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Under the Hague Rules, Lord Pearson may be right, but under the Hamburg Rules, Mr. Justice Wright’s view seems to meet the requirements of reasonableness and the final result might be in favour of the appellant.[107] In short, taking reasonable measures are more demanding and therefore impose more duty on the carrier than in Hague Rules.
B The Effect of the Abolition of the Nautical Fault Defence
It will be helpful if we review some cases decided under the Hague Rules from the perspective of the Hamburg Rules. In Rio Tinto Company, Ltd. v. The Seed Shipping Company, Ltd.[108] , the master made a fatal mistake, taking the absolutely wrong course, for which he was accused of incompetence by the cargo owner, and resulted in the stranding and the loss of the cargo. If the Hamburg Rules had been applied, the carrier would have been liable for the loss of the cargo while the carrier was released from the liability for the nautical fault defence under the Hague Rules.
However, in Yawata Iron & Steel v. Anthony Shipping [109], the final results probably would be the same. The ship with a damaged hatch cover encountered force 9 winds, the master reversed the course to let his men check the hatch cover. After the hatch was discovered damaged and was unable to be reclosed, the master decided to turn back into the wind and finally the ship sank.[110] The court held that the damage of the hatch alone could not cause the sinking and that it was the master’s decision to turn back into the storm resulting in the tragedy,[111] which brought the carrier within the nautical fault defence. If the Hamburg Rules had been applied, the court would have examined whether the master took reasonable measures to avoid the occurrence of the loss of the cargo. In this case, the master might make several different decisions dealing with the risk. it was hard for any ordinary master with ordinary knowledge to make sure which one was better. Any choice might cause the ship sinking earlier. In this circumstance, the court might think the master’s decision was reasonable. [112]
It can be concluded that although the nautical fault defence is abolished and liability regime is basically in favour of the cargo owner, many cases which were decided in favour of the carrier will not be reversed under the Hamburg Rules. Therefore the carrier’s situation is not as bad as expected.
VI DEBATE ON THE ABOLITION OF THE NAUTICAL FAULT DEFENCE
A Criticism 1: Certainty Issue
The Hamburg Rules may look simple since it has abolished the nautical fault defence. However, it retains an excuse for the carrier that if the carrier proves that he or his men took all reasonable measures to avoid the occurrence of the loss or damage to the cargo and its consequences, he is still not liable.[113] Nobody can clearly say what reasonable measures are. Accordingly, there might be more loopholes than before for lawyers of both the carrier and the cargo owner. Lord Diplock said it has “wonderful scope for variation of application” he “could decide almost every case exactly as I liked” given that very broad definition.[114] It is likely that the previous confusion having been clarified by numerous cases will rise again under the Hamburg Rules. Carruthers pointed out that [115]
By reason of their draftsmanship the (Hamburg Rules) raise a multitude of legal problems, including questions which go to the main thrust of the new rules i.e. the division of responsibility between cargo and ship. It will take the courts many years to resolve these problems.
Finally he concluded that the Hamburg Rules were intended to reduce uncertainty and ambiguities, but in fact it would “create as many legal problems as they purport to solve”[116] . In 1988, the Baltic and International Maritime Conference (BIMCO) even appealed that the Hamburg Rules must be resisted at every opportunity since they would cast aside the results of half a century of expensive litigation and pave the way for another half century of legal debate on a new and different regime.[117]
Before we make a decision whether the Hamburg Rules will cause massive uncertainty in the maritime law practice, a review of the degree of certainty under the Hague Rules is necessary. If we look at the value of case-law from another perspective, the large quantity of cases just means the Hague Rules are not certain enough to reduce the litigation. Carriers have been struggling for bringing themselves to the nautical fault defence while cargo owners have been struggling for accusing carriers of lack of duty of care of cargo or failure to keep the ship seaworthy. All those problems come from the Hague Rules’ “inherently overlapping boundaries: itemised areas of immunity (e.g., “navigation,” “management of the ship,” “fire”) with overlapping specified areas of responsibility (e.g., ship that is “seaworthy” and properly manned and equipped; “care of the cargo”)”.[118] It will benefit all parties to the contract of the carriage of goods by sea if unnecessary uncertainty surrounding the definition and extent of such exceptions is removed.[119]
Another point is worth noting that although the nautical fault defence is removed, cases relating to duty of care of cargo under the Hague Rules are still applicable under the Hamburg Rules since the two regimes have no difference in this respect. [120]
B Criticism 2: Uniformity Issue
Many commentators are worried that the implementation of the Hamburg Rules might cause negative impact on the unification of the maritime law. The Hague Rules and 1968 Protocol [121] are widely accepted among developed countries while the Hamburg Rules are accepted only by a small number of countries. Therefore, the introduction of the Hamburg Rules was somewhat a deviation to pursuing a set of uniform maritime regime. Teley warned that [122]
Most important of all, if (the Hamburg Rules) come into force, they will not be universal but will create a third carriage of goods by sea convention existing simultaneously with the Hague Rules on the shipping lanes of the world. The ensuing contradictions and disputes will frustrate carriers and shippers, confound Admiralty lawyers, ensnare the courts of the world and only please the occasional professor of conflicts of law.
It seems right if we only look at the numbers of countries having adopted the Hague or Hamburg Rules. There is no doubt that the Hague Rules did achieve the high degree of uniformity in the past several decades, but it does not follow that the Hague Rules or its Amendments are the uniform maritime regime worldwide. The application of the Hague Rules is far from uniform.[123] More importantly the carriage of goods by sea is always associated with other transport modes, like land carriage. As said in part III, the Hague Rules is at odds with almost all other transport regimes with regard to the carrier’s liability for negligence. In contrast, the Hamburg Rules have brought the liability regime in line with other transport modes and therefore significantly contributed to the uniformity issue.
C Criticism 3: The Abolition of the Nautical Fault Defence does not Necessarily Make Carrier More Aware of the Duty of Care.
The Hamburg Rules purported to enhance carriers’ duty of care of cargo by abolishing the nautical fault defence with an assumption that the carrier is “wayward”, “recalcitrant” or “slothful” and is reluctant to use more resources to improve its carriage service.[124]
However, opponents of the Hamburg Rules argue that not only cargo owners, but also carriers care for the delivery of the cargo in its good order and conditions. It is essential for the carrier to pay 100 percent attention to care of the cargo otherwise it will not be employed by the merchants and its insurance cost will be very high. If this is the case, its business will not be prosperous. Therefore, “the goodwill of their business, which is amongst their most valuable assets, is based entirely upon the care with which their cargoes are carried and the satisfaction they give to the merchants”[125] . There is an economic incentive for the carrier to care for the cargo.[126] This has been proven by the past maritime practice. Due to the deflation of the currencies, the liability limit has actually decreased a great deal, but there is not evidence of the dramatic increases in cargo damage.[127]
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