Hague Visby Rules – When is a country a ‘Contracting State’?
In a recent judgment, the Federal Court of Australia considered how Ireland had adopted the Hague Visby Rules (H/V Rules) and if Ireland was deemed to be a ‘Contracting State’.
Parties to shipping contracts might assume that a country is a Contracting State to an international convention, without considering how that country may have adopted a convention.
Hague Visby Rules
Whether a country is a ‘Contracting Sate’ may determine if the H/V Rules apply compulsorily when, for example, goods are shipped from, and/or a bill of lading is issued in a ‘Contracting State’. Article 10 of the H/V Rules provides three situations which trigger the application of the H/V Rules:
- the bill of lading is issued in a Contracting State; or
- the carriage is from a port in a Contracting State; or
- the contract contained in or evidenced by the bill of lading provides that the Rules are to govern the contract.
In this case, the cargo was shipped from Ireland under a booking note contract governed by Dutch law, with a waybill issued in Ireland. There was a complex matrix of fact and law for the Australian Court to consider including whether Ireland was a Contracting State to the H/V Rules.
The Hague-Visby Rules were ‘given force of law’ in Ireland by the Merchant Shipping (Liability of Shipowners and Others) Act 1996 (the 1996 Act).
The Irish Constitution provides that the executive power of the State in, or in connection with, its external relations shall be exercised by or on the authority of the Irish Government. However, no international agreement can be part of domestic Irish law unless determined by the Irish Parliament. Therefore, the Irish Government can conclude treaties and conventions ‘on the international plane’ but such treaties and conventions do not form part of Irish domestic law unless, and until, they are adopted into domestic legislation by the Irish Parliament.
Definition of a Contracting State
The Vienna Convention on the Law of Treaties defines “Contracting State” to mean “a State which has consented to be bound by the treaty, whether or not the treaty has entered into force”.
The Vienna Convention also provides that ‘consent to be bound by a treaty’ can be expressed by signature (Art 12), an exchange of instruments constituting a treaty (Art 13), ratification, acceptance or approval (Art 14) and accession (Art 15). Under Art 12, consent to be bound is expressed by signature when the treaty provides that signature shall have that effect.
The Australian Judgment
In the Australian case it was accepted that Ireland has not ratified, adhered or acceded to the H/V Rules. However, it was argued that Ireland had “consented to be bound” by the H/V Rules by signing the protocols, lodging them with the depositary State, (Belgium) and enacting the 1996 Act which gave ‘force of law’ to the H/V Rules.
Importantly, however, expressing a ‘consent to be bound’ in respect of any particular treaty depends on the relevant treaty’s clauses. Both the Hague Visby Protocol and the SDR Protocol provide that they “shall be ratified”.
The Australian Court concluded that ratification is therefore required for Ireland to be considered as a ‘Contracting State’. As there was no evidence of ratification by Ireland, the Australian Court determined that Ireland was not a ‘Contracting State’ to the H/V Rules.
The Court determined that the contract of carriage was subject to Dutch law and that Ireland was not a Contracting State to the H/V Rules. The Court held that the fact that the cargo was shipped from Ireland was not sufficient to trigger the application of the H/V Rules. The carrier was entitled, under its written conditions, to limit its liability to an amount considerably smaller than under the H/V Rules.
Parties may need to consider how a country has adopted the Hague Visby Rules before presuming that country is a ‘Contracting State’