IN 1998, Chile enacted Book III of the Chilean Code of Commerce which, inter alia, incorporates the Hamburg Rules. Initially, shipowners were entitled to contract out of the Chilean enactment of the rules until they came into force internationally but, as of November 1, 1992, that entitlement ended. In considering the particularities of the Chilean enactment of the rules, one should look first at the period of responsibility of the carrier. Under the convention, the period of responsibility of the carrier covers the period during which it is in charge of the goods at the port of loading, during the period of carriage, and at the port of discharge – in other words, from port to port. On the other hand, the Chilean enactment establishes that carriers will become responsible for the goods as soon as they are in their custody – even before they reach the loading port – and after they are removed from the port of discharge. Carriers should be aware of the possibility of facing legal proceedings in Chile, even where they have not performed the actual carriage itself What about legal disputes? According to the rules, in the absence of an express arbitration agreement in the contract, disputes should be referred to ordinary courts of justice. Book III, on the other hand, provides that, in the absence of an express agreement in the contract, disputes will be subject to arbitration. With regard to limitation of actions, Book III, just like the convention, recognises a general time-bar period of two years. But, as far as time extensions are concerned, Book III establishes that, once a time extension has been granted, the two-year time-bar period starts to run again from the date of the last declaration. The basis of liability under the Hamburg Rules Article 984 of Book III (Article 5.1 of the rules) is based on the presumed fault of the carrier. With reference to interpretation of the expression ‘reasonable measures’, it has been said that all the different interpretations aim towards the reasonable and diligent behaviour of the carrier, usually known by expressions such us ‘due diligence’, ‘reasonable diligence’, or ‘reasonable measures’. In general, ‘reasonableness’ has been understood to be what can be expected from a carrier or its agents, bearing in mind all the circumstances of the specific case.” The burden of proof lies on the carrier. Moreover, the carrier not only has to prove that it has acted as a reasonable carrier, it also has to identify the occurrence that caused the loss, damage or delay. Finally, the duty to make the vessel seaworthy lies on the carrier throughout the voyage. Arrest of vessels The most controversial provision regulating the arrest of vessels in Chile is Article 1234 (b) of Book III. This provides that “a vessel may be the object of a special precautionary measure dealt with in this paragraph … when the creditor is the title holder of a privilege over another vessel in the same ownership or is subject to the same management or operation”. The arrest of a vessel is governed by an ‘associated ship provision’ which enables claimants to safely institute proceedings against a ship which is under the same ownership, control or management as that of the ship against which the claim is being made. Moreover, a broad interpretation has traditionally been given to the words ‘management or operation’. Additionally, the person who requests the arrest of a vessel must file a lawsuit within ten days (extendable to thirty days) of the arrest being granted. If this procedural requirement is not met, the arrest is considered wrongful, and the petitioner liable for the damages caused to the arrested vessel. Limitation of liability Chile has not ratified any of the international limitation conventions. Book III follows the 1957 convention but, as far as the amount of liability is concerned, Chile observes the 1976 convention. Probably the most controversial provision is Article 891 (equivalent to Article 4 of the 1976 convention). The wording of this article has given rise to two conflicting opinions. One states that the level of fault required to break the owner’s right to limit liability is lower than the one required under the 1976 convention. The other states that the domestic provision has not changed the international understanding of Article 4 of the 1976 convention. Delivery of cargo The Chilean customs authorities control importation of goods into Chile. With the exception of free zones, this control is normally carried out by a customs agent licensed by the customs service. The customs agent, who represents the importer and acts on its behalf with customs, is the agent of the consignee and also verifies that its principal is entitled to the goods by obtaining and verifying all import documents required, including the endorsed original bill of lading. Following discharge, cargo is placed in customs warehouses operated by the state-run port administration or by a private operator under licence to the customs service. Delivery to warehouse is made in exchange for a receipt which records, among other things, the amount, condition and weight of the cargo. The cargo will remain in these warehouses until all formalities have been completed. This system is known as ‘indirect withdrawal’. There also exists a system known as ‘direct withdrawal’ whereby the cargo can skip storage at these customs warehouses. Cargo is delivered directly from the ship to its actual owner. The same formalities are completed before discharge from the ship. The carrier is not entitled to demand surrender – or even sight – of the original or a copy of the bill of lading by the consignee when delivering the goods to these customs warehouses. In Chile, delivery of the goods by the carrier is not made against surrender of the original bill of lading to the carrier. The original is retained by the customs agent, who is also responsible for verifying the consignee’s entitlement to the goods. Distinction between actual and contractual carrier The term ‘contractual carrier’ refers to any person by whom, or in whose name, a contract of carriage of goods by sea has been concluded with a shipper. An ‘actual carrier’, on the other hand, refers to any person to whom the performance of the carriage of the goods, or part of the carriage, has been entrusted. Where the performance of the carriage has been entrusted to an actual carrier, the carrier nevertheless remains responsible for the entire carriage. In respect of transportation effected by the actual carrier, the contractual carrier shall be jointly liable with the latter for actions or omissions, both by the actual carrier and by its servant or agents. Consequently, a cargo claimant is entitled to institute proceedings against the contractual carrier, the actual carrier or both. The contractual carrier will remain responsible throughout the period of responsibility, and the actual carrier will be liable for loss, damage or delay incurred during that part of the carriage which it has performed. Where the obligations of each overlap, liability is joint and several. As a result, carriers should be aware of the possibility of facing legal proceedings in Chile, even where they have not performed the actual carriage itself. Also, a carrier could be deemed an actual carrier even if its vessel has not been named in a bill of lading, for example when the cargo has been transhipped onto another vessel without issuing a new bill of lading for that part of the carriage.