1.

Shipment: the process of loading goods into ship mostly

The act of transporting goods from one place to another. It refers to the specific goods
or cargo being transported, as well as the process itself. For example, "shipment" could
mean a container of goods or the service of moving that container.

2. Freight: means the items being shipped (like cargo on a truck) or the price paid to move
these items.

3. Carrier: The company or individual responsible for the transportation of goods. Carriers
provide the means to move goods, such as ships, planes, trucks, or trains. Examples include
DHL, FedEx, and Maersk.

4. Shipper: The person or company that owns or initiates the shipment of goods. The
shipper is responsible for preparing and dispatching the goods to the consignee (receiver).

5. Affreightment: A legal agreement or contract between a shipper and a carrier in which

the carrier agrees to transport goods for the shipper for a fee. It's commonly used in
maritime shipping for contracts detailing the transport of goods via sea.

6. Consignee: The person or company to whom the goods are being delivered. The
consignee is the recipient and is often responsible for receiving and signing for the goods
upon arrival.

7. Freight Forwarder: A third-party agent or company that manages the logistics of shipping
goods on behalf of a shipper. Freight forwarders coordinate various aspects like
transportation, warehousing, customs clearance, and documentation, helping ensure that
goods move smoothly from origin to destination.

Functions of a Bill of Lading and Its Importance to International Trade

A bill of lading (B/L) is a crucial document in international shipping and trade, serving several
important functions:

1. Receipt of Goods: It acts as a receipt issued by the carrier to the shipper,

acknowledging that they have received the goods in good condition for transport.
This is essential for both parties as it verifies that the carrier has taken control of the
goods.
 Tally CLERK: RESPONISBLE OF LAODING GOODS TO THE VESSIL -DOES THE BILL OF
LADDING

2. Evidence of Contract of Carriage: It serves as proof of the contract between the shipper
and the carrier, outlining the terms of transport, responsibilities, and liabilities. This
contractual evidence is particularly important in international trade where multiple legal
jurisdictions may be involved.

3. Document of Title: A bill of lading also serves as a document of title, giving the holder the
right to claim and take possession of the goods upon arrival. This is critical for the transfer of
ownership, especially in cases where the goods are sold multiple times while in transit.

These functions make the bill of lading indispensable in international trade by providing
security and legal structure to transactions, ensuring that both parties have protection and
recourse if disputes arise. It also simplifies the transfer of ownership across borders, which
is essential in global supply chains.

### Differences Between Straight and Negotiable Bills of Lading

1. Straight Bill of Lading:

- Also known as a non-negotiable bill of lading.
- Specifies a named consignee who is the only party authorized to receive the goods.
- Ownership is not transferable, meaning that the consignee listed on the document is the
sole party entitled to take possession of the goods upon delivery.
- Commonly used in situations where the goods are already paid for and are being shipped
directly to the buyer without further sale.

2. Negotiable Bill of Lading:

- Also referred to as an order bill of lading.
- Transferable and can be endorsed by the shipper or consignee, allowing it to be traded or
transferred to another party while the goods are still in transit.
- Provides flexibility in the ownership of the goods, allowing them to be resold before
reaching the final destination.
- This type of bill of lading is often used when there is financing involved, such as a letter of
credit, or when goods are resold during transit.

Sea WAYBIL( SIMILAR TO BILL OF LADDING): 1) RECEIPT OF GOODS ONLY NOT USED TO
SHOW ONWERSHIP 2)NON-NEGITOBALE
### The Himalaya Clause and Its Implications

The Himalaya clause is a provision in a bill of lading that extends the carrier’s liability
limitations and protections to third parties involved in the transport of the goods. This can
include subcontractors, agents, or employees who may handle the cargo during various
stages of transit, such as stevedores (dockworkers) and other intermediaries.
Contracts (RIGHTS OF 3RD PARTY) 1999
#### Parties Concerned About the Inclusion of a Himalaya Clause

1. Shippers and Consignees:

- Shippers and consignees might be concerned about the Himalaya clause because it limits
their recourse if damage or loss occurs due to the actions of a third party. Since the third
party is protected under the carrier’s liability limitations, the consignee or shipper might
have restricted options for claiming compensation.

2. Subcontractors and Third Parties:

- Conversely, subcontractors and other third parties handling the goods benefit from the
clause. It gives them protection from liability claims, which is valuable in the high-risk
environment of international shipping.

In summary, the Himalaya clause is often included to ensure that carriers' third-party
associates are shielded from claims that could otherwise be directed at them. This clause
can affect the ability of shippers or consignees to seek damages, and thus they may be wary
of it due to the limitation of liability it imposes.

A documentary sale is a type of international trade transaction where the sale and transfer
of goods are conducted through specified documents rather than through the physical
delivery of the goods. In this type of sale, the seller provides key documents to the buyer (or
buyer’s bank) as proof that the goods have been shipped and comply with the contract.
These documents serve as evidence of ownership, shipment, and compliance with the
contract terms, enabling the buyer to take possession of the goods once they reach their
destination.

### Key Documents Necessary for a Documentary Sale

Several essential documents are typically required for a documentary sale, and these
documents may vary depending on the specific terms of the transaction or the
requirements of the buyer or buyer’s bank. The most common documents in a documentary
sale include:

1. Bill of Lading:
- Acts as a receipt for the goods, a contract of carriage, and a document of title.
- Allows the buyer to take possession of the goods upon arrival and can be straight (non-
negotiable) or negotiable (transferable).

2.Export license

2. Commercial Invoice:
- Issued by the seller, this document lists the goods sold, their quantity, price, terms of
sale, and total amount due.
- Serves as a statement of the transaction and a demand for payment.

3. Certificate of Origin:
- Confirms the country of origin of the goods being shipped.
- May be required to satisfy import regulations or to qualify for preferential tariffs under
trade agreements.

4. Insurance Certificate:
- Provides proof that the goods are insured against damage, loss, or theft during transit.
- Required for transactions where the buyer needs assurance of coverage for the goods in
case of an unforeseen incident.

5. Packing List:
- Details the packaging and contents of each shipment container.
- Assists in verifying the shipment’s contents at customs and upon delivery.

6. Letter of Credit (if applicable):

- Often used to guarantee payment; issued by the buyer’s bank, promising payment to the
seller upon presentation of specific documents.
- Provides financial security to the seller and ensures that the buyer’s payment is made
according to the agreed terms.

7. Inspection Certificate:
- Provides verification from an independent party (often a third-party inspector) that the
goods meet the specified quality, quantity, and condition as per the contract.
- Required in transactions where quality or compliance with standards is a concern.
 These documents collectively help ensure that both parties fulfill their obligations. They
allow the seller to receive payment upon meeting the document requirements, and they
protect the buyer by providing evidence of the shipment and status of goods before
payment is finalized.

The Hague Rules and the Hague-Visby Rules are a set of international rules that govern the
rights and obligations of parties involved in the carriage of goods by sea:

 Hague Rules
The original rules were drafted in Brussels in 1924. They were based on an earlier draft
adopted by the International Law Association in The Hague in 1921. The Carriage of Goods
by Sea Act 1924 brought the Hague Rules into English law.

 Hague-Visby Rules
These rules are an updated version of the Hague Rules. They were brought into force in
England by the Carriage of Goods by Sea Act 1971. The Hague-Visby Rules provide rights
and immunities to the carrier, and define the rights and liabilities of ship owners.

The Hague-Visby Rules apply to contracts of carriage covered by a bill of lading or similar
document of title. The rules do not apply to charterparties, but owners and charterers often
agree to apply them through standard forms.

Key features of the Hague Rules include:

1. Carrier Liability:
- Carriers are responsible for taking care of the goods and delivering them in good
condition, but liability is limited in cases of loss or damage.

2. Limitations of Liability:
- The carrier’s liability is capped at £100 per package or unit of goods, offering carriers
some protection from excessive claims.

3. Duties of the Carrier:

- Carriers must ensure the ship is seaworthy, properly crewed, and equipped to carry the
cargo.
- The carrier is responsible for carefully loading, stowing, carrying, and discharging the
goods.

4. Exceptions for Carriers:

 - Carriers are exempted from liability in specific circumstances, such as acts of God, war, or
public enemies, as well as negligence by the crew.

While the Hague Rules provided a structure for liability, they were seen as more favorable
to carriers, which led to pressure for further refinement.

### The Hague-Visby Rules (1968)

The Hague-Visby Rules are an updated version of the original Hague Rules, adopted in 1968
to address some of the limitations of the original rules and to offer a more balanced
approach between the interests of carriers and shippers. The Hague-Visby Rules have since
been widely adopted by many countries.

Key updates and additions under the Hague-Visby Rules include:

1. Increased Liability Limits:

- The liability limit was raised to 666.67 Special Drawing Rights (SDRs) per package or 2
SDRs per kilogram, whichever is higher. This increase provided greater compensation
potential for shippers if goods were damaged or lost.

2. Geographical Scope:
- The Hague-Visby Rules apply to carriage between ports in different countries that have
adopted the rules. This helped to make the rules more universally applicable.

3. “Tackle-to-Tackle” Period:
- The rules specify that carrier liability extends only from the time goods are loaded onto
the vessel until they are discharged (referred to as the “tackle-to-tackle” period). This leaves
the loading and unloading phases somewhat unregulated.

4. Containerized Cargo:
- The rules also include provisions for modernized shipping practices, including
containerized cargo, which became common after the original Hague Rules.

### Importance of the Hague and Hague-Visby Rules

Both The Hague Rules and the Hague-Visby Rules are foundational in international maritime
law. They aim to balance the interests of carriers and shippers, provide consistency in
international trade, and offer a fair allocation of risk. Though newer conventions like the
Hamburg Rules (1978) and Rotterdam Rules (2008) have been developed, the Hague-Visby
Rules remain widely used and continue to shape maritime shipping regulations worldwide.
Marine insurance in international law is a specialized form of insurance designed to cover
the risks associated with the transportation of goods and vessels over water. It provides
financial protection for losses or damages to ships, cargo, terminals, and other goods or
property involved in the transportation process. Marine insurance is governed by a mixture
of international conventions, national laws, and private contracts, making it a critical
component of international maritime commerce.

### Key Principles of Marine Insurance in International Law

1. **Indemnity Principle**:
- Marine insurance operates on the principle of indemnity, meaning the insurer agrees to
compensate the insured for losses directly associated with a covered peril. However, it does
not allow the insured to profit from the insurance, only to be restored to their financial
position before the loss.

2. **Utmost Good Faith (Uberrimae Fidei)**:

- Marine insurance is based on the principle of utmost good faith, where both the insured
and insurer must disclose all material facts. The insured must be transparent about the risk
profile, and failure to disclose relevant information can lead to a voided policy.

3. **Insurable Interest**:
- The insured must have a financial interest in the ship or cargo at risk. This means they
would suffer financial loss if the insured goods or vessel were lost or damaged.

4. **Proximate Cause**:
- In marine insurance, claims are generally assessed based on the "proximate cause,"
meaning the insurer covers losses resulting directly from a peril specified in the policy, even
if other contributing causes were involved.

### Types of Marine Insurance Coverage

1. **Hull Insurance**:
- Covers the physical damage or loss of the ship itself. It is generally purchased by
shipowners to protect the vessel against risks such as collision, fire, and other accidents at
sea.

2. **Cargo Insurance**:
- Covers the goods or cargo being transported. This insurance is typically purchased by the
owners of the goods, and it covers risks like theft, piracy, and physical damage during
transit.
3. **Freight Insurance**:
- Protects the income of the shipowner or operator by insuring the freight payment for the
shipment. If goods are damaged or lost, freight insurance compensates for the freight
income lost as a result.

4. **Protection and Indemnity (P&I) Insurance**:

- Covers the shipowner's third-party liabilities, such as environmental damage, cargo
liabilities, or injury claims. P&I insurance is often provided by mutual associations, known as
P&I Clubs.

### International Conventions Related to Marine Insurance

There is no single international convention governing marine insurance, but several

conventions and regulations indirectly affect it by setting standards for the treatment of
cargo, the handling of claims, and the responsibilities of carriers and shippers. Key
conventions include:

1. **The Hague-Visby Rules (1968)**:

- While primarily governing the rights and obligations between shippers and carriers, these
rules indirectly impact marine insurance by defining carrier liability, risk allocation, and what
losses insurers may have to cover.

2. **The Hamburg Rules (1978)**:

- Introduced alternative liability rules with a higher threshold for carrier liability, which
affects marine insurers by increasing potential claim amounts.

3. **The York-Antwerp Rules**:

- These rules govern the concept of "general average" in maritime law, where all parties
involved in a sea venture proportionally share losses resulting from a voluntary sacrifice of
part of the ship or cargo to save the whole venture. Marine insurance policies often cover
general average claims, and these rules dictate how such costs are allocated.

4. **The Rotterdam Rules (2008)**:

- Proposed to update and standardize shipping practices globally, these rules include
provisions that clarify carrier liabilities and responsibilities for cargo, which in turn affect
marine insurance policies.

### Role of Lloyd’s of London and Marine Insurance Policies

Historically, **Lloyd’s of London** has played a major role in the development of marine
insurance. Lloyd's underwriters and their policies have influenced the marine insurance
industry by creating standardized clauses and terms, such as the **Institute Cargo Clauses
(ICC)**, which define the scope of coverage for cargo insurance in international trade.

### Importance of Marine Insurance in International Trade

1. **Risk Mitigation**:
- Marine insurance helps manage and transfer the significant risks of transporting goods by
sea, including loss or damage to goods, accidents, natural disasters, and piracy. This security
allows companies to engage confidently in international trade.

2. **Facilitating Financing**:
- Banks and financial institutions often require marine insurance on goods as a condition
for financing trade deals. Marine insurance ensures that if a loss occurs, the loan can still be
repaid, reducing the lender’s risk.

3. **Promoting Legal Consistency**:

- Through standardized policies and adherence to international conventions, marine
insurance contributes to a more predictable and consistent framework, making
international maritime transactions smoother and more secure.

In summary, marine insurance plays a critical role in international maritime trade by

providing financial protection against various sea-related risks. Although no single global
convention governs marine insurance, it is shaped by a combination of international
conventions, national laws, and private agreements, all contributing to the stability and
security of global shipping.