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MINISTRY OF EDUCATION AND TRAINING MINISTRY OF JUSTICE HANOI UNIVERSITY OF LAW HA VIET HUNG CONTRACTS FOR INTERNATIONAL CARRIAGE OF GOODS BY SEA AND ISSUES IN IMPROVEMENT OF LAW OF VIETNAM Speciality: International Law Ref Code No.: 62 38 01 08 SUMMARY OF THE DOCTORAL DISSERTATION IN JURISPRUDENCE HANOI 2017 The dissertation was completed at: HANOI UNIVERSITY OF LAW Academic supervisors: Assoc Prof Dr Doan Nang Assoc Prof.Dr.Nong Quoc Binh Reviewer 1: Dr Le Mai Thanh Reviewer 2: Assoc Prof Dr Tang Van Nghia Reviewer 3: Assoc Prof Dr Hoang Phuoc Hiep This dissertation will be defended before the university-level evaluation Council convened at Hanoi Law University at on 2017 The dissertation is available at: 1) The National Library 2) The Library at Hanoi Law University THE AUTHOR’S PUBLICATION LIST REGARDING TO THE DOCTORAL THESIS LLM HA VIET HUNG – Dr NGUYEN VU HOANG (2012), “On the voyage charter in international maritime’’, Jurisprudence Journal, No 3/2012, pages 28-35 LLM HA VIET HUNG (2014), “Some legal issues on the sea bills of lading in international carriage of goods by sea”, Jurisprudence Journal, No 5/2014, pages 16-22 LLM HA VIET HUNG (2015), “The outstanding characteristics of the international contract on the carriage of goods by sea”, Journal of Science, No 4/2015, pages 75-84 LLM HA VIET HUNG - Assoc.Pro.Dr NGUYEN VU HOANG (2015), “International marine arbitrator, notion, model and mode of expression”, Legal Professions Review, No 6/2015, pages 67-70 LLM HA VIET HUNG (2017), “ Some recommendations to finalize law on contract of transporting international good by sea under Viet Nam’s Maritime Law’’, Legal Professions Review, No 2/2017, pages 74- 78 INTRODUCTION Rationale Over the past years, Vietnam has fostered its international economic integration process and actively participated in bilateral and multilateral mechanisms of international cooperation, especially in the trade field Apprehending significance of sea transportation economy, the Communist Party and Government of Vietnam have issued proper policies to encourage economic activities relating to the sea Resolution No 09 – NQ/TW dated 9/2/2007 at the Conference of the Central Executive Board of the Communist Party Session Term X on Strategies on the Sea of Vietnam until 2020 targets at transforming Vietnam to a nation with strength from the sea, wealth from the sea, with a particular objective of increasing the proportion of the marine and coastal economy in the gross domestic products (GDP) to 53- 55% This has proven that, together with a rapid development ratio of international trade, Vietnam’s economy has engaged in integration and development processes where sea transport is among key industries given special priority Over the past years, transport by sea has increasingly evolved and played a crucial role in the international maritime field In Vietnam, sea transport plays an extremely essential role Internationally transported goods are estimated to account for 80% of the total volume of imported and exported goods of Vietnam; ample sea transport companies have emerged and increasingly developed and needed to be governed by relevant legal regulations The issuance of the Maritime Code of Vietnam 2005 was a new landmark in the development of international goods transportation by sea in Vietnam Based on that, entrepreneurs in Vietnam have a better-equipped legal basis for conclusion of contracts for international carriage of goods by sea In reality, the Maritime Code of Vietnam was issued in 2015 and took effect on 01/7/2017; however, law of Vietnam governing international carriage of goods by sea still has drawbacks due to regulations of ambiguity, inconsistency with and irrelevance to practical situation as well as to international conventions on carriage of goods by sea At present, Vietnam is a State Member to the World Trade Organization, which requires Vietnam to continuously amend, supplement and perfect regulations of law of Vietnam on service operations of international carriage of goods by sea for better consistency with practical requirements in Vietnam and international trade and marine practice Improvements of law of Vietnam on contracts for international carriage of goods by sea aim at protecting rights and interests of parties to contractual transactions of international carriage of goods by sea, enhancing maritime trade cooperation relations between Vietnam and countries in the world Therefore, a reflection on legal issues in contracts for international carriage of goods is of urgent significance and of topical nature in the present period As a result, the author has selected the topic of “Contracts for international carriage of goods by sea and issues in improvement of law of Vietnam” as the theme of the dissertation Objects and scope of research of the dissertation + Research objects: - Regulations of law of Vietnam on contracts for international carriage of goods by sea in relation with regulations of international law; Comparison between regulations of law of Vietnam and laws of some states in the world on contracts for international carriage of goods by sea; Practice of application of existing legal regulations on contracts for international carriage of goods by sea + Research scope: The dissertation centers on legal regulations of Vietnam on contracts for international carriage of goods by sea in relation with international conventions on sea transport and on comparison with and reference to laws of some nations on contracts for international carriage of goods by sea Research objectives and tasks of the dissertation + Objectives of the dissertation: clarification of theoretical issues in contracts for international carriage of goods by sea, law on contracts for international carriage of goods by sea as well as evaluation of practice of application of law on contracts for international carriage of goods by sea in Vietnam Based on that, viewpoints and resolutions on perfection of law on contracts for international carriage of goods in Vietnam are identified + Research tasks of the dissertation: To achieve the above-mentioned objectives, research tasks of the dissertation includes: - Clarification of the concept of contracts for international carriage of goods by sea - Analysis and evaluation of existing legal regulations of Vietnam on contracts for international carriage for goods by sea in relation with rules of international conventions on sea transport and comparison with legal regulations of some states in the world At the same time, drawbacks and shortcomings of law of Vietnam on contracts for international carriage of goods by sea are pointed out - Based on assessment of reality in application of rules on contracts for international carriage of goods by sea, stances and concrete solutions to improvement of law of Vietnam on contracts for international carriage of goods by sea are suggested Research methodology The dissertation employs methodology of dialectical materialism and historical materialism of Marxism and Leninism and ideology of Ho Chi Minh on the Law-based State, thoroughly grasps directions, guidelines and policies of the Party and State on judicial reforms and legal system improvement during the integration period Research methods include analysis, statistics, comparison, history, proof and synthesis, induction combined with theoretical and practical studies Among which, analysis, statistics, comparison and proofs are major methods of the dissertation More specifically: - The method of deduction is exploited to reflect on fundamental theoretical issues in contracts for international carriage of goods by sea Through analysis of basic theoretical issues such as concepts, features, formation and development history of law on contracts for international carriage of goods by sea, the significance and necessity of the research are justified - Methods of analysis and comments are used to represent specific rules of international law as well as law of Vietnam on contracts for international carriage of goods by sea, to clarify strengths and weaknesses of rules in the whole effective legal system Through that, comments and assessments of drawbacks or shortcomings of law of Vietnam are made, compared with rules of international law - The method of comparative jurisprudence is also utilized to study rules of international law, international case law and laws of some states and compare with rules of law of Vietnam on contracts for international carriage of goods by sea to evaluate consistency and relevance, thereby proposing measures for improvement of law of Vietnam on this issue - Methods of systemization, synthesis and combination between theories and practice are made use of to generalize and draw basic conclusions and recommendations on novel contributions of the dissertation to improvement on the law of Vietnam on contracts for international carriage of goods by sea - Methods of synthesis and induction are used mainly to draw conclusions in each chapter and the general conclusion of the dissertation Novel scientific contributions of the dissertation The dissertation is a fundamental and in-depth research on rules of law of Vietnam and international conventions on contracts for international carriage of goods by sea and improvement of the law of Vietnam In view of the proposed objectives and tasks, the dissertation makes contributions in scientific terms proven by novelties of the dissertation which include more specifically as follows: Firstly, the dissertation is an independent scientific work on proper and objective assessments of the research status-quo of domestic and foreign authorities relevant to the dissertation theme Based on that, research objectives and scope are reasonably proposed to then address legal issues on contracts for international carriage of goods by sea which have failed to be either under research or under in-depth research Secondly, the dissertation specifies scientific grounds in both theoretical and practical terms for contracts for international carriage of goods by sea and improvement on law of Vietnam The dissertation draws scientific conclusions clarifying: the concept of contracts for international carriage of goods by sea, features of contracts for international carriage of goods by sea The dissertation also discusses in a systematic manner types of sources of law applicable to contracts for international carriage of goods by sea, linkage among types of sources of law, particularly reflections on development tendency of laws on contracts for international carriage of goods by sea towards modernization and unification of relevant legal rules on contracts for international carriage of goods by sea Thirdly, the dissertation focuses on comprehensive research and analysis, comparison and review of the status-quo of legal regulations of Vietnam and international conventions on contracts for international carriage of goods by sea Based on that, advantages and disadvantages of legal regulations of Vietnam on contracts for international carriage of goods by sea are shown Fourthly, the dissertation analyzes and reviews some real legal cases, thereby drawing some experience lessons for enterprises during the process of conclusion and performance of contracts for international carriage of goods by sea, contributing to enhancing awareness of the business community about dispute settlement for protection of their legitimate rights and interests Fifthly, the dissertation analyzes requirements and necessity of perfection of the legal system of Vietnam on contracts for international carriage of goods by sea Starting from that, the dissertation analyzes and puts forward resolutions to improvement of law on contracts for international carriage of goods by sea in Vietnam Structure of the dissertation The dissertation consists of the introduction, subject-matter, conclusion and list of references Chapters are named as follows: Chapter Overview of the status-quo of researches relevant to the dissertation theme Chapter Theoretical issues on contracts for international carriage of goods by sea Chapter Legal regulations of Vietnam and international conventions on contracts for international carriage of goods by sea Chapter Viewpoints and resolutions on improvements of law of Vietnam on contracts for international carriage of goods by sea Chapter OVERVIEW OF THE STATUS-QUO OF RESEARCHES RELEVANT TO THE DISSERTATION THEME After an elaborated and selective reflection on domestic and oversea scientific works relevant to the dissertation topic, it is the author’s judgement that there is no systematic research on contracts for international carriage of goods by sea and the issue of improvement of the law of Vietnam However, in practice, contracts for international carriage of goods by sea have been under consideration of multiple scientific works These works include reference treatises, dissertation, articles and publications on scientific journals and conferences, etc It can be seen that, over the past time, in Vietnam and the world, although there have been some works regarding to Contracts for international carriage of goods by sea, the other publications are limited in quantity, undiverse and unspecialized in essense Works mainly take the form of textbooks, specialized books primarily used at universities, some articles, scientific research themes at undergraduate and master degrees, but there have been no works at the doctoral degree on this problem The author recognizes that this problem has not been under in-depth and systematic research in Vietnam, that research scopes are of general nature or limited to some individual aspects, but not of synthetic nature covering specific aspects of the matter Therefore, objectives of the dissertation must point out shortcomings and continuously study resolutions, more specifically: Firstly, the dissertation continuously centers on comprehensive reflection on fundamental theories on contracts for international carriage of goods by sea In the first part of the dissertation, the author focuses on studying and clarifying the concept and features of contracts for international carriage of goods by sea The author will center on studying prominent features of contracts for international carriage of goods by sea and their principal differences from other contracts Secondly, the dissertation analyzes sources of law governing modes of international transport of goods by sea, analyzes and shows divergences in sources of law governing two types of space charters and voyage charter-parties in international shipping Simultaneously, the author analyzes development tendency of law on contracts for international carriage of goods by sea in the context of international economic integration This is a ground for Vietnam to accede to and sign international conventions on goods transport by sea Thirdly, the dissertation focuses on in-depth reflection on fundamental legal issues in contracts for international carriage of goods by sea such as objects of contracts, subjects of contracts, subject-matters of contracts, rights, obligations and liabilities of parties to contracts The author will analyze, compare and point out shortcomings of the status-quo of regulations as well as practice of applications of contracts for international carriage of goods by sea in Vietnam This is also a basis for the author to propose recommendations on improvements of law of Vietnam on contracts for international carriage of goods by sea Fourthly, the author analyzes characteristics of dispute settlement in the field of international carriage of goods by sea by analyzing methods of dispute settlement such as negotiation, conciliation, litigation and arbitration The author also clearly points out that, in some developed countries with well-established shipping industries, there are specialized judicial bodies and arbitration to settle international shipping disputes Based on analysis of the status-quo of dispute settlement, the author has shown difficulties, hitches and irrelevant legal regulations for assisting subjects with experiences in processes of negotiation, conclusion and execution of contracts for international carriage of goods by sea At the same time, this is also grounds for the author to suggest perfection of law in the area of international carriage of goods by sea Fifthly, in view of solved matters, the author of the dissertation presents resolutions on improvement of law of Vietnam on contracts for international carriage of goods by sea Specific measures are improvement of regulations of the Maritime Code of Vietnam on contracts for international carriage of goods by sea in accordance with practical circumstances in Vietnam in face of demands of international integration and some other solutions contributing to reinforcing and guaranteeing efficiency of enforcement of law on international carriage of goods by sea in Vietnam Sixthly, the author analyzes and assesses implications of international conventions on international transport of goods by sea on construction and improvement of law of Vietnam on contracts for international carriage of goods by sea Analyses of roles and significance of international conventions on goods shipping by sea aim at the vitality for Vietnam to conclude and accede to these conventions and domestically codify regulations of these conventions throughout the process of establishment and improvement of law of Vietnam Chapter THEORETICAL ISSUES ON CONTRACTS FOR INTERNATIONAL CARRIAGE OF GOODS BY SEA 2.1 OVERVIEW OF CONTRACTS FOR INTERNATIONAL CARRIAGE OF GOODS BY SEA 2.1.1 The concept of contracts for international carriage of goods by sea According to international law, a contract is considered as being of international nature when parties whose places of business are in different states and it is related to two or more different legal systems The manner of evaluation of the “internationality” based on these criteria is judged as reasonable and closely inter-related as contracts concluded by parties having “places” of business in different states will relate to two or more applicable different legal systems In practice, contracts of internationality widely recognized at present are thoses concluded between traders whose places of business locate in territories of different states Due to typical characteristics of transported merchandise under contracts for international carriage of goods by sea, the goods are transported from seaports of one state or territory to those of another A contract for international carriage of goods by sea is construed as agreement between a shipowner and a merchant, in which the shipowner collects shipment fares paid by the merchant and uses vessels to transport cargos from seaports of departure to seaports of arrival situated in different states or territories 2.1.2 Characteristics of contracts for international carriage of goods by sea Based on the concept of contracts for international carriage of goods by sea, it is seen that this type of contracts bares the following typical features: Firstly, contracts for international carriage of goods by sea is one type of services contracts of internationality of which the contractual object is cargos transported across borders of two or more states Different from sale contracts, carriage contracts not change the owner of cargos but just their location Secondly, regarding subjects of the contract, contracts for international carriage of goods by sea are concluded by the goods carrier and shipper or consigner Thirdly, regarding forms of contracts for international carriage of goods by sea, Article 146 of the Maritime Code of Vietnam stipulates that bill of lading contracts shall be concluded in the form agreed upon between parties while voyage charter parties must be concluded in writing Fourthly, contracts for international carriage of goods by sea are bilateral and remunerative contracts Two parties to a contract for international carriage of goods by sea are a carrier and a shipper having corresponding rights and obligations, that is, the carrier has the duty to carry properties to the agreed location, preserve the properties during the agreed period and at the agreed-upon location Fares paid by the shipper to the carrier are the compensatory money in contracts for international carriage of goods by sea Fifthly, contracts for international carriage of goods by sea are legal grounds for determination of legal relations between contractual parties In a contract, parties identify their rights and obligations through distinct provisions which are simultaneously a basis of dispute settlement in cases of conflicts arising between contractual parties Sixthly, disputes over international sea carriage are often addressed at international maritime arbitration This is a rather significant divergence of international sea transport For other disputes, arbitration and litigation play significant roles wheareas, for international sea carriage, international maritime arbitration holds a preeminent role Seventhly, right to freedom of navigation is often referred to in international carriage of goods by sea Freedom of navigation is recognized in many international 10 economic integration and fostering development of the sea transport industry In conclusion, through the development and improvement of maritime law of Vietnam in general and the regime of contracts for sea transport of goods in particular, it can be observed that maritime law of Vietnam has absorbed selectively subject-matters of international conventions on sea transportation for transformation and execution of regulations of these conventions in maritime law of Vietnam A possible evaluation is that Vietnam has been extremely active in improvement of maritime law for international integration 2.2.2 Sources of law governing space charters Space charters are stipulated by international treaties, national law, case law and international maritime and trade customs - International treaties Treaties in the international maritime sphere play a tremendously significant role in formation of rules, principles, frameworks and general standards for the governance and creation of a fair and favourable environment for maritime commercial development At present, there are two chief international Conventions relevant to space charters which are the International Convention for the Unification of Certain Rules relating to Bills of Lading 1924 (the Brussels Convention) and the United Nations Convention on the Carriage of Goods by Sea 1978 (the Hamburg Convention) The Brussels Convention was amended by the Protocol 1968 and afterwards named as the Hague –Visby Rules In addition, another important international document which must be referred to is the United Nations Convention on Contracts for International Carriage of Goods Wholly or Partly by Sea adopted in Rotterdam in 2009 Added to international conventions directly governing contracts for international carriage of goods by sea are other relevant treaties - International maritime trade customs Beside international treaties, international maritime customs are also frequently used as a source of law governing concrete maritime trade relations International maritime customs governing international carriage of goods by sea are customs relevant to international maritime operations, specific maritime practice at ports in the region and globe Furthermore, there are international maritime trade customs International maritime trade customs are practice in maritime commerce recurring over and over again, recognized by many states and continuously adopted so much so that it become a rule parties inherently observe International maritime trade customs explain, supplement and guide performance of relevant terms in contracts for sea carriage of goods which have not been under regulation or lack specific rules - National law In practice of conclusion and performance of contracts for international carriage of goods by sea, beside international treaties, international maritime trade customs and 11 case law, national law plays a crucial role and, in many instances, is the law applicable to contractual relations National law becomes law applicable to contracts for international carriage of goods by sea in cases: When parties concluding contracts for international carriage of goods by sea agree in provisions of law applicable to the contract on the choice of law of the state of either party or of the third party to govern the contract; When clauses of law applicable to contracts for international carriage of goods by sea are stipulated in relevant international treaties, national law will automatically become applicable law to such contracts; When there are prescriptions under national law of which the role is a source of law governing contracts for international carriage of goods by sea, national law will govern contracts for international carriage of goods by sea of such nation National law is an important source of law applicable to governing contracts for international carriage of goods by sea In Vietnam, in view of practical demands, on 14/6/2005, at Session 7, the National Assembly of the Socialist Republic of Vietnam Term XI adopted the amended Maritime Code of Vietnam (the Maritime Code of Vietnam 2005), which entered into force on 01/01/2006 To reinforce roles of marine transportation in socio-economic development of the country satisfying demands of international integration, Vietnam extended the scope of, amended and supplemented the Maritime Code 2005 and issued the Maritime Code 2015 The Maritime Code 2015 was constructed based on reference to law of several countries and selectively absorbed from international conventions on sea transport In addition to above-mentioned fundamental sources, law governing contracts for international carriage of goods by sea also takes the form of case law made by judicial bodies Case law is rulings or decisions of courts establishing reliable legal rules or grounds for settlement of other cases in the future To meet requirements of international integration, on 28/10/2015, the Council of Justices of the People’s Supreme Court issued Resolution No 03/2015/NQ-HDTP on procedures of selection, publication and application of case law in Vietnam This is among crucial transforms not only in conception but also in reality to enlarge scope of applicable law in general and the international contract sphere in particular Research on and application of knowledge about case-law doctrines from the international perspective will improve understanding of forces of lawyers and judges in Vietnam when addressing issues relevant to international law 2.2.3 Sources of law governing voyage charter parties Sources of law governing voyage charter parties are chiefly national law, case law and international maritime commercial customs in that, so far, there is no international treaties signed for governance of contract for carriage of exported and imported cargos by vessels in voyage charter parties Hence, national law is still the most important and 12 principal source of law regulating relations between the carrier and the shipper in voyage charter parties National law: this is a crucial source of law applicable to contracts for international carriage of goods by sea In the field of international sea carriage of goods, national law is among options for parties when concluding contracts for goods carriage thanks to its straightforwardness and non-misleadingness in legal interpretation National law chosen by parties as law applicable to contracts for international carriage of goods by sea can be law of the state of the carrier, or that of the shipper, or that of a third-party upon which both parties agreed to refer to That national law of which state is applicable will be stipulated by the contract itself In case the contract has no choice-of-law clauses, both parties can agree on selection of applicable law by a separate document In Vietnam, the Maritime Code 2005 and the Maritime Code 2015, since their advent, have governed almost relations linked to voyage charter parties International maritime trade customs: beside national law, international maritime trade customs are often applied as a source of law on settlement of disputes arising from contracts for international carriage of goods by sea when being referred to by parties to contracts International maritime trade customs assist the interpretation, supplementation and guide implementation of terms relevant to contract for sea carriage which have not been governed or lack specific regulations Multiple documents in the legal system of Vietnam have regulations allowing parties to contracts to agree on adoption of international customs as law applicable to contractual relations Generally, regulations on adoption of international customs consistently require application of international customs on condition that they not contrast with fundamental principles of law of Vietnam Item 2, Article of the Maritime Code 2015 stipulates that parties to contracts relevant to maritime operations of which at least one side is a foreign organization or individual shall have right to agreement on adoption of foreign law or international maritime customs for contractual relations To sum up, it can be seen that sources of law governing Contracts for international carriage of goods by sea are rather diverse and specialized; therefore, it is necessary for systematic studies of these sources to further improve the legal system of Vietnam regarding contracts for international carriage of goods by sea in the context of international integration 13 Chapter LEGAL REGULATIONS OF VIETNAM AND INTERNATIONAL CONVENTIONS ON CONTRACTS FOR INTERNATIONAL CARRIAGE OF GOODS BY SEA This chapter focuses on fundamental legal matters of contracts for international carriage of goods by sea, such as objects of contracts and subjects of contracts As space charters are drafted based on model contracts and agreement of parties, this Dissertation presents crucial legal subject-matters of voyage charter parties At present, for bill of lading contracts have been under unified governance of international conventions on sea transportation, the author will thoroughly discuss major legal problems relevant to liabilities of the carrier and the shipper under international conventions on sea carriage and regulations of law of Vietnam on contracts for international carriage of goods on a basis of comparison to identify shortcomings of the legal system of Vietnam The author simultaneously analyzes attributes of dispute settlement in the sphere of international sea carriage of goods by analyzing methods of dispute settlement such as negotiation, conciliation, litigation and arbitration This is also a basis for the author to recommend improvements of law in the area of international sea transportation of freight 3.1 OBJECTS OF CONTRACTS FOR INTERNATIONAL CARRIAGE OF GOODS BY SEA The object of contracts for international carriage of goods by sea is the cargos that the carrier has to transport from one place to another Contracts for international carriage of goods by sea are characterized not by a change in ownership of goods but just by their location shift 3.2 SUBJECTS OF CONTRACTS FOR INTERNATIONAL CARRIAGE OF GOODS BY SEA Subjects of contracts for international carriage of goods by sea are the carrier and the shipper Besides, it is inevitably impossible not to mention parties relevant to transport contracts: the agent or the entrusted carrier, the consigner, the consignee, the consignee and employees of the carrier In cases agents or brokers are delegated to conclude the contract, their delegated status needs to be clearly regulated in the contract This can save troubles subsequent to disputes between parties The determination of subjects of contracts for international carriage of goods by sea plays an especially important role in the capability of carriage contract performance Prior to the conclusion of vessel rental contracts, the shipper needs to thoroughly research his partner including the address, telephone number and fax number… as, in many instances, hints of fraud come from these tiny details; the shipper also needs to inquire for unambiguous registration details and actual location of business, financial 14 situation of the partner… That whether contracts for international carriage of goods by sea can be accomplished or not heavily depends on the signatories 3.3 SUBJECT-MATTERS OF CONTRACTS FOR INTERNATIONAL CARRIAGE OF GOODS BY SEA Voyage charter parties are outcomes of a process of negotiation and arrangement based on equitable agreement between parties to clearly stipulate rights and obligations of contractual parties Voyage charter parties cover different types, are complicated contracts and contain diverse provisions to identify rights, obligations and liabilities of parties Subject-matters of voyage charter parties in practice comprise of the following provisions: - Information about subjects of voyage charter parties - Information about the vessel in voyage charter parties - Regulations on time of the ship’s arrival at loading ports - Regulations on shipped cargos - Regulations on loading and discharge ports - Regulations on ship rental fares and payment - Regulations on uploading and loading expenses - Regulations on lay time, dispatch and demurrage - Regulations on liabilities and liability exemption of the carrier - Clauses of arbitration and applicable law 3.4 OBLIGATIONS AND LIABILITIES OF PARTIES TO INTERNATIONAL BILL OF LADING CONTRACTS 3.4.1 Obligations and liabilities of the shipper Obligations and liabilities relevant to goods supply: Item 5, Article of the Brussels Convention 1924, Article 12 of the Hamburg Convention 1978 and Item 1, Article 81 of the Maritime Code of Vietnam 2005 stipulate that the shipper must ensure that the goods are packed and have a suitable marking on it and supply goods in conformity with subject-matters of the contract * Obligation of freight payment Contracts for sea carriage are a type of services contracts concluded between one side who is a service supplier (the carrier) and one side who is a service leasee (the shipper) Article 145 of the Maritime Code of Vietnam 2015 stipulates that “the carrier is paid freight by the shipper” Payment of freight belongs to obligations of the leasee (the shipper) Therefore, the shipper has to pay in full, on time, at the location, in the currency and payment method agreed upon by both parties * Obligations and liabilities of provision of goods documents Provision of documents of goods is an important obligation of the shipper in that these documents clarify weights, volumes of goods, crucial guidance regarding explosive, inflammable goods, hazardous goods, or goods subject to special handing, 15 transport and discharge Obligations to provide documents of goods can be performed at the time of agreement on the carriage or at time of transfer of goods from the shipper to the carrier or at the time prior to goods loading Failure to perform this obligation or lateness in goods document transfer, if causing damage to the goods, will make liability to fall upon the shipper 3.4.2 Obligations and liabilities of the carrier Goods transported by sea are at multiple risks due to various causes of damage, breakdown and loss to the cargos Legal regulations in the Hague-Visby Rules and the Hamburg Rules 1978 are a legal background for parties to determine their liabilities during the process of transportation of goods from goods reception and uploading prior to carriage, during the carriage process to goods discharge at the destination port for the shipowner and to procedures of dispute settlement for goods declared on bills of lading for the consigner Contents consist of: 3.4.2.1 Bases of liability Bases of liability are cases in which the carrier is liable for the goods and cases of liability exemption Under the law of Vietnam, obligations of the carrier to provide a sea vessel are stipulated in Item 1, Article 75 of the Maritime Code of Vietnam 2005, more specifically, the carrier shall be bound before and at the beginning of the voyage to exercise due diligence to make a ship seaworthy, properly manned, equipped and supplied; its holds, cool and refrigerating chambers and other compartments for goods carriage are in proper conditions for goods reception, carriage and preservation in accordance with their nature 3.4.2.2 Statutory limitation of liability of the carrier Statutory limitation of liability of the carrier is a period of time and expansion of space throughout which the carrier is liable for damage to and losses of goods during carriage According to Article 74 of the Maritime Code, liabilities of the carrier emerge at the time “the carrier is discharged of the goods at the port of loading, exist during the carriage and terminate at the time of goods delivery at the discharge port” Consequently, liabilities of the carrier begin at the time of goods reception and last until goods delivery at the discharge port The Maritime Code of Vietnam stipulation on statutory limitation of liabilities of the carrier in Article 74 is equivalent to regulations in the Hamburg Rules 1978 (from the port of departure to the port of destination) and longer than the period stated in the Hague- Visby Rules (hook to hook) and shorter than the limitation under the Rotterdam Rules 2009 (door to door) 3.4.2.3 Limitations on liability of the carrier for the goods Limitations on liability of the carrier is the amount of compensation by the carrier for each unit of goods lost or damaged of which the value has not been declared in the bill of lading or transport documents The Maritime Code of Vietnam 16 2005 stipulated limitations on liability of the carrier in same instances as the SDR Protocol 1979 In particular, Item 1, Article 79 of the Maritime Code 2005 prescribes limitations of liability of the carrier for loss or damage to goods would be equivalent to 666.67 units of account per package or unit or units of account per kilo of gross weight of the goods lost or damaged, whichever was higher In practice of limitations on liability, the amount of limitation on liability of the carrier under the law of Vietnam is tremendously low compared to devaluation of the currency in the globe at present Limitations on liability of the carrier for loss of or damage to goods stipulated in Article 79 of the Maritime Code of Vietnam 2005 were the same as those of the SDR Protocol and well below those of the Hamburg Rules 1978 and the Rotterdam Rules 2009 3.5 TYPICAL CHARACTERISTICS OF DISPUTE SETTLEMENT OF CONTRACTS FOR INTERNATIONAL CARRIAGE OF GOODS BY SEA Dispute settlement of contracts for international carriage of goods by sea is the reconciliation of differences and conflicts on different bases and in various methods chosen by parties for protection of their legitimate rights and interest in contracts for international carriage of goods by sea Disputes over contracts for international carriage of goods by sea are among diverse, intricate and frequent ones arising in international maritime practice Disputes over contracts for international carriage of goods by sea can be addressed through negotiation, conciliation, litigation or arbitration 3.5.1 Settlement of disputes over contracts for international carriage of goods by sea through litigation Settlement of disputes over contracts for international carriage of goods by sea through litigation is the method of dispute resolution through operation of statal judicial bodies However, different from methods of conciliation or arbitration which can be performed by various well-established and prestigious centers for international maritime conciliation and arbitration, at present, there is no specialized international court of international maritime dispute settlement in general and disputes over contracts for international carriage of goods by sea in particular As a consequence, international maritime disputes in practice have been resolved at national courts which vary by states 3.5.2 Settlement of disputes over contracts for international carriage of goods by sea through maritime arbitration Maritime arbitration addresses disputes mainly over goods carriage contracts, insurance contracts, or contract of carriage by sea vessels Throughout hundreds of years, the maritime industry has been accustomed to resolving disputes in different methods, mainly through arbitration Based on practice of dispute settlement of maritime contracts, the method of arbitration has proven many advantages such as prompt procedures, maintenance of prestiges of parties and less costs 17 Disputes in the marine industry can be settled at such prestigous maritime arbitration centers as London Maritime Arbitrators Association or New York Society of Maritime Arbitrators Besides, many other experienced arbitration Centers in the maritime field can deal with the issue such as the Japaneses Shipbroker Association, Maritime Arbitration Center at Gdynia, Poland, Maritime Arbitration Chamber of Paris, China Maritime Arbitration Commission, Singapore Chamber of Maritime Arbitration… In the view of the author, practice of dispute settlement regarding the international maritime field in general and contracts for international carriage of goods by sea in particular so far has a great deal of drawbacks At present, Vietnam does not have specialized courts as some other countries to handle international maritime disputes in general and disputes over contracts for international carriage of goods by sea in particular Forces of judges and lawyers in Vietnam are limited in terms of foreign language capacity and in-depth international commercial and maritime knowledge Regarding settlement of disputes through arbitration, many countries have prestigious centers for maritime arbitration in international maritime dispute resolutions in general and disputes over contracts for international carriage of goods by sea in particular, however, at present, in Vietnam, the Vietnam International Arbitration Center has not established a separate Maritime Arbitration Board Resolutions of maritime trade disputes in Vietnam are still modest Reality has proven that extremely few commercial disputes with foreign elements have been settled at arbitration Centers in Vietnam In addition, qualifications of arbitrators are limited in terms of foreign languages, specialized knowledge about international maritime and commercial fields as well as practical experiences in resolution of international maritime disputes in general and in the field of contracts for international carriage of goods by sea in particular Chapter VIEWPOINTS AND RESOLUTIONS ON IMPROVEMENTS OF LAW OF VIETNAM ON CONTRACTS FOR INTERNATIONAL CARRIAGE OF GOODS BY SEA 4.1 VIEWPOINTS ON IMPROVEMENT OF LAW OF VIETNAM ON CONTRACTS FOR INTERNATIONAL CARRIAGE OF GOODS BY SEA 4.1.1 Necessity of improvement of law of Vietnam on contracts for international carriage of goods by sea That Vietnam has become member of the World Trade Organization (WTO) since 11/1/2007 has brought about opportunies for and challenges against Vietnam, 18 necessitating further improved legal regulations in the field of maritime transport in accordance with international maritime commerce and standards In face of requirements of the reform period, improvements of law of Vietnam in the field of international carriage of goods by sea must base on general objectives and guidelines of the whole legal system Directions in improvements of law on Vietnam in the sphere of international carriage of goods by sea must be manifested as follows: Perfection of maritime law in Vietnam must guarantee the suitability to and consistency with the Constitution and existing legal normative documents in the legal system of Vietnam Construction and improvements of law on contracts for international carriage of goods by sea must be made in the consistent roadmap of perfections of legal documents in civil, commercial, investment areas and secure harmonious unity with mother laws such as the Civil Code Improvements of maritime law in general and contracts for international carriage of goods by sea in particular must assure regulation formations to be unified, transparent, adequate and favourable to implementation in reality Based on inheritence from former rules are amendment, supplementation or issuance of new rules on unregulated subject-matters or ambiguous and inconsistent rules; on the other hand, it is required to remove regulations irrelevant to practice and development tendency of international economic integration Formation of and improvement in legal regulations on international carriage of goods by sea must be oriented towards accordance with international conventions on sea transport which Vietnam plans to join 4.1.2 Advantages and disadvantages in improvement of law of Vietnam on contracts for international carriage of goods by sea 4.1.2.1 Advantages Sea transportation plays an increasingly significant role in the economic growth of Vietnam It is estimated that almost 90% of goods are transported by sea The vessel fleet in Vietnam, especially heavy-lift vessels, has increasingly developed in both quantity and quality In 2015, the volume of goods transported through the seaport system in Vietnam grew impressively The reform cause in Vietnam is also part of the deep international economic integration process at different levels, in diverse forms and in accordance with principles and standards of the global market Vietnam has established various strategic partnership relations in economy, including active construction of the ASEAN Community 2015 and perfection of domestic markets at a more sufficient level than its WTO commitments The ASEAN Economic Community was formulated on 31/12/2015 For Vietnam, deeper ASEAN integration will definitely assist domestic businesses with more market access opportunities 19 Achievements in the international economic integration process of Vietnam have contributed to fostering the maritime industry development and facilitating improvements of maritime law of Vietnam 4.1.2.2 Difficulties and hinderings In addition to achievements, due to implications of global maritime – commercial operations and domestic difficulties (shortage of heavy-lift vessels, descending fares, ascending fuel costs and devaluation ), the vessel-rental market in Vietnam has been severely affected and faced considerable difficulties Firstly, sea vessels in Vietnam account for a small proportion and are primarily light-weight The existing vessel fleets of Vietnam are mainly light-weight and unqualified for long routes while foreign vessel companies possess modern ship fleets, professional services and lower fares compared to those of sea transport enterprises in Vietnam Therefore, foreign partners tend to choose foreign vessels instead of those of Vietnam to avoid weight conveyance, which reduces revenues of domestic shipping companies Secondly, regarding practice of contract conclusion, businesspeople mainly use available model contracts when concluding ship rental contracts, but rarely use regulations under the Maritime Code of Vietnam 2005 Thirdly, regarding limitations on expertise, legal qualifications of participants in contract conclusion and the number of specialized lawyers in the maritime area, the number of lawyers and assistant forces for Vietnam enterprises with maritime specialization is minimal and few of them can litigate in English, which leads businesses to employ foreign lawyers at high costs These matters result in certain hardship for Vietnamese businesses during negotiation and performance of contracts for international carriage of goods by sea Fourthly, the maritime legal system of Vietnam is not fully developed The Maritime Code of Vietnam was formulated well after maritime laws of many countries and international conventions on sea transport However, rules on implementation are insufficient and therefore difficult to apply in reality Fifthly, regarding the seaport system in Vietnam, in practice, the severe shortage of international seaports as well as weaknesses of the seaport system have restrained goods transport operations by sea in the country Sixthly, understanding and application of maritime law in adjudication by courts and arbitrators in Vietnam have many limitations In regards of expertise, forces of judges and arbitrators in the country at present are not a representative force with well comprehension of and insight into law, in particular international maritime law 4.2 RESOLUTIONS ON IMPROV EMENTS OF LAW OF VIETNAM ON CONTRACTS FOR INTERNATIONAL CARRIAGE OF GOODS BY SEA 20 4.2.1 Improvement of regulations of the Maritime Code of Vietnam in accordance with international practice and customs In the upcoming time, Vietnam needs to supplement and improve some subjectmatters in the Maritimce Code of Vietnam 2015 regardings contracts for international carriage of goods by sea and push for conclusions of international treaties and bilateral agreements directly governing sea transport of goods Besides, in the author’s opinion, contents of the Maritime Code of Vietnam in terms of contracts for international carriage of goods by sea need to be studied for amendment, supplementation and specification for feasibility security, in particular: Firstly, the obligation of the carrier to make a ship seaworthy should require the shipowner to ensure the seaworthiness not only before and at the beginning of the voyage but also during the whole carriage procedure Secondly, Item 2, Article 78 of the Maritime Code of Vietnam 2005 and Article 51 of the Maritime Code 2015 prescribe for exemption of liability for the carrier resulting from “faults of the ship master, crew members, marine navigators or employees of the carrier in the navigation or management of the vessel” This is an exemption discriminating for protection of interests of the carrier, failing to secure equality among parties to carriage contracts Therefore, this exemption is badly absurd and must be repealed Thirdly, statutory limitation “port to port” is unsuitable to multimodal transports which are extremely popular in the world at present Hence, the Maritime Code of Vietnam needs to prescribe that the carrier will be liable for damage to the goods from the time point when the carrier or the actual carrier receives cargo at the place of departure to the time point of goods delivery at the place of destination Fourthly, limitations on liability of the carrier stipulated in Article 79 of the Maritime Code of Vietnam 2005 and Article 152 of the Maritime Code are too minimal Consequently, law of Vietnam should raise limitations on liability of the carrier Fifthly, the Comité Maritime International has issued data on development of electronic bills of lading in the future, and therefore, since 1990, there have been Rules of the Comité Maritime International for electronic bills of lading Hence, the Maritime Code of Vietnam should introduce some data norms on this issue Sixthly, the one-year time limitation on litigation under Article 97 of the Maritime Code 2005 and Article 169 of the Maritime Code 2015 is too short Hence, it is necessary to stipulate the 2-year time limitation of filing lawsuits on damage to and losses of goods since the delivery date of the goods or that date on which the goods should have been delivered to the consignee Seventhly, rules and guidance by the Government on implementation of contracts for international carriage of goods is ambiguous So, to clarify legal documents, the 21 Government should issue guiding Decrees acting as legal frameworks for execution of operations of goods carriage by sea Eighthly, the State should construct and issue more specific regulations on sequence, procedures, contents and steps of settlement of maritime disputes as well as legal aftermaths of failure to enforce findings stated in conciliation or negotiation minutes In the future, Vietnam should establish specialized courts in settlement of international maritime disputes Ninthly, the State needs to institutionalize international customary norms in the maritime field to facilitate the access to and application of international customs in maritime commercial activities by individuals and businesses in Vietnam 4.2.2 Conclusion of and accession to international treaties on sea transport of goods Up to date, Vietnam has just acceded to 15 maritime conventions such as the Convention of the International Maritime Organization 1948, the International Convention for Safety of Life at Sea 1974, the Convention on Facilitation of International Martime Traffic 1965, etc Nevertheless, so far, Vietnam has not acceded to international conventions on maritime transportation This fact has troubled and put at risk sea transport enterprises in cases of arising disputes and through commercial and business course with foreign parterns Furthermore, the conclusion, accession and implementation of international conventions on sea carriage of goods as well as reasonable application of international maritime customs and usages make a significant contribution to perfection of maritime law of Vietnam Nowadays, the Rotterdam Convention 2009 consists of more advantages than previous conventions Therefore, Vietam’s commencement of accession to the Rotterdam 2009 is a necessity in that it is a Convention advanced, modern and updated with development of the world science and technology, secured of fairness between the cargo owner and the carrier 4.2.3 Several solutions to reinforcement and guarantee of effective implementation of law on sea carriage of goods in Vietnam Firstly, there should be an increase in quantity of heavy-lift vessels in the ship fleets of the country qualified for lengthy international routes In this period, to affirm effective territories, Vietnam must have giant vessels and powerful marine businesses To achieve the objectives, in the current condition, Vietnam needs to develop the marine transport industry Secondly, there is a need for deep-water habour for traffic of heavy-lift vessels The key point in development of deep-water habours is investment in synchronic infrastructure, renovation and upgrading of warehouse systems and loading and uploading equipment Thirdly, it is necessary for strict supervision by the State regarding the sea transportation industry It is compulsory to take measures to enhance development of 22 domestic sea transport enterprises competitive with oversea sea transport businesses It is required for enhancement and rigid implementation of international standards on sea vessels and thorough checks of sea ships of Vietnam at Registration and Inspection bodies Fourthly, it is boosting efficiency of operations of international carriage of goods by sea in Vietnam In the upcoming time, Vietnam needs to strongly reinforce international cooperation in the sea transport field to gain increasing market access for maritime transport enterprises of Vietnam to expand their market shares Fifthly, it is improvement in training of human resources for the maritime industry in general and for contracts of international carriage of goods by sea in particular In the upcoming period, focus should be on operation of training and enhancement of expertise and professional ethics for vessels’ crew members and officiers Maritime transport businesses, Vietnam Shipowners’ Association should frequently organize sessions on promulgation and upgrading expertise for ship masters and invites oversea experienced specialists to exchange and educate practice experience Sixthly, it is the enhancement of understanding of enterprises in Vietnam about the Maritime Code of Vietnam 2015 and provisions of the Rotterdam Convention 2009 In addition to promulgation and conveyance through public media such as radio stations, television stations and the Internet…, organization of short-term training courses, workshops or meetings among exportation and importation enterprises and transport businesses is essential to increase of awareness of these enterprises Seventhly, promulgation and increase knowledge of importation and exportation enterprises to change their routine habits of sales on the FOB term and purchases on the CIF term A change in the purchasing and selling habits will lead to a considerably increased foreign currency revenues for the country and simultaneously enhance bargaining posisions of Vietnamese exports in international maritime commercial operations Eighthly, improvement in capability of Vietnamese judges, arbitrators and lawyers engaged in maritime dispute litigation To achieve this, Vietnam needs to train and supplement legal officials equipped with foreign languages, profound expertise in international maritime and commericial fields 23 CONCLUSION In the condition of aggressive economic integration, studying theoretical and practical problems regarding contracts for international carriage of goods by sea and perfection of law of Vietnam is of high scientificity and practicality The dissertation has reasoned and clarified several theoretical and practical matters in contracts for international carriage of goods by sea towards the improvement of law and increase in feasibility and effectiveness of application of legal regulations on contracts for international carriage of goods by sea Based on reflection on theoretical and practical issues regarding contracts for international carriage of goods by sea and perfection of law of Vietnam, several conclusions can be drawn as follows: Contracts for international carriage of goods by sea are a popular type of contracts in international maritime and commercial areas, but also complex and related to various aspects of international maritime and commercial relations Contracts for international carriage of goods by sea cover their typical characteristics compared to other contracts with foreign elements Contracts for international carriage of goods by sea are subject to influences of not only national law but also international treaties and international maritime trade customs Conclusion and performance of contracts for international carriage of goods by sea in Vietnam, in the condition of the socialism-oriented market economy development and international economic integration, also bear distinct features requesting the State of proper modifications to guarantee both the feasibility, suitability to the conditions and circumstances of Vietnam and the consistency with international law and practices in the tendency of modernization and unification of regulations on contracts for international carriage of goods by sea at the international level and with the perfection of maritime laws in nations Existing law of Vietnam on contracts for international carriage of goods by sea has not fully developed and revealed some shortcomings and inconsistency between regulations of law of Vietnam and international treaties on maritime transport The author of the Dissertation has made premised reasoning for improvements in contents of the Maritime Code of Vietnam 2015 on contracts for international carriage of goods by sea in accordance with international standards and for facilitation of maritime commercial development of Vietnam Perfection of law of Vietnam on contracts for international carriage of goods by sea must comply with guidelines made by the Communist Party on strategies of judicial reforms, construction and improvements of the legal system of Vietnam and with international legal standards Resolutions to improvements of law of Vietnam on contracts for international carriage of goods by sea link to increase in liability of the 24 carrier, rise in limitations on liability of the carrier and evolution of electronic bills of lading in the future, etc Besides, it is necessary to push for conclusion of international conventions as well as bilateral agreements directly governing activities of international carriage of goods by sea Above are primary solutions and guidelines on perfection of law on contracts for international carriage of goods by sea To enhance efficacy of the law, the State needs to take various measures in boosting and guaranteeing effectiveness of implementation of law on sea carriage of goods in Vietnam In the future, it is vital to raise strict statal scrutiny of the sea transport industry, effectiveness of operation of international carriage of goods by sea in Vietnam, foster understanding of Vietnamese enterprises about the Maritime Code of Vietnam 2015 and international maritime law and improve qualification of judges, arbitrators and lawyers of Vietnam in international maritime dispute litigation… At this moment, requirements for Vietnam are to continuously amend, supplement regulations of law of Vietnam on service activities of international carriage of goods by sea in conformity with practical demands in Vietnam and international maritime practice Based on this is facilitation for Vietnam to develop services of international carriage of goods by sea and transform Vietnam to be a powerful nation with sea-based strength and sea-based wealth ... one or more states have easy movement through one or more other states This principle comes from international customs according to which ships flying the flag of any sovereign state will not... referred to by parties to contracts International maritime trade customs assist the interpretation, supplementation and guide implementation of terms relevant to contract for sea carriage which have... carriage and preservation in accordance with their nature 3.4.2.2 Statutory limitation of liability of the carrier Statutory limitation of liability of the carrier is a period of time and expansion