Sea Carriers Liability for Default

Intractable problems in applying the Hague Rules arise from conflicts between two kinds of default by sea carriers, that is, the commercial default and the vessel management default, which are often difficult to separate. Establishing a standard to distinguish the two defaults is desirable both for the risk management as well as clarifying whether the carrier or the cargo insurer is liable. This paper attempts to define a distinguishing standard for commercial default and vessel management default by analyzing the relevant theories and precedents. The purpose or nature of the act causing the fault allows lines to be drawn between commercial default and vessel management default. When the purpose of an act is for the navigation or safety of the vessel, for example, negligence should be considered as vessel management default. In determining the purpose or nature of an act, one of the most persuadable methods of interpretation is to apply the supplementary term, such as primary or sole purpose.