Page 52 - 2024 - Q4 - Minerva in Focus

MINERVA IN FOCUS

The Hague Rules –

100 years old

and still standing

The Hague Rules came into being 100 growing complexity of trade demanded a
years ago this year, becoming the first in- more harmonised framework, and in 1924,
ternational convention governing the rights the Hague Rules were signed by 26 states in
and obligations under bills of lading for the Brussels, thanks to the efforts of the Comité
carriage of goods by sea. As the volume Maritime International (CMI).
of internationally traded goods grew, the The Hague Rules represented a compro-
Hague Rules were born out of a need for mise between shipowning and cargo-rep-
uniformity in the allocation of risk between resenting nations. They imposed obligations
shipowners and cargo interests. on carriers, including ensuring seaworthi-
ness and exercising due care for the cargo.
The backdrop In exchange, carriers were granted specific
The story of the Hague Rules begins with protections, such as limited liability, excep-
the evolving dynamics of risk allocation tions for certain perils, a one-year time bar
between carriers and cargo interests. In on claims, and safeguards against improp-
ancient Rome, carriers bore the burden of erly declared dangerous goods.
liability, as they were deemed best placed Significantly, the rules affirmed the eviden-
to safeguard goods from harm. However, tiary value of bills of lading, giving buyers
the risks faced by early sailing ships — from confidence in goods descriptions and en-
piracy to unpredictable weather — led to abling smoother transactions. This frame-
the development of standard exceptions work, balancing carrier and cargo interests,
to carrier liability, including inherent vice of became a critical tool for fostering trust in
goods and acts of nature. international trade.
As shipowners gained influence in global
trade, they expanded these exceptions, of- Adapting to changing times
ten to the detriment of cargo interests. The The rise of container shipping in the mid-
advent of cargo insurance allowed traders 20th century necessitated revisions to the
to transfer risk, but dissatisfaction with the Hague Rules. The Hague-Visby Rules of
imbalance in liability persisted, particularly 1968 modernised liability limits and ad-
in the United States. This led to the Har- dressed some criticisms of the original
ter Act of 1893, a legislative precursor to rules. Yet, the explosion of global trade
the Hague Rules, aimed at achieving fairer and the rise of developing nations in the
risk allocation. Despite its merits, the Harter maritime arena spurred calls for further
Act’s effectiveness was limited by its juris- reforms.
dictional scope, as foreign shipowners and The Hamburg Rules of 1978, developed by
courts often ruled differently. the United Nations Commission on Interna-
tional Trade Law (UNCITRAL), aimed to shift
The Hague Rules more liability onto carriers and extended
The transition from sail to steam and the their responsibilities beyond tackle-to-tackle
advent of shipping regulations, including the transport to include ports of receipt and
first Safety of Life at Sea (SOLAS) conven- delivery. However, these rules failed to gain
tion in 1914 after the Titanic disaster, further widespread adoption, with many nations
set the stage for uniform global rules. The viewing them as overly cargo friendly.

50 ISSUE 30 / Q4 2024