Exploring the spread of the liability arising from dangerous goods under C.I.F. and F.O.B. contracts

Abstract

Both at common law and under the Hague-Visby Rules, the shipper, by reason of the
dangerous nature of the goods, may become subject to strict liability for damages or losses caused to
the vessel, any other cargo or lives on board. However, this formulation only provides a partial portrait
of the allocation of this liability, which is only from the perspective of the law of carriage of goods by
sea, since it only attaches this liability to whoever falls within the term “shipper”. The term “shipper”
however does not signify any real party or identity under the law of carriage of goods by sea. The
question therefore remains as to who is the real party contracting for the carriage of the goods by sea.
Perhaps the answer lies within the international sale of goodsFor sale contracts on shipment terms, alongside physical obligations in relation to the goods at the loading port, (depending on the sale contract), it is either the seller or the buyer who must make transport arrangements and conclude a contract of carriage for the goods. In the concept of shipment sales, documents are as significant as goods. At the centre of these documents lies bill of lading, whose role it is to evidence a contract of carriage for the agreed destination in the sale contract. When the buyer is not privy to the carriage contract with the carrier, COGSA 1992 Act artificially enables him to become party to that contract. English law, in terms of contract of carriage, is based on principle of mutuality which means that it is not only concerned with the transfer of rights, but also with the imposition of liabilities.

In terms of liability arising from dangerous goods, the transferability issue is not yet a settled matter under English law. This area is not fully explored under English law, given that the buyer has not had actually this liability imposed on him. If transmissible, it is therefore not known whether the law of international sale of goods would correspond to recover the buyer’s loss against the seller. Hence, rather than leaving the liability vaguely on the “shipper”, the complex scheme of international sale of goods law proves the necessity to examine the following question, which is at the centre of this thesis: How does the liability arising from the shipment of dangerous goods spread to the real parties of international trade, namely between the seller and the buyer under c.i.f. and f.o.b. sales? This question can be divided into three sub-questions. Firstly, who is the shipper under c.i.f. and f.o.b. sales and do the courts take a different approach in determining the identity of the shipper particularly for the purpose of allocation of the dangerous goods liability? Secondly, is this liability actually transmissible to the buyer and if so, can the law be justified? Thirdly and finally an aspect, which is frequently missing in other academic studies, would the law of international sale of goods provide any assistance to the buyer for recovery of such loss against the seller? If not, how can this problem be overcome? While examining these questions, not only will the thesis assess how satisfactory English law is currently on these issues, but also it will seek to fill the missing parts addressed in the questions with plausible suggestions both under contractual and non-contractual actions.

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