Paramount Clause - General
[All Bills of Lading under this Charter Party shall contain the following clauses]
The International Convention for the Unification of Certain Rules of Law relating to Bills of Lading signed at Brussels on 25 August 1924 (“the Hague Rules”) as amended by the Protocol signed at Brussels on 23 February 1968 (“the Hague-Visby Rules”) and as enacted in the country of shipment shall apply to this Contract. When the Hague-Visby Rules are not enacted in the country of shipment, the corresponding legislation of the country of destination shall apply, irrespective of whether such legislation may only regulate outbound shipments.
When there is no enactment of the Hague-Visby Rules in either the country of shipment or in the country of destination, the Hague-Visby Rules shall apply to this Contract save where the Hague Rules as enacted in the country of shipment or if no such enactment is in place, the Hague Rules as enacted in the country of destination apply compulsorily to this Contract.
The Protocol signed at Brussels on 21 December 1979 (“the SDR Protocol 1979”) shall apply where the Hague-Visby Rules apply, whether mandatorily or by this Contract.
The Carrier shall in no case be responsible for loss of or damage to cargo arising prior to loading, after discharging, or while the cargo is in the charge of another carrier, or with respect to deck cargo and live animals.
Source: BIMCO
Published: 1997
US Paramount Clause
[In all bills of lading to or from USA ports the following clause should be used.]
This bill of lading shall have effect subject to the provisions of the Carriage of Goods by Sea Act of the United States, approved 16 April 1936, which shall be deemed to be incorporated herein, and nothing herein contained shall be deemed a surrender by the carrier of any of its rights or immunities or an increase of any of its responsibilities or liabilities under said Act. The provisions stated in said Act shall ‘except as may be otherwise specifically provided herein’ govern before the goods are loaded on and after they are discharged from the ship and throughout the entire time the goods are in custody of the carrier. The carrier shall not be liable in any capacity whatsoever for any delay, non-delivery or mis-delivery, or loss of or damage to the goods occurring while the goods are not in the actual custody of the carrier.
Paramount Clause - Commentary
Suitable for
Bills of lading, waybills & voyage charterers.
Time charters may stipulate that bills of lading issued under the charterparty must contain the Paramount Clause. In that case, the opening sentence [in brackets] must be used.
Time charters may also go a step further and incorporate the Clause in the charterparty so that the Hague-Visby Rules will regulate disputes between owners and charterers, as well as between carriers and receivers.
Purpose
The main function of a Paramount Clause is to ensure that bills of lading issued for cargo carried under the charterparty are subject to the provisions of the Hague-Visby Rules. The Hague-Visby Rules will often apply compulsorily to claim brought by cargo receivers. The Paramount Clause will make sure that, even if the Rules are not apply compulsory, they will apply by contract. The aim is that cargo claims will always be subject to the same uniform legal regime and that carriers will always have the benefit of the defences and limitations contained in the Rules.
Versions
Although we have used the General Paramount Clause published by BIMCO and used inter alia in the CONGENBILL 1994, there are many different versions. The choice of Paramount Clause may depend on the vessel’s operations. For example, in US trade it is usual to refer to the US Carriage of Goods by Sea Act 1936.
The final paragraph of the BIMCO Clause is not found in all Paramount Clauses. It seeks to avoid responsibility on the part of the carrier in circumstances permitted under the Rules (i.e. before loading, after discharge, for live animals and, subject to certain additional requirements, deck cargo).
P&I Cover
P&I cover is excluded for claims which arise out of the carriage of cargo on terms which are less favourable than the Hague-Visby Rules (Rule 5.2.8). It is therefore important that members use a Paramount Clause (Appendix 6 1.1). Alternatively, if they carry on terms which are less favourable than the Hague-Visby Rules, they should arrange for additional cover.