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Lloyd's Maritime and Commercial Law Quarterly

TRIPARTITE CONTRACTS AND THE MISSING LINK

The Jordan II
A FIOST (free in out stowed and trimmed) clause in a bill of lading purports to effect a transfer of responsibility for loading, stowing and discharging away from the shipowner to the shipper, as regards loading and stowing, and to the receiver, as regards discharging. For nearly 50 years it has been assumed that under English law such a clause is not rendered ‘‘null and void’’ by Art III, r 8 of the Hague and Hague-Visby Rules. This is because the clause does not constitute a ‘‘clause, covenant or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to, or in connection with goods arising from negligence, fault, or failure in the duties and obligations provided in this article or lessening such liability otherwise than as provided in these Rules’’. The reference to ‘‘the duties and obligations provided in this article’’ makes it necessary to consider the wording of Art III, r 2, which states that ‘‘the carrier shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried’’. This provision could be read as requiring the carrier to perform these tasks, in which case a FIOST clause would surely be caught by Art III, r 8. However, an alternative interpretation was propounded by Devlin J in Pyrene v. Scindia 1 as follows,
It is difficult to believe that the rules were intended to impose a universal rigidity in this respect, or to deny freedom of contract to the carrier. The carrier is practically bound to play some part in the loading and discharging, so that both operations are naturally included in those covered by the contract of carriage. But I see no reason why the rules should not leave the parties free to determine by their own contract the part which each has to play. On this view the whole contract of carriage is subject to the rules, but the extent to which loading and discharging are brought within the carrier’s obligations is left to the parties themselves to decide.
A few years later this interpretation received the endorsement of the majority of the House of Lords in GH Renton & Co v. Palmyra Trading Corp of Panama .2 It follows that, if the carrier has not undertaken responsibility for a particular activity listed in Art III, r 2, it will incur no liability thereunder if the cargo is lost or damaged due to the way in which that activity is performed. The application of this principle to a FIOST clause is relatively straightforward when a claim is advanced by the party responsible for the operations during which the cargo was damaged—as where damage occurs during discharge and the claim is advanced by the receiver. However, what is the position when the claim is

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