In brief: carriage of goods by sea in Chile

Carriage of goods by sea and bills of lading

Are the Hague Rules, Hague-Visby Rules, Hamburg Rules or some variation in force and have they been ratified or implemented without ratification? Has your state ratified, accepted, approved or acceded to the UN Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea? When does carriage at sea begin and end for the purpose of application of such rules?

In 1982, Chile ratified the United Nations Convention on the Carriage of Goods by Sea 1978 (the Hamburg Rules), which were in force internationally as of 1 November 1992. Additionally, the Chilean legislature included them in the Commercial Code in 1988 (Book III, Title V, paragraph 3), with minimal changes (the Chilean Rules).

Chile has not considered the ratification, acceptance or approval of the Rotterdam Rules. As explained above, Chile ratified the Hamburg Rules in 1982 and any departure from these Rules is very unlikely for the time being.

Are there Conventions or domestic laws in force in respect of road, rail or air transport that apply to stages of the transport other than by sea under a combined transport or multimodal bill of lading?

The main rules regarding multimodal transport can be found in article 1041 et seq of the Chilean Commercial Code. Thus, article 1041 defines the main concepts applicable to multimodal transport: multimodal transport, contract of multimodal transport and operator of multimodal transport.

Furthermore, article 1043 sets out the regime of liability applicable in multimodal transport. The relevance of this article is that under Chilean law the liability of all those involved in any part or parts of the multimodal transport is joint.

Likewise, the Hamburg Rules must be taken into consideration when dealing with multimodal transport, especially in connection with the limitation of responsibility set out by the Hamburg Rules, of which Chile is a signatory country.

Who has title to sue on a bill of lading?

The shipper, consignee or third-party holder or endorsee, as the case may be.

To what extent can the terms in a charter party be incorporated into the bill of lading? Is a jurisdiction or arbitration clause in a charter party, the terms of which are incorporated in the bill, binding on a third-party holder or endorsee of the bill?

Under the Chilean Rules, any party may be subject to the provisions of our rules regarding carriage of goods by sea, which are applicable if:

• the port of loading or discharge as provided for in the contract of carriage by sea is located in Chile;
• the bill of lading or other document evidencing the contract of carriage by sea (such as the sea waybill, through bill of lading, short form bill of lading, etc) stipulates that the contract will be governed by Chilean law (such as through a clause paramount); or
• one of the optional ports of discharge provided for in the contract of carriage by sea is the actual port of discharge and such port is located in Chile.

Chilean regulations are compulsorily applicable regardless of the nationality of the ship, carrier, actual carrier, shipper, consignee or any other interested person. In this respect, it is important to note that clauses paramount have been held as unwritten by the Chilean Supreme Court (AJ Broom v Exportadora, Supreme Court of Chile, Case No. 683-98) as they would be contrary to public policy.

The Chilean Rules are applicable to all contracts of carriage by sea and it is not a condition that they are necessarily evidenced in a bill of lading or other documents of title such as sea waybills or short-sea notes. In respect to combined transport bills or through bills of lading, the Rules are applicable only to the corresponding sea leg carriage. The Rules do not apply to charter parties. Nonetheless, a bill of lading issued in compliance with a charter party is under the Rules if it governs the relation between the carrier and the holder of the bill of lading other than the charterer.

In the case of contracts providing for future carriage of goods in a series of shipments during an agreed period (eg, tonnage or volume contracts used for cargo projects), the Rules apply to each shipment. However, where a shipment is made under a charter party, the Rules do not operate, with the exception explained in the preceding paragraph.

Is the ‘demise’ clause or identity of carrier clause recognised and binding?

Chilean law recognises a basic distinction between the ‘carrier’ (also known as the ‘contractual carrier’) and the ‘actual carrier’. The former is defined as ‘any person by whom or in whose name a contract of carriage of goods by sea has been concluded with a shipper’ (article 975, No. 1 of the Commercial Code) and the latter as ‘any person to whom the performance of the carriage of the goods, or part of the carriage, has been entrusted by the carrier, and includes any other person to whom such performance has been entrusted’ (article 975, No. 2 of the Commercial Code).

The above distinction has very much simplified the identity of the carrier problem, as anyone who issues a bill of lading as a principal may be treated as a contractual carrier. This applies even to freight forwarders if they issue their own ‘house’ bill of lading and, as a matter of Chilean practice, many cargo claims are normally based on these documents alone. In this regard, it is important to note that under Chilean practice ‘demise’ or identity of carrier clauses have no effect.

In this respect, where the performance of the carriage or part thereof has been entrusted to an actual carrier, the carrier nevertheless remains responsible for the entire carriage. The carrier is jointly and severally responsible, in relation to the carriage performed by the actual carrier, for the acts and omissions of the actual carrier and of his or her staff and agents acting within the scope of their employment. Additionally, all the provisions governing the responsibility of the carrier also apply to the responsibility of the actual carrier for the carriage performed by him or her.

Are shipowners liable for cargo damage where they are not the contractual carrier and what defences can they raise against such liability? In particular, can they rely on the terms of the bill of lading even though they are not contractual carriers?

Under the Chilean Rules the main principle is that the liability of the carrier is based on presumed fault or neglect. Accordingly, the carrier is liable for loss resulting from loss or damage to the goods, as well as from delay in delivery, if the occurrence that caused the loss, damage or delay took place while the goods were in the carrier’s charge. If the shipowner is deemed an actual carrier (as opposed to the ‘carrier’ definition explained in question 44) and damage occurs during his or her custody period, such shipowner would be liable. However, in Chile a carrier may avoid liability if he or she discharges the burden of proving that he, his or her staff or his or her agents adopted all measures that could reasonably be required to avoid the cause of loss or damage, and consequences thereof.

The above is notwithstanding the carrier’s right to limit liability as per the regimes explained in question 10, if applicable.

What is the effect of deviation from a vessel’s route on contractual defences?

Under the Chilean Rules, there are no specific provisions dealing with deviation. If he or she is the cause of the loss or damage, the carrier is subject to the general test of proving that he or she took all measures that could reasonably be required to avoid the cause of loss or damage, and consequences thereof. However, the carrier is not liable, except in general average, where loss, damage or delay in delivery resulted from measures to save life or from reasonable measures to save property at sea.

What liens can be exercised?

According to Chilean law, privileges on a vessel are attached to credits arising from the following cases:

• legal cost and other disbursements caused by reason of a suit, in the common interest of the creditors, for the preservation of the vessel or for its forced alienation and distribution of the yield;
• the remuneration and other benefits arising from the contracts of embarkation of the vessel’s crew, in accordance with labour regulations and civil law that regulate the concurrence of these credits, together with the emoluments paid to the pilots at the service of the vessel. This privilege applies to the indemnities that are due for death or bodily injuries of the servants who survive ashore, on board or in the water, and always provided that they stem from accidents related directly with the trading of the vessel;
• the charges and rates of ports, channels and navigable waters, together with fiscal charges in respect of signalling and pilotage;
• the expenses and remunerations due in respect of assistance rendered at sea and general average contribution. This privilege applies to the reimbursement of expenses and sacrifices incurred by the authority or third parties, to prevent or minimise pollution damages or hydrocarbon spills or other contaminating substances to the environment or third-party property, when the fund of limitation of liability has not been constituted as established in Title IX of the Chilean Law of Navigation; and
• the indemnities for damages or losses caused to other vessels, to port works, piers or navigable waters or to cargo or luggage, as a consequence of the collision or other accidents during navigation, when the respective action is not susceptible to be founded upon a contract, and the damages in respect of bodily injury to the passengers and crew of these other vessels.

There is also a privilege attached to mortgage credit over major and minor vessels; however, the credits mentioned above will prefer any mortgage.

Last, privileges on a vessel are attached to the following credits, which will be preferred over the credits mentioned in the paragraphs above, namely:

• credits in respect of the sale price, construction, repair and equipping of the vessel;
• credits in respect of supply of products or materials, which are indispensable for the trading or conservation of the vessel;
• credits arising from contracts of passage money, affreightment or carriage of goods, including the indemnities for damages, lack and short deliveries in cargo and luggage, and the credits deriving from damages in respect of contamination or the spilling of hydrocarbons or other contaminating substances;
• credits in respect of disbursements incurred by the master, agents or third parties, for account of the owner, for the purpose of trading the vessel, including agency service; and
• credits in respect of insurance premiums concerning the vessel, be they hull, machinery or third-party liability.

Likewise, privileges on cargo are attached to credits arising from the following cases:

• legal and other disbursements caused by a lawsuit aimed at the preservation of the goods or the forced alienation and distribution of the yield, which is in the common interest of the creditors of the owner of the goods;
• reimbursement of expenditure and remuneration related to salvage operations and to which cargo interests contribute, as well as general average contributions;
• removal of shipwrecked goods; and
• freight and accessory charges, including loading, discharging and warehousing costs when applicable.

In this respect, in Chile, shipowners or carriers are not entitled to retain cargo on board at the port of discharge in order to secure the freight payment. Instead, they may file an application before the competent judge at the port of discharge to deposit the goods with a third party in order to sell them at auction. This application is normally handled quickly. Charterers or consignees are able to release the goods if they provide enough security for the outstanding payment; the judge decides whether the security offered is adequate.

What liability do carriers incur for delivery of cargo without production of the bill of lading and can they limit such liability?

The main regulations applicable to cargo delivery procedures are the Hamburg Rules, which have been incorporated without major changes into the Commercial Code (article 974 et seq) (see question 41). In addition, the Customs Ordinance, the Compendium of Customs Regulations, the Coastal Shipping Regulations and Customs resolutions regarding free trade zones are also applicable.

Although article 977 of the Commercial Code defines a ‘bill of lading’ as a document that obliges the carrier to deliver the goods upon presentation of the bill of lading to the carrier, under old customs regulations in place until 2005, this verification often could not take place. Customs Resolution No. 2250/05 overcame the problem of cargo delivery at Chilean ports without surrender of the original bill of lading - the problem arises as a result of the conflict between local shipping regulations and customs regulations. The resolution was issued after lengthy negotiations with the Customs Authority in the context of its internet systems integration project for the development of customs operations. As a result of the resolution, ocean carriers in Chile are now directly involved in cargo delivery procedures, both in practice and from a legal point of view, for the first time. Accordingly, under the new regulations, if carriers proceed to deliver cargo without production of the bill of lading, they can face both contractual and tort liability.

Regarding limitation, it would operate exclusively under the circumstances explained in question 10.

What are the responsibilities and liabilities of the shipper?

The shipper is subject to a general rule that he or she is not liable for loss sustained by the carrier or the actual carrier, or for damage sustained by the ship, unless such loss or damage was caused by the fault or neglect of the shipper, his or her staff or agents. Nor is any servant or agent of the shipper liable for such loss or damage unless the loss or damage was caused by fault or neglect on his or her part. In addition, the shipper is subject to further special rules on dangerous goods.