Clause Paramount
A clause in a bill of lading or charter party that incorporates an international liability regime into the contract, usually the Hague or Hague-Visby Rules, and makes it prevail over other terms.
Maritime conventions apply by law only to certain voyages, for example under a bill of lading between state parties. For others, and in particular for charter parties that these conventions do not govern, the parties may choose to submit to them through a Paramount clause. The clause makes the designated rules applicable as a matter of contract, with their seaworthiness obligations, excepted perils, liability limits and one-year time bar. It prevails over any contrary term of the contract, hence its name. Its drafting is a source of litigation: a vague reference to governing law, a reference to a national statute or an extension to phases outside the sea voyage may change the applicable limit or the time for suit. For the cargo insurer pursuing recovery after a loss, reading the Paramount clause is the first step to know whom to sue, within what time and for how much.
A voyage charter concluded in 2023 with a Paramount clause referring to the Hague-Visby Rules limits the owner's liability, for 400 tons of damaged steel, to 800,000 SDR, that is 2 SDR per kilogram, and subjects the claim to the one-year time bar.
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