Rolf Herber outlines the reformed German maritime law. It offers wide freedom of contract and gives much foreseeability of legal consequences, he argues
1. Introduction
Germany recently has modernized its Commercial Code (Handelsgesetzbuch / HGB) by completely redrafting the 5 th Book[ds_preview] concerning maritime transport (Gesetz vom 20. April 2013, Bundesgesetzblatt 2013 Teil I, Seite 831). The reform followed the modernization of the 4 th Book covering all other means of transport – in other words: the general rules on transport law – which took place already in 1998(Gesetz vom 25. Juni 1998, Bundesgesetzblatt 1998 Teil I, Seite 1588). Both law reforms have been prepared by expert panels and were intensely discussed with the German Association for Transport Law (Deutsche Gesellschaft für Transportrecht) and the German Maritime Law Association (Deutscher Verein für Internationales Seerecht) and, of course, with representatives of the industry. They have restored the whole German transport law to a modern codification in the Commercial Code.
In particular for the 5 th Book on maritime transport the German legislator had to admit that his margin was limited by many international conventions and usages with which the new rules should comply. This demand did not raise problems in respect of conventions like those on Collision (1910), on Salvage (1989), on Maritime Liens (1967 – with few exceptions), on Limitation for Maritime Claims (1976 with Protocol of 1999), and for the many conventions providing liabilities in respect of oil pollution. Some of them are incorporated in the new code, some apply by their own text.
There was, however, an obvious problem relating to the core of the rules on maritime transport, the rules on liability for damage caused to the goods. Insofar no generally accepted international rules exist. After more than hundred years of work the international instruments of unification in this field are multiple and the adherence to them is split up in an outdated Brussels Convention of 1924 (the so-called Hague Rules), an insufficient Brussels Protocol thereto of 1968 (the so-called Visby Protocol) and an UN Convention on Carriage of Goods by Sea of 1978 (the Hamburg Rules). All three instruments are in force, albeit with different (but in all cases relatively low) numbers of participation.
It is true that there is – at least among major shipping countries – a certain uniformity of some principles, supported in practice mainly by paramount clauses in bills of lading (B/L). According thereto the basis of most of the rules seems to be the Visby Rules as regards principle and limits of carrier’s liability. However, it must not be disregarded that modern international discussions and all relevant international decisions since the adoption to that liability system have changed in some important respects: As well the Hamburg Rules and its revised version, the Rotterdam Rules, both after long preparatory work on a world-wide level, have unanimously decided to apply the liability rules – which remained in principle based on the Visby model – should apply to all contracts of carriage, irrespective of whether or not a B/L has been issued, that they should apply to the whole period of custody of the carrier und that the carrier should no longer enjoy an exemption of the carrier for nautical fault of the crew. In addition, the new conventions hold the actual carrier liable.
The hope finally to obtain worldwide uniformity did not improve by the Rotterdam Rules(UN Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea, which was adopted in December 2008 by the General Assembly of the UN and opened for signature on invitation of the Dutch Government in a signing conference at Rotterdam 2009, therefore named »Rotterdam Rules«). This recent convention is meant to revise the Hamburg Rules in order to make them more acceptable to states. The liability system is not fundamentally different from that of the Hamburg Rules, however, because of the opposition of the common law countries to the traditional civil law way of clear drafting by the Hamburg Rules, it is written in a more imprecise and vague way and thus creates many uncertainties and doubts in interpretation. It does in substance not add benefit to the original Hamburg Rules. Apart from the shortcomings in drafting it presents a great impediment against adherence for many countries in a geographical situation like Germany: the wider scope of application. The Rotterdam Rules include in the maritime liability system multimodal transport without preserving the application of various and highly developed national mandatory rules on liability for the inland part of such transportation.
The Rotterdam Rules have been ratified, up to now, only by three states (Spain, Togo and Congo.) but need twenty ratifications for entry into force. So one has, in any event, to realize that this new convention will come in force, if at all, only after a long period of time. The German legislator had to face this international situation and to find a medium solution. Germany in any event could not defer the maritime law reform further. The actual law was in substance nearly 150 years old and did not take into account all kinds of modern technological developments in shipping and harbour practices, in particular not those of container transport. So the new law based the liability rules in principle on the Hague and Visby Rules, but modified them in particular in regards to their scope of application, their binding character and the liability for fault of the crew in management and operation of the vessel.
2. The new law
The 5 th HGB Book has tightened the rules, deleted outmoded provisions and offered solutions for new situations. The draft reduces radically the number of provisions, nevertheless giving new regulations for legal institutions not addressed by the previous law, as e.g. for time charter contracts and seaway bills. On the other hand, a special form of maritime commercial company, the »Partenreederei«, was deleted as to its future founding; detailed rules on sea protest (»Verklarungsverfahren«) have been abolished.
2.1. Structure
An important improvement is the introduction of a clearer structure of the various types of contracts. One section on transport contracts (»Beförderungsverträge«) is divided into contracts for general cargo (»Stückgutfrachtverträge«) and voyage charter contracts (»Reisefrachtverträge«), supplemented by passenger contracts. Another section deals with contracts of affreightment (»Schiffsüberlassungverträge«), divided into bareboat charter contracts (»Schiffsmietverträge«) and time charter contracts (»Zeitcharterverträge«). Within the first subsection (Stückgutfrachtverträge) the new structured rules contain provisions on rights and duties of the parties, on liability for damages caused to the cargo and on transport documents. They constitute, at the same time, the basis for reference in other subsections.
As to the substance of these rules it should been mentioned that many rights and obligations of the parties to a maritime contract have been set out more clearly than today and, as far as reasonable, be adapted to general transport law – e.g. the obligation of the consignee to pay freight, the right of control and liabilities of shipper and actual shipper (»Ablader«). Liability of the carrier is supplemented by joint liability of the actual (performing) carrier. And the provisions on negotiable bills of lading have been brought more in line with general rules on negotiable instruments.
2.2. Liability for damages to cargo
As mentioned above, basis and limitation of cargo claims is basically in conformity with the principles of the Hague/Visby Rules. Only few but admittedly important deviations have been made:
First: The rules apply to all contracts of transport, whether or not incorporated in a bill of lading, and for the full period of carrier’s custody, not excluding the land period of the carriage.
Second: In principle all provisions of the law are non-mandatory. Only those relating to carrier’s liability under a contract for carriage of general cargo (»Stückgutfrachtverträge«) – not for voyage charters – are protected against reduction by means of standard pre-prepared terms of contract (»Allgemeine Geschäftsbedingungen«). That means: Even all liability rules are freely changeable by individual stipulation. So the German law is, as to commercial contracts, extremely liberal and leaves to the parties the utmost freedom of arrangement. It gives enormous flexibility for service contracts and frame contracts to which the Rotterdam Rules aim as well, but less elegant and reliable by using categories like »volume contracts« and »liner trade« without clear definition.
Third: The law does not maintain the carrier’s exoneration in case of nautical fault of the crew. But as a concession to the actual international situation, as mentioned above, it allows the introduction by the parties to a given contract of carriage even by standard pre-prepared terms of contract. So the parties may decide what degree of liability they want.
2.3. Special rules for bills of lading under the Hague Rules of 1924
There is, unfortunately, one weak spot in the liability concept: a special rule to preserve, within a limited scope, the application of the outdated rules of the (non-revised, original) Hague Rules of 1924. Against the suggestion of the expert panel, the government and parliament have decided – according
to the desire of the German Shipowners’ Association – to maintain the membership
in the old Hague Convention of 1924, which Germany has joined in 1937. The Hamburg Rules have not been ratified yet because it was felt – as Lord Diplock rightly stated at an CMI Colloquium in Vienna after the Hamburg Conference in 1979 – that it seemed necessary that a shift to the new liability rules should be done by a substantive majority of maritime states at the same time. Important states, however, were reluctant and the chance for modernization now seems to have gone. Germany, on the other hand, has not ratified the Visby Rules, because this would have been interpreted as giving up prematurely the Hamburg Rules, which Germany hosted and signed.
When Germany decided not exactly to follow either of the conventions, and least the old convention, which is practically not applied in any state without any changes, it would have been logical to denounce it. Since this would not be done, Germany is now forced to treat a bill of lading issued in a state being a member to the 1924 Hague Rules (without having ratified the Visby Protocol) (As to a B/L issued in Germany the exceptional rules apply if the port of destination is in a Hague-Rules-state) according to some important principles of the old rules: mandatory liability, but no liability for nautical fault of the crew, limitation only per package or unit (not however, alternatively, per kilogram). This is regrettable, in substance and for lack of comprehensibility. It is to be hoped that the government, after some experience with the odd rules, will change its view and proceeds to denounce the Hague Rules, which as such practically no state applies anymore.
3. Conclusion
As long as the majority of maritime states do not agree on reasonable, readable and generally acceptable rules, states can only keep their law in line with some generally accepted principles of law. The German maritime law reform tried to do so and it succeeded to the extent possible under these circumstances. If one looks at the new German maritime law, one can ascertain its main features as follows:
Rights and duties of the parties to the contract are precisely set out for all types of contracts, separating contracts on carriage of goods and contracts of affreightment. These rules, of course, are not mandatory and open for all kinds of derogating stipulations, as well by general conditions.
The provisions on liability for damages to cargo follow the Hague/Visby Rules as they did in Germany before the reform. There are, however, some exceptions deviating from the Hague/Visby principles, namely:
– The liability rules apply to the whole period of custody of the carrier.
– The liability rules apply as well to a performing carrier.
– The liability rules do no longer provide for exemption by law of the carrier for nautical fault of the crew; this exemption may, however, be agreed to in a contract of carriage even by general conditions.
– The liability rules are binding in favour of the cargo interests only for contracts of carriage (not for charter parties) and only with respect to agreements minimizing liability by general conditions. Any change by individual stipulation is admitted.
One has, for the sake of completeness, to mention that there remain stricter and less modern conditions for some very limited relations to countries being still tied to the old Hague Rules (unrevised by the Visby Protocol): To them Germany has to apply the rules of the 1924 Hague Convention, because the government did not follow the suggestion of the expert panel to denounce this archaic convention. It is to be hoped that German shipowners soon give up their resistance against such termination so that the modern rules of law can apply to all contracts. The new law is clearly drafted, easy to understand and to apply. It gives much foreseeability of legal consequences and at the same time offers wide freedom of contract to individual stipulations and thereby serves the practical need of the shipping industry. The full text will soon be available in an English translation, which currently is being prepared by the German Association for Transport Law, and will be published on its website www.transportrecht.org.
Rolf Herber
