All questions

Shipping contracts

i Shipbuilding

Chile does not undertake a significant amount of shipbuilding.

ii Contracts of carriage

In 1982, Chile ratified the Hamburg Rules, which entered into force internationally as of 1 November 1992. Additionally, the Chilean legislature included the provisions of the Hamburg Rules in the Chilean Commercial Code in 1988, with minimal changes.

Cabotage

A cabotage reservation system is in force under the Merchant Navy Law (Decree Law 3059/79). The Law implies that only Chilean vessels are permitted to provide maritime or fluvial transport services (of cargo or passengers) within the national territory or the exclusive economic zone. On exceptional occasions, foreign vessels may participate in cargo cabotage when:

  1. cargo volumes exceed 900 tonnes, and where a previous public bid has been carried out by the user in advance; or
  2. cargo volumes are equal to or less than 900 tonnes when Chilean-flagged vessels are not available (provided that authorisation has been obtained from the Maritime Authority).

In addition, passengers cabotage on foreign cruise vessels is allowed provided that the following conditions are met:,

  1. having transport capacity equal to or greater than 400 passengers;
  2. counting with overnight stay facilities aboard; and
  3. performing the transportation of passengers for tourism purposes.
Liens

Chilean law recognises the concept of maritime privileges (see Section V.i).

How the duties and liabilities of the shipper are addressed

In accordance with the Chilean adoption of the Hamburg Rules, 'shipper' means 'any person by whom or in whose name or on whose behalf a contract of carriage of goods by sea has been concluded with a carrier, and any person by whom or in whose name or on whose behalf the goods are actually delivered to the carrier in relation to the contract of carriage by sea'. In line with Chilean practice, the scope of this definition includes both the person concluding the contract of carriage of goods by sea and the person actually delivering the cargo, provided they are not the same person.

The shipper is deemed to have guaranteed to the carrier the accuracy of particulars relating to the general nature of the goods, their marks, number, weight and quantity as furnished by him or her for inclusion in the bill of lading. The shipper must indemnify the carrier against any loss resulting from inaccuracies in these particulars. The shipper remains liable even if the bill of lading has been transferred by him or her. The right of the carrier to such indemnity in no way limits his or her liability under the contract of carriage by sea to any person other than the shipper.

Operation of multimodal bills of lading

The main rules regarding multimodal transport can be found in Articles 1041 et seq. of the Chilean Commercial Code, which are based on the United Nations Convention on International Multimodal Transport of Goods (Geneva, 24 May 1980). 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.

iii Cargo claimsCarriage of goods by sea

Under the Chilean adoption of the Hamburg Rules, any party may be subject to the provisions of the rules regarding carriage of goods by sea if:

  1. the port of loading or discharge as provided for in the contract of carriage by sea is located in Chile;
  2. the bill of lading or other document evidencing the contract of carriage by sea (such as the sea waybill, or through bills of lading or short-form bills of lading) stipulates that the contract will be governed by Chilean law (such as through a clause paramount); or
  3. one of the optional ports of discharge provided for in the contract of carriage by sea is the actual port of discharge and that 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 Supreme Court as they would be contrary to public policy.

The Chilean regulations 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 document of title, such as a sea waybill or short-sea note. In respect of combined transport bills or through bills of lading, the regulations are applicable only to the corresponding sea-leg carriage.

Charter parties

The Chilean adoption of the Hamburg Rules does not apply to charter parties. Nonetheless, a bill of lading issued in compliance with a charter party falls under these 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 (e.g., 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, except with the aforementioned exception.

Demise clauses

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' 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'.

The above distinction has very much simplified the problem of identifying the carrier 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 many cargo claims are based on these documents. In this regard it is important to note that under Chilean practice, demise clauses have no effect.

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. In this respect, 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 servants 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.

iv Limitation of liabilityTonnage limitation

Chilean regulations that refer to tonnage limitation (i.e., Articles 889 to 904 of the Commercial Code) are inspired by both the international conventions signed in Brussels in 1957 (the 1957 Convention) and in London in 1976 (the 1976 Convention). With respect to the tonnage limitation figures, the Commercial Code follows the lines of the 1976 Convention. In addition, note that the Commercial Code establishes a specific set of procedural provisions in connection with the constitution and distribution of the corresponding limitation fund.

The types of claims subject to limitation are as follows:

  1. death or personal injury and damage to property on board;
  2. death or personal injury caused by any person for whom the owner is responsible, whether on board or on shore (in the latter case, his or her acts must be related to the operation of the ship or to the loading, discharging or carriage of the relevant goods);
  3. loss or damage to other goods, including the cargo, caused by same person or people, grounds, places and circumstances as given in point (b); and
  4. resulting liability related to the damage caused by a vessel to harbour works, dry docks, basins and waterways.

The people entitled to limit pursuant to this regime are as follows:

  1. the shipowner as defined by Chilean regulations;
  2. the shipowner's staff;
  3. liability insurers;
  4. the operator, carrier, charterer and the ship's proprietor, if a different person or entity from that specified in point (a); and
  5. individual employees of any person specified in point (d), including the master and members of the crew, if sued.
Limitation in connection with civil liability for damage derived from spillage of hydrocarbons and other hazardous substances

The spillage of hydrocarbons from seagoing vessels carrying oil in bulk as cargo is subject to the CLC Convention 1992. On the other hand, the spillage of hydrocarbons from vessels not carrying oil in bulk as cargo, or spillage of other hazardous substances, is subject to the terms of the CLC Convention 1969 and supplementary norms set forth by the Chilean Navigation Law (among other things, it extends the limitation benefit to the owner, proprietor and operator).

Carriage of goods by sea

Chilean law draws a distinction between lost or damaged goods and delayed goods. In the former case, the carrier's liability is limited to an amount equal to 835 SDRs per package or other shipping unit, or 2.5 SDRs per kilogram of gross weight, if the latter is higher. In the case of delayed goods, the carrier's liability is limited to an amount equivalent to 2.5 times the freight payable for the goods delayed, but not exceeding the total sum of the freight payable under the contract of carriage by sea. The aforementioned rules do not include either the interest on the value of the damaged goods or judicial costs.

Passengers

Under the Chilean regulations that refer to passage contracts, liability can be limited in the following cases:

  1. passenger's death or personal injury: the maximum liability amount is obtained by multiplying 46,666 SDRs by the number of passengers that the vessel is authorised to carry, up to a maximum equal to 25 million SDRs; and
  2. damage to property on board: up to 1,200 SDRs unless higher limits have been agreed in writing.