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responsible for crew, equipment, etc. Charterers rely on this warranty and the delineation of responsibility.
Section 3(1) provides that the contracting carrier and ocean carrier shall have the obligation to exercise due diligence to make the vessel seaworthy and properly man, equip and supply it. (Query: What can an NVOCC who issues a bill of lading do to comply with the obligation to use due diligence to furnish a seaworthy vessel, man, equip and supply?] While an NVOCC issues a bill of lading in the common carriage game and, thus, may not engender any degree of real sympathy, the area of private carriage and private contract gives more concem.
If one who procures performance incidental to carriage can be a carrier, what would be the result in the following situation:
A time charterer procures a vessel from its owner and sub-charters it down the line by way of either time charterer or voyage charter. The sub-charterer issues a bill of lading. To make it simple, the bill of lading is issued by the subcharterer and not by or for the master. Under the definitions of the proposed amendments, the sub-charterer would be a “carrier” (contracting carrier). The vessel owner would also be a “carrier" because its vessel was performing the transportation and it owns or operates that vessel (performing carrier, ocean carrier).
However, the time charterer, although in the charter party chain (private contract), could be said to have procured performance incidental to carriage of the cargo. At the same time, that time charterer has no means or right to control, operate, maintain or repair that vessel, nor does it hire or maintain the crew or provide the vessel's equipment. Any time charterer in such a situation and under the prevailing law today would take the position that it was not a carrier and did not have a carrier's responsibility vis-a-vis cargo. Yet, if the definitions of proposed Section 1 can be read literally and broadly, such a time charterer could find himself pegged as a "carrier" by statutory definition.
It is submitted that this was not and is not an intent of the proposed amendments.
Section 3(3)(i) provides for the carrier to issue a bill of lading showing the number of packages or pieces, or the quantity or weight, as furnished in writing by the shipper. For non-containerized goods, the carrier may qualify the bill of lading by using the phrase "said to contain” or “shipper's weight, load, and count.”
Sections 3(3)(iii)(a) and (b) make a distinction with respect to containerized goods.
Sub-section (a) essentially provides that if the carrier receives a sealed container and no carrier “verified the container's contents” a qualifying phrase would avoid the statements being prima facie evidence that the carrier received the goods as described in the contract of carriage.
Sub-section (b) provides that if the carrier demonstrates that no carrier weighed the container before the contract was issued, the statement of weight as provided by the shipper must be qualified by an express statement that the container has not been weighed.
By way of explanation, the initial report of the Ad Hoc Study Group acknowledged that "opening a sealed container for inspection is inevitably too great a burden to impose” (document #716 at 10701). Yet, a distinction is made with respect to weight if it is contained in the bill of lading.
Section 3(5) makes provision for a guarantee by the shipper of the information given to the carrier, including weight (see also the intermodal container rule of the Department of Transportation's Federal Highway Administration requiring any person presenting a container with a gross cargo weight of more than 10,000 lbs. for intermodal transport to provide a certificate as to such weight).
The explanation for substantive changes to the final report set forth some eleven illustrations in an effort to “clarify the narrow situations in which they would apply." In Sub-Section (b) and throughout the illustrations, the term "weighed the container" is used. It is submitted that this term is at odds with operational reality.
The Pomerene Act (much of which would be incorporated in the proposed amendments) in Section 101, set forth a distinction between package freight and bulk freight. With the former, if the carrier could not count, it could use a qualifying phrase. With respect to bulk freight, where the shipper installs adequate facilities for weighing the bulk freight, and makes the same available to the carrier, then the carrier, upon request and when given a reasonable opportunity, would be required to ascertain the kind and quantity. In such instance, the carrier could not insert qualifying phrase such as “shipper's weight."
It should be noted that the Pomerene Act did not require the carrier to furnish or provide weighing facilities. In the real world of transportation, a number of ports do not have weighing facilities. Other may have weighing facilities; however, they may not be under the control of the carrier.
In most cases where scales are available when a containerized shipment is received what is usually weighed is not just the container, but the tractor, chassis, container (including cargo), the fuel in the tractor's tank and possibly the driver himself. Without mathematical computation to get to the weight of the
cargo, the gross weight in such instance is meaningless. By the same token even given the mathematical exercise, without a comparison of the cargo weight with the weight declared by the shipper, such computation would also be meaningless. Bills of lading may be issued some distance away from the scale the containerized shipment is received and time is a factor.
Given the recognition that it would be burdensome and certainly time consuming and more expensive to require carriers to open sealed containers, it is submitted the same would be applicable to a requirement that the carrier ascertain the weight of the cargo claimed to be inside the container.
As a practical matter, containers are not weighed by themselves and the "weight of the container" is just that. What is important to determine, if it is a significant factor in the commercial transaction, is the weight of the cargo being shipped.
In such a case, i.e., where the weight of the cargo is an important part of the commercial transaction, a-consignee may easily insist that the weight of the cargo be verified. A carrier in certain instances, might verify the weight of the contents himself. In either case, a carrier should be bound by the weight verified or stated if the carrier was requested to weigh and did not.
It seems somewhat anomalous that a carrier may use a qualifying statement as to count when receiving a sealed container, yet be held to the prima facie impact of the weight stated on the bill of lading as given to him by the shipper. If the carrier does indeed verify the cargo weight or is requested to do so and does not, let him be bound by statement of weight in the bill of lading.
At the same time, if weight is not a consideration of the commercial transaction, holding a carrier to the prima facie impact of weight on the bill of lading makes little sense when one considers the operational realities involved in getting to a comparison of the actual weight of the container contents with the declared weight given by the shipper.
One of the stated intentions of the project was clarification, and, hopefully, the reduction of litigated disputes. It is submitted that further clarification of the terms commented on above will help to achieve this end.
The writer also recognizes that any proposed legislation submitted to Congress will be subject to further comment and very likely further change. Be that as it may, I believe the Maritime Law Association, well recognized for drafting ability, should do its best to submit a product as clear as capable of being made clear.
Hopefully, by May 3, 1996, when the Association will be called to vote on the proposed revisions, clarifying amendments can be proposed. This "dissent"
suggests that we can do better and, as the “Pros from Dover" I believe we should.
ODIN, FELDMAN & PITTLEMAN, P.C.
ATTORNEYS AT LAW
WRITER'S DIRECT DIAL NUMBER
March 14, 1996
William R. Dorsey, III
of the United States
Re: New Proposal COGSA Bill
Dear Mr. Dorsey:
I respectfully disagree with the proposed subsection 3(8)(b) of the COGSA Bill which provides for the nullification of choice of foreign forum clauses. I agree with the rest of the New Proposal and voted in its favor. I informed Mr. Vince De Orchis, the Chairman of the COGSA Committee, by a letter faxed February 7, 1996 of my disagreement with the subsection and suggested that a subcommittee should be appointed to examine the matter.
My disagreement is based on the following grounds: (1) The nullification of the choice of foreign forum clause, postulates that the foreign court or arbitrator will apply a law conflicting with COGSA. (2) The a priori nullification by statute of a clause submitting future disputes to arbitration in a Contracting State of the New York Convention on the Recognition and Enforcement of Arbitral Awards, violates Article II of the said Convention, which provides that each Contracting State shall recognize an agreement in writing submitting disputes to arbitration. Whether the agreement to arbitrate is
void, voidable or unenforceable is a matter to be determined by the arbitration or a court having jurisdiction. Is Congress willing to trump the above treaty provision? (3) The purported “nullification" of the clause will not avert the commencement of proceedings abroad and the enforcement against a vessel or other property or person within the jurisdiction of the foreign court or arbitrator. (4) Protectionism applied to clauses that submit disputes to litigation or arbitration abroad is contrary to the judicial trend represented by a number of well known United States Supreme Court decisions with last and not least the Vimar Seguros case. They all upheld foreign litigation or arbitration expected to result in the evasion of preemptory statutory or common law rules of the United States. There are, of course, situations in which a choice of foreign forum should not be upheld, however they are rare and depend on an evaluation of a number of factors to be left to the courts.
(5) Protectionism against foreign arbitration clauses destabilizes the increasing global respect for arbitration clauses and the worldwide enforcement of arbitration clauses and awards and is therefore injurious to United States trade and business interests.
In conclusion, I respectfully submit that the subsection should be deleted or alternatively the matter submitted to a subcommittee for further consideration.
George A. Zaphiriou cc: Chester D. Hooper, Esquire
Vincent M. De Orchis, Esquire