The liability of the carrier for damaged or lost cargo discharged in Malta : a case for reform

Abstract

Malta's strategic geographical position in the heart of the Mediterranean Sea has inevitably led to Malta playing a leading role in the maritime industry. Nonetheless, in order for such a small country to succeed in this task there has to be a sound legislative framework in place sustaining Malta's position. The Maltese economy is mainly service oriented and hence most of the products have to be imported. However, upon a thorough examination of the Carriage of Goods by Sea Act, one can appreciate the fact that this law applies only to goods leaving the Maltese Islands. Consequently, this thesis will examine the lacuna regarding imports, in particular, the liability of the carrier for damage or lost goods discharged in Malta. The relationship between the shipper and the carrier in the carriage of goods by sea is regulated by a contract of carriage, which is usually evidenced by a bill of lading. The latter document is the basis of the contract, thus it is essential that an examination of the basic fundamental aspects of the contract is made. This is conducted under Chapter 1, which studies the historical development of the bill of lading. A superficial inspection of the functions of the bill of lading will also be undertaken since this is essential for the analysis of the liability of the carrier. The carrier's liability is also dependent on the type of bill of lading used and the clauses incorporated within it. These will be dealt with at the end of Chapter 1. Therefore this chapter will lay down a strong basis for a comprehensive assessment of the responsibilities and consequences for breach of the contract of carnage. This will be followed by an in-depth study of the liability of the carrier under the three international regimes. In Chapter 2 the liability of the carrier under the The International Convention on the Unification of Certain Rules of Law relating to Bills of Lading ("Hague Rules") and The Hague Rules as Amended by the Brussels Protocol 1968 ("Hague-Visby Rules"). Consequently, an analysis will be made on how the courts of Malta have interpreted The Hague and Hague Visby Rules. In Chapter 3 there will be an examination of those cases in which the court have not applied The Hague or Hague Visby Rules but referred to domestic law or to the clauses contained in the bill of lading. Chapter 4 will deal with the liability of the carrier under The United Nations Convention on the Carriage of Goods by Sea, 1978 ('Hamburg Rules'). Recently an initiative taken jointly by the United Nations Commission on International Trade Law ('UNCITRAL') and the Comite Maritim International ('CMI') has led to the development of a new international convention named the 'UNCITRAL Draft Convention on Contracts for the International Carriage of Goods wholly or partly by Sea' ('Draft Convention' or 'Rotterdam Rules'). This convention has been adopted by the United Nations in Athens on October 2008 and is currently open for ratification. If it comes into force the convention will be known as the "Rotterdam Rules". Hence Chapter 5 will analyse the liability of the carrier under this new regime which will hopefully supersede the current rules in force. The crucial part of the conclusion is that dealing with the Way Forward. After examining the liability of the carrier under all the current and future regimes and the position under Maltese law, this part will state the best solution suitable for Malta.