Carriage Of Goods By Sea

Goods transported by sea are governed by the Carriage of Goods by Sea Act, 1925 and the (Indian) Bills of Lading Act, 1856. Besides, the Merchant Shipping Act, 1958 and the Marine Insurance Act, 1963 are also applicable. Here we shall confine our discussion to the first two of the above mentioned Act.

A contract of carriage of goods by sea is called a contract of affreightment and the consideration for carriage is called the freight. A contact of affreightment may take the form of a Charter Party where an entire ship is hired, or a Bill of Lading, where the goods are to be carried in a general ship which can be used for this purpose by any person. In both these contracts, the ship owner as the carrier undertakes the responsibility of carrying the goods of the consignor safely and securely to the destination.

Conditions Implied

In a contract for carriage of goods by sea, the following conditions are implied:

• Seaworthiness - This means that the ship is reasonably fit to encounter the 'perils of the sea'. This is an absolute undertaking warranted by the shipowner. Seaworthiness is a relative term meaning that the ship is fit to undertake the particular voyage and to carry the particular cargo.
• Commencement of Voyage - The ship shall be ready to load the cargo and commence the voyage agreed on without undue delay and shall also complete the voyage with all reasonable dispatch.
• Non-deviation of Voyage - It means that if the ship does not carry out the voyage by the prescribed or usual route in the customary manner, the contract becomes void from the beginning of the voyage, no matter when and where the deviation from the usual route took place.
• Dangerous Goods not to be Shipped - If the shipper ships dangerous goods and if on account of this, the charterer suffers any damage, he can recover the same from the shipper.

Charter Party

A charter party is a contract providing for a hiring of a whole ship. Its terms may amount to a leasing of the ship, when the master and the crew of the ship become the servants of the charterer. A charter party may be for a particular period, or for a particular voyage. In the former case it is called a time charter party and in the latter case, a voyage charter party has no specific form; the form varies from trade to trade depending on the customs of the trade.

Bill Of Lading

A bill of lading is issued when goods are delivered for carriage to a general ship, which offers to carry them. The position of the owner of a general ship is that of a common carrier. A bill of lading may be used even when a ship is chartered. A bill of lading acknowledges the receipt of goods is a document of title to the goods and is also a contract of carriage of goods.

A bill of lading, as a document of title to the goods, can be transferred to another person by endorsement and delivery. This characteristic of a bill of lading resembles that of a negotiable instrument, but in the strict legal and technical sense it is not a negotiable instrument. It may be said that it is negotiable only in the popular sense.

Delivery Of Goods

The prime duty and obligation of a carrier by sea is to deliver the goods to the holder of the bill of lading, provided proper payment of freight has been made. Bill of lading is commonly drawn in a set of three copies, one of which is sent to the consignee, the second is for the ship's master and the consignor retains the third.

Shipowner's Liaen

In the event of non-payment of freight and other charges, the shipowner has a right of lien on the cargo. He is thus entitled to retain the goods in his possession until the dues are paid. His lien exists independently of any express agreement in this regards, but ceases upon the delivery of goods.