Deck Cargo

We are aware an increasing number of Chinese vessels carry cargo on deck such as loggers or containerships, and this advice is for the benefit of these owners as P&I Club cover excludes liability for deck carriage in certain situations.

P&I Club rules provide there is no cover for claims arising out of deck carriage unless the cargo is suitable for carriage on deck, and the contract of carriage is endorsed to state deck carriage, and there is a clause in the contract of carriage which excludes the carrier's liability to such cargo howsoever caused or that the Hague or Visby rules apply to deck carriage.

The following summaries of the legal position may be useful.

1. clean bill of lading means under deck stowage. Under English law a carrier need not clause a bill of lading stating on deck carriage where it is a custom of trade to carry such cargo on deck ie.logs and containers.
2. When cargo is carried on deck and stated to be so carried in the contract of carriage, the Hague of Visby rules will not apply. This is the reason in this situation owners need to include a clause in the contract of carriage which gives the carrier the liberty to carry cargo on deck and further excludes the carrier's liability for such cargo howsoever caused or that the Hague or Visby Rules still apply. See the P&I Club rules mentioned above. The contract of carriage must be claused to state the cargo is carried on deck when it is not customary for such cargo to be carried on deck.

Custom of trade

We said above that under English law there is no need to clause a bill of lading stating on deck carriage where this is the custom of trade. However the burden of proof is upon the party who alleges the existence of such a custom ie.the shipowner. We do no envisage any difficulty to show this custom in relation to containers or logs in view this practice is so widespread. However we are aware the laws of other countries do not provide an exception to the general rule to clause a bill of lading stating on deck carriage even in trades where this is a custom. This presumably is based on jurisprudence that the cargo can be carried in the holds, and if it is carried on deck the cargo is certainly subject to greater and additional risks. Under the laws of these countries who do not recognize a custom of trade as an exception to the general rule, a bill of lading which is not found to be claused for deck carriage may be tantamount to a deviation of the contract of carriage which will have severe consequences such that the carrier will not be able to rely on any exception and limitation clauses in his favour in the bill of lading such as the Hague rules. It is of particular importance that despite a custom of trade is an exception to the general rule under English law, the rules of West Of England P&I Club provide without any exceptions there will not be Club cover unless the cargo is suitable for deck carriage and the bill of lading is so endorsed to state deck carriage.
The rules of the UK Club provide that there is no cover in respect of any cargo liabilities including cargo carried on deck which are in excess of the Hague or Visby Rules. If the Hague or Visby rules do not apply to the contract of carriage for any reason, then Club cover is prejudiced.

Conclusion

Despite the custom of trade to carry cargo on deck, it is important to clause bills of lading to state on deck carriage in all situations even in container and log trades to ensure that Club cover is not prejudiced in view the rules of the P&I Clubs prudently do not recognize (due to the difficulties mentioned) the English law custom of trade as a ground or exception to the general principle that all bills of lading must be claused to state on deck carriage.