Overall the standard displayed was fair, given the objectives of the examination. A slight improvement in this April’s examination results was also recorded. Over half of the candidates displayed competence in identifying legal problems.
Both the essay and problem type questions were answered reasonably well by a large number of candidates, with a clear and well-informed presentation from a significant number of candidates. Legibility and tidiness was fair in the majority.
Questions 2, 4, 10 and 6 were favoured by candidates (i.e. over 50% of the total number of candidates sitting the examination attempted them), whereas questions 6, 2, 5 and 10 were the most successfully answered ones (i.e. obtaining over 50% of the marks allocated to each question) respectively.
Comments on individual questions are as follows:
Question 1 – Time charter & Voyage charter problem
This was a problem type question, based mainly on the facts of The Hill Harmony [2001] 1 Lloyd’s Rep. 147. Even if one had not come across the particular case, it was expected that candidates would consider employment and indemnity issues. “Navigation” should not be interpreted narrowly; “go from A to B via route X” indicates a navigational course and is not subject to Master’s discretion whether to follow it, unless, as suggested by many candidates, the safety of the crew and vessel are endangered. Encountering bad weather is not unusual in such ocean crossings, nor are repairs after encountering such weather. Was the same route safe for the master to take from Japan to U.S.A., and has now become unsafe? Was it reasonable at that point in time to take a different route, i.e. for the safety of the adventure?
Some answers were quite careless, suggesting deviation under a time charter-party.
Unfortunately, the issue of whether the shorter Northern route was/is the usual (or one of the usual) route taken by merchant ships was missed altogether by most.
This latter point was very important when considering the same scenario under a voyage charter party. Under a voyage charter and in the absence of the route being agreed, would it not be reasonable to query whether the vessel diverted from the normal/usual/shortest trading route?
Question 2 – Voyage charter – laytime and demurrage – ‘Reid’ test
This was a straightforward question requiring candidates to deal with two distinct but at the same time related issues. The first part was an open question, where things such as ‘arrived’ ship, likely costs involved, etc., should have been considered. A few answers confused the fact that these types of charter party (port, berth/dock) are voyage charter parties!
The second part required a good explanation of laytime and demurrage, and addressing the term ‘once on demurrage always on demurrage’. A large proportion of answers omitted to actually explain the meaning of the expression, and only outlined the terms laytime and demurrage. One remark that should be made here in relation to demurrage is that in English law liquidated damages cannot be a ‘penalty’, but they must genuinely reflect the likely loss if the particular breach (delay beyond agreed laytime) occurs. If demurrage was a ‘penalty’ then it would not be enforceable as a contractual provision.
Overall, this was a well answered question.
Question 3 – Hague-Visby Rules 1968/Carriage of Goods by Sea Act 1971
Not well answered overall. In the first part, most answers identified that the Rules/Act would apply to the carriage, and that the time bar for any action against the carrier must commence within a year under the Rules/Act. However, most failed to identify that according to Article III rule 8 such clauses were null and void since seek to reduce the carrier’s liability for loss or damage to, or in connection with the goods in reducing the time (from one year) within which the shipper/consignee may commence a claim against the carrier.
The second part of the question tested whether candidates are actually aware of the particular time-bar provision of the Rules/Act. Article III rule 6 only deals with the carrier’s liability to the shipper/consignee, not with the shipper’s/consignee’s liability to the carrier. In English law and in the absence of any provision in the contract of carriage, this issue is regulated by the Limitation Act 1980, which provides for a six year period. However, this provision of the Limitation Act may be reduced or increased by agreement of the parties. Increasing or decreasing the time within which the carrier may take action against the shipper is beyond the scope of Hague-Visby Rules/Carriage of Goods by Sea Act, and hence allowed.
The third part of the question again related to Article III rule 8. Under the Hague Rules the limits of liability of the carrier are considerably lower than under the Hague-Visby Rules. Article III rule 8 makes such clauses null and void since they seek to reduce the carrier’s liability for loss or damage to, or in connection with the goods in reducing the limits of liability; The Morviken [1983] A.C. 565.
Question 4 – Bills of lading as contracts of carriage of goods
Reasonably answered overall. I should perhaps explain that the expression relating to the bill’s of lading function of evidence of the contract, as found in most reference/text books refers to evidence of the carriage of goods contract, rather than the contract for the ‘hire’ of the vessel, i.e. charter-parties. Bills of lading issued under charter-parties are governed by them. Therefore, whether this function is attributed to such bills of lading depends on what the charter-party provides. Of course, as most answers identified, even these bills of lading could become the actual contract of carriage if are transferred by endorsement to a third party.
Question 5 – I.M.O. Conventions
The question required good essay-planning, because any of I.M.O.’s conventions could provoke an essay of dissertation length.
The phasing out of single-hull tankers (MARPOL), the I.S.M. Code, and S.T.C.W. (as amended), were mentioned in most answers. However, a number of candidates did not discuss the main provisions as required by the question. Overall, reasonably answered.
Question 6 – Hague-Visby & Hamburg Rules
Well answered overall. A criticism is that a number of answers were too descriptive. In fact some candidates drew a table and put forward a number of differences. The question, however, required that candidates should provide a commentary on both sets of Rules, using a number of differences they considered important for either point of view. Although it was not expected all differences to be covered, a few answers missed to mention the “excepted perils”, and to clarify whether seaworthiness was relevant in the Hamburg Rules.
Question 7 – Agency
A fairly well answered question. Most answers omitted to consider all potential issues involved, i.e. ratification, ostensible/apparent authority, breach of warranty of authority. The few candidates who mentioned breach of warranty of authority, did not identify who the claimant would be under this heading. Bonus marks were awarded to a few answers for identifying the requirements for valid ratification, and the difficulty, on the facts, the principal would have in obtaining damages against the agent.
Question 8 – E.U. legislation and Latin-based expressions
The first part of the question was not well answered. A criticism is that answers gave the impression that a European Regulation is similar to an international convention/treaty, whereby signatory countries, such as the U.K., would ratify and then enact/implement them into their own legal system. This view is incorrect. One of the main characteristics of European Regulations is that they have ‘direct effect’, i.e. once they are officially issued/released they are the law of land; no need for enacting, implementing, or doing anything else in relation to them.
The second part of the question was one of the better-answered questions. The question expected candidates to ‘explain’ as well as ‘define’, so the better answers showed an understanding as well as a simple definition of the terms. Ejusdem generis was generally the weaker answer, with a number of candidates not attempting it or confusing it with obiter dicta, or considering that it applies when only construing a provision of a statute.
Question 9 – Claiming agency commission
A popular question with most candidates, and a reasonably well answered one. Most answers included a mention of privity of contract and persuading the charterer to sue, or the broker deducting his commission from any freight collected from the charterer, and suing under the Contracts (Rights of Third Parties) Act 1999. Better answers included a mention of The Vistafjord, and an outline of the requirements for the Contracts (Rights of Third Parties) Act 1999 to apply.
Question 10 -
Overall, a reasonably well answered question. The facts of The Himalaya case were described by almost all candidates, as was vicarious liability. However, a large number omitted to outline the difficulties associated with identifying an employee (as opposed to an independent contractor), or to give an explanation on how the so-called ‘Himalaya clause’ extends the categories of persons entitled to the benefit(s) of the carrier’s exclusion/limitation of liability beyond the scope of vicarious liability.
