Voyage Charters

Timothy Young KC; Michael Ashcroft; Julian Cooke; Andrew Taylor; John Kimball; LeRoy Lambert; David Martowski; Michael Sturley

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Chapter 66 The Hague and Hague-Visby Rules

(The Rules are set out in full in Appendices 1 and 3.)

The Role of the Rules in Relation to Charterparties

The Paramount Clause

66.1 The Hague Rules, and the later amendments to them incorporated in what are usually called the Hague-Visby Rules,1 were principally drafted to govern the carriage of goods by sea under bills of lading or similar documents of title, and either or both sets of the Rules have been incorporated into the law of many countries involved in maritime trade, such that under designated circumstances they are compulsorily applicable to such voyages. However, they are not compulsorily applicable to charterparties2 and they must be incorporated expressly if it is intended that they should apply as between shipowners and charterers. The standard Gencon form does not incorporate either set of Rules, but other standard forms do, such as the Asbatankvoy. It is quite common for parties specifically to agree their incorporation into the charterparty by means of a so-called Paramount Clause.3 66.2 The precise formulation of the Paramount Clause incorporated must, however, always be carefully considered, for there are a number of different formulations which range from very detailed ones, such as the Chamber of Shipping Voyage Charter Clause Paramount 1958, to very simple ones such as “Paramount Clause to be incorporated herein”, and they achieve different levels of incorporation and potentially very different results. In The Tasman Discoverer,4 for example, the bill of lading was construed as incorporating Articles I–VIII but not Article IX with its “gold value” provision;5 accordingly the Article IV rule 5 package limitation was determined by reference to £100 sterling and not the

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gold value of that sum, which was considerably greater. In The Sonia,6 the charterparty provided that the provisions of Article III (other than rule 8) of the Hague-Visby Rules should apply; the omission of rule 8 thus excluded the paramountcy of the Rules. One common expression is “The following Paramount Clause to apply and to be inserted in all Bills of Lading issued under the Charter Party”. This has been held by Mance J. to mean “The following Paramount Clause to apply under the charter” and not “The following Paramount Clause to apply … in all Bills of Lading issued under this Charter Party, but not to the charterparty itself”.7 66.3 Lord Denning M.R. explained the meaning of the simple form of incorporation “Paramount Clause to be incorporated herein” in these terms:8

Primarily it applies to bills of lading. In that context its meaning is, I think, clear beyond question. It means a clause by which the Hague Rules are incorporated into the contract evidenced by the bill of lading and which overrides any express exemption or condition that is inconsistent with it…. Such being the clear meaning of “clause paramount” in a bill of lading, we have to see what its meaning is in this charterparty…. It brings the Hague Rules into the charterparty so as to render the voyage or voyages subject to the Hague Rules, so far as applicable thereto; and it makes those Rules prevail over any of the exceptions in the charterparty…. It seems to me that when the “Paramount clause” is incorporated, without any words of qualification, it means all the Hague Rules are incorporated. If the parties intend only to incorporate part of the Rules … or only such as are compulsorily applicable they say so. In the absence of any such qualification, it seems to me that a “clause paramount” is a clause which incorporates all the Hague Rules. I mean of course the accepted Hague Rules, not the Hague-Visby Rules, which are of later date.

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