Third party liability and exemption clauses in the contract of carriage by sea

摘要

Sea carriers in the past, have extended liability to their servants,udagents and sub-contractors through Himalaya clauses in the billsudof lading. However, there has been a complicated legal debate over thirdudparty liability and exemption clauses in the contract of carriage by sea.udComplicated issues have made it difficult to determine who bears responsibilityudfor the goods from carriage to delivery. This will affect theudintroduction of adequate insurance rates, which will in turn, apply to efficientudrates of carriage.udSome of the difficulties had been overcome by an established principleudof vicarious liability. However, this principle was short lived, asudit was severely restricted and later, well defunct.udThe Privy Council decision of A. M. Satterthwaite and Co. Ltd. v New Zealand Shipping Co. Ltd., did successfully transfer indemnity to audthird party. However, the High Court decision of Port Jackson StevedoringudPty. Ltd. v Salmond and Spraggon (Australia) Pty. Ltd. failed to applyudthe Eurymedon doctrine. Therefore, although the Enrymedon was not overudruled, there was still opposition to third party indemnity under bills ofudlading. The High Court initiated a search for fine distinctions involvingudthe capacity issue, construction of the agreement, consideration, agencyudand fundamental breach.udThe New York Star was appealed to the Privy Council, which reversedudthe decision of the High Court. The status of third party liability was still somewhat unsettled until the matter was again tested and upheldudin Broken Hill Proprietary Co. Ltd. v Hapag-Lloyd Aktiengesellschafudand others, and Sidney Cooke Ltd. v Hapag-Lloyd Aktiengesellschaf andudAnother, decisions.udThe principles in the House of Lord's decision in the New YorkudStar, which allowed the exclusion of stevedores under a bill of lading,udwere transferred to the road haulage industry in Celthene Pty. Ltd. vudW.K.J. Hauliers Pty. Ltd. and Another, and upheld in Life Savers (Australasia)udLtd. v Frigmobile Pty. Ltd. and Another.udIt is apparent from these recent decisions, that a properly wordedudlimitation or exclusion clause, can operate to exempt the carrier's servants,udagents and independent contractors, from liability for damage orudloss of goods. Such an understanding makes it easier for cargo owners toudascertain the risk they undertake when shipping their freight, and toudarrange for appropriate insurance coverage. The carrier, knowing thatudhis servants, agents and independent contractors employed from time toudtime, are exempted from liability, can set competitive rates of carriage,udand discard high insurance costs.