime transport can carry various types of cargo: liquid bulk, dry bulk, oversized items, and more. In many foreign trade transactions, parties utilize sea transport to perform the relevant contract.

Meanwhile, the legal regulation of international carriage of goods by sea currently lacks uniform application, which is why foreign trade participants regularly encounter problems with their correct application.

What Regulates the International Carriage of Goods?

In Russian law, the source of legal regulation for the carriage of goods by sea is the Merchant Shipping Code dated April 30, 1999 (the "MSC RF"), which governs relations arising from merchant shipping. Under the MSC RF, merchant shipping refers to activities related to, among other things, the use of vessels for the carriage of goods. The MSC RF applies to sea vessels during their navigation along both sea routes and inland waterways, unless otherwise provided by an international treaty of Russia.

Regarding the international carriage of goods by sea, it is regulated by three international conventions, one of which has not entered into force. Russia is a party to only one of them.

The International Convention for the Unification of Certain Rules of Law relating to Bills of Lading was adopted on August 25, 1924, in Brussels and entered into force on June 2, 1931 (the "Brussels Convention"). The Brussels Convention was not intended as a comprehensive or independent international act regulating the sea carriage of goods; it was designed exclusively to unify the rules regarding bills of lading. The consolidated text of the Brussels Convention, with amendments introduced by the 1968 Protocol and the 1979 Protocol, constituted new rules known as the Hague-Visby Rules. Russia ratified this convention in this form in 1998.

Another international legal act regulating the sea carriage of goods is the United Nations Convention on the Carriage of Goods by Sea 1978 (the "Hamburg Rules"), which is divided into 7 parts and consists of 34 articles.

Despite the Hamburg Rules being signed and ratified as early as 1978, they entered into force in 1992. Meanwhile, many researchers consider this convention unsuccessful because none of the 34 states that ratified it (Tunisia, Hungary, Nigeria, Tanzania, Zaire, Zambia, etc.) are major maritime powers. Russia has not joined the Hamburg Rules; the USA signed the Convention but has not joined or ratified it. The same applies to Norway and Sweden. This unpopularity of the Hamburg Rules is explained by a rather radical approach regarding the carrier's liability, as the carrier's fault for loss or damage to cargo is presumed. The burden of proving the contrary rests with the carrier.[1]

The scope of application of the Hamburg Rules is broader than that of the Brussels Convention. Both conventions provide that the carriage must be international and one of the parties to the contract must be associated with a country that signed the convention. However, the Brussels Convention is not applicable in a situation where carriage is performed from a port of a state not participating in the convention to a port of a participating state, whereas the Hamburg Rules provide for such a situation.

The provisions of the Hamburg Rules apply in the following cases:

• The port of loading provided for in the contract of carriage by sea is located in one of the contracting states;
• The port of discharge provided for in the contract of carriage by sea is located in one of the contracting states;
• One of the optional ports of discharge provided for in the contract of carriage by sea is the actual port of discharge, and such port is located in one of the contracting states;
• The bill of lading or another document evidencing the contract of carriage by sea is issued in one of the contracting states;
• The bill of lading or another document evidencing the contract of carriage by sea provides that the contract should be governed by the provisions of the Hamburg Rules or the legislation of any state giving effect to them.

The provisions of this convention apply regardless of the nationality of the vessel, carrier, actual carrier, shipper, consignee, or any other interested person.

The provisions of the convention do not apply to charter parties. However, when a bill of lading is issued pursuant to a charter party, the provisions of the convention apply to such bill of lading if it governs the relationship between the carrier and the holder of the bill of lading who is not the charterer.

In addition to the two conventions discussed, there is also the Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea, the so-called "Rotterdam Rules" (the "Rotterdam Rules"), approved in July 2008 at the 41st session of UNCITRAL and then adopted at the 63rd session of the UN General Assembly on December 11, 2008.

The Rotterdam Rules are significantly larger in volume compared to the preceding conventions. They consist of 18 chapters and 96 articles. Some chapters are dedicated to issues that are new in terms of official codification in international sea carriage: Chapter 8 (Electronic Transport Records), Chapter 9 (Delivery of Goods), Chapter 10 (Rights of the Controlling Party), Chapter 11 (Transfer of Rights), Chapter 14 (Jurisdiction), and Chapter 15 (Arbitration).

The Rotterdam Rules have a much broader scope of application. Beyond the concepts of the contract of carriage, shipper, consignee, and transport document, the Rotterdam Rules also define concepts such as volume contract, liner transportation, non-liner transportation, carrier, performing party, maritime performing party, documentary shipper, holder, right of control over the cargo, controlling party, negotiable and non-negotiable transport documents, electronic message, electronic transport and negotiable records, issuance, transfer, contract particulars, vessel, container, vehicle, freight, domicile, and competent court.

The Rotterdam Rules regulate issues related to the contract of carriage of goods by sea in more detail, particularly the obligations and liabilities of the carrier and shipper, and attention is also paid to the issuance and circulation of electronic documents used in this field; however, currently, these rules do not have legal force.

The Rotterdam Rules provide that they enter into force on the first day of the month after the expiration of one year following the date of deposit of the twentieth instrument of ratification, acceptance, approval, or accession. Of the 26 states that signed them (Russia is not among the signatories), only 5 countries have ratified them (Benin, Cameroon, Congo, Spain, Togo).[2]

Regarding the hierarchy of the aforementioned international acts, it should be noted that in the event the Rotterdam Rules are adopted, a conflict situation will not arise regarding which document's norms to apply. Article 89 of the Rotterdam Rules implies that all countries joining them undertake the obligation to denounce either the Brussels Convention or the Hamburg Rules (whichever was previously adopted by the state).

Thus, any possibility of confusion regarding the effect of certain legal norms and provisions is excluded. This requirement for denunciation is reasonable, as the adoption of the Rotterdam Rules was aimed precisely at replacing the two existing legal regimes, which, when applied together, can become sources of many problems related to discrepancies in national legal regulation and the possibility of different judicial interpretations of identical issues.[3]

In international cargo carriage, a multi-layered system of legal regulation has emerged. Most states apply the Brussels Convention taking into account the protocols of 1968 and 1979; however, many countries use the Brussels Convention in its original version. A small number of countries have adopted the Hamburg Rules. Some countries rely on national legislation, specifically in England, where the Carriage of Goods by Sea Act 1971 is used for exports, and in the USA, a 1936 act of the same name applies to both export and import carriage. Many states, being participants in the Brussels Convention, implemented certain provisions of the Hamburg Rules into their national legislation, which are considered compatible with the Brussels Convention (e.g., Norway, Denmark, Sweden, Finland).[4]

What is Included in an International Contract for the Carriage of Goods?

Recall that in accordance with Article 784 of the Civil Code of the Russian Federation (the "Civil Code"), the carriage of goods is performed on the basis of a contract of carriage. General conditions of carriage are determined by transport statutes and codes, other laws, and rules issued in accordance with them. Conditions for the carriage of goods, passengers, and baggage by specific types of transport, as well as the liability of the parties for these carriages, are determined by the agreement of the parties, unless otherwise established by the Civil Code, transport statutes and codes, other laws, or rules issued in accordance with them.

According to Article 785 of the Civil Code, under a contract of carriage of goods, the carrier undertakes to deliver the cargo entrusted to it by the shipper to the destination and hand it over to the person authorized to receive the cargo (the consignee), and the shipper undertakes to pay the established fee for the carriage. The conclusion of a contract of carriage of goods is confirmed by the preparation and issuance of a waybill (bill of lading or another document for the cargo provided for by the relevant transport statute or code) to the shipper.

An international contract for the carriage of goods by sea is a document concluded between the shipper and the carrier. Under the terms of the contract, the carrier undertakes, for remuneration, to deliver the cargo from a port in one country to a port in another country, and the customer is obliged to pay for the service. The cost of carriage depends on the volume and type of cargo, type of contract, complexity of the route, and other factors.

International sea cargo carriages are divided into the following types depending on the type of cargo being carried:

• Bulk, in which cargoes are carried unpackaged in large quantities, such as coal, ore, or grain;
• Container, which are the most common in world trade. Cargoes are carried in special containers that are easily loaded and unloaded, ensuring high efficiency and safety. They are used for consumer goods, industrial equipment, agricultural products, etc.;
• Non-container is transportation where the cargo cannot be packed into a container, such as large-sized cargo, equipment, or vehicles. This is usually carried out in open form on ship decks or in specialized vessels.

There are two types of contracts: a charter party or carriage under a bill of lading. A charter party is used in chartering, where the entire vessel or specific parts of it are provided for the transportation of cargo. This type of contract is used when employing a vessel without a specific fixed schedule.

If a contract is concluded without terms providing the entire vessel or its premises, then a contract of carriage under a bill of lading is drawn up. The shipper has no right to demand specific placement conditions for its cargo. The carrier arranges it on the vessel at its discretion. In this case, the cargo may be placed separately or together with the cargo of other clients. After loading, the shipper is issued a bill of lading, according to which the consignee will be issued the cargo upon delivery. This type of contract is concluded for liner shipping services.

The contract specifies conditions regarding the time and route of carriage. In cases where the cargo requires special handling, this is indicated in the contract so that the carrier can ensure appropriate requirements are met. The document also specifies the cost of the service, the rights and obligations of the parties, the carrier's liability, and situations under which obligations to the client may be terminated.

Under general rules, the parties to a contract may, upon concluding the contract or subsequently, choose by agreement between them the law applicable to their rights and obligations under this contract (Article 1210 of the Civil Code). In the absence of an agreement between the parties on the applicable law, the law of the country where the party performing the service of decisive importance for the content of the contract has its residence or principal place of business at the time of the contract's conclusion applies (Article 1211 of the Civil Code). In a contract of carriage, such party is the carrier.

A contentious issue is the seat of arbitration. None of the international conventions listed above establish mandatory norms specifying the location for dispute resolution or the applicable law. Thus, the resolution of this and other issues remains at the discretion of the conflict-of-law rules of private international law—that is, at the discretion of both parties.

For example, the parties may specify the Maritime Arbitration Commission at the Chamber of Commerce and Industry of the Russian Federation, established in 1930, as the venue for resolving possible disputes.

The Maritime Arbitration Commission administers disputes arising from contractual and other civil law relations originating from merchant shipping, regardless of whether the parties to such relations are subjects of Russian and foreign law, only Russian law, or only foreign law. In particular, the MAC resolves disputes arising from relations on vessel chartering, sea carriage of goods, and carriage of goods in mixed navigation (river-sea). [5]

How is a Contract Concluded for International Carriage of Goods by Sea?

Article 115 of the MSC RF defines that under a contract of carriage of goods by sea, the carrier undertakes to deliver the cargo, which the shipper has transferred or will transfer to it, to the port of destination and hand it over to the person authorized to receive the cargo, while the shipper or charterer undertakes to pay the established fee (freight) for the carriage.

In accordance with Article 117 of the MSC RF, a contract of carriage of goods by sea is concluded in writing, including in the form of an electronic document. The existence and content of a contract of carriage of goods by sea may be evidenced by a charter party, a bill of lading, a bill of lading formed as an electronic document, or other written evidence.

According to Article 118 of the MSC RF, when performing systematic sea cargo carriages, the carrier and the cargo owner may conclude long-term agreements for the organization of sea cargo carriages. When a long-term agreement is concluded, the carriage of a specific batch of cargo is performed in accordance with a contract of carriage of goods by sea concluded on the basis of such long-term agreement.

The Brussels Convention defines a carrier as the shipowner or charterer who is a party to a contract of carriage with a shipper. A contract of carriage applies exclusively to a contract of carriage evidenced by a bill of lading or any similar document of title that is the basis for the sea carriage of goods; it also applies to a bill of lading or similar document issued under a charter party from the moment such bill of lading or document regulates the relations between the carrier and the holder of this bill of lading or document. The carriage of goods covers the period from the moment the goods are loaded on board the vessel until they are discharged from the vessel (Article 1).

The provisions of the Brussels Convention apply to any bill of lading relating to the carriage of goods between ports of two different states if:

• The bill of lading is issued in a contracting state;
• The carriage is performed from a port located in a contracting state;
• The contract contained in or evidenced by the bill of lading provides that the convention rules or the legislation of any state giving effect to them apply to this contract, whatever the nationality of the vessel, carrier, shipper, consignee, or any other interested person.

In accordance with Article 3 of the Brussels Convention, after receiving the goods and taking them into his charge, the carrier must, on demand of the shipper, issue a bill of lading containing such data:

• The leading marks necessary for identification of the cargo, as furnished in writing by the shipper before the loading of such cargo started, provided these marks are stamped or clearly indicated in another way on the cargo if unpackaged, or on the cases or packaging in which the cargo is contained, so that the marks remain sufficiently legible until the end of the voyage;
• The number of packages or pieces, or the quantity or weight, as the case may be and in accordance with what is furnished in writing by the shipper;
• The apparent order and visible condition of the cargo.

However, the carrier is not obliged to state or show in the bill of lading marks, number of packages, quantity, or weight which he has reasonable grounds for suspecting do not accurately correspond to the cargo actually received by him, or which he has no possibility to check by reasonable means.

Such a bill of lading creates a presumption, unless proven otherwise, of receipt of the cargo by the carrier. However, proving the contrary is not permitted when the bill of lading is transferred to a third party acting in good faith.

The Hamburg Rules define a contract of sea carriage as any contract whereby the carrier, in exchange for the payment of freight, undertakes to carry goods by sea from one port to another; however, a contract covering carriage by sea and also carriage by some other means is considered a contract of sea carriage only to the extent it relates to the carriage by sea.

When the carrier or the actual carrier takes the cargo into his charge, the carrier must, on demand of the shipper, issue a bill of lading to the shipper.

The bill of lading may be signed by a person having authority from the carrier. A bill of lading signed by the master of the vessel on which the cargo is carried is considered signed on behalf of the carrier; however, there are no such clarifications regarding the shipper.

The signature on the bill of lading may be handwritten, printed in facsimile, perforated, stamped, in symbols, or by any other mechanical or electronic means, provided this does not contradict the law of the country where the bill of lading is issued.

Similar to the Brussels Convention, the Hamburg Rules do not fully define the form of the bill of lading, only establishing a list of data mandatory for inclusion:

• The general nature of the cargo, the leading marks necessary for identification of the cargo, an express indication (where appropriate) regarding the dangerous nature of the cargo, the number of packages or pieces, and the weight of the cargo or its quantity otherwise expressed, all these data being indicated as presented by the shipper;
• The apparent condition of the cargo;
• The name of the carrier and the location of its principal place of business;
• The name of the shipper;
• The name of the consignee, if named by the shipper;
• The port of loading according to the contract of carriage by sea and the date of receipt of the cargo by the carrier at the port of loading;
• The port of discharge according to the contract of carriage by sea;
• The number of originals of the bill of lading if there are more than one;
• The place of issuance of the bill of lading;
• The signature of the carrier or a person acting on its behalf;
• The freight in the amount payable by the consignee, or another indication that freight is to be paid by them;
• An indication (where appropriate) that the cargo must or may be carried on deck;
• The date or period of delivery of the cargo at the port of discharge, if expressly agreed by the parties;
• Increased limits or limits of liability, if such are agreed upon.
• It should be noted that Article 144 of the MSC RF also contains a list of information that must be included in the bill of lading:
• The name of the carrier and its location;
• The name of the port of loading according to the contract of carriage by sea and the date of receipt of the cargo by the carrier at the port of loading;
• The name of the shipper and its location;
• The name of the port of discharge according to the contract of carriage by sea;
• The name of the consignee, if named by the shipper;
• The name of the cargo, leading marks necessary for identifying the cargo, an indication where appropriate of dangerous nature or special properties of the cargo, the number of packages or pieces, and the mass of the cargo or its quantity otherwise expressed. All data is indicated as presented by the shipper;
• The apparent condition of the cargo and its packaging;
• The freight in the amount payable by the consignee, or another indication that freight is to be paid by them;
• The time and place of issuance of the bill of lading;
• The number of originals of the bill of lading if there are more than one;
• The signature of the carrier or a person acting on its behalf.

By agreement of the parties, other data and clauses may also be included in the bill of lading.

What to Check with an International Carrier for Sea Carriage?

When choosing a company that will perform sea cargo carriage, attention should be focused on the following nuances:

• The list of transported cargoes, as some carriers refuse to deliver certain cargoes by sea. Most often, companies do not take dangerous, valuable, or fragile goods;
• Delivery times;
• Possibility of groupage deliveries, where the client only pays for the volume their cargo occupied in the container;
• Reviews and the carrier's duration of operation, which can be found not only on their official website but also on social media pages and various forums;
• Insurance;
• Cost of services, including the possibility of incurring additional expenses.

What Disputes Arise in International Sea Carriage and How to Avoid Them?

According to the Brussels Convention, before the voyage, the carrier is obliged to exercise due diligence to make the vessel seaworthy, properly man, equip, and supply the vessel, and make the holds, refrigerating and cold chambers, and all other parts of the vessel in which goods are carried fit and safe for their reception, carriage, and preservation.

The duty of the carrier from the moment of accepting the cargo for carriage until the moment of its delivery is to properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods. Meanwhile, the shipper and charterer are liable for losses caused to the carrier unless they prove that the losses were not caused by their fault or the fault of persons for whose actions or omissions they are responsible.

For instance, the shipper is obliged to pay for sea carriage. From the materials of case No. A56-68331/2022, it follows that the plaintiff properly provided the defendant with sea carriage services, but these services were not paid for by the defendant. The courts established that "despite the demand to pay the debt, the funds were not paid to the carrier". The stated claims were satisfied.[6]

We draw attention to such a term as "Laytime". Article 130 of the MSC RF defines it as the period during which the carrier provides the vessel for loading and keeps it under loading without payments additional to the freight. Laytime is determined by agreement of the parties or, in the absence of such agreement, by the times usually accepted at the port of loading.

Furthermore, upon the expiration of laytime, additional waiting time ("demurrage time") may be established by agreement of the parties. In the absence of agreement, the duration of demurrage time is determined by times usually accepted at the port of loading (Article 131 of the MSC RF).

The amount of payment due to the carrier for vessel detention during demurrage time ("demurrage") is determined by agreement of the parties or, in the absence of agreement, according to rates usually accepted at the relevant port. If no such rates exist, the amount of payment for vessel detention is determined by the costs of maintaining the vessel and its crew (Article 132 of the MSC RF).

For vessel detention beyond the demurrage time, the charterer is obliged to compensate the carrier for the caused losses if the vessel detention occurred for reasons beyond the carrier's control (Article 135 of the MSC RF).

Thus, it is extremely important to observe the times for loading and unloading the vessel and its stay in port to avoid incurring additional costs.

So, in the consideration of case No. A53-4206/2024, the courts noted that "the charterer, as a subject professionally performing sea carriages, when fulfilling the obligation should have proceeded from the mandatory nature of unloading the vessel within the laytime and, consequently, organized the acceptance of the vessel at the port specified by them". [7]

Compensation for Damage in Case of Cargo Loss and Damage

In accordance with the Brussels Convention, it is considered that the shipper guaranteed to the carrier at the time of loading the accuracy of marks, number of packages, quantity, and weight of the cargo as provided by them, and the shipper is obliged to compensate the carrier for all losses, damages, and expenses arising as a consequence or result of inaccuracies in this data. The carrier's right to such compensation does not limit their liability and obligations under the contract of carriage.

Thus, in the materials of case No. A43-3510/2023, it is indicated that the bills of lading contain a clause stating that "the quality, quantity, and weight of cargo packages are unknown to the carrier. Cargo information is according to the notification of the charterer/shipper". The courts established that the parties agreed that "the freight forwarder is not liable for discrepancies between the weight stated in the transport documents and the actual weight of the cargo, in the event the order does not contain instructions for checking the weight in the country of origin". In the order, the instruction for checking the cargo weight was absent. Consequently, the courts concluded there were no grounds for satisfying the claim for recovery of the cost of under-delivered goods.[8]

If notice of loss or damage, indicating its nature, is not given in writing to the carrier at the port of discharge before or at the time of the removal of the goods and their handover, such removal shall be prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading.

If the loss or damage is not apparent, notice must be given within 3 days from the delivery of the goods. Written notice is not required if the condition of the cargo at the time of its receipt was established jointly.

In any event, the carrier and the ship shall be discharged from all liability in respect of the goods unless suit is brought within 1 year after their delivery or the date when they should have been delivered. This period may be extended by an agreement concluded by the parties after the cause of action has arisen.

Any clause, condition, or agreement in a contract of carriage relieving the carrier or ship from liability for loss or damage to cargo arising from negligence, fault, or failure in duties, or lessening such liability otherwise than as provided in the Brussels Convention, shall be null and void and of no effect.

According to Article 4 of the Brussels Convention, the carrier is not liable for loss or damage arising from or resulting from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy, or to ensure that the ship is properly manned, equipped, and supplied, or to 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. Whenever loss or damage has resulted from unseaworthiness, the burden of proving the exercise of due diligence shall be on the carrier or other person claiming exemption.

The carrier is not liable for loss or damage arising or resulting from:

• Acts, neglect, or default of the master, crew, pilot, or servants of the carrier in the navigation or management of the ship;
• Fire, unless caused by the actual fault or privity of the carrier;
• Perils, dangers, and accidents of the sea or other navigable waters;
• Act of God;
• Act of war;
• Act of public enemies;
• Arrest or restraint of princes, rulers, or people, or seizure under legal process;
• Quarantine restrictions;
• Act or omission of the shipper or owner of the goods;
• Strikes or lockouts or stoppage or restraint of labor from whatever cause, whether partial or general;
• Riots and civil commotions;
• Saving or attempting to save life or property at sea;
• Wastage in bulk or weight or any other loss or damage arising from inherent defect, quality, or vice of the goods;
• Insufficiency of packing;
• Insufficiency or inadequacy of marks;
• Latent defects not discoverable by due diligence;
• Any other cause arising without the actual fault or privity of the carrier; however, the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault nor privity of the carrier contributed to the loss or damage.

The reason for the consideration of case No. A51-11990/2018 was the total loss of cargo carried by sea. During the consideration of the case, it was established that the causes of the accident were miscalculations in the method of placement and securing of the cargo, as well as the sudden occurrence during the voyage of the impact of an irresistible force of nature on the vessel (gale-force wind). Meanwhile, the courts established that the defendant "is a professional freight forwarder and could not but have assumed that when carrying oversized cargo by sea as deck cargo, its loss is possible if such cargo is improperly secured on the deck of a sea vessel. Consequently, they should have taken measures to ensure proper control over the securing of oversized cargo on the vessel's deck". The courts established that the cargo was accepted by the defendant for carriage, part of the cargo was not delivered to the destination, another part as a result of delivery received damage, which testifies to the defendant's non-fulfillment of the accepted obligations under the contract; therefore, the defendant is obliged to compensate the plaintiff for losses caused by the loss and damage of the cargo. [9]

In the consideration of another case No. A32-19459/2017, it was established that when carrying cargo, a requirement to observe a special temperature regime was indicated. The judicial instances concluded that the executor's obligation to observe the temperature regime in the container "did not cease both during carriage on the vessel and in the period after discharge of the container until its removal from the port territory". Since damage to the disputed cargo occurred during the period when it was under the carrier's responsibility due to non-observance of the temperature regime, the courts rightfully satisfied the claim. [10]

The shipper is not responsible for loss or damage sustained by the carrier or the ship arising or resulting from any cause without the act, fault, or neglect of the shipper.

The Brussels Convention notes that no deviation in saving or attempting to save life or property at sea shall be deemed to be an infringement or breach, and the carrier shall not be liable for any loss or damage resulting therefrom.

Unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading, neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the goods in an amount exceeding 666.67 units of account per package or unit or 2 units of account per kilogram of gross weight of the goods lost or damaged, whichever is higher.

The total amount recoverable shall be calculated by reference to the value of such goods at the place and time at which they are discharged from the ship or should have been discharged in accordance with the contract. The value of the goods shall be fixed according to the commodity exchange price, or, if there be no such price, according to the current market price, or, if there be neither, by reference to the normal value of goods of the same kind and quality.

When a container, pallet, or similar article of transport is used to consolidate goods, the number of packages or units enumerated in the bill of lading as packed in such article of transport shall be deemed the number of packages or units. Except as aforesaid, such article of transport shall be considered the package or unit.

The unit of account mentioned in this article is the Special Drawing Right as defined by the International Monetary Fund. The aforementioned amounts shall be converted into national currency on the basis of the value of that currency on a date to be determined by the law of the court seized of the case. The value of the national currency of a state which is a member of the International Monetary Fund, in terms of Special Drawing Rights, shall be calculated in accordance with the method of valuation applied by the International Monetary Fund in effect at the date in question for its operations and transactions. The value of the national currency of a state which is not a member of the International Monetary Fund shall be calculated in a manner determined by that state.

It should be noted that the carrier shall not be entitled to the benefit of the limitation of liability if it is proved 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.

By agreement between the carrier and the shipper, other maximum amounts may be fixed, provided that the maximum amount so fixed shall not be less than the appropriate maximum.

The carrier is not responsible for loss or damage caused to or in connection with the goods if the nature or value thereof has been knowingly misstated by the shipper in the bill of lading.

Goods of an inflammable, explosive, or dangerous nature to the shipment whereof the carrier, knowing their nature or character, would not have consented, may at any time before discharge be landed at any place or destroyed or rendered innocuous by the carrier without compensation, and the shipper of such goods shall be liable for all damages and expenses directly or indirectly arising out of or resulting from such shipment. If any such goods shipped with such knowledge and consent shall become a danger to the ship or cargo, they may in like manner be landed, destroyed, or rendered innocuous by the carrier without liability on the part of the carrier except to general average, if any.

The Hamburg Rules significantly expanded the potential period of the carrier's liability, although at the same time some specialists believe such an assertion is only theoretical, and in practice, the convention does not provide for any significant extension of the carrier's liability period. Nevertheless, according to the Hamburg Rules, the carrier's responsibility for the goods under this Convention covers the period during which the goods are in the charge of the carrier at the port of loading, during the carriage, and at the port of discharge. It is implied that the carrier has taken responsibility for the cargo from the moment they accepted it from the shipper. Thus, the Hamburg Rules eliminated difficulties with determining the person responsible for losses obtained during loading or unloading of the goods.[11]

The carrier is liable for damage resulting from loss of or damage to the goods, as well as from delay in delivery, if the occurrence which caused the loss, damage, or delay took place while the goods were in his charge, unless the carrier proves that he took all measures that could reasonably be required to avoid the occurrence and its consequences.

Delay in delivery occurs when the goods have not been delivered at the port of discharge provided for in the contract of carriage by sea within the time expressly agreed upon or, in the absence of such agreement, within the time which it would be reasonable to require of a diligent carrier, having regard to the circumstances of the case. The person entitled to make a claim for the loss of goods may treat the goods as lost if they have not been delivered within 60 consecutive days following the expiry of the time for delivery.

The carrier is liable:

• For loss of or damage to the goods or delay in delivery caused by fire, if the claimant proves that the fire arose from fault on the part of the carrier;
• For such loss, damage, or delay in delivery which, if proved by the claimant, occurred through the fault of the carrier in taking all measures that could reasonably be required to put out the fire and avoid or mitigate its consequences.

The carrier is not liable, except in general average, where loss, damage, or delay in delivery resulted from measures to save life or from reasonable measures to save property at sea.

The liability of the carrier for damage resulting from loss of or damage to goods is limited to an amount equivalent to 835 units of account per package or other shipping unit or 2.5 units of account per kilogram of gross weight of the goods lost or damaged, whichever is the higher amount. The liability of the carrier for delay in delivery is limited to an amount equivalent to two and a half times the freight payable for the goods delayed, but not exceeding the total freight payable under the contract of carriage by sea.

When a container, pallet, or similar article of transport is used to consolidate goods, the packages or other shipping units enumerated in the bill of lading, if issued, or otherwise in any other document evidencing the contract of carriage by sea, as packed in such article of transport, are deemed packages or shipping units. Except as aforesaid, the goods in such article of transport are deemed one shipping unit. In those cases where the article of transport itself has been lost or damaged, that article of transport, if not owned or otherwise supplied by the carrier, is considered one separate shipping unit.

Just as in the Brussels Convention, the unit of account in the Hamburg Rules means the Special Drawing Right. Also, by agreement between the carrier and the shipper, limits of liability exceeding those established may be fixed.

The shipper is not liable for loss sustained by the carrier or the actual carrier, or for damage sustained by the ship, unless such loss or damage was caused by the fault of the shipper.

The shipper must mark or label in a suitable manner dangerous goods as dangerous. Where the shipper hands over dangerous goods to the carrier or an actual carrier, as the case may be, the shipper must inform him of the dangerous character of the goods and, if necessary, of the precautions to be taken. If the shipper fails to do so and such carrier or actual carrier does not otherwise have knowledge of their dangerous character, the shipper is liable to the carrier and any actual carrier for the loss resulting from the shipment of such goods. Furthermore, the goods may at any time be unloaded, destroyed, or rendered innocuous, as the circumstances may require, without payment of compensation.

One of the ways to protect the carrier from the shipper's bad faith has been reservations in the bill of lading. Thus, the carrier should enter a reservation in the bill of lading regarding inaccuracies of data, grounds for suspicion, or the lack of a real possibility to check the cargo for its nature, leading marks, number of packages or pieces, weight, or quantity of the cargo. If the carrier or other person issuing the bill of lading on his behalf does not indicate in the bill of lading the apparent condition of the goods, he is deemed to have noted in the bill of lading that the goods were in apparent good condition.

If notice of loss or damage, specifying the general nature of such loss or damage, is not given in writing by the consignee to the carrier not later than the working day after the day when the goods were handed over to the consignee, such handing over is prima facie evidence of the delivery by the carrier of the goods as described in the document of transport or, if no such document has been issued, in good condition. Where the loss or damage is not apparent, notice in writing must be given within 15 consecutive days after the day when the goods were handed over to the consignee.

No compensation is payable for loss resulting from delay in delivery unless a notice has been given in writing to the carrier within 60 consecutive days after the day when the goods were handed over to the consignee.

If notice of loss or damage, specifying the general nature of the loss or damage, is not given in writing by the carrier or actual carrier to the shipper within 90 consecutive days after the occurrence of such loss or damage or after the delivery of the goods, whichever is later, the failure to give such notice is prima facie evidence that the carrier or the actual carrier has sustained no loss or damage due to the fault of the shipper, his servants, or agents.

The limitation period for disputes arising in connection with the carriage of goods under the Hamburg Rules is 2 years. The limitation period commences on the day on which the carrier has delivered the goods or part of the goods or, in cases where no goods have been delivered, on the last day on which the goods should have been delivered. The day on which the limitation period commences is not included in the period.

In the case of judicial proceedings, the plaintiff, at his option, may institute an action in a court which is competent according to the law of the state of the court and within the jurisdiction of which is situated one of the following places:

• The principal place of business or, in the absence thereof, the habitual residence of the defendant;
• The place where the contract was made, provided that the defendant has there a place of business, branch, or agency through which the contract was made;
• The port of loading or the port of discharge;
• Any additional place designated for that purpose in the contract of carriage by sea.

The parties may provide by agreement evidenced in writing that any dispute that may arise relating to the carriage of goods under the Hamburg Rules shall be referred to arbitration.

The arbitration proceedings shall, at the option of the claimant, be instituted at one of the following places:

• A place in a state within whose territory is situated the principal place of business of the defendant or, in the absence thereof, the habitual residence of the defendant; or the place where the contract was made, provided that the defendant has there a place of business, branch, or agency through which the contract was made; or the port of loading or discharge;
• Any place designated for that purpose in the arbitration clause or agreement.

In this article, we have considered the legal regulation of international sea carriages, the procedure for concluding a contract of carriage, the carrier's liability limits, as well as contentious issues that may arise during the sea carriage of goods.

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References

[1] Nesterov M.N. The problem of collision of international rules for the carriage of goods by sea (Hague Rules, Hague-Visby, Hamburg Rules). "Ocean Management" Journal, 2023, No. 4(22).

[2] Information from the United Nations website.

[3] Kosovskaya V.A. The effectiveness of modern international legal regulation of sea carriages of goods. MCU Bulletin, "Legal Sciences" Series, 2020.

[4] Bazhanov S.V. The practice of applying international rules on sea carriages of goods and problems of their unification. "Problems of Modern Science and Education" Journal, 2017.

[5] Information from the website of the Chamber of Commerce and Industry of the Russian Federation.

[6] Resolution of the Arbitration Court of the North-Western District dated September 22, 2023, in case No. A56-68331/2022.

[7] Resolution of the Arbitration Court of the North Caucasus District dated December 18, 2024, No. A53-4206/2024.

[8] Resolution of the Arbitration Court of the Volga-Vyatka District dated October 15, 2024, in case No. A43-3510/2023.

[9] Resolution of the Arbitration Court of the Far Eastern District dated August 16, 2019, in case No. A51-11990/2018.

[10] Resolution of the Arbitration Court of the North Caucasus District dated May 10, 2018, in case No. A32-19459/2017.

[11] Kasatkina A.S. International sea carriages of goods: current problems of legal regulation. HSE Journal, 2016, No. 2.