Rule 4 Liabilities in respect of cargo
Section 1 Cargo liabilities
Liabilities, costs or expenses for loss, shortage, damage or other responsibility relating to cargo before, during or after the contracted transport by the entered ship.
The cover afforded by the Association is limited to the period from the time the goods are loaded on, to the time they are discharged from the ship, unless otherwise extended pursuant to mandatory rules of law and, in any event, is limited to a period starting a maximum of fourteen days before the commencement of the transport and ending a maximum of fourteen days after its completion.
For cargo which is the property of the Member, cover is provided by the Association to the same extent as if the cargo had been the property of a third party.
For deck cargo, cover is afforded by the Association provided that the ship and cargo, containers or similar articles of transport are suitable for deck carriage in all the circumstances and that the bill of lading, waybill or other document containing or evidencing the contract of carriage contains a valid liberty clause to carry such cargo on deck and either
(a) states that the cargo is being so carried and excludes all liability for loss or damage to such cargo or;
(b) makes the carriage subject to the Hague Rules or the Hague-Visby Rules.
Where the value of any cargo is declared to be more than USD 2,500 by reference to a unit, piece, package or otherwise in the bill of lading, waybill or other document containing or evidencing the contract of carriage, and where the effect of such declaration is to deprive the Member of any right of limitation to which he would otherwise have been entitled then liabilities exceeding USD 2,500 in respect of any such unit, piece, or package are excluded from cover.
Section 2 Cargo liabilities during through transports and lighterage
Liabilities, costs or expenses in respect of damage to cargo provided that the transport is performed under a through or transhipment bill of lading or other document of carriage approved by the Association providing for carriage partly to be performed by the entered ship.
Liabilities, costs or expenses in respect of cargo during contractual and customary lighterage.
Section 3 Liabilities for bill of lading particulars
Liability for incorrect or incomplete description of the cargo or other incorrect statements in a bill of lading, waybill or other document containing or evidencing the contract of carriage, except that there shall be no recovery in respect of liabilities, costs or expenses arising out of
(a) the issuance of an ante dated or post dated bill of lading, waybill or other document containing or evidencing the contract of carriage, which records the loading, shipment or receipt for shipment on a date prior or subsequent to the date on which the cargo was in fact loaded, shipped or received,
(b) the issuance of a bill of lading, waybill or other document containing or evidencing the contract of carriage with a description of cargo, its quantity or condition, or of its port of loading or discharge which the Member or the Master of the entered ship knew to be incorrect.
Section 4 Liabilities for delivery of cargo
Liability for misdelivery of cargo except
(a) as regards a negotiable bill of lading or similar document of title when delivery has been made without the production of that Bill of Lading or document by the person to whom delivery is made,
(b) as regards a non-negotiable bill of lading, waybill or similar document when delivery has been made to a person who is neither named in the document as the person to whom delivery should be made nor, as regards waybill, is lawfully nominated by the shipper as the person to whom delivery should be made,
(c) as regards a non-negotiable bill of lading, waybill or similar document when delivery has been made without production of that bill of lading, waybill or document by the person to whom delivery is made, where such production is required by the express terms of such bill of lading, waybill or document or by operation of law.
Section 5 Paperless trading
Unless the Association otherwise decides there shall be no recovery from the Association in respect of liabilities, losses, costs and expenses arising from the use of any electronic trading system, other than a system approved by the Association, to the extent that such liabilities, losses, costs and expenses would not (save insofar as the Association in its sole discretion otherwise determines) have arisen under a paper trading system.
(a)An electronic trading system is any system which replaces or is intended to replace paper documents used for the sale of goods and/or their carriage by sea or partly by sea and other means of transport and which:
(i) are documents of title, or
(ii) entitle the holder to delivery or possession of the goods referred to in such documents, or
(iii) evidence a contract of carriage under which the rights and obligations of either of the contracting parties may be transferred to a third party.
(b) A “document” shall mean anything in which information of any description is recorded including, but not limited to, computer or other electronically generated information”.
(c) An electronic trading system shall be deemed approved, provided:
(i) it is a reliable system in accordance with the Electronic Trade Documents Act 2023 of the United Kingdom or UNCITRAL’s Model Law on Electronic Transferable Records and the reliability of that system is evidenced by:
(ia) an audit by an independent body; or
(ib) a declaration by a supervisory, regulatory or accreditation body or applicable voluntary scheme; or
(ic) applicable industry standards; and
(ii) any electronic document generated thereunder, which performs the functions specified in paragraph (a) (i)-(iii), has the same effect under its applicable law as a paper document performing those functions.
Section 6 Extraordinary handling costs
Costs or expenses in excess of those which would normally have been incurred in respect of
(a) discharging or disposing of damaged, rejected or worthless cargo,
(b) discharging, handling, storing and reloading cargo where the ship has sustained damage recoverable under the Hull insurance of the entered ship.
Extraordinary costs under a-b above are recoverable only if and to the extent that compensation is not afforded in General Average or recoverable from any other party and provided such costs are not caused by the nature of the cargo which was known or should have been known by the Member.
Section 7 General Average
Unrecoverable General Average contributions
The proportion of General Average expenditure, special charges or salvage which the Member is or would be entitled to claim from cargo or from some other party to the marine adventure and which is not legally recoverable solely by reason of a breach of the contract of carriage provided always that the Member obtained adequate General Average security. Without such security recovery from the Association can be obtained only if the Member can prove that, at the time of delivery of the cargo, he neither knew nor ought to have known that there had been an occurrence of General Average nature during the voyage.
Ship’s proportion of General Average
The entered ship’s proportion of General Average, special charges or salvage not recoverable under the Hull insurance by reason of the value of the ship being assessed for contribution to General Average or salvage at a sound value in excess of the insured value under the Hull insurance.
Section 8 Deviation
The Association shall not be liable to compensate the Member for liabilities, costs or expenses arising out of a deviation or departure from the contractually agreed voyage or adventure which deprives the Member of the right to rely on defences or rights of limitation which would otherwise have been available to the Member
Where the Member has reported the deviation to the Association as soon as he became aware of it, the Association may at its discretion agree to cover the Member fully, partly or against special conditions or an additional premium.