An Overview of the Recent Amendments Made to the Carriage of Goods by Sea Act 1950

On 15.7.2021, the Carriage of Goods by Sea Act (Amendment) Act 2020 (“Amending Act”) came into operation. This Amending Act seeks to improve the CGSA 1950, by amending some of its provisions and incorporating the following international protocols into the First Schedule of CGSA 1950:

• Protocol to Amend the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading (“Visby Rules”) and
• Protocol Amending the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading of 25 August 1924 (“SDR Protocol”)

In this article, we shall discuss the effect of these important amendments on the maritime trade industry in Malaysia.

The Amendments

• Amendment to the Schedule to the Act

Originally, the First Schedule under the CGSA 1950 incorporates the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading (“Hague Rules”).  However, the First Schedule is wholly inadequate to meet the current conditions and practices of carriage of goods by sea. Some parts of the First Schedule are outdated, as they are inconsistent with international conventions adopted by many other countries.

In order to incorporate the Visby Rules and the SDR Protocol into the CGSA 1950, the Malaysian government and legislature has taken two steps. First, parliament has passed the Amending Act to essentially delegate powers to the Minister to amend the schedules under the CSGA 1950. This is done by incorporating the Section 6A, which stipulates that “The Minister may, by order published in the Gazette, amend the Schedule to the Act.”

Second, and after the Amending Act came into operation in 15.7.2021, the Minister of Transport exercised powers conferred to him under Section 6A, and issued the Carriage of Goods by Sea (Amendment of First Schedule) Order 2021 (PU(A) 305/2021) (“Minister Order”) – changing some of the provisions under the First Schedule to be consistent with the Visby Rules, SDR Protocol and modern maritime trade practices. Amongst the changes made are:

• Extending the scope of documents relating to shipping transactions, by introducing the concept of ‘sea carriage documents’;
• Introducing the concept of “data message” as means of transfer of a sea carriage document (aka electronic documents);
• Amending provisions relating to carrier’s limits of liability, and introducing the concept of “Special Drawing Rights” to measure these limits;
• Allowing carrier and cargo owner to extend the 1 year time bar by way of an agreement.

In light of the above, the amendments to the First Schedule will indubitably improve the domestic legislation governing carriage of goods by sea – by updating it to be consistent with the global practice in the maritime trade industry. These updates will instill confidence of local and foreign industry players in carriage of goods transactions in Malaysia.

• Sea Carriage Documents

Another significant amendment is the introduction of the concept of “Sea Carriage Documents”, which was absent in the unamended CGSA 1950. The phrase ‘bill of lading or similar documents of title’ found in the CSGA 1950 has now been substituted with the phrase ‘sea carriage documents’, purpose of which is to broaden scope of documents relating to shipping transactions, which currently is limited to only bills of lading under the CGSA 1950.

‘Sea carriage documents’ are defined as

• a bill of lading;
• a negotiable document of title that is similar to a bill of lading and that contains or evidences a contract of carriage of goods by sea;
• a bill of lading that, by law, is not negotiable; or
• a non-negotiable document including a consignment note and a document of the kind known as a sea waybill or the kind known as a ship’s delivery order which either contains or evidences a contract of carriage of goods by sea.

As noted above, the CSGA 1950 can now be applied to a plethora of shipping documents such as negotiable bills of lading whether they are consignment notes, seaway bills or ship’s delivery orders and non-negotiable bills of lading.  The move to broaden the scope of commercial contractual documents is consistent with the commercial needs of modern maritime transactions.

Conclusion

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