Section I:carriage Of Cargo
A contract of affreightment for carriage of cargo are classified into two categories as follows:
1. Those for the purpose of carrying individual cargo.
2. Those for the purpose of providing the entirety or a proportionate part of a ship for carriage.
The contract for the purpose of providing the entirety or a proportionate part of a ship for carriage shall be made in writing.
The contract of carriage referred to in the preceding Article shall contain the following particulars:
1. Names and domiciles, principal place of business or operation offices of the parties.
2. Name of the ship and her description.
3. Kinds and quality of the cargo.
4. Duration of the contract and particulars in respect of the voyage.
5. The freight.
The contract for the purpose of providing the entirety or a proportionate part of a ship for carriage shall not be affected by a transfer in the ownership of that ship.
Where the ship provided by the carrier has defects and therefore incapable of fulfilling the contract of carriage, the shipper may rescind the contract.
Where the entirety of a ship is provided for carriage, the shipper may rescind the contract prior to the commencement of the voyage upon payment of one-third of the freight; and in case the whole or a part of the cargo have been loaded, he shall also pay the additional expenses incurred for the loading and unloading.
If, the contract in the preceding paragraph is to make an outward and homeward voyage and the shipper rescinded the contract prior to the commencement of the homeward voyage, he shall pay two-thirds of the freight.
The provisions in the preceding two paragraphs shall not affect any mutual agreement on demurrage between the parties concerned.
Where only a proportionate part of a ship is provided for carriage, the shipper may rescind the contract prior to the commencement of the voyage, provided that he shall pay the full amount of the freight; and in case the whole or a part of the cargo have been loaded, he shall also pay the additional expenses incurred for the loading and unloading and indemnify any damage caused to the other cargo as a result.
With regards to the preceding paragraph where all shippers rescind the contract, each shipper shall be only liable to the liability as described in the preceding Article.
The provisions of the preceding two Articles are not applicable where the contract of carriage is made under a fixed period of time or several consecutive voyages basis.
Where the entirety of a ship is provided for carriage within a fixed period of time, the carriage can only be carried out by a manner either mutually agreed or subject to the characteristics of the ship.
The shipper referred to in the preceding Article is liable only for the freight accrued within the period of the ship is capable of being used, provided, where there is a suspension of service caused by an incident of navigation, the shipper shall nevertheless continuously liable for the freight.
In the event where the said suspension of service referred to in the preceding paragraph is caused by an act of the carrier or his agent, or as a result of the condition of the ship, the shipper is then not liable for the freight and may claim for the damages, if any.
Where the ship is missing, the shipper shall pay for the whole freight up to the date of the last information of the ship being received; and pay for half of the freight counting from the date of the last information received to the day of the particular voyage would have been normally completed.
Where the entirety or a proportionate part of a ship is provided for carriage and if the quantity of the cargo loaded by the shipper is less than what was agrees on, the shipper shall still pay for the whole freight, however, any expenses therefore saved by the ship and three-quarters of the freight earned on account of other cargo shall be deducted therefrom.
Where the shipper rescinds the contract and thus shall pay the full freight, any expenses therefore saved by the ship and three-quarters of the freight earned on account of other cargo shall be deducted therefrom.
The carrier or shipmaster shall immediately notify the notify party designated by the shipper or the consignee while the cargo arrived.
In case the consignee failed to take delivery of the cargo, the carrier or shipmaster may, at the expense and on the account of the consignee, hand over the cargo to the custody of the warehouse of the port authority or a licensed warehouse and notify the consignee of this deposition.
Where the consignee is unknown or where the consignee refuses to take delivery of the cargo, the carrier or shipmaster may take action in accordance with the rules provided in the preceding paragraph and notify the shipper and consignee of the action.
The carrier may apply to the courts for permission to sell the cargo mentioned in the preceding two paragraphs by auction if any of the events listed hereunder occur, and if so then deposit the reminder of the proceeds of the sale with the courts after deducting the freight and any other necessary related expenses.
1. The cargo cannot be bailed in a warehouse.
2. The cargo are likely perishable.
3. The value of the cargo is obviously not sufficient to pay the freight and other necessary related expenses.
Where the entirety or a part of the ship is provided for carriage, the carrier shall not issue the notice of readiness for loading or discharging until the preparation for the loading or discharging has been completed.
The period for loading or discharging shall commence from the next day after the notice of readiness in the preceding paragraph is served, without counting non-working holidays and any days during which it has been impossible to effect the loading or discharging. Nevertheless, where the loading and/or discharging has exceeded a reasonable period, the shipowner may claim for reasonable compensation subject to the number of days exceeded.
The period exceeds the loading and/or discharging as mentioned in the preceding paragraph shall count in all holidays and any days during which it has been impossible to effect the loading or discharging.
The carrier or shipmaster, upon demand of the shipper, shall issue a bill of lading after loading of the cargo.
A bill of lading shall contain the following particulars and shall be signed by the carrier or shipmaster:
1. Name of the ship.
2. Name or trade name of the shipper.
3. Description of the cargo, the number of pieces or weight, or kind of packing, the number of packages and marks furnished by the shipper in writing.
4. Port of loading and port of discharging.
5. Payment of the freight.
6. Number of copies of the bill of lading.
7. The year, month and date of issuance.
If the particulars furnished as stipulated in sub-paragraph 3 of the preceding paragraph has reasonable grounds to suspect do not accurately represent the cargo actually taken over, or if he had no reasonable means of checking such particulars, the carrier or shipmaster may or may not specify such matter in the bill of lading.
Where a bill of lading was described in accordance with sub-paragraph 3 of the preceding paragraph one, shall be a prima facie evidence of the carrier carrying the cargo as stated therein.
The shipper shall guarantee to the carrier the accuracy of the notifications of the name, quantity, or their kind of packing, the number of packages of the cargo delivered, and the shipper shall indemnify the carrier against all loss, damages and expenses arising or resulting from inaccuracies in such particulars.
The carrier is not entitled to a defense against any holders of the bill of lading other than the shipper on account of his claim against the shipper mentioned in the preceding paragraph.
Once the cargo have been delivered by the person entitled to delivery, such delivery shall be prima facie evidence of the delivery by the carrier of the cargo as described in the bill of lading unless:
1. notice of the general nature of damage or loss be given in writing by the person entitled to take delivery to the carrier before or at the time of the delivery of the cargo, or
2. the damage or loss of the cargo has, before or at the time of the delivery of the cargo, been the subject of joint survey and the survey report has been made, or
3. if the damage or loss be not apparent, the carrier has been notified in writing within three days, or
4. the damage or loss has been remarked on the receipt of delivery of the cargo.
The carrier and the shipowner shall be discharged from all liability in respect of the damage or loss either totally or partly, of the cargo unless suit is brought within one year of their delivery or of the date when they should have been delivered.
The shipper shall not be responsible for the loss sustained by the carrier or the shipowner unless it was caused by the fault of the shipper, his agents or servants.
At the port of destination the carrier or shipmaster shall not refuse to deliver the cargo, even though the person demands such delivery only hold one of the two or more parts of the bills of lading. At the places other than the port of destination, the carrier or shipmaster shall not delivery the cargo unless all the parts of the bill of lading were surrendered.
If there are two or more holders of the bills of lading have demanded delivery of the cargo, the carrier or shipmaster shall without delay deposit the cargo with the competent authority in accordance with the provisions of Article 51, and also despatch notice thereof to each holder who has ever demanded such delivery. If, after the carrier or shipmaster has delivered a part of the cargo, another holder has demanded delivery of the cargo, the same apply in respect of the remainder.
If, in cases where there are two or more holders of the bills of lading and one of them has taken delivery of the cargo before the other holder(s), the bill of lading held by the other holders shall lose their effect with respect to the carrier.
If, in cases where there are two or more holders of the bills of lading, the carrier or shipmaster has not yet delivered the cargo, the holder of the part which was forwarded or delivered earliest may exercise his right in preference to the others.
The provisions relating to the Bill of Lading as contained in Article 627 to Article 630 of the Civil Code apply mutatis mutandis to the bill of lading prescribed hereof.
Where a Bill of Lading is issued under a contract for the entirety or a proportionate part of a ship for carriage, the legal relationship between the carrier and the holder of the Bill of Lading other than the shipper is determined in accordance with the terms and conditions of the Bill of Lading.
Where a contract of carriage which is for the purpose of carrying individual cargo or a Bill of Lading contains a clause, covenant or an agreement diminishing or relieving the carrier or the shipowner from liability for damage to, loss of or delay to the cargo resulting from negligence or a failure to fulfill the obligations provided in this Chapter, such clause, covenant or agreement shall be null and void.
The carrier or shipowner shall be bound, before and at the time of the commencement of the voyage, to exercise due diligence to:
1. make the ship be capable of navigating safely.
2. proper man, equip and supply the ship.
3. make the holds, refrigeration and cooling chambers, and all other parts of the ship used to carry the cargo, fit and safe for reception, carriage and preservation.
The carrier is not liable for the damage or loss resulting from an unexpectable loss of the capability for the navigation of the ship after sailing.
The burden of proof shall be on the carrier or shipowner claiming exemption provided in the preceding paragraph.
The carrier shall properly and carefully load, discharge, handle, stow, care for, carry and keep the cargo carried.
Cargo of an contraband or being declared fraudulently with knowledge by the carrier, the carrier shall refuse to carry it. The same rule applies where the nature of the cargo tends to cause damage to the ship or endanger the health of the personnel on board the ship, provided that those are allowable under a custom of shipping or commercial trade.
Cargo of an inflammable, explosive or dangerous nature whereof the carrier has consented with knowledge of their nature becoming a danger to the ship or cargo, may at any time be landed at any place, or destroyed or rendered innocuous by the carrier without compensation except to general average, if any.
The carrier or shipmaster found any cargo aboard without declaration may unload them at the loading port, or charge the freight at the highest rate on the same kind of cargo under the same voyage, and may also claim damages, if any.
The cargo mentioned in the preceding paragraph if found during the voyage and are of contraband or of a nature of danger, may be jettisoned by the shipmaster, if necessary.
Where after the commencement of the voyage, the ship is unable to reach the port of destination due to force majeure and the cargo are then brought back to the loading port, the shipper shall be only liable for the freight of the outward voyage even though the ship is contracted to make an outward and homeward voyage.
Where during voyage the ship becomes in need of repairs due to an accident at sea, the shipper shall pay full freight if he intended to take delivery of the cargo prior to their arrival at the port of destination.
Where the ship during voyage encounters a disaster or becomes incapable of navigation yet the cargo are eventually carried to the port of destination by the shipmaster, and the freight payable thus becomes lower than the freight previously agreed upon, the shipper shall pay the freight with a deduction of one half of the difference between the two freights.
If the new freight is the same in sum as the freight previously agreed upon, the shipper shall bear no obligation to pay any additional expenses. If the new freight is higher than the freight previously agreed upon, the balance is to be borne by the shipper.
Neither the carrier nor the shipowner shall be responsible for loss or damage arising or resulting from:
1. Neglect of the shipmaster, mariner, pilot or the servant of the carrier in the navigation or in the management of the ship.
2. Perils, dangers and accidents of the sea or on routing.
3. Fire, unless caused by the carrier own intentional or negligent acts.
4. Act of God.
5. Act of war.
7. Acts by public enemies.
8. Arrests, restraints of the authority, or seizures under legal process.
9. Quarantine restrictions.
10. Strikes or other labor incidents.
11. Saving or attempting to save life or property at sea.
12. Insufficiency of packing.
13. Insufficiency or inadequacy of marks.
14. Wastage or any other damage or loss due to inherent defects, quality or vice of the cargo.
15. Act or omission of the shipper or owner of the cargo, his agent or representative.
16. Latent defects of the ship not discoverable by due diligence.
17. Any other cause arising without the carrier’s own intentional or negligent acts or without the fault or the neglect of the agent or servant of the carrier or the shipowner.
Where the nature or value of the cargo have been fraudulently declared by the shipper at the time of shipment, neither the carrier nor shipowner shall be liable for any damage to or loss of the cargo.
Unless the nature and value of the cargo have been declared by the shipper before shipment and inserted in the bill of lading, neither the carrier nor the shipowner shall be liable for any damage to or loss of the cargo in an amount exceeding 666.67 Special Drawing Rights per package or 2 Special Drawing Rights per kilogram, whichever is the higher.
The “package” referred to in the preceding paragraph means a unit of the packing of cargo for shipment. Where a container, pallet or similar article of transport is used to consolidate cargo, the number of packages enumerated in the bill of lading as packed in such article of transport shall be deemed the number of packages. Whereas the said number of packages did not enumerate in the bill of lading, the number of the consolidated article is deemed to be the number of packages. If the container is provided by the shipper, the container is deemed to be a package.
Neither the carrier nor the shipowner shall be entitled to the benefit of the limitation of liability provided for in the preceding second paragraph if damage or loss resulted from an intended act or gross negligence of the carrier or the shipowner.
Any deviation in saving or attempting to save life or property at sea or for other reasonable cause shall not be deemed to be an infringement of the contract of carriage, and neither the carrier nor shipowner shall be liable for the damage or loss resulting therefrom.
Where the cargo were loaded without the consent of the shipmaster or carrier, neither the carrier nor shipowner shall be liable for the damage to or loss of such cargo.
If the carrier or the shipmaster has shipped the cargo on deck and the cargo have consequently suffered loss or damage, the carrier shall be liable therefor, unless it has been consented to by the shipper and also stated in the contract of carriage or comply with the particular kind of ocean carriage or the custom of the trade.
The issuer of a bill of lading shall be responsible for all acts which should be done as stated in the bill of lading.
The issuer referred to in the preceding paragraph shall guarantee the acts of each consecutive carrier of the cargo; provided however that each consecutive carrier is only liable for the damage, loss and delay for delivery arose during his own voyage.
Where there is a consecutive carriage of cargo involving carriage by sea and other modes of carriage, the leg of the journey involving carriage by sea shall be governed by this Code.
If the time of the loss of or damage to the cargo occurred could not be ascertained, it shall be presumed as occurring during the carriage by sea.
The agent or servant of the carrier is entitled to avail himself to the defense and the limitation of liability, as entitled by the carrier under this Section, against the shipper or other third party for the loss of or damage to the cargo; except that it is proven that the delay for delivery, loss of or damage to the cargo is due to an intended act or gross negligence on the part of the agent or servant.
The provisions of the preceding paragraph shall be applicable to any parties who are performing their duties within the commercial harbour area for the loading, unloading, handling, carriage, custody, keep, care, stowage, tally, lashing and dunnage.
Where the port of loading or port of discharge stipulated in the Bill of Lading is a port of ROC, the applicable law of any legal relationship arising under that bill of lading shall be determined according to the Code of Application of Law in Relation to Foreign-related Civil Matters. However provided that this Code shall be applied in case any provisions in this Code provide a better and more favourable position to the shipper or consignee who is of ROC nationality.
Any disputes arising under a Bill of Lading and one of the port of loading or port of discharge is in ROC, may be instituted an action in the court of the said ROC port of loading or port of discharge or any competent court according to the law or regulations.
Where the Bill of Lading as mentioned in the preceding paragraph contains an arbitration clause, any disputes arising thereof, if so agreed by the contracting parties, may be submitted to arbitration in ROC, regardless of the place and any applicable rules of arbitration contained in the said arbitration clause.
The provision in the preceding paragraph is deemed as a part of arbitration agreement. However nothing in this provision will affect the validity of an agreement relating to arbitration made by the parties after the dispute has arisen.
Section II: Carriage Of Passengers
Unless otherwise provided in this Section, the provisions of Section I of this Chapter apply mutatis mutandis to the carriage of passengers.
Where passengers are provided with provisions, the cost of the provisions shall be included in the ticket fare.
There shall subscribe an accident insurance for transporting the passengers in the specific navigation routes and area; the passenger ticket shall state the amount insured and constitute part of the contact; the insurance premium shall be included in the ticket fare, and the amount insured shall be deemed as the highest amount of the damages.
The terms “specific navigation routes and areas” and “amount insured” referred to in the preceding paragraph are to be decided by the Ministry of Communications and Transportation.
In the event the passenger subscribes an accident insurance policy for himself in addition to the policy referred to in the preceding article, the measure of damages is to be in accordance with such agreement provided that such agreement shall be made in writing.
The carrier or shipmaster shall, comply with the tenor of the passenger ticket, transport the passenger to the port of destination.
Where the carrier or shipmaster is in breach of the provision in the preceding paragraph, the passenger may rescind the contract and may also claim for damages, if any.
Prior to twenty-four hours before the commencement of the voyage, the passenger may rescind the contract upon payment of two-tenths of the ticket fare; If, prior to the commencement of the voyage, the passenger has become incapable of making or refusing the embarkation because of death, illness or other personal affections beyond control, the carrier may demand one-tenth of the ticket fare.
If the passenger does not come on board by the time fixed for embarkation or during the voyage or is ordered to leave the ship by the shipmaster acting within his authority for taking emergency action, the passenger shall nevertheless pay the full amount of the ticket fare.
The passenger may rescind the contract where the ship fails to commence the voyage on the scheduled date.
Where the passenger, by his/her accord, disembarks the ship during the voyage, the passenger shall bear the full amount of the ticket fare. Where the disembarkation is due to illness or death, the passenger shall only pay a part of the ticket fare in the same proportion as the distance already covered bears to the whole voyage.
Where the ship is unable to continue the voyage due to force majeure, the carrier or shipmaster shall still endeavour to carry the passenger to the port of destination.
Where the ship is unable to enter the port of destination for disembarking the passenger due to an act of God, war or disturbances, epidemic or any extraordinary events at that port, the carrier or shipmaster shall be liable, at the option of passenger, to send the passenger to the nearest port or back to the original port of embarkation.
If the ship has to be repaired during the voyage, the carrier or shipmaster shall still complete the voyage with another ship of the same class, and furnish adequate lodging and provisions for passenger during the period of waiting without extra payment.
The passenger, while the ship arrives the port of destination, is obliged to obey the directions of the shipmaster for leaving the ship.
Section III: Towage Of Ship
Where the tug and the tow are of the same owner, the liability for the damages incurred from the towage shall be borne by the tug-owner, Except as otherwise provided by the contract.
The tows in parallel or series connection shall be jointly and severally liable to an injured third party for the damage arising out of the towing navigation. However, the innocent tug(s) shall have a right of recourse against the wrongful tug(s).