JAPAN Law and Practice Contributed by: Jumpei Osada, Masaaki Sasaki, Takuto Kobayashi and Hiroshi Ideyama, TMI Associates
3.3 Ship-Owners’ Liability and Limitation of Liability for Cargo Damages Ship-Owner’s Liability for Cargo Damages Under the JCOGSA, two main duties are imposed on the carrier: (i) the duty to receive, load, stow, carry, custody, discharge and deliver cargo properly and carefully; and (ii) the duty to ensure the vessel is seaworthy in three respects, namely, the physical condition of the vessel, the efficiency of the crew and equipment, and the vessel’s cargo-worthiness. In the event of dam - age to the cargo during a voyage, the carrier is liable for damages unless the carrier can suc - cessfully prove that exercise of due diligence on the aspects has been fulfilled by the carrier. Calculation and Limitation of Liability for Cargo Damages The JCOGSA sets out the rules for calculation of cargo damages, which state that the amount shall be either the current market price or, if there is no available market, the normal value at the place and time at which the goods should have been discharged. The prevailing view is that determination of the value should be consistent with the cost, insurance and freight value. The JCOGSA also includes a package limitation that is identical to that set out in Article IV (5) of the Hague-Visby Rules. 3.4 Misdeclaration of Cargo The shipper is obliged to notify the carrier of the nature of the cargo, together with other informa - tion necessary to carry it safely, if the cargo has a flammable, explosive or otherwise dangerous nature. In the case of a breach of the shipper’s duty to provide notice of the cargo (including a misdeclaration), the carrier is entitled to claim damages against the shipper. On 12 December 2015, the Supreme Court affirmed a judgment by the Tokyo High Court
in the NYK Argus case, in which it ruled that the shipper and the cargo manufacturers were liable for damage to the vessel and the cargo caused by a fire in the container of the cargo in question, on the basis of tort and product liability respec - tively. 3.5 Time Bar for Filing Claims for Damaged or Lost Cargo The time limits and prescription periods set out in substantive laws vary, depending on the nature of the claim. Claims for carrier’s liabil - ity for breach of contract for carriage of cargo (including a claim for damaged or lost cargo) are subject to one-year time limits from the date of delivery of the cargo, or the date when the cargo should have been delivered in the case of total loss of the cargo. The shipper can agree with the carrier on an extension of time to sue the carrier in order to avoid unnecessary court proceedings, and this agreement on extension of time is commonly used in the practice of cargo claims. 4. Maritime Liens and Ship Arrests 4.1 Ship Arrests Japan has not ratified the 1952 Arrest Con - vention, nor the 1999 Arrest Convention; thus, vessel arrest is carried out under the domestic laws of Japan. Under Japanese law, creditors may arrest vessels upon the following rights or
orders: • a lien; • a mortgage; or • a provisional attachment order.
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