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PART V MARITIME COMMERCE

PART V MARITIME COMMERCE

CHAPTER I MARINE ENTERPRISE

SECTION I SHIPS

Article 740 (Definition of Ship)

A ship mentioned in this Act is a vessel used for navigation for the purpose of commercial activities or any other profit-making transactions.

[This Article Wholly Amended, Aug. 3, 2007]

Article 741 (Scope)

(1) The provisions of this Part shall apply mutatis mutandis to the ships used for navigation even if they are not used for the purpose of commercial activities or any other profit-making transactions: Provided, That notwithstanding the proviso of Article 29 of the Ship Act, the above shall not apply to national or public ships, if it is determined by the Presidential Decree that the mutatis mutandis application of the provisions of this Part is not appropriate considering the purpose and character, etc. of navigation.

(2) The provisions of this Part shall not apply to small boats or to any vessel propelled mainly by oars.

[This Article Wholly Amended, Aug. 3, 2007]

Article 742 (Accessory to Ship)

Any article entered in the ship's inventory of appurtenances shall be presumed to be an accessory to the ship. [This Article Wholly Amended, Aug. 3, 2007]

Article 743 (Transfer of Ownership of Ship)

Where a ship is eligible for registration and entry, the transfer of the ownership of the ship shall take effect only by an agreement between the parties: Provided, That such transfer shall not be asserted against a third party unless it has been registered and an entry thereof has been made in the ship's nationality certificate. [This Article Wholly Amended, Aug. 3, 2007]

Article 744 (Arrest or Provisional Arrest of Ship) (1) No attachment or provisional attachment shall be made on a ship which has completed preparations for commencing a voyage, or on her appurtenances: Provided, That the above shall not apply to such obligations which have been incurred for the purpose of making preparations for commencing a voyage.

(2) Paragraph (1) shall not apply to any ship with a gross tonnage of less than twenty tons.

[This Article Wholly Amended, Aug. 3, 2007]

SECTION II MASTER

Article 745 (Appointment and Dismissal of Master) The shipowner shall appoint or dismiss the master. [This Article Wholly Amended, Aug. 3, 2007]

Article 746 (Claim for Compensation against Unreasonable Dismissal of Master)

If the master is dismissed without reasonable cause by the shipowner, the master may demand the shipowner to compensate for any damage arising therefrom.

[This Article Wholly Amended, Aug. 3, 2007]

Article 747 (Master's Responsibility to Continue Performing His Duties)

If the master is dismissed or his term expires during the voyage, he shall assume responsibility to perform his duties until another master is able to perform such duties or the ship arrives at the port of registry.

[This Article Wholly Amended, Aug. 3, 2007]

Article 748 (Master's Authority and Responsibility to Appoint Replacement Master)

If the master is unable to perform his duties by reason of force majeure, he may, at his responsibility, appoint another person and require him to perform the master's duties, except as otherwise provided by the Acts and subordinate statutes.

[This Article Wholly Amended, Aug. 3, 2007]

Article 749 (Scope of Proxy Right)

(1) While away from the port of registry, the master shall have the authority to perform all judicial and extra-judicial acts which are necessary for the voyage.

(2) While at the port of registry, the master has the authority only to hire and dismiss seamen, except in cases where he has been vested with special authority.

[This Article Wholly Amended, Aug. 3, 2007]

Article 750 (Authority in Respect of Special Acts) (1) The master shall not do any of the following acts except in order to pay repair costs, salvage claims, or any other expenses necessary for the continuance of the voyage:

1. Offering the ship or her appurtenance as security;

2. Borrowing money; and

3. Disposing of the whole or a part of the cargo. (2) The amount of damages, if the master disposes of the cargo, shall be determined by the value of such cargo at the port of discharge at the time when it should have arrived there: Provided, That any expenses which are not required to be paid shall be deducted from such value.

[This Article Wholly Amended, Aug. 3, 2007]

Article 751 (Restriction upon Proxy Right)

No restriction upon the proxy right of the master shall be asserted against a third party acting in good faith. [This Article Wholly Amended, Aug. 3, 2007]

Article 752 (Disposition of Cargo for Benefit of Persons Interested) (1) If the master disposes of the cargo during the voyage, such disposition shall be made in the best interest of the persons interested.

(2) Pursuant to paragraph (1), the person interested shall be liable to the person, who became the creditor on the account of such a disposition, within the limit of the value of the cargo unless the person interested is guilty of negligence.

[This Article Wholly Amended, Aug. 3, 2007]

Article 753 (Auction of Ship)

If the ship has become unrepairable while away from the port of registry, the master may auction the ship with the authorization of the marine authority.

[This Article Wholly Amended, Aug. 3, 2007]

Article 754 (Unrepairable Ships)

(1) A ship shall be deemed to have become unrepairable in the cases falling under any of the following subparagraphs:

1. Where the ship cannot be repaired at the place where she lies and cannot proceed to a place where repairs can be made; and

2. Where the repair costs exceed three-quarters of the value of the ship.

(2) If the ship has been damaged in the course of the voyage, the value mentioned in paragraph (1) 2 shall be determined as the value at the time of commencement of such voyage; and in other cases, the foregoing value shall be determined as the value of the ship before she sustained such damage.

[This Article Wholly Amended, Aug. 3, 2007]

Article 755 (Duty to Report and Make Up Accounts) (1) The master shall, without delay, report to the shipowner on all important matters relating to the voyage.

(2) At the end of each voyage, the master shall, without delay, present the statement of the accounts to the shipowner and obtain the shipowner's approval thereof.

(3) Whenever requested by the shipowner, the master shall report on matters relating to the voyage and on the accounts. [This Article Wholly Amended, Aug. 3, 2007]

SECTION III CO-OWNERSHIP

Article 756 (Decision Making of Co-owners on Use of Ship) (1) The matters relating to the use of the ship owned by the co-owners shall be determined by the majority of the shares in proportion to the value of the respective share of the co-owners. (2) The matters which alter the contract in relation to the co-ownership of the ship shall be determined by the unanimous consent of the co-owners.

[This Article Wholly Amended, Aug. 3, 2007]

Article 757 (Burden of Expenses)

The co-owners of a ship shall bear the expenses in regard to the use of the ship and the liabilities arising in respect of such use in proportion to the value of their respective share. [This Article Wholly Amended, Aug. 3, 2007]

Article 758 (Apportionment of Profit and Loss)

The loss and profit shall be allocated in proportion to the value of the respective share of the co-owners of a ship after each voyage is completed.

[This Article Wholly Amended, Aug. 3, 2007]

Article 759 (Transfer of Share)

Even if the co-owners of a ship formed a partnership, each co-owner may transfer his share to another person without the consent of the other co-owners unless he is the manager of the ship.

[This Article Wholly Amended, Aug. 3, 2007]

Article 760 (Loss of Nationality, and Purchase of Share or Application for Auction)

When a ship loses the nationality of the Republic of Korea for the reason that a co-owner transfers his share or loses his nationality, other co-owners may purchase such share at a reasonable price or may apply to the court for an auction of such share.

[This Article Wholly Amended, Aug. 3, 2007]

Article 761 (Right to Demand Purchase of Shares belonging to Persons who Object to Resolution)

(1) When the co-owners of a ship have resolved to commence a new voyage or to repair the ship extensively, any co-owner who has an objection thereto may request that the other co-owner(s) purchase his shares at a reasonable price.

(2) Any person who intends to effect the request mentioned in paragraph (1) shall dispatch a notice thereof to the other co-owner(s) or to the ship manager within three days from the date of resolution, and in cases where the person did not participate in the resolution, from the date on which he received the notice of resolution.

[This Article Wholly Amended, Aug. 3, 2007]

Article 762 (Right to Demand Purchase of Shares belonging to Dismissed Master)

(1) If the master who co-owns the ship is dismissed against his will, he may request that the other co-owner(s) purchase his shares at a reasonable price.

(2) When the co-owner intends to effect the request mentioned in paragraph (1), he shall without delay send the notice thereof to the other co-owner(s) or the ship manager.

[This Article Wholly Amended, Aug. 3, 2007]

Article 763 (Transfer of Ship, etc. during Voyage) If a ship or the shares thereof have been transferred during voyage, the transferee shall acquire the profit and bear the loss arising from the voyage, unless otherwise agreed upon by the parties.

[This Article Wholly Amended, Aug. 3, 2007]

Article 764 (Appointment and Registration of Ship Manager) (1) The co-owners of a ship shall appoint a ship manager. In this case, the consent of all the co-owners shall be required for the appointment of a ship manager who is not a co-owner. (2) The appointment of a ship manager and the termination of his proxy right shall be registered.

[This Article Wholly Amended, Aug. 3, 2007]

Article 765 (Authority of Ship Manager)

(1) The ship manager shall have the authority to do all judicial and extrajudicial acts relating to the use of the ship. (2) No restriction upon such proxy right of a ship manager shall be asserted against a third party acting in good faith. [This Article Wholly Amended, Aug. 3, 2007]

Article 766 (Restriction on Authority of Ship Manager) The ship manager shall not do the acts falling under any of the following subparagraphs unless he has been mandated to do so in writing by the co-owners of the ship:

1. Transferring, leasing, or offering as security of the ship;

2. Commencing of a new voyage;

3. Obtaining of an insurance coverage on the ship;

4. Extensive repair of the ship; and

5. Borrowing of money. [This Article Wholly Amended, Aug. 3, 2007]

Article 767 (Entry and Keeping of Record)

The ship manager shall keep a ledger with regard to the execution of his duties, and all matters relating to the use of the ship shall be entered therein.

[This Article Wholly Amended, Aug. 3, 2007]

Article 768 (Report of Ship Manager and Approval Thereof) After the end of each voyage, the ship manager shall, without delay, prepare the documents with regard to the progress of such voyage and the accounts thereof, report them to the co-owners of the ship, and obtain their approval.

[This Article Wholly Amended, Aug. 3, 2007]

SECTION IV LIMITATION OF SHIPOWNER'S LIABILITY

Article 769 (Shipowner's Limited Liability)

The shipowner may, regardless of the basis of the liability, limit his liability for the claims falling under any of the following subparagraphs to the amounts as prescribed in Article 770: Provided, That the above shall not apply in cases where such claims relate to the loss resulted from his personal act or ommission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result:

1. Claims in respect of loss of life, personal injury or loss of or damage to property other than the ship, occurring on board or in direct connection with the operation of the ship;

2. Claims in respect of loss resulting from delay in the carriage of cargo, passengers or their luggage;

3. Claims in respect of loss resulting from infringement of a person's rights other than contractual rights occurring in direct connection with the operation of the ship, except those claims referred to in subparagraphs 1 and 2; and

4. Claims in respect of measures taken to avert or minimize loss resulted or to be resulted in the claims referred to in subparagraphs 1 through 3, or in respect of loss caused by such measures.

[This Article Wholly Amended, Aug. 3, 2007]

Article 770 (Limitation Amount)

(1) The amount of the liability the shipowner may limit shall be calculated as follows:

1. The limits of liability in respect of claims for loss of life or personal injury of passengers shall be an amount of 175,000 units of account multiplied by the number of passengers authorized in the ship's inspection certificate. (Each unit of account is equivalent to the Special Drawing Right as defined by the International Monetary Fund. The same applies hereinbelow.)

2. The limits of liability in respect of claims for loss of life or personal injury of a person other than passengers shall be calculated based on the tonnage of ship as follows: Provided, That the limits of liability shall be 167,000 Units of Account for a ship with a tonnage of less than 300 tons:

(a) 333,000 Units of Account for a ship not exceeding 500 tons; and

(b) For a ship with a tonnage in excess of 500 tons, the following amount in addition to that mentioned in (a): (i) For each ton from 501 to 3,000 tons, 500 Units of Account;

(ii) For each ton from 3,001 to 30,000 tons, 333

Units of Account;

(iii) For each ton from 30,001 to 70,000 tons, 250 Units of Account; and

(iv) for each ton in excess of 70,000 tons, 167 Units of Account.

3. The limits of liability in respect of other claims not mentioned in subparagraphs 1 and 2 shall be calculated on the basis of the tonnage of the ship as follows: Provided, That the limits of liability shall be 83,000 Units of Account for a ship with a tonnage of less than 300 tons:

(a) 167,000 Units of Account for a ship not exceeding 500 tons; and

(b) for a ship with a tonnage in excess of 500 tons, the following amount in addition to that mentioned in (a): (i) For each ton from 501 to 30,000 tons, 167 Units of Account;

(ii) For each ton from 30,001 to 70,000 tons, 125 Units of Account; and

(iii) For each ton in excess of 70,000 tons, 83 Units of Account.

(2) The limits of liability determined in accordance with the respective subparagraphs of paragraph (1) of this Article shall apply to the aggregate of all claims against the shipowner for each ship which arise on any distinct occasion and are subject to the respective limits.

(3) The claims for which the shipowner may limit his liability in accordance with Article 769 shall compete with each other pro rata against the respective limits of liability referred to in the subparagraphs of paragraph (1).

(4) If the limits of liability calculated in accordance with paragraph (1) 2 of this Article is insufficient to pay the claims mentioned therein in full, the limits of liability calculated in accordance with paragraph (1) 3 shall be available for payment of the balance of these claims. In case where the claims mentioned in paragraph (1) 3 also arose out of the same occurrence, such claims and the balance of the claims under paragraph (1) 2 shall compete with each other pro rata against the limits of liability referred to in paragraph (1) 3.

[This Article Wholly Amended, Aug. 3, 2007]

Article 771 (Deduction of Counterclaims arising out of the Same Occurrence)

Where the shipowner has a claim against the claimant whose claims are subject to limitation arising out of the same occurrence, their respective claims shall be set off against each other and the limitation of liability shall only apply to the balance, if any. [This Article Wholly Amended, Aug. 3, 2007]

Article 772 (Tonnage of Ship for Limitation of Liability) For the purpose of determining the tonnage of a ship stated in Article 770, paragraph (1), the tonnage of a ship which is engaged in international navigation shall be the international gross tonnage as set forth in the Ship Act, and the tonnage of other ships shall be the gross tonnage as set forth in the said Act. [This Article Wholly Amended, Aug. 3, 2007]

Article 773 (Claims Excepted from Limitation)

The shipowner may not limit his liability for any claims in the following subparagraphs:

1. Claims against the shipowner by the master, seaman or other employees whose duties are connected with the operations of the ship, or by their inheritors, dependents or other persons entitled to make such claims;

2. Claims for salvage or contribution in general average;

3. Claims for oil pollution damage to which the International Convention on Civil Liability for Oil Pollution Damage, dated November 29th 1969, or any amendment or Protocol thereto is applicable;

4. Claims in respect of the raising, removal, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded, abandoned, or having suffered other marine accidents, including cargo and anything that is or has been on board such ship; and

5. Claims for nuclear damages. [This Article Wholly Amended, Aug. 3, 2007]

Article 774 (Persons Entitled to Limit Liability) (1) The persons falling under any of the following subparagraphs may limit their liability to the same extent as the shipowner in accordance with the provisions of this Section:

1. Charterer, manager or operator of a ship;

2. Member with unlimited liability of a corporate shipowner or the person mentioned in subparagraph 1; and

3. Master, seaman, pilot, or employee or agent of the shipowner or the persons referred to in subparagraph 1, who has incurred through his own act the claims prescribed in the subparagraphs of Article 769 against the shipowner or the person referred to in subparagraph 1.

(2) The total amount of the limits of liability of the shipowner and the persons referred to in paragraph (1) for all of the claims arising on any distinct occasion shall not exceed the limits of liability prescribed in Article 770 for each ship. (3) If a shipowner or one of the persons referred to in the subparagraphs of paragraph (1) obtains a decision from the court for the commencement of the limitation proceedings, the other persons who are entitled to limit their liability may take advantage of such decision.

[This Article Wholly Amended, Aug. 3, 2007]

Article 775 (Limitation of Liability of Salvors)

(1) The salvor may limit his liability, pursuant to the provisions of Articles 769 through 774, excluding subparagraph 2 of Article 769 and subparagraph 1 of Article 770 (1), for loss of life, personal injury, loss of or damage to property, claims for loss resulting from the infringement of another person's rights other than contractual rights, claims in respect of measures taken to prevent or minimize such loss or damage, or claims caused as a result of the foregoing measures, arising in direct connection with salvage operations of the salvor or his employees.

(2) Any salvor who did not perform the salvage operation from on board a ship, or performed only on the ship which has been rescued, shall be deemed to be operating on a ship with 1,500 tons with respect to the limits of liability as prescribed in Article 770. (3) The limitation of liability of a salvor shall apply to all claims arising on any distinct occasion for each rescue ship, and in the case referred to in paragraph (2), for each salvor. (4) The "salvor" referred to in paragraph (1) denotes a person who provided services in direct relation to salvage operations, and "salvage operation" denotes not only rescue activities at the time of salvage, but also all measures of raising, removal, destruction or rendering harmless of a ship which is sunk, wrecked, stranded, abandoned, or having suffered other marine accidents, and the cargo thereon and anything that is or has been on board such ship and all measures to avert or minimize the loss relating thereto. [This Article Wholly Amended, Aug. 3, 2007]

Article 776 (Procedures for Limitation of Liability) (1) Any person who desires to limit his liability pursuant to the provisions of this Section, shall apply to the court for the commencement of the limitation proceedings within one year from the date he receives from the claimant a written claim of an amount exceeding the limits of liability.

(2) The application for the commencement of the limitation proceedings, constitution of the limitation fund, public notice thereof, participation in the proceedings, distribution of the fund, and other necessary matters shall be set forth by separate Act. [This Article Wholly Amended, Aug. 3, 2007]

SECTION V LIEN ON VESSEL

Article 777 (Claim Giving Rise to Maritime Lien)

(1) A person who has any of the following claims holds maritime lien on a vessel and the appurtenances thereof, on the freight for the voyage during which the claim giving rise to the lien arises, and on the accessories of the vessel and freight:

1. Expenses for legal actions raised in the common interest of the creditors, public taxes imposed on the vessel regarding the voyage, pilotage dues and towage dues, and the cost of preservation and inspection of the vessel and the appurtenances thereof after the entry into the last port;

2. Claims arising out of the employment contract for the crew and other persons hired on board;

3. Claims for salvage and the general average contribution; and

4. Indemnities for damage caused by collisions or other accident of navigation; indemnities for damage caused to harbors, docks, and navigable ways; indemnities for loss of life and personal injury of the crew or passengers.

(2) A creditor who has a maritime lien mentioned in paragraph (1) shall have priority in executing his claims in respect of the property mentioned in paragraph (1) over other creditors in accordance with the provisions of this Act or other Acts. In such case, the provisions of the Civil Act relating to the mortgage shall apply mutatis mutandis unless contrary to its nature. [This Article Wholly Amended, Aug. 3, 2007]

Article 778 (Accessories of Vessel and Freight)

The accessories of the vessel and the freight mentioned in Article 777 mean:

1. Compensation due to the shipowner for damage to or loss of the vessel or loss of freight;

2. General average contributions due to the shipowner in respect of damage to or loss of the vessel or loss of freight; and

3. Salvage Claims due to the shipowner for the salvage operation.

[This Article Wholly Amended, Aug. 3, 2007]

Article 779 (Maritime Lien on Freight)

The maritime lien on freight may be enforced only against the unpaid freight or the amount of freight that has been paid and is still in the hands of the shipowner or his agent. [This Article Wholly Amended, Aug. 3, 2007]

Article 780 (Exclusion of Insurance Amount etc.)

Article 778 shall not apply to insurance benefits due to the shipowner and any other bounties or national subsidies. [This Article Wholly Amended, Aug. 3, 2007]

Article 781 (Claims Arising from Employment Contract of Persons Hired on Board)

The claims mentioned in Article 777, paragraph (1), subparagraph 2 shall have maritime lien on the total amount of the freight for all voyages made during the duration of the employment contract.

[This Article Wholly Amended, Aug. 3, 2007]

Article 782 (Priority of Maritime Liens in the Same Voyage) (1) In the case of concurrent claims secured by maritime liens arising from the same voyage, they shall rank in the order as set out in the subparagraphs in Article 777 (1).

(2) The claims mentioned in Article 777 (1) 3 shall rank in the inverse order of the dates on which they came into existence. The claims arising from the same accident shall be deemed to have arisen simultaneously.

[This Article Wholly Amended, Aug. 3, 2007]

Article 783 (Priority of Maritime Liens in Multiple Voyages) (1) In the case of concurrent claims secured by maritime liens which have arisen in regard to two or more voyages, a claim arising in respect of a later voyage shall rank prior to a claim arising in respect of an earlier voyage.

(2) The maritime lien mentioned in Article 781 shall rank equally with claims attached to the last voyage.

[This Article Wholly Amended, Aug. 3, 2007]

Article 784 (Competing Maritime Liens with the Same Rank) In the case maritime liens which have the same rank in accordance with Articles 781 through 783 compete with each other, such claims shall be paid pro rata.

[This Article Wholly Amended, Aug. 3, 2007]

Article 785 (Overtaking Nature of Maritime Liens) The maritime lien of a creditor shall not be affected by the transfer of ownership of the ship.

[This Article Wholly Amended, Aug. 3, 2007]

Article 786 (Extinction of Maritime Lien)

The maritime lien of a creditor shall be extinguished if it has not been enforced within one year from the date on which it arose. [This Article Wholly Amended, Aug. 3, 2007]

Article 787 (Ship Mortgage)

(1) A registered ship may be the object of a ship mortgage. (2) A mortgage on a ship shall extend to its appurtenances. (3) The provisions relating to the mortgage in the Civil Act shall apply mutatis mutandis to the ship mortgage. [This Article Wholly Amended, Aug. 3, 2007]

Article 788 (Competetion between Ship Mortgage, etc. and Maritime Lien)

The maritime lien of a creditor shall take priority over a pledge and a mortgage.

[This Article Wholly Amended, Aug. 3, 2007]

Article 789 (Prohibition of Putting Registered Ship to Pledge) Any registered ship shall not be the object of a pledge. [This Article Wholly Amended, Aug. 3, 2007]

Article 790 (Mutatis Mutandis Application to Ship under Construction)

The provisions of this Section shall apply mutatis mutandis to ships under construction.

[This Article Wholly Amended, Aug. 3, 2007]

CHAPTER II CARRIAGE AND CHARTER

SECTION I CARRIAGE OF INDIVIDUAL GOODS

Article 791 (Contract of Carriage of Individual Goods) A contract of carriage of individual goods shall take effect when a carrier undertakes to carry individual goods by a ship at sea and a shipper agrees to pay the freight to the carrier. [This Article Wholly Amended, Aug. 3, 2007]

Article 792 (Providing Goods)

(1) The shipper shall hand over the goods to the carrier at such time and place as agreed upon between parties or as determined in accordance with the custom of the loading port.

(2) If the shipper fails to hand over goods to the carrier at such time and place as referred to in paragraph (1), the contract shall be deemed to have been rescinded. In this case, the master may immediately commence the voyage, and the shipper shall pay the freight in full.

[This Article Wholly Amended, Aug. 3, 2007]

Article 793 (Furnishing Documents Necessary for Carriage) The shipper shall, within the period allowed for loading, furnish the master with the documents necessary for the carriage. [This Article Wholly Amended, Aug. 3, 2007]

Article 794 (Duty to Exercise Due Diligence as to Seaworthiness) The carrier shall be liable for loss resulting from loss of, damage to, or delay in delivery of the goods, unless he proves that neither he, nor the crew, nor any of his employees has failed to exercise due diligence in connection with the following particulars at the commencement of the voyage:

1. Make the ship seaworthy;

2. Properly man, equip and supply the ship; and

3. Make the holds, refrigerating and cool chambers, and all other parts of the ship in which goods are stowed, fit and safe for their reception, carriage and preservation.

[This Article Wholly Amended, Aug. 3, 2007]

Article 795 (Duty of Care in respect of Goods)

(1) If the carrier fails to prove that he or the crew or other employees of the ship exercised his duty of care in respect of receiving, loading, stowage, carriage, keeping, discharging and delivering of the goods, he shall be liable to compensate for loss resulting from loss of, damage to or delay in delivery of the goods. (2) The carrier shall not be responsible for loss in respect of the goods arising or resulting from an act of the master, seaman, pilot, or other employees of the carrier in the navigation or the management of the ship, or a fire. The above shall not apply where the fire was caused by the intentional act or negligence of the carrier.

[This Article Wholly Amended, Aug. 3, 2007]

Article 796 (Exemption of Carrier from Liability) The carrier shall be relieved of the liability for compensation if he has proved that any facts referred to in the following subparagraphs existed and that the loss in respect of the goods is usually caused by such fact: Provided, That the same shall not apply if it was proved that he failed to exercise due diligence in accordance with Articles 794 and 795 (1) and that he could have avoided such loss if he had exercised such diligence:

1. Perils or accidents of the sea and other navigable waters;

2. Act of God;

3. War, riots, or civil commotions;

4. Piracy and other similar acts;

5. Judicial seizure, quarantine restrictions and other restraint by public authorities;

6. Act of the shipper or the owner of the goods or his employees;

7. Strikes, restraint of labor or lockouts;

8. Saving life or property at sea or any deviation in saving life or property at sea or any reasonable deviation;

9. Insufficiency in packing the goods, or inadequacy of marks;

10. Particular nature or latent defects of the goods; and

11. Latent defects of the ship. [This Article Wholly Amended, Aug. 3, 2007]

Article 797 (Limitation of Liability)

(1) The carrier may limit his liability for compensation under Articles 794 through 796 to the monetary equivalent of 666 and 67/100 (666.67) Units of Account per package or shipping unit or 2 Units of Account per kilogram, whichever is higher: Provided, That the carrier shall not limit his liability if it is proved that the damage resulted from an act or omission of the carrier done with intent to cause such damage, or recklessly and with knowledge that damage would probably result.

(2) In applying paragraph (1), the number of the package or shipping unit shall be determined as follows:

1. Where a container or similar article of transport is used to consolidate the goods, if the number of packages or shipping units of the goods in such article of transport is enumerated in the bill of lading or other documents evidencing the contract of carriage, each package or unit shall count as a package or a shipping unit. Except as aforesaid, each article of transport that contains the goods shall count as a package or a shipping unit; and

2. Where the article of transport itself supplied by a person other than the carrier has been lost or damaged, such article of transport shall be deemed a separate package or shipping unit. (3) Paragraphs (1) and (2) shall not apply if, at the time of delivery of the goods to the carrier by the shipper, the nature and value of the goods have been declared by the shipper and inserted in the bill of lading or other documents evidencing the contract of carriage: Provided, That where the shipper has knowingly and significantly misstated the nature or value thereof, the carrier shall not be responsible in any event for the loss in respect of the goods unless the carrier or his employees was aware of the misstatement. (4) The provisions of paragraphs (1) through (3) shall not affect the application of Articles 769 through 774 and Article 776. [This Article Wholly Amended, Aug. 3, 2007]

[Effective Date of Article 797 (1), Aug. 4, 2010] Article 798 (Application to Non-Contractual Claim) (1) The provisions of this Section concerning the liability of the carrier shall also apply to the carrier's liability in tort. (2) If any claim for indemnities in respect of the goods is made against an employee or agent of the carrier and if such loss occurred in respect of the performance of his duties, such employee or agent shall be entitled to avail himself of the defences and limitation of liability which the carrier is entitled to invoke, except in the case of acts or omissions of the employee or agent done with intent to cause damage, or recklessly and with the knowledge that loss of, damage to or delay in delivery of the goods would probably result.

(3) In the case as referred to in the main clause of paragraph (2), the aggregate of the limits of liability of the carrier, his employees or agents shall in no case exceed the limits of liability as prescribed in Article 797 (1).

(4) The provisions of paragraphs (1) through (3) shall also apply in cases where the claim for indemnities in respect of the goods is made against the actual carrier, his employees or agents, other than the carrier.

[This Article Wholly Amended, Aug. 3, 2007]

Article 799 (Prohibition of Reduction of Carrier's Liability) (1) No special agreement between the parties that reduces or exempts any obligation or liability of the carrier in breach of the provisions of Articles 794 through 798, shall be valid. This provision shall also apply to a stipulation transferring insurance benefits in respect of the goods to the carrier, or to any similar stipulations. (2) Paragraph (1) shall not be applicable to carriage of live animals and carriage of the goods which are stated in the bill of lading or other documents evidencing the contract of carriage as being carried on deck and is so carried.

[This Article Wholly Amended, Aug. 3, 2007]

Article 800 (Disposal of Unlawful Goods Loaded)

(1) The goods which have been loaded in contravention of any Acts, subordinate statutes or a contract, may, at any time, be unloaded by the master, and if such goods become a danger to the ship or other goods, they may be abandoned.

(2) If the master carries the goods mentioned in paragraph (1), the carrier may demand the largest freight for the same types of goods at the time and place of the loading.

(3) Paragraphs (1) and (2) shall not affect any claim for damages by the carrier or any other interested person. [This Article Wholly Amended, Aug. 3, 2007]

Article 801 (Disposal of Dangerous Goods)

(1) Even though the carrier had knowledge of the nature of the goods when loading them, the goods of an inflammable, explosive or dangerous nature may, if such goods become a danger to the ship or other goods on board, at any time before discharge, be landed, destroyed or rendered innocuous by the master.

(2) The carrier shall be exempted from the liability to compensate for any loss inflicted on the goods by such disposal as referred to in paragraph (1) except its liability for the general average contribution.

[This Article Wholly Amended, Aug. 3, 2007]

Article 802 (Receipt of Goods)

The consignee who has been notified of the arrival of the goods, shall receive the goods without delay at such time and place as agreed between the parties or determined pursuant to the custom of the unloading port.

Article 803 (Deposit of Goods, etc.)

(1) If the consignee neglects to receive the goods, the master may deposit them, or deliver them to the places permitted by the customs or other authorities as prescribed by the relevant Acts and subordinate statutes. In this case, the master shall dispatch the notice thereof without delay to the consignee.

(2) If the consignee cannot be identified, or he refuses to receive the goods, the master shall deposit them, or deliver them to the places permitted by the customs or other authorities as prescribed by the relevant Acts and subordinate statutes, and dispatch notice thereof without delay to the charterer or shipper and consignee, if known.

(3) If the goods are deposited, or delivered to the places permitted by the customs or other authorities as prescribed by the relevant Acts and subordinate statutes, pursuant to paragraphs (1) and (2), the goods shall be deemed to have been delivered to the holder of the bill of lading or other consignees. [This Article Wholly Amended, Aug. 3, 2007]

Article 804 (Notice of Partial Loss of or Damage to Goods) (1) If the consignee finds a partial loss of or damage to the goods, he shall send the carrier a written notice providing a summary thereof without delay after he receives the goods: Provided, That if it is impossible to detect such loss or damage immediately, he shall send such notice within three days after he receives the goods.

(2) If there is no notice as referred to in paragraph (1), the goods shall be presumed to have been delivered to the consignee without any loss or damage.

(3) Paragraphs (1) and (2) shall not apply in cases where the carrier or his employee was aware of such loss or damage. (4) If any loss of or damage to the goods has taken place, or there is such suspicion, the carrier and consignee shall provide necessary assistance for the inspection of such goods to the other party.

(5) The special agreement between the parties unfavorable to the consignee in violation of the provisions of paragraphs (1) through (4) shall not be valid.

[This Article Wholly Amended, Aug. 3, 2007]

Article 805 (Freight by Weight or Volume)

If freight is based on weight or volume of the goods, the amount of freight shall be determined by weight or volume of such goods at the time of delivery.

[This Article Wholly Amended, Aug. 3, 2007]

Article 806 (Freight by Period)

(1) If freight is based on period, the amount of the freight shall be determined by the period from the day on which loading of the goods was commenced to the day on which the unloading was completed.

(2) The period mentioned in paragraph (1) shall not include the period during which by reason of force majeure the ship has anchored at the port of loading or in the course of the voyage, or it has been repaired in the course of the voyage.

[This Article Wholly Amended, Aug. 3, 2007]

Article 807 (Obligation of Consignee, Master's Right of Retention) (1) When the consignee receives the goods, he shall be liable to pay the freight, the incidental expenses, the amount paid by the carrier on behalf of the cargo interests, demurrage charge, the contribution to the general average and Salvage Claims in proportion to the value of the goods, in accordance with the purport of the contract of carriage or of the bill of lading. (2) The master shall not be responsible to deliver the goods without exchange for the payment of the amount as referred to in paragraph (1).

[This Article Wholly Amended, Aug. 3, 2007]

Article 808 (Carrier's Right to Sell Goods by Auction) (1) In order to be paid for the amounts specified in Article 807 (1), the carrier may, with the permission of the court, auction the goods, and shall be entitled to receive payment in preference to others.

(2) A carrier may exercise his right as referred to in paragraph (1) over the goods even after the master has delivered them to the consignee: Provided, That the above shall not apply when thirty days have elapsed from the date of delivery or if a third party has acquired possession of such goods.

[This Article Wholly Amended, Aug. 3, 2007]

Article 809 (Sub-contract of Carriage by Voyage Charterer et. al. and Liability of Shipowner)

If a voyage charterer or a time charterer has entered into the contract of carriage with a third party under his own name, the shipowner shall assume the liability as prescribed in Articles 794 and 795 to the third party to the extent that the fulfillment of the contract belongs to the duties of the master.

[This Article Wholly Amended, Aug. 3, 2007]

Article 810 (Reasons for Termination of Contract of Carriage) (1) The contract of carriage shall be terminated for any of the following reasons:

1. If the ship has sunk or has been lost;

2. If the ship has become unrepairable;

3. If the ship has been captured; and

4. If the goods have been lost by reason of force majeure. (2) If any of the events mentioned in subparagraphs 1 through 3 of paragraph (1) has occurred during the voyage, the shipper shall pay the freight in proportion to the carriage performed up to the value of the existing goods.

[This Article Wholly Amended, Aug. 3, 2007]

Article 811 (Rescission of Contract for Reasons Stipulated in Act) (1) If the voyage or carriage has become illegal, or if by reason of force majeure fulfillment of the purpose of the contract has become impossible, either party may rescind the contract. (2) If, in cases where either of the reasons mentioned in paragraph (1) occurred in the course of the voyage, the contract has been terminated, the shipper shall pay the freight in proportion to the carriage performed.

[This Article Wholly Amended, Aug. 3, 2007]

Article 812 (Force Majure in Respect of a Part of Goods) (1) If either of the reasons mentioned in Articles 810 (1) 4 and Article 811 (1) has occurred in respect to a part of the goods, the shipper may load other goods in so far as the liability of the carrier does not increase thereby.

(2) If the shipper desires to exercise the right mentioned in paragraph (1), he shall unload or load the goods without delay. If he has neglected such unloading or loading, he shall pay the full amount of the freight.

[This Article Wholly Amended, Aug. 3, 2007]

Article 813 (Disposal of Cargo by Master and Freight) The carrier may demand the full payment of the freight in any of the following cases:

1. If the master disposed of the cargo in accordance with Article 750 (1); and

2. If the master disposed of the cargo in accordance with Article 865.

[This Article Wholly Amended, Aug. 3, 2007]

Article 814 (Extinction of Claims and Obligations of Carrier) (1) Any claims against and obligations of the carrier to the shipper or consignee shall, regardless of the grounds of the claims, be extinguished if no legal action is filed within one year after the carrier delivers or should have delivered the goods to the consignee: Provided, That this period may be extended by mutual agreement of both parties.

(2) In cases where the carrier consigns the carriage that he undertook to a third party, if the consignor or the consignee have reached an amicable compromise with the carrier or filed an action against the carrier within the period prescribed in paragraph (1), the claims and obligations of the carrier against the third party shall not extinguish notwithstanding paragraph (1) before three months elapse from the date the compromise was made or action was brought. Even if the carrier and the third party have made an agreement to the same effect as the proviso of paragraph (1), this paragraph shall apply.

(3) In the case of paragraph (2), if the carrier against whom the action was filed issues a notice of the legal proceedings to the third party within three months therefrom, the period of three months shall start from the time when the action has been finalized or otherwise has ended.

[This Article Wholly Amended, Aug. 3, 2007]

Article 815 (Mutatis Mutandis Applicable Provisions) The provisions of Articles 134, 136 through 140 shall apply mutatis mutandis to the carrier prescribed in this section. [This Article Wholly Amended, Aug. 3, 2007]

Article 816 (Liability of Multimodal Transporter) (1) If the carriage of goods the carrier undertook includes a stage other than sea carriage, the carrier shall assume liabilities in accordance with the law to be applied in the particular stage where the damage arose.

(2) If it is unclear in which stage of transport the damage occurred, or if the occurrence of the damage by nature cannot be confined to a certain stage, the carrier shall assume liabilities in accordance with the law to be applied in the stage where the transportation is the longest: Provided, That in cases where the length of transportation is the same or it is not possible to determine the stage where the transportation is the longest, the carrier shall assume liability in accordance with the law of the stage for which the freight is the most expensive.

[This Article Wholly Amended, Aug. 3, 2007]

SECTION II CONTRACT OF CARRIAGE OF PASSENGERS

Article 817 (Contract of Carriage of Passengers)

A carriage contract of passengers shall take effect when a carrier undertakes to carry a passenger from the point of departure to the destination by a ship and the passenger agrees to pay the fare to the carrier.

[This Article Wholly Amended, Aug. 3, 2007]

Article 818 (Nominative Passenger Ticket)

A nominative passenger ticket shall not be transferred to another person.

[This Article Wholly Amended, Aug. 3, 2007]

Article 819 (Duty of Providing Meals and lodging) (1) Unless otherwise agreed, meals of a passenger during the voyage shall be provided by the carrier.

(2) If the ship has to be repaired during a voyage, the carrier shall provide adequate lodging and meals for passengers during the period of repair: Provided, That the above shall not apply in cases where the carrier has provided them with the convenient transportation to the port of disembarkation without prejudicing their rights thereby.

(3) In the case mentioned in paragraph (2), the passenger may terminate the contract after paying the freight in proportion to the voyage performed.

[This Article Wholly Amended, Aug. 3, 2007]

Article 820 (Duty of Free Carriage of Luggage)

In the absence of any agreement to the contrary, the carrier shall not demand the freight for luggage which the passenger is entitled to bring on board with him pursuant to the contract. [This Article Wholly Amended, Aug. 3, 2007]

Article 821 (Delay of Boarding and Master's Right to Commence Voyage)

(1) If a passenger does not get on board at the time fixed for embarkation, the master may commence the voyage immediately. The same shall apply at the port of call during the course of the voyage.

(2) In the case of paragraph (1), the passenger shall pay the full amount of the fare.

[This Article Wholly Amended, Aug. 3, 2007]

Article 822 (Rescission of Contract by Passenger and Fare) If, prior to the commencement of the voyage, a passenger rescinds the contract, he shall pay one-half of the fare, and if he rescinds the contract after the commencement of the voyage, he shall pay the full amount of the fare.

[This Article Wholly Amended, Aug. 3, 2007]

Article 823 (Rescission of Contract for Reasons Stipulated by Law) If, prior to the commencement of the voyage, a passenger becomes incapable of making the voyage because of death, illness, or any other force majeure, the carrier may demand three-tenths of the fare, and if any of such reasons occur after the commencement of the voyage, the carrier may, at his discretion, demand either three-tenths of the fare or fare in proportion to the carriage performed.

[This Article Wholly Amended, Aug. 3, 2007]

Article 824 (Duty to Dispose of the Luggage of Deceased Passenger)

If a passenger dies, the master shall dispose of luggage brought by the deceased in such manner as will be in the best interest of his heirs.

[This Article Wholly Amended, Aug. 3, 2007]

Article 825 (Reasons for Termination of Contract Stipulated by Law)

The contract of carriage shall be terminated by any of the reasons mentioned in Article 810 (1) 1 through 3. If any of such reasons occurs during the voyage, the passenger shall pay the fare in proportion to the carriage performed.

[This Article Wholly Amended, Aug. 3, 2007]

Article 826 (Mutatis Mutandis Applicable Provisions) (1) The provisions of Articles 148, 794, 799 (1) and 809 shall apply mutatis mutandis to the carriage of passengers by sea. (2) The provisions of Articles 134, 136, 149 (2), 794 through 801, 804, 807, 809, 811 and 814 shall apply mutatis mutandis to the carriage of the luggage of the passengers that was entrusted to the carrier.

(3) The provisions of Articles 150, 797 (1) and (4), 798, 799 (1), 809 and 814 shall apply mutatis mutandis to the luggage of the passengers that was not entrusted to the carrier. [This Article Wholly Amended, Aug. 3, 2007]

SECTION III VOYAGE CHARTER

Article 827 (Voyage Charter Party)

(1) A voyage charter party shall take effect when a shipowner agrees to provide the whole or part of a ship that is manned and equipped for the carriage of goods on a particular voyage and the charterer agrees to pay the freight therefor.

(2) The provisions of this section shall apply mutatis mutandis to the voyage charter party for the carriage of passengers unless contrary to the nature thereof.

(3) Unless contrary to the nature thereof, the provisions of this section shall apply mutatis mutandis to the case where the charterer pays the freight per voyage although the shipowner is obliged to provide his vessel to the charterer for an agreed period of time. [This Article Wholly Amended, Aug. 3, 2007]

Article 828 (Charter Party)

A party to a charter party shall, upon demand by the other party, provide the charter party to the other party. [This Article Wholly Amended, Aug. 3, 2007]

Article 829 (Notice of Readiness for Loading Goods and Laytime for Loading)

(1) The shipowner shall, as soon as the preparations necessary for loading are completed, dispatch a notice thereof to the charterer without delay.

(2) If the laytime for loading is stipulated, such laytime shall commence from 13:00 hours of the day, if the notification as referred to in paragraph (1) is made before noon, and from 06:00 hours of the following day, if the notification is made in the afternoon. This laytime shall not include the day on which the loading is impossible by force majeure, and the day on which no loading work is done due to custom in the port.

(3) If any goods have been loaded after the passage of such laytime as referred to in paragraph (2), the carrier may demand reasonable remuneration.

[This Article Wholly Amended, Aug. 3, 2007]

Article 830 (Notice and Loading Where a third party is Loader) In cases where a third party other than the charterer loades the goods, if it is impossible for the master to ascertain such person or if such person fails to load the goods, the master shall, without delay, dispatch a notice thereof to the charterer. In such cases, the charterer may load the goods only within the laytime allowed for loading.

[This Article Wholly Amended, Aug. 3, 2007]

Article 831 (Charterer's Right to Request Commencement of Voyage and Master's Right to Commence Voyage)

(1) The charterer may request the master to commence the voyage even when all the goods are not loaded.

(2) The master may, with the lapse of the laytime allowed for loading, immediately commence the voyage, even if the charterer has not loaded all the goods.

(3) In cases mentioned in paragraphs (1) and (2), the charterer shall pay the full amount of the freight and expenses arising from his failure to load all the goods, and shall, if requested by the shipowner, provide adequate security.

[This Article Wholly Amended, Aug. 3, 2007]

Article 832 (Rescission of the Charter Party for the Vessel's Whole Space prior to Commencement of Voyage, etc.)

(1) Prior to the commencement of the voyage, the whole space charterer may rescind the contract upon payment of one-half of the freight.

(2) If, in the case of a charter for a return voyage, the whole space charterer terminates the charter prior to the voyage for return, he shall pay two-thirds of the freight.

(3) In the case of a charter which required a ship to sail from another port to the port of loading, paragraph (2) shall also apply when the whole space charterer terminated the charter party before the ship leaves the port of loading.

[This Article Wholly Amended, Aug. 3, 2007]

Article 833 (Partial Space Charter and Rescission of Charter prior to Commencement of Voyage, etc.)

(1) The partial space charterer or the shipper may rescind or terminate the charter party in accordance with Article 832 only when the rescission or the termination is done jointly with the other charterers and the other shippers.

(2) Except in cases mentioned in paragraph (1), even if the partial space charterer or the shipper has rescinded or terminated the charter party before the commencement of a voyage, he shall pay the full amount of the freight.

(3) Even before the commencement of the voyage, if the partial space charterer or the shipper has loaded the whole or a part of the goods, he may not rescind or terminate the charter party without obtaining the consent of the other charterers and the other shippers.

[This Article Wholly Amended, Aug. 3, 2007]

Article 834 (Duty to Pay Incidental Expenses and the Amount paid by the Carrier on behalf of the Cargo Interests, etc.) (1) Even if the charterer or the shipper rescinds or terminates the charter party in accordance with Articles 832 and 833 (1), he shall not be relieved of the liability to pay any incidental expenses and the amount paid by the shipowner on behalf of the cargo interests.

(2) In the case mentioned in Article 832 (2) and (3), the charterer or the shipper shall pay, in addition to the amount mentioned in paragraph (1), the amount of his contribution to the general average or Salvage Claims in proportion to the value of the goods.

[This Article Wholly Amended, Aug. 3, 2007]

Article 835 (Expenses of Loading and Unloading)

If, in the case mentioned in Articles 833 and 834, the whole or a part of the goods has been loaded, the charterer or the shipper shall cover the expenses of such loading and unloading. [This Article Wholly Amended, Aug. 3, 2007]

Article 836 (Effect of Failure to Load within Laytime allowed for Loading)

The charterer shall be deemed to have rescinded or terminated the charter party if he failed to load the goods within the laytime allowed for loading.

[This Article Wholly Amended, Aug. 3, 2007]

Article 837 (Termination of Charter Party after Commencement of Voyage)

After the commencement of a voyage, the charterer or the shipper may not terminate the charter party unless he pays the full amount of the freight, the amount paid by the shipowner on behalf of the cargo interests, the demurrage charge, contribution to general average or Salvage Claims, and any damages arising from unloading or provides adequate security therefor.

[This Article Wholly Amended, Aug. 3, 2007]

Article 838 (Unloading of Goods)

(1) If preparations necessary for unloading the goods are completed, the master shall without delay dispatch a notice thereof to the consignee.

(2) Article 829 (2) shall apply mutatis mutandis to the calculation of laytime allowed for unloading of the goods. (3) If any goods have been unloaded after the passage of such laytime pursuant to paragraph (2), the shipowner may demand reasonable remuneration.

[This Article Wholly Amended, Aug. 3, 2007]

Article 839 (Prohibition of Reduction of Shipowner's Liability) (1) No special agreement between the parties that reduces or exempts any obligation or liability of the carrier stipulated in this section in breach of Article 794 shall be valid. This provision shall also apply to a stipulation transferring the benefit of insurance that covers the goods to the shipowner, or to any similar stipulations. (2) Article 799 (2) shall apply mutatis mutandis to paragraph (1).

[This Article Wholly Amended, Aug. 3, 2007]

Article 840 (Extinction of Claims and Obligations of Shipowner) (1) The shipowner's claims against and obligations to the charterer or the consignee shall, regardless of the grounds of the claims, be extinguished if no legal action is filed within two years after the shipowner delivers or should have delivered the goods to the consignee: Provided, That the proviso in Article 814 (1) shall apply mutatis mutandis to this paragraph.

(2) The agreement between the shipowner and the charterer to shorten the period mentioned in paragraph (1) shall not be valid unless the agreement is explicitly stipulated in the contract of carriage.

[This Article Wholly Amended, Aug. 3, 2007]

Article 841 (Mutatis Mutandis Applicable Provisions) (1) Articles of 134, 136, 137, 140, 793 through 797, 798 (1) through (3), 800, 801, 803, 804 (1) through (4), 805 through 808, and 810 through 813 shall apply mutatis mutandis to the voyage charter party.

(2) In calculating the freight under Article 806 pursuant to paragraph (1), if the goods are loaded or unloaded after the lapse of the laytime allowed for loading under Article 829 (2) or the laytime allowed for unloading under Article 838 (2), the time taken to load and unload after the lapse of the stipulated laytime shall not be included in the time of loading or unloading, and the remuneration therefor shall be fixed separately in accordance with Article 829 (3) and Article 838 (3).

[This Article Wholly Amended, Aug. 3, 2007]

SECTION IV TIME CHARTER

Article 842 (Time Charter Party)

A time charter party shall take effect when the shipowner agrees to provide the charterer with a ship that is manned and equipped so that the charterer may use her for navigation or a specified period, and the charterer agrees to pay the hire therefor calculated by period.

[This Article Wholly Amended, Aug. 3, 2007]

Article 843 (Right of Time Charterer to Command Master) (1) The time charterer shall have the right to command the master for the use of the ship within the stipulated extent. (2) If the time charterer suffers loss due to the breach of the time charterer's reasonable orders by the master, seaman or other employees of the ship, the shipowner shall be liable to compensate for the loss.

[This Article Wholly Amended, Aug. 3, 2007]

Article 844 (Right of Shipowner to Retain and Auction Goods) (1) Articles 807 (2) and 808 shall apply mutatis mutandis in cases where the time charterer fails to pay the shipowner the hire or the amount paid by the shipowner on behalf of the time charterer, or fails to perform any similar obligations under the time charter party: Provided, That the shipowner may not assert these rights against a third party who has acquired the bill of lading issued by the time charterer in good faith.

(2) The right of the shipowner on the goods as referred to in paragraph (1) shall not be exercised beyond the charterage or freight range stipulated by the time charterer on the goods. [This Article Wholly Amended, Aug. 3, 2007]

Article 845 (Arrears of hire, Termination of Contract, etc.) (1) If the time charterer fails to pay the hire by the due date, the shipowner may rescind or terminate the charter party. (2) If the shipowner rescinds or terminates the charter party under paragraph (1) during voyage after the time charterer entered into the contract of the carriage with a third party and loaded the goods, the shipowner shall have the same liability to carry the goods as the time charterer to the person interested in the goods. (3) If the shipowner notifies in writing the person interested in the goods of his intention to rescind or terminate the charter party and continue the carriage under paragraph (2), the right of pledge shall be deemed to have been established on the charterage or freight, which the time charterer has against the person interested in the goods, as a security for the hire, the amount paid by the shipowner on behalf of the time charterer and other similar claims arising from the time charter.

(4) The provisions of paragraphs (1) through (3) shall not affect the claim for damages by the shipowner or the person interested in the goods against the time charterer.

[This Article Wholly Amended, Aug. 3, 2007]

Article 846 (Extinction of Claim under Time Charter Party) (1) Any claims between the parties arising from the time charter shall be extinguished if no legal action is filed within two years from the date the ship was returned to the shipowner: Provided, That in this case, the proviso of Article 814 (1) shall apply mutatis mutandis.

(2) Article 840 (2) shall apply mutatis mutandis to the case mentioned in paragraph (1).

[This Article Wholly Amended, Aug. 3, 2007]

SECTION V BAREBOAT CHARTER

Article 847 (Bareboat Charter Party)

(1) The bareboat charter party shall take effect when the shipowner agrees to provide the charterer with a ship so that the charterer may use the ship for navigation under his management and control and the charterer agrees to pay hire therefor. (2) Even in cases where the shipowner is obliged to provide the master and seamen, the contract shall be deemed to be a bareboat charter party if the purpose of the contract is for the crew to navigate the ship under the management and control of the charterer.

[This Article Wholly Amended, Aug. 3, 2007]

Article 848 (Legal Nature)

(1) The provisions with respect to the lease in the Civil Act shall apply mutatis mutandis to the bareboat charter party unless contrary to its nature.

(2) Even in cases where the charterer holds the right to purchase or take over the vessel after the charter period, or where the charterer entered into the bareboat charter party to provide a finance security to the creditor by designating his as the shipowner, the parties hereto shall have the right and obligation pursuant to the provisions of this section during the charter period. [This Article Wholly Amended, Aug. 3, 2007]

Article 849 (Bareboat Charterer's Right to Demand Registration and Effect Thereof)

(1) The bareboat charterer may demand the shipowner to cooperate in registering the bareboat charter.

(2) The bareboat charter of a ship, if registered, shall be effective against the third party from the time the registration is made.

[This Article Wholly Amended, Aug. 3, 2007]

Article 850 (Bareboat Charter of Ship and Legal Relation against third party)

(1) If the bareboat charterer of a ship uses the ship for navigation for the purpose of commercial activities or any other profit-making purposes, the bareboat charterer shall, in relation to the third party, have the same rights and obligations as the shipowner in matters with regard to the use of the ship. (2) In the case mentioned in paragraph (1), any maritime lien which arises in connection with the use of the ship shall also be effective against the shipowner: Provided, That the same shall not apply in cases where the holder of the maritime lien was aware that the use was not in conformity with the bareboat charter party. [This Article Wholly Amended, Aug. 3, 2007]

Article 851 (Extinction of Claims under Bareboat Charter) (1) The claims arising from the bareboat charter between the parties hereto shall be extinguished if no legal action is filed within two years from the date the ship was returned to the shipowner. In this case, the proviso of Article 814 (2) shall apply mutatis mutandis.

(2) Article 840 (2) shall apply mutatis mutandis to the case mentioned in paragraph (1) of this Article.

SECTION VI TRANSPORT DOCUMENT

Article 852 (Issuance of Bill of Lading)

(1) The carrier shall, upon demand by the shipper, provide him with a bill of lading in one or more copies after receipt of the goods.

(2) The carrier shall, upon demand by the shipper, provide him with the on-board bill of lading in one or more copies after loading of the goods, or shall indicate such loading on the bill of lading mentioned in paragraph (1).

(3) The carrier may authorize the master or any other agent to provide the bill of lading or to indicate loading on the bill of lading pursuant to paragraph (2).

[This Article Wholly Amended, Aug. 3, 2007]

Article 853 (Matters to be Entered in Bill of Lading) (1) The bill of lading shall include the following matters, and the carrier shall inscribe his name and affix his seal or sign thereon:

1. Name, nationality and tonnage of the ship;

2. Type, weight or volume of the goods, type of packing, number and marks, which are notified in writing by the shipper;

3. Apparent condition of the goods;

4. Name or trade name of the charterer or the shipper;

5. Name or trade name of the consignee or the notify party;

6. Loading port;

7. Unloading port;

8. Freight;

9. Issuing date and place;

10. If several bills of lading are issued, the number thereof;

11. Name or trade name of the carrier; and

12. Seat of the main office of the carrier. (2) If there is any justifiable reason to doubt that the weight, volume, number or marks of the goods as referred to in paragraph (1) 2 does not accurately indicate the goods which the carrier actually received, or if there is no adequate way to confirm it, such entry may be omitted.

(3) The shipper shall be deemed to guarantee to the carrier that the information as referred to in paragraph (1) 2 is correct. (4) If the carrier has made notification of the goods to the notify party specified in the bill of lading, he shall be deemed to have made the notification to the shipper, the holder of the bill of lading and other consignees.

[This Article Wholly Amended, Aug. 3, 2007]

Article 854 (Effect of Statement in Bill of Lading) (1) If the bill of lading is issued in accordance with Article 853 (1), it shall be presumed that the contract of carriage of individual goods was concluded between the carrier and the shipper and the goods were received or loaded, as stated in the bill of lading. (2) Vis--vis the holder who obtained the bill of lading mentioned in paragraph (1) in good faith, it shall be deemed that the carrier received or loaded the goods as stated in the bill of lading and the carrier shall be liable in accordance with the statement in the bill of lading.

[This Article Wholly Amended, Aug. 3, 2007]

Article 855 (Charter Party and Bill of Lading)

(1) If the charterer demands, the shipowner shall issue the bill of lading pursuant to Articles 852 and 853 after receipt of the goods.

(2) In cases where the bill of lading was issued in accordance with paragraph (1), it shall be presumed that the shipowner received or loaded the goods as stated in the bill of lading. (3) In a case where a third party obtained the bill of lading in paragraph (1) in good faith, the shipowner shall have the right and obligation as the carrier in accordance with Article 854 (2). If the shipowner issued the bill of lading to a third party upon demand of the charterer, the same shall apply.

(4) In the case of paragraph (3), a third party shall be deemed as the shipper pursuant to Articles 833 through 835 and Article

837. (5) In the case of paragraph (3), a special agreement to mitigate or exempt the obligation and liability of the carrier in breach of Article 799 shall not be made.

[This Article Wholly Amended, Aug. 3, 2007]

Article 856 (Delivery of Certified Copy)

The charterer or the shipper who has been provided with a bill of lading shall, upon demand by the issuer, inscribe his name and affix his seal or sign on a copy of the bill of lading and deliver it to the issuer.

[This Article Wholly Amended, Aug. 3, 2007]

Article 857 (Multiple Copies of Bill of Lading and Delivery of Goods at Port of Unloading)

(1) At the port of unloading, even in cases where the holder of only one of multiple copies of the bill of lading demands the delivery of the goods, the master shall not refuse to deliver the goods.

(2) If the holder of only one of multiple copies of the bill of lading has taken delivery of the goods in accordance with paragraph (1), the other copies of bill of lading shall become null and void. [This Article Wholly Amended, Aug. 3, 2007]

Article 858 (Multiple Copies of Bill of Lading and Delivery of Goods at Places other than Port of Unloading)

At places other than the port of unloading, the master shall not deliver the goods except upon receipt of all the copies of the bill of lading.

[This Article Wholly Amended, Aug. 3, 2007]

Article 859 (Demand for Delivery of Goods by Plural Holders and Deposit)

(1) If two or more holders of the bill of lading demanded the delivery of the goods, the master shall without delay deposit the goods with the competent authorities and dispatch notice thereof to each person who demanded such delivery.

(2) If, after the master has delivered a part of the goods in accordance with Article 857 (1), another holder has demanded delivery of the goods, paragraph (1) shall apply in respect of the remaining goods.

[This Article Wholly Amended, Aug. 3, 2007]

Article 860 (Priority of Plural Holders of Bill of Lading) (1) As to the goods deposited with the competent authorities pursuant to Article 859, the right of the holder who received the bill of lading earlier from the same former holder who delivered the bills of lading to plural holders shall take priority over the right of the other holders who received the bill later.

(2) In regards to the bill of lading dispatched to an absentee, the time when a bill of lading was dispatched shall be deemed to be the time it is delivered.

[This Article Wholly Amended, Aug. 3, 2007]

Article 861 (Mutatis Mutandis Applicable Provisions) Articles 129, 130, 132 and 133 shall apply mutatis mutandis to the bill of lading in Articles 852 and 855.

[This Article Wholly Amended, Aug. 3, 2007]

Article 862 (Electronic Bill of Lading)

(1) The carrier may issue an electronic bill of lading by registering it with competent registration authorities designated by the Minister of Justice with the consent of the shipper or the charterer, instead of issuing the bill of lading in accordance with Articles 852 or 855. In this case, the electronic bill of lading has the same legal effect as the bill of lading under Articles 852 and

855. (2) The electronic bill of lading shall include the entries of each subparagraph of Article 853 (1) and take effect only when the carrier sends his electronic signature and the charterer or the shipper receives the same.

(3) The right holder of the electronic bill of lading may transfer the right by completing the electronic document that records the endorsement and sending the other party the same with the electronic bill of lading attached thereto through the designated registration authorities.

(4) If the other party receives the electronic document with the record of endorsement as prescribed in paragraph (3), this shall have the same legal effect as endorsing and delivering the bill of lading in accordance with Articles 852 and 855, and the right holder who received the electronic document pursuant to paragraphs (2) and (3) shall obtain the same right as the person who received the bill of lading in accordance with Articles 852 and 855. (5) The requirements for designating competent authorities for the registration of the bill of lading, the electronic methods of issuance and endorsement thereof, the specific procedure of receiving the goods, and other necessary matters shall be prescribed by Presidential Decree.

[This Article Wholly Amended, Aug. 3, 2007]

Article 863 (Issuance of Sea Waybill)

(1) If the charterer or the shipper demands, the carrier may issue the sea waybill instead of the bill of lading mentioned in Article 852 or 855. The sea waybill may be issued electronically with the agreement of the parties hereto.

(2) The matters stipulated in each subparagraph of Article 853 (1) shall be entered in the sea waybill, in addition to the indication that the document is the sea waybill, and the carrier shall inscribe name and affix his seal or sign thereon.

(3) Paragraphs (2) and (4) of Article 853 shall apply mutatis mutandis to the sea waybill.

[This Article Wholly Amended, Aug. 3, 2007]

Article 864 (Effect of Sea Waybill)

(1) In cases where the sea waybill is issued in accordance with the provisions of Article 863 (1), it shall be presumed that the carrier received or shipped the goods as stated in the sea waybill. (2) If there are justifiable reasons to believe that the receiver of the goods is the consignee or his agent stipulated in the sea waybill when the carrier delivers the goods, the carrier shall be relieved from the liability even if the receiver is not the right holder. [This Article Wholly Amended, Aug. 3, 2007]

CHAPTER III MARITIME PERIL

SECTION I GENERAL AVERAGE

Article 865 (Requirements of General Average)

Damage or expenditure which arise from the disposition of the ship or the cargo by the master in order to preserve the ship and the cargo from a common peril shall constitute general average. [This Article Wholly Amended, Aug. 3, 2007]

Article 866 (Contributions to General Average)

General average shall be borne by the respective interested persons in the proportion of the value of the ship and the cargo preserved from a common peril and one-half of the freight to the amount of the general average.

[This Article Wholly Amended, Aug. 3, 2007]

Article 867 (Computation General Average Contribution) With regard to the determination of general average contribution, the value of the ship shall be the value at the time and place of arrival, and the value of the cargo shall be the value at the time and place of unloading: Provided, That in regard to the cargo, the freight and any other expenses which are exempted from payment due to the loss of or damage to such cargo shall be deducted from its value.

[This Article Wholly Amended, Aug. 3, 2007]

Article 868 (Limitation of Liability of General Average Contributor) The persons who are liable for general average contribution in accordance with Articles 866 and 867 shall be liable only to the extent of the values at the time when the ship arrives or the cargo is delivered.

[This Article Wholly Amended, Aug. 3, 2007]

Article 869 (Computation of General Average Amount) With regard to the determination of the amount of general average, the value of the ship shall be the value at the time and place of arrival, and the value of the cargo shall be the value at the time and place of unloading: Provided, That in regard to the cargo, all the expenses which have been exempted from payment thereof due to the loss of or damage to such cargo shall be deducted from its value.

[This Article Wholly Amended, Aug. 3, 2007]

Article 870 (Right of Reimbursement against Person Liable) If a common peril of the ship and cargo arises from any defect of the ship or cargo or from any negligent act, the contributor to general average may exercise the right of reimbursement against the person liable for such peril.

[This Article Wholly Amended, Aug. 3, 2007]

Article 871 (Exclusion from Contributions to General Average) The value of the arms installed on board a ship, the wages of the crew, and the food and clothing of the crew and passengers, if preserved, shall not be included in the calculation of contributions to general average, and such value shall be included in the amount of general average if lost.

[This Article Wholly Amended, Aug. 3, 2007]

Article 872 (Exclusion from Claim for Contribution to General Average)

(1) The value of any appurtenances not included in the inventory of appurtenances, the goods loaded without the bill of lading or any other document available as a basis for the valuation of the cargo, or money or the negotiable instruments and any other valuable goods of which the particulars and value are not expressed, if preserved, shall be included in the calculation of contributions to general average, whereas such value shall not be included in the amount of general average if lost.

(2) Paragraph (1) of this Article shall also apply to the goods loaded on deck: Provided, That the same shall not apply in cases where loading on deck is allowed customarily and in cases of coastal navigation.

[This Article Wholly Amended, Aug. 3, 2007]

Article 873 (False Entry of Value of Cargo and General Average) (1) If, in the bill of lading or any other document available as a basis for the valuation of the cargo, the value of the cargo has been stated higher than its actual value, in cases where the cargo is preserved, the amount of contributions to general average shall be determined upon the basis of the value so stated, and if the value of the cargo has been stated lower than its actual value, the value so stated shall be the amount of general average if the cargo is lost. (2) Paragraph (1) shall apply mutatis mutandis in cases where a false entry was made regarding any matters that may affect the value of the cargo.

[This Article Wholly Amended, Aug. 3, 2007]

Article 874 (Recovery of Damage which is General Average) If, after the shipowner, charterer, shipper, or any other person interested contributed to general average, the ship, its appurtenances or the whole or a part of the cargo was restored to the owner, he shall return the amount of money he received as general average money after deducting therefrom any salvage and any damage caused by a partial loss.

[This Article Wholly Amended, Aug. 3, 2007]

Article 875 (Extinction of General Average Claim) Any claim arising from general average or claim for the reimbursement pursuant to Article 870 shall be extinguished if no legal action is filed within one year from the date the adjustment thereof is completed. In this case, the proviso of Article 814 (1) shall apply mutatis mutandis.

[This Article Wholly Amended, Aug. 3, 2007]

SECTION II COLLISION OF VESSELS

Article 876 (Provisions Applicable to Collision of Vessels) (1) Where a collision occurs between seagoing vessels or between a seagoing vessel and a vessel of inland navigation, the compensation for damages caused to the vessels or to any things or persons on board therof, shall be settled in accordance with the provisions in this section, in whatever waters the collision takes lace.

(2) The "collision of vessels" mentioned in this section means effecting, by act or ommission relating to the steering of vessels, damage to the other ship or to persons or things on board among two or more ships and does not require actual contact between the vessels.

[This Article Wholly Amended, Aug. 3, 2007]

Article 877 (Collision due to Force Majeure)

If a collision is caused by force majeure, or if causes of the collision are left in doubt, those who suffer the damages shall not claim damages.

[This Article Wholly Amended, Aug. 3, 2007]

Article 878 (Collision caused by Fault of One Party) If a collision is caused by the fault of the crew of one of the vessels, the owner of the vessel at fault shall be liable for compensation for the damages arising therefrom.

[This Article Wholly Amended, Aug. 3, 2007]

Article 879 (Collision caused by Fault of Both Parties) (1) When a collision is caused by the fault of the crew of both vessels, the owner of each vessel shall be liable for the damages in proportion to the degree of the faults respectively committed. In this case, if it is not possible to establish the degree of the respective faults, the liability shall be apportioned equally. (2) In the case mentioned in paragraph (1) of this Article, the owners of both vessels shall be jointly and severally liable for death or personal injury of third parties.

[This Article Wholly Amended, Aug. 3, 2007]

Article 880 (Collision caused by Fault of Pilot)

Even in cases where a collision is caused by the fault of the pilot of a vessel, the owner of such vessel shall be liable for damages in accordance with Articles 878 and 879.

[This Article Wholly Amended, Aug. 3, 2007]

Article 881 (Extinction of Claims Arising from Collision) The claims for compensation for the damage caused by collision of vessels shall be extinguished if no legal action is instituted within two years from the date of the collision. In this case, the proviso of Article 814 (1) shall apply mutatis mutandis.

[This Article Wholly Amended, Aug. 3, 2007]

CHAPTER III SALVAGE

Article 882 (Requirements for Salvage)

A person who, without any duty to do so, salvaged a ship in distress, its cargo or any other things on any water surface, may claim reasonable rewards for the result obtained from such efforts. The same shall apply to salvage operation between seagoing ships and ships of inland navigation.

[This Article Wholly Amended, Aug. 3, 2007]

Article 883 (Determination of Salvage Rewards)

In cases where there is no special stipulation as to salvage rewards, if no agreement is made as to the amount thereof between the parties, the court shall, upon application from the parties, determine the amount, taking into consideration the salved value of the vessel and other property, the degree of distress, the efforts and expenses of the salvor, the degree of risk run by the salvor or the salvage equipment, the result of salvage, efforts to prevent environmental damage and any other relevant circumstances. [This Article Wholly Amended, Aug. 3, 2007]

Article 884 (Limitation on Amount of Salvage Reward) (1) Unless agreed otherwise, the amount of salvage reward shall not exceed the value of the salved object.

(2) If there is a maritime lien with higher priority, the amount of the salvage reward shall not exceed the amount that remains after the amount of the claim of the person having such maritime lien is deducted.

[This Article Wholly Amended, Aug. 3, 2007]

Article 885 (Special Compensation for Salvage Operation for Prevention of Environmental Damage)

(1) If a vessel itself or its cargo threatened damage to the environment, the salvor who carried out salvage operations involving the prevention or minimization of damage to the environment, may claim, without regard to whether the salvage operation was successful and without regard to Article 884, a special compensation for the expenses incurred during the salvage operation. (2) The "expenses" in paragraph (1) of this Article means the out-of-pocket expenses reasonably incurred by the salvor in the salvage operation and fair remuneration for the equipment and personnel used in the salvage operation.

(3) If the salvor by his salvage operations has prevented or minimized damage to the environment, he can claim for an increase in the special compensation, and the court shall decide whether to increase the special compensation and the amount thereof taking into account the particulars prescribed in Article 883. In this case, even if the special compensation is ordered to be increased, it shall not exceed 200% of the amount of the expenses in paragraph (1) of this Article.

(4) If the salvor, intentionally or negligently, failed to minimize or prevent the environmental damage, the court may reduce or deny the amount of the special compensation under paragraphs (1) and (3) of this Article.

(5) If a salvor who carried out one salvage operation may claim the reward under in Article 882 in addition to the special compensation prescribed in the provisions from paragraph (1) through (4) of this Article, he may claim the bigger amount as the salvage claims.

[This Article Wholly Amended, Aug. 3, 2007]

Article 886 (Duty to Pay Salvage Claims)

The shipowner and other salved property interests shall be liable to pay the salvage claims including salvage reward and special compensation in proportion to the respective values of the salved vessel and property.

[This Article Wholly Amended, Aug. 3, 2007]

Article 887 (Special Stipulation on Salvage)

(1) In cases where the parties concluded the salvage contract beforehand and the salvage operation was carried out in accordance with the contract, the provisions of this Section shall apply to the matters not prescribed in the salvage contract unless to the contrary of its nature.

(2) Even where the amount of salvage claims has been stipulated, the court, if the amount is considerably unreasonable, may increase or reduce such amount taking into account the particulars of Article 883.

[This Article Wholly Amended, Aug. 3, 2007]

Article 888 (Apportionment of Salvage Claims among Joint Salvors) (1) If two or more persons have engaged in salvage operation together, Article 883 shall apply mutatis mutandis to the apportionment rate of salvage claims.

(2) The person who has engaged in saving human life may also share salvage claims in accordance with paragraph (1) of this Article.

[This Article Wholly Amended, Aug. 3, 2007]

Article 889 (Distribution of Salvage Claims Within a Ship) (1) If a ship is engaged in the salvage operation and received the salvage claims, the amount of damage caused to the ship and the expenses for the salvage operation shall be paid to the shipowner, and a half of the balance shall be paid to the master and to the seamen.

(2) As to the distribution of the salvage claims to be paid to the seamen in accordance with paragraph (1) of this Article, the master shall, prior to the termination of voyage, draw up the distribution list, taking into consideration the efforts of each seaman, the results thereof and the relevant circumstances, and notify the seamen thereof.

[This Article Wholly Amended, Aug. 3, 2007]

Article 890 (Salvage by Tugboat)

In case of the salvage of a vessel or a cargo on board the vessel by a tugboat, a salvage claims shall not be demanded unless any special efforts, which is not considered to be the performance of the contract of towage, has been provided.

[This Article Wholly Amended, Aug. 3, 2007]

Article 891 (Remuneration between Ships Belonging to Same Owner)

Even between ships which belong to the same owner, any person who has been engaged in salvage operation may demand reasonable salvage claims.

[This Article Wholly Amended, Aug. 3, 2007]

Article 892 (Persons who shall not Demand Salvage Claims) The persons falling under any of the following subparagraphs shall not demand salvage claims:

1. Person who has been employed by the salved ship;

2. Person who has caused the marine accidents, either intentionally or by negligence;

3. Person who has forcibly effected salvage, notwithstanding the refusal of salvage for justifiable reasons; and

4. Person who has concealed or disposed of any salved goods without justifiable reasons.

[This Article Wholly Amended, Aug. 3, 2007]

Article 893 (Salvor's Maritime Lien)

(1) The salvage claims of the person who has been engaged in the salvage operation shall have a maritime lien on the salved cargo: Provided, That such lien shall not be exercised against the cargo that the debtor delivered to a third party. (2) The provisions relating to the maritime lien of Article 777 shall apply mutatis mutandis to the maritime lien mentioned in paragraph (1) of this Article, unless contrary to its nature. [This Article Wholly Amended, Aug. 3, 2007]

Article 894 (Master's Authority concerning Payment of Salvage Claims)

(1) The master has authority to do, on behalf of the debtor who has to pay salvage claims, all judicial and extra-judicial acts relating to the payment of the salvage claims.

(2) The master may himself become a party to an action relating to salvage claims and the final judgment in such action shall also be valid for the debtors of the salvage claims. [This Article Wholly Amended, Aug. 3, 2007]

Article 895 (Extinction of Salvage Claims)

Any salvage claims shall be extinguished if no action is instituted within two years from the date the salvage is completed. In this case, the proviso of Article 814 (1) shall apply mutatis mutandis.

[This Article Wholly Amended, Aug. 3, 2007]


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