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The FIOS(T) Clause

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The Obligations of the Carrier Regarding the Cargo

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Abstract

This chapter explains the quintessence and purpose of the FIOS(T) clause, as well as of its derivatives such as FIO, FI, FO, FILO, etc. The chapter identifies the amendments that such a provision brings to the contract of carriage with regard to costs, risks, and responsibility for the handling of the goods as opposed to the same under liner terms. It is clarified why the FIOS(T) clause is a problem in the context of the Hague-Visby Rules, and it is conceded that a tension between the two exists. To illustrate that the FIOS(T) clause, being an exception to the Rules, has been addressed differently under various national legal systems, examples are provided from English law, US law, Dutch law, and French law. Furthermore, it is shown that the attitude of both courts and scholars is far from unanimous with regard to defining the limits of the carrier’s responsibilities under free-in-and-out terms. Finally, the chapter analyzes the respective provisions of the Rotterdam Rules regarding the acceptability of FIOS(T) terms, and it gives an appraisal of the approach undertaken by the new Convention as opposed to the one under the Hague-Visby Rules.

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Notes

  1. 1.

    FILO, FILTD, FIO, FIOST, FIOT, FIS, FISLO, LIFO, etc. See Sect. 3.2 below.

  2. 2.

    Tetley, W. (2008) Marine Cargo Claims (4th ed.). Les Editions Yvon Blais Inc., Vol. 1, p. 661.

  3. 3.

    For the transfer of these duties under a charter party, see Chap. 2, Sect. 2.4.4.1 above and Sect. 3.4.4 below.

  4. 4.

    von Ziegler, A. (2009) The Liability of the Contracting Carrier. The Texas International Law Journal, Vol. 44, No 3, p. 329.

  5. 5.

    Jindal Iron and Steel Co. Ltd. and Others v Islamic Solidarity Shipping Co Jordan Ltd. (The “Jordan II”) [2003] 2 Ll. L. Rep. 87, p. 103.

  6. 6.

    This argument was raised in the US case Sumitomo Corp. of America v. M/V Sie Kim. The District Court went further and adduced the extreme argument that since the bill of lading specifies that loading and stowage are not performed by the carrier, then the bill will not regulate the relations between the carrier and the shipper during this stage. Hence, following COGSA’s provision, which embodies the definition in Article I(b) of the Hague Rules, loading and stowage will not be part of the “contract of carriage,” and therefore COGSA should not be applicable as between the carrier and the shipper, allowing the former to contract out its liability for loading and stowage.

  7. 7.

    Tetley, W. (2008) Marine Cargo Claims (4th ed.), Les Editions Yvon Blais Inc., Vol. 1, Chapter 24, p. 1260.

  8. 8.

    Sturley, M. F. (1993). The law of treaties and admiralty, in 6 Benedict on Admiralty Supplement (7th rev. ed). New York: Matthew Bender, §94. https://law.utexas.edu/faculty/publications/1993-The-Law-of-Treaties-and-Admiralty.

  9. 9.

    Tetley, W. (2008) Marine Cargo Claims (4th ed.), Les Editions Yvon Blais Inc., Vol. 1, Chapter 24, p. 1256.

  10. 10.

    Tetley, W. (2008) Marine Cargo Claims (4th ed.), Les Editions Yvon Blais Inc., Vol. 1, Chapter 25, pp. 1297–1300.

  11. 11.

    Michel, A. (1999) La Portée de la Clause F.I.O./F.I.O.S/F.I.O.S.T dans l’affrètement au Voyage. 597 Droit Maritime Français, p. 799.

  12. 12.

    Sumitomo Corp. of America v. M/V Sie Kim, 632 F.Supp. 824 (1985), United States District Court, S.D. New York, August 27, 1985.

  13. 13.

    Atlas Assurance Co. v. Harper, Robinson Shipping Co., 508 F.2d 1381 (1975), United States Court of Appeals, Ninth Circuit. January 7, 1975.

  14. 14.

    Sigri Carbon Corp. v. Lykes Bros. Steamship Co., 655 F.Supp. 1435 (1987), United States District Court, W.D. of Kentucky, Paducah Division, March 24, 1987.

  15. 15.

    See Demsey & Associates, Inc. v. S/S Sea Star, 461 F.2d 1009 (1972), United States Court of Appeals, Second Circuit. Argued January 11, 1972. Decided May 16, 1972, and Nichimen Co. v. M/V Farland, 462 F.2d 319 (1972), United States Court of Appeals, Second Circuit. Argued April 12, 1972. Decided May 12, 1972.

  16. 16.

    Associated Metals & Minerals Corp. v. M/V Arktis Sky, 978 F.2d 47 (1992), United States Court of Appeals, Second Circuit. Argued June 4, 1992. Decided October 1, 1992.

  17. 17.

    Hegarty, M. (1993) A COGSA Carrier’s Duty to Load and Stow Cargo is Non-delegable, or Is It?: Associated Metals & Minerals Corp. v. M/V Arktis Sky. Tul. Mar. L. J., Vol. 18, No. 1, p. 125.

  18. 18.

    Royer, S. (1959) Hoofdzaken der vervoerdersaansprakelijkheid in het zeerecht. Zwolle: Tjeenk Willink, p. 431: “Het is dan ook allerminst in strijd met de billijkheid, dat de afzender zich met het inladen belast; wel zou het daarentegen onbillijk zijn om de vervoerder aansprakelijkheid te houden op grond van onbehoorlijk en onzorgvuldig laden, stuwen en lossen, terwijl in feite de afzender het laden heeft verricht en daarbij niet behoorlijk en zorgvuldig te werk is gegaan. Niettemin brengt de strenge leer deze consequentie met zich mede. Immers, indien de afzender de goederen inlaadt en daarbij schade veroorzaakt, is de vervoerder krachtens deze leer in ieder geval aansprakelijk, aangezien hij zich niet aan het voorschrift van art.III lid 2 heeft gehouden.” [Royer, S. (1959) Main points of the carrier’s liability in maritime law. Zwolle: Tjeenk Willink, p. 431: “It is, therefore, not at all contrary to fairness if the shipper is responsible for loading; on the other hand, it would be unfair if the carrier is held liable based on improper and careless loading, stowage and discharge, while in fact it is the shipper who has performed the loading and has not, thereby, properly and carefully proceeded with the tasks. Nevertheless, the strict doctrine involves these consequences. After all, if the shipper loads the goods and causes damage thereby, under this doctrine it is the carrier who is in any case liable since he has not complied with the provision of Art. III rule 2.”]

  19. 19.

    Royer, S. (1959) Hoofdzaken der vervoerdersaansprakelijkheid in het zeerecht. Zwolle: Tjeenk Willink, p. 430: “In sommige gevallen worden clausules, waarbij de afzender op zich neemt om te laden en te stuwen en de ontvanger om te lossen, juist door deze personen noodzakelijk geacht; indien het namelijk goederen betreft, die door hun bijzondere aard deskundige behandeling vereisen, zal de ladingbelanghebbende zich veel liever zelf met het uitvoeren der betrokken verrichtingen belasten dan dit overlaten aan de terzake niet, althans minder deskundige vervoerder, waarbij immers een veel groter kans op het ontstaan van schade aanwezig is. Weliswaar zal de vervoerder voor deze schade aansprakelijk zijn, doch een ladingbelanghebbende, die de keus heeft tussenschadevergoeding en onbeschadigde aflevering der goederen, zal over het algemeen uiteraard de voorkeur hechten aan dit laatste, ook al brengt zulks met zich mede, dat hij zelf voor het laden, stuwen en lossen zorg zal hebben te dragen.” [Sjoerd Royer – ‘Main points of the carrier’s liability in maritime law’, Zwolle: Tjeenk Willink, 1959, p. 430: “In some instances, clauses under which the shipper undertakes to load and stow and the receiver to discharge, are considered necessary particularly by these parties; in case this actually concerns goods that require expert handling because of their particular nature, then the cargo interests would prefer to take care of the handling operations themselves than to leave those to the, at this point, not or at least less experienced carrier, which will result in a much greater chance of damage to the cargo. Indeed the carrier will be liable for this damage, but the cargo interests who have the choice between compensation or undamaged delivery of the goods, will generally speaking prefer the last option of course, even if they themselves must take care of loading, stowage and discharge.”]

  20. 20.

    Schadee, H. (1956) Het Nieuwste Zeerecht, Voordracht voor de leden der Nederlandsche Vereeniging voor Zeerecht te Amsterdam gehouden op 7.I.1956, Koninklijke Nederlandsche Reedersvereeniging, p. 18: “Ik vrees, dat onder vigueur van ons nieuwste zeerecht dergelijke op zichzelf zeer wenselijke en gerechtvaardigde ontheffingsclausules [als FIOS] nietig zullen blijken te zijn. Art. 468-2 [Art. III(2) HVR] bepaalt uitdrukkelijk, dat de vervoerder verplicht is zorg te dragen voor goede stuwage en art. 468-9 [Art. III(8) HVR] even uitdrukkelijk, dat hij zich niet kan ontheffen van aansprakelijkheid voor schade voortvloeiende uit nalatigheid in het voldoen van deze verplichting.” [Schadee, H. (1956) The Newest Maritime Law, Speech for the members of the Dutch Association for Maritime Law held in Amsterdam on 7.I.1956, Koninklijke Nederlandsche Reedersvereeniging, p. 18: “I am afraid that under our newest maritime law, such exemption clauses that are in and out themselves very desirable and justified [as FIOS] will turn out to be null and void. Art. 468-2 [Art. III(2) HVR] expressly provides that the carrier is required to ensure proper stowage and art. 468-9 [Art. III(8) HVR) also expressly states that he cannot be exempted from liability for damages resulting from failure to comply with this obligation.]

  21. 21.

    Boonk, H. (1993) Zeevervoer onder cognossement. Gouda Quint BV, Arnhem, p. 190.

  22. 22.

    Boonk, H. (1993) Zeevervoer onder cognossement. Gouda Quint BV, Arnhem, p. 191: “Voor zover ondanks een FIOS-beding de inlading, lossing en/of stuwage daadwerkelijk geschieden door de vervoerder of diens hulppersonen, kan de vervoerder zich in verband met art. 381 lid 2 niet vrijtekenen voor de uitvoering van die werkzaamheden gemaakte fouten.” [Boonk, H. (1993) Sea transport under bills of lading. Gouda Quint BV, Arnhem, p. 191: “To the extent that, despite a FIOS clause, a carrier or his agents actually carries out loading, discharge and/or stowage, in view of art. 381 rule 2 the carrier cannot be exonerated for the faults that were made during performing these activities.”]

  23. 23.

    Margetson, N.J. (2008) Liability of the Carrier Under the Hague (Visby) Rules for Cargo Damage Caused by Unseaworthiness of Its Containers. 14 JIML 153, p. 158.

  24. 24.

    De Favoriet, SCN 19 January 1968, NJ 1968, 20; Schip en Schade [1968], p. 51 No. 19–20.

  25. 25.

    De Favoriet, SCN 19 January 1968, NJ 1968, 20; Schip en Schade [1968], No. 20, pp. 51–53, at p. 52: “...voor het slagen van dat beroep niet, althans niet zonder meer en in alle omstandigheden, vereist is, dat de vervoerder stelt en/of te bewijzen aanbiedt, resp. bewijst, dat het aan de cognossementshouder bekend was, dat de belading en/of de stuwage is geschied door de afzender, casu quo bevrachter, resp. dat de goederen zijn geladen en gestuwd door personen niet in dienst van, ondergeschikt aan of werkende voor rekening van de vervoerder;”. [De Favoriet, SCN 19 January 1968, NJ 1968, 20; Schip en Schade [1968], No. 20, pp. 51–53, at p. 52: “…for the success of this action it is not, at least not without question and in all circumstances, required that the carrier states and/or offers to prove, respectively proves, that the bill of lading holder was aware of the fact that the loading and/or stowage was performed by the shipper, casu quo the charterer, respectively that the goods were loaded and stowed by parties who are not agents, subsidiaries or employees of the carrier.”]

  26. 26.

    Hendrikse, M.L., Margetson, N.H. & Margetson, N.J. (2008) Aspects of Maritime Law: Claims under Bills of Lading. Kluwer Law International, p. 80.

  27. 27.

    De Atlantic Coast, Rb. Rotterdam 16 februari 1990, Schip en Schade [1991], Nr. 15, p. 34.

  28. 28.

    De Atlantic Coast, Rb. Rotterdam 16 februari 1990, Schip en Schade [1991], Nr. 15, pp. 34–36 at p. 35: “De Rechtbank is van oordeel dat de FIOST-clausule behalve een kostenbeding tevens een risico-beding is. Dit is vaste rechtspraak hier te lande. Blijkens de bewoordingen van het beding (“free in and out stowed”) beoogt de clausule vrijtekening van de vervoerdersaansprakelijkheid volgens de Hague Rules zowel bij belading en stuwage als bij lossing.” [De Atlantic Coast, Rb. Rotterdam 16 februari 1990, Schip en Schade [1991], Nr. 15, pp. 34–36 at p. 35: “The Court finds that the FIOST clause, besides being a cost-related clause, also is a risk-related clause. This is settled case law in this country. It is apparent from the wording of the clause (“free in and out stowed”) that the clause is deemed as an exemption for the carrier from liability under the Hague Rules with regard to both loading and stowage, and discharge.”]

  29. 29.

    van Overklift, H.S. (2005) De FIOS-clausule in rechtsvergelijkend perspectief. Tijdschrift Vervoer & Recht (TVR), maart 2005 – afl. 2, p. 35.

  30. 30.

    Jindal Iron and Steel Co. Ltd. and Others v Islamic Solidarity Shipping Co Jordan Ltd. (The “Jordan II”) [2005] 1 Ll. L. Rep 57, p. 65.

  31. 31.

    Under this common law principle, which distinguishes common law systems from civil law systems, new cases are decided with reference to former decisions or precedents in cases with similar facts. Although it is not always strictly applied, it provides for a predictable resolution of cases and for maintaining stability and uniformity in the application of the law.

  32. 32.

    See Chap. 2, Sect. 2.4.3.1.

  33. 33.

    See Chap. 2, Sect. 2.4.3.4.

  34. 34.

    Pyrene Company Ltd. v Scindia Steam Navigation Company Ltd. [1954] 1 Ll. L. L. Rep., pp. 328–329.

  35. 35.

    Pyrene Company Ltd. v Scindia Steam Navigation Company Ltd. [1954] 1 Ll. L. L. Rep., p. 329.

  36. 36.

    Jindal Iron and Steel Co. Ltd. and Others v Islamic Solidarity Shipping Co Jordan Ltd. (The “Jordan II”) [2005] 1 Ll. L. Rep. 57, p. 62.

  37. 37.

    G.H. Renton & Co. Ltd. v Palmyra Trading Corporation of Panama (The “Caspiana”) [1956] 2 Ll. L. Rep. 379.

  38. 38.

    For the carriage of goods on deck, see Chap. 4 below.

  39. 39.

    G.H. Renton & Co. Ltd. v Palmyra Trading Corporation of Panama (The “Caspiana”) [1956] 2 Ll. L. Rep. 379, p. 388.

  40. 40.

    G.H. Renton & Co. Ltd. v Palmyra Trading Corporation of Panama (The “Caspiana”) [1956] 2 Ll. L. Rep. 379, pp. 389–390.

  41. 41.

    G.H. Renton & Co. Ltd. v Palmyra Trading Corporation of Panama (The “Caspiana”) [1956] 2 Ll. L. Rep. 379, p. 390.

  42. 42.

    G.H. Renton & Co. Ltd. v Palmyra Trading Corporation of Panama (The “Caspiana”) [1956] 2 Ll. L. Rep. 379, p. 393: “[Article III rule 2] is, in my opinion, directed and only directed to the manner in which the obligations undertaken are to be carried out. Subject to the latter provisions, it prohibits the shipowner from contracting out of liability for doing what he undertakes to do properly and with care.”

  43. 43.

    Leigh and Sillivan Ltd. v. Aliakmon Shipping Co. Ltd. (The “Aliakmon”) [1983] 1 Ll. L. Rep. 203; [1986] 2 Ll. L. Rep. 1.

  44. 44.

    The main issue at stake was whether the plaintiff buyers had title to sue since, at the time the damage took place, the legal property in the cargo did not pass to the buyers but only the risk of damage did. In fact, there was no contractual link between the c&f buyers and the defendant shipowners, because the sellers and buyers modified the terms of their c&f contract of sale, whereby the risk passed from sellers to buyers upon shipment whereas the sellers reserved the right of disposal of the goods even upon endorsement of the bill of lading up until the moment the buyers paid the price of the goods after they have been discharged. Eventually, the Court of Appeal and then the House of Lords ruled against the claim of the buyers, who had neither the legal ownership nor a possessory title to the goods concerned.

  45. 45.

    The C&F (Cost and Freight) term has been nowadays modified by the International Chamber of Commerce (ICC) into CFR (Cost and Freight) term ever since the Incoterms 2000 rules were issued. No other update of that term was made in the latest version of the rules known as Incoterms 2010 rules. Although C&F has been removed as an acronym since the Incoterms rules update in 2000, it still continues to be used by trading parties.

  46. 46.

    Leigh and Sillivan Ltd. v. Aliakmon Shipping Co. Ltd. (The “Aliakmon”) [1983] 1 Ll. L. Rep. 203, p. 208.

  47. 47.

    Leigh and Sillivan Ltd. v. Aliakmon Shipping Co. Ltd. (The “Aliakmon”) [1983] 1 Ll. L. Rep. 203, pp. 208–209.

  48. 48.

    See Chap. 1, Sect. 1.2.1 above dedicated to the bill of lading contract of carriage.

  49. 49.

    Leigh and Sillivan Ltd. v. Aliakmon Shipping Co. Ltd. (The “Aliakmon”) [1983] 1 Ll. L. Rep. 203, p. 209.

  50. 50.

    Baughen, S. (2015) Shipping Law (6th ed). Routledge, p. 78.

  51. 51.

    Baughen, S. (2015) Shipping Law (6th ed). Routledge, p. 78.

  52. 52.

    Baughen, S. (2015) Shipping Law (6th ed). Routledge, p. 78.

  53. 53.

    Balli Trading Ltd. v Afalona Shipping Co. Ltd. (The “Coral”) [1993] 1 Ll. L. Rep. 1.

  54. 54.

    Balli Trading Ltd. v Afalona Shipping Co. Ltd. (The “Coral”) [1993] 1 Ll. L. Rep. 1, pp. 6–7.

  55. 55.

    Baughen, S. (2009) Shipping Law (4th ed), Routledge-Cavendish, ISBN-13: 978-0-415-48719-1, p. 118.

  56. 56.

    Jindal Iron and Steel Co. Ltd. and Others v Islamic Solidarity Shipping Co Jordan Ltd. (The “Jordan II”) [2003] 2 Ll. L. Rep. 87; [2005] 1 Ll. L. Rep. 57.

  57. 57.

    The claimant charterers did not appeal the decision of the Court of Appeal and, hence, the dispute before the House of Lords was between the appellant cargo owners (the shipper and the consignee) and the respondent shipowners.

  58. 58.

    Article IV rule 2(i) of the Hague-Visby Rules states: “Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from: […] (i) Act or omission of the shipper or owner of the goods, his agent or representative.”

  59. 59.

    Article IV rule 2(q) states: “Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from: […] (q) Any other cause arising without the actual fault or privity of the carrier, or without the fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage.”

  60. 60.

    Baughen, S. (2009) Shipping Law (4th ed), Routledge-Cavendish, p. 117.

  61. 61.

    The Practice Statement is a statement made in the House of Lords in 1966 by Lord Gardiner. It allowed the House of Lords (the then Highest Court) to depart from its own previous decisions “when too rigid adherence to precedent may lead to injustice in a particular case and also unduly restrict the proper development of the law”.

  62. 62.

    Jindal Iron and Steel Co. Ltd. and Others v Islamic Solidarity Shipping Co Jordan Ltd. (The “Jordan II”) [2005] 1 Ll. L. Rep. 57, p. 63.

  63. 63.

    See Sect. 3.3 above.

  64. 64.

    Nikaki, Th. (2005) Analysis and Comment: The Jordan II. 11 JIML, pp. 13–17 at p. 16.

  65. 65.

    Considering the ruling in The “Jordan II,” the Singapore High Court ruled in a free-in-liner-out case that a FIOS clause found only in a general freight provision in a Liner Booking Note (Conlinebooking 1978 Standard Form, Box 10: Freight rate) was not sufficient for the carrier to contract out the responsibility and the risk of loading. See Subiaco Pte Ltd v Baker Hughes Singapore Pte (The “Achilles”) [2010] SGHC 265.

  66. 66.

    Yuzhny Zavod Metall Profil LLC v Eems Beheerder B.V. (The “Eems Solar”) [2013] 2 Ll. L. Rep. 489.

  67. 67.

    Yuzhny Zavod Metall Profil LLC v Eems Beheerder B.V. (The “Eems Solar”) [2013] 2 Ll. L. Rep. 489, p. 518, para. 95.

  68. 68.

    Yuzhny Zavod Metall Profil LLC v Eems Beheerder B.V. (The “Eems Solar”) [2013] 2 Ll. L. Rep. 489, p. 520, para. 99.

  69. 69.

    See Sect. 3.4.3.1 above.

  70. 70.

    See Baughen, S. (2003) Defining the Ambit of Article III r.8 of the Hague Rules: Obligations and Exceptions Clauses. 9 JIML 2, pp. 115–122 at p. 116. The then perfectly solid reasoning was supported with the case The “Miramar” AC 676 [1984] 2 Ll. Rep. 129, in which a bill of lading incorporated a charter party, and a demurrage clause found in the charter party and referring solely to the “charterer” was held by the House of Lords not to prevail over other bill of lading provisions. While the Owners in that case contended that the obligation to pay demurrage could transfer to the receiver, the Court held that the bill of lading contract intended that the charterer alone should be responsible for demurrage. This case, however, is not the perfect example in the context of the transfer of obligations under FIO terms given that the obligation to pay demurrage is a matter to be settled exclusively between shipowners and charterers under a charter party agreement and is, least to say, very remote to cargo interests under a bill of lading.

  71. 71.

    For the precise meaning of the FIOS(T) terminology, see Sect. 3.2 above.

  72. 72.

    This is a printed clause 5(a) of the Gencon 94 voyage charter party.

  73. 73.

    The “Visurgis” [1999] 1 Ll. L. Rep. 218.

  74. 74.

    The “Visurgis” [1999] 1 Ll. L. Rep. 218, pp. 223–224.

  75. 75.

    Compania Sud American Vapores v MS ER Hamburg Schiffahrtsgesellschaft GmbH & Co KG [2006] 2 Ll. L. Rep. 66; [2006] 689 Ll. Mar. L. N. 1. The charter party in this case incorporated the Hague-Visby Rules.

  76. 76.

    Compania Sud American Vapores v MS ER Hamburg Schiffahrtsgesellschaft GmbH & Co KG [2006] 2 Ll. L. Rep. 66, p. 79, para. 42.

  77. 77.

    Court Line Ltd. v Canadian Transport Co Ltd [1940] 1 Ll. L. Rep. 161. See Sect. 3.4.4.2 below.

  78. 78.

    Onego Shipping & Chartering BV v JSC Arcadia Shipping (The “Socol 3”) [2010] 2 Ll. L. Rep. 221.

  79. 79.

    Court Line Ltd. v Canadian Transport Co Ltd [1940] 1 Ll. L. Rep. 161.

  80. 80.

    Gaskell, N. (2003) Charterer’s Liability to Shipowner – Orders, Indemnities and Vessel Damage. In: Schelin, J (ed) (2003) Modern Law of Charterparties. Jure Forlag AB, Sweden, p. 19 at p. 46.

  81. 81.

    A. B. Marintrans v. Comet Shipping Co. Ltd. (The “Shinjitsu Maru No. 5”) [1985] 1 Ll. L. Rep. 568, p. 575.

  82. 82.

    Alexandros Shipping Co. of Piraeus v MSC Mediterranean Shipping Co. S.A. of Geneva (The “Alexandros P”) [1986] 1 Ll. L. Rep. 421, p. 424.

  83. 83.

    Alexandros Shipping Co. of Piraeus v MSC Mediterranean Shipping Co. S.A. of Geneva (The “Alexandros P”) [1986] 1 Ll. L. Rep. 421, p. 424.

  84. 84.

    Transocean Liners Reederei G.m.b.H. v Euxine Shipping Co. Ltd. (The “Imvros”) [1999] 1 Ll. L. Rep. 848.

  85. 85.

    Newcastle P&I v Assurance Foreningen Gard Gjensidig [1998] 2 Ll. L. Rep. 387, p. 403.

  86. 86.

    Transocean Liners Reederei G.m.b.H. v Euxine Shipping Co. Ltd. (The “Imvros”) [1999] 1 Ll. L. Rep. 848, p. 851.

  87. 87.

    Court Line Ltd. v Canadian Transport Co Ltd [1940] 1 Ll. L. Rep. 161.

  88. 88.

    Court Line Ltd. v Canadian Transport Co Ltd [1940] 1 Ll. L. Rep. 161, p. 162.

  89. 89.

    Court Line Ltd. v Canadian Transport Co Ltd [1940] 1 Ll. L. Rep. 161, p. 166.

  90. 90.

    Court Line Ltd. v Canadian Transport Co Ltd [1940] 1 Ll. L. Rep. 161, p. 166.

  91. 91.

    Court Line Ltd. v Canadian Transport Co Ltd [1940] 1 Ll. L. Rep. 161, p. 166.

  92. 92.

    Court Line Ltd. v Canadian Transport Co Ltd [1940] 1 Ll. L. Rep. 161, p. 172.

  93. 93.

    Alexandros Shipping Co. of Piraeus v MSC Mediterranean Shipping Co. S.A. of Geneva (The “Alexandros P”) [1986] 1 Ll. L. Rep. 421, p. 424.

  94. 94.

    Ismail v Polish Ocean Lines (The “Ciechocinek”) [1976] 1 Ll. L. Rep. 489.

  95. 95.

    MSC Mediterranean Shipping Company S.A. v Alianca Bay Shipping Company Ltd. (The “Argonaut”) [1985] 2 Ll. L. Rep. 216.

  96. 96.

    Article IV rule 2 (m) states: “Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from: (m) wastage in bulk or weight or any other loss or damage arising from inherent defect, quality or vice of the goods;”

  97. 97.

    Article IV rule 2 (q) states: “Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from: (q) any other cause arising without the actual fault and privity of the carrier, or without the fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage.”

  98. 98.

    As Lord Justice Ormrod pointed out, “it would be hard to find a form of words better adapted to promoting disputes between owners and charterers than this” because the first part of the clause requires the master to carefully follow the instructions of the charterer with regard to stowage and dunnaging, while the second part leaves him responsible for the proper performance of these operations. See The “Ciechocinek” [1976] 1 Ll. L. Rep. 489, pp. 497–498.

  99. 99.

    Article IV rule 2 (i) states: “Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from: (i) act or omission of the shipper or owner of the goods, his agent or representative;”

  100. 100.

    MSC Mediterranean Shipping Company S.A. v Alianca Bay Shipping Company Ltd. (The “Argonaut”) [1985] 2 Ll. L. Rep. 216.

  101. 101.

    MSC Mediterranean Shipping Company S.A. v Alianca Bay Shipping Company Ltd. (The “Argonaut”) [1985] 2 Ll. L. Rep. [1985] 216, p. 218.

  102. 102.

    See Sect. 3.4.4.2 above.

  103. 103.

    Neill LJ in The “Shinjitsu Maru No. 5” [1985] 1 Ll. L. Rep. 568, p. 575.

  104. 104.

    MSC Mediterranean Shipping Company S.A. v Alianca Bay Shipping Company Ltd. (The “Argonaut”) [1985] 2 Ll. L. Rep. 216, p. 224.

  105. 105.

    C.H.Z. Rolimpex v Eftavrysses Compania Naviera S.A. (The “Panaghia Tinnou”) [1986] 2 Ll. L. Rep. 586.

  106. 106.

    See Sect. 3.4.1 above.

  107. 107.

    See Sect. 3.4.1 above.

  108. 108.

    See Sect. 3.4.4.3 above.

  109. 109.

    See Lord Justice Ormrod’s judgment in The “Ciechocinek” [1976] 1 Ll. L. Rep. 489, p. 497: “It would be hard to find a form of words better adapted to promoting disputes between owners and charterers than this. On the face of it it places the master in the impossible position of being under obligations which are, at least potentially, mutually inconsistent. The first part of the clause requires him to comply with the charterer's instructions as to stowage and dunnaging; the second leaves the responsibility for proper stowaging and dunnaging on him.”

  110. 110.

    See Sect. 3.4.4.2 above.

  111. 111.

    A relevant side note here is that, contrary to that finding of Steyn J. in The “Panaghia Tinnou,” Langley J. pointed out in The “Imvros” to how peculiar the following interpretation would be: if stowage performed by the charterers is so bad as to risk the vessel’s seaworthiness, then the responsibility will shift to the shipowners, meaning that the worse the stowage is performed by the shippers, the better for the shippers because the more likely it is that they will escape liability (The “Imvros” [1999] 1 Ll.L. Rep. 848, p. 851). On that basis, the judge in The “Imvros” supported the shipowners’ contention that the duty of seaworthiness under the charter party was not breached notwithstanding that the charterer’s bad stowage in effect risked the vessel’s seaworthiness. In other words, the owner’s right to intervene to prevent the vessel from becoming unseaworthy because of poor stowage was not tantamount to a duty and, accordingly, did not trigger liability on the part of the shipowners for not intervening and, at the same time, it did not relieve the charterers from liability. Finally, The “Eems Solar” has provided a conclusive answer to the problem of FIOS(T) clauses and a vessel’s unseaworthiness caused by the charterer’s poor stowage: “the shipowner [under a FIOS clause] will not be liable for damage arising from improper stowage even if it renders the vessel unseaworthy unless it is established that the bad stowage leading to the damage arose from a significant intervention by the shipowners [where] “intervention” must be significant in the sense that it operate so as to tie the stevedores’ hands and was caused only by the captain’s orders or was the result of matters of which the captain was, but the charterers were not, aware.” (see Sect. 3.4.3.2 above) For the duty of the master to intervene under a FIOS clause if poor stowage threatens the ship’s seaworthiness, see Nikaki, T. (2007) The effect of the FIOS clause of NYPE 1946 charterparties on owners’ duty to provide a seaworthy vessel. 13 JIML 29. As the owner’s duty to provide a seaworthy vessel stays outside the ambit of the present work, this problem will not be addressed in details here.

  112. 112.

    This will be the case, for example, where the FIOS(T) clause qualified by the words “under the responsibility of the master” or when the FIOS(T) transfers only the physical performance and/or costs for these operations but not the risk for them.

  113. 113.

    Filikos Shipping Corporation of Monrovia v Shipmair B.V. (The “Filikos”) [1983] 1 Ll. L. Rep. 9.

  114. 114.

    Filikos Shipping Corporation of Monrovia v Shipmair B.V. (The “Filikos”) [1983] 1 Ll. L. Rep. 9, p. 12.

  115. 115.

    Nikaki, Th. (2007) The effect of the FIOS clause of NYPE 1946 charterparties on owners’ duty to provide a seaworthy vessel. 13 JIML 29, p. 38.

  116. 116.

    UNCITRAL Report of Working Group III (Transport Law) on the work of its twenty-first session (Vienna, 14–25 January 2008), Doc A/CN.9/645, para 44.

  117. 117.

    Delebecque, Ph. (2010) Obligations and Liability Exemptions of the Carrier. European Journal of Commercial Contract Law 2010–1/2, p. 89.

  118. 118.

    See Chap. 2, Sect. 2.4.3 above.

  119. 119.

    Article 58.2 reads: “A holder that is not the shipper and that exercises any right under the contract of carriage assumes any liabilities imposed on it under the contract of carriage to the extent that such liabilities are incorporated in or ascertainable from the negotiable transport document or the negotiable electronic transport record.”

  120. 120.

    Baatz, Y., DeBattista, Ch., Lorenzon, F., Serdy, A., Staniland, H. & Tsimplis, M. (2009) The Rotterdam Rules: A Practical Annotation. Informa Law, Chap. 4, p. 36.

  121. 121.

    Article 17.3 (i) reads: “The carrier is also relieved of all or part of its liability pursuant to paragraph 1 of this article if, alternatively to proving the absence of fault as provided in paragraph 2 of this article, it proves that one or more of the following events or circumstances caused or contributed to the loss, damage, or delay:

    (i) Loading, handling, stowing, or unloading of the goods performed pursuant to an agreement in accordance with article 13, paragraph 2, unless the carrier or a performing party performs such activity on behalf of the shipper, the documentary shipper or the consignee;”

  122. 122.

    Working Group III (Transport Law), 9th session (New York, 15–26 April 2002) – UNCITRAL Report of the Working Group on Transport Law on the work of its ninth session, A/CN.9/510, p. 37, para 121.

  123. 123.

    Working Group III (Transport Law), 21st session (Vienna, 14–25 January 2008) – UNCITRAL Report of the Working Group (Transport Law) on the work of its twenty-first session, A/CN.9/645, para. 44.

  124. 124.

    Working Group III (Transport Law), 21st session (Vienna, 14–25 January 2008) – UNCITRAL Report of the Working Group (Transport Law) on the work of its twenty-first session, A/CN.9/645, para. 47.

  125. 125.

    Working Group III (Transport Law), 21st session (Vienna, 14–25 January 2008) – UNCITRAL Report of the Working Group (Transport Law) on the work of its twenty-first session, A/CN.9/645, para. 47.

  126. 126.

    Margetson, N.J. (2008) Liability of the Carrier Under the Hague (Visby) Rules for Cargo Damage Caused by Unseaworthiness of Its Containers. 14 JIML 153, p. 159.

  127. 127.

    Renton v Palmyra (The “Caspiana”) [1956] 2 Ll. L. Rep. 379, p. 390.

  128. 128.

    Comité Maritime International, The Travaux Préparatoires Of The International Convention For The Unification Of Certain Rules Of Law Relating To Bills Of Lading Of 25 August 1924 The Hague Rules And Of The Protocols Of 23 February 1968 And 21 December 1979 The Hague-Visby Rules, p. 186.

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    Ilian Djadjev

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Djadjev, I. (2017). The FIOS(T) Clause. In: The Obligations of the Carrier Regarding the Cargo. Springer, Cham. https://doi.org/10.1007/978-3-319-62440-2_3

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