Himalaya Clause: Everything You Need to Know
A Himalaya clause is typically included in a transportation contract or a bill of lading with the purpose of assisting the carrier by limiting liabilities.3 min read
A Himalaya clause is one that is typically included in a transportation contract or a bill of lading with the purpose of assisting the carrier by limiting liabilities.
Definition of a Himalaya Clause
The name, Himalaya clause, originates from an English law case concerning a ship called the Himalaya.
A Himalaya clause benefits those who provide services in completing the duties of the individual directly protected by the contract. The individuals who benefit from the clause may include the following:
Himalaya clauses are usually provided in contracts for the shipment of goods known as a bill of lading.
The purpose of the clause is to provide a carrier's employees and subcontractors with the advantages of a forum selection clause while also protecting them from being sued by various jurisdictions.
Depending on the jurisdiction, a contract that is not maritime may be questionable concerning prosecution; however, it is usually excessive when it comes to a non-maritime contract.
The Himalaya clause is utilized in a transportation contract or a bill of lading, and establishes rights for those who are a third party and not privy to provisions given by the contract. Its purpose is to grant the benefits provided to the carrier to other individuals such as stevedores and longshoremen.
The following is an example of a current Himalaya clause:
It is hereby purposely acknowledged that no agent, employee, or subcontractor of the carrier will be held liable under any situation, to the owner of the product, shipper, or any other person applicable to this bill of lading for any delay, destruction, or loss that happens while carrying out employment duties. All provisions, limitations, exemptions, rights, and conditions given to the carrier will also be given to all employees and agents of the carrier. The carrier is considered to be the acting agent for all individuals who are said to be his or her employees, agents, or subcontractors, and all these individuals will be considered covered in the contract discussed in this bill of lading.
As mentioned, a Himalaya clause is typically included in either the bill of lading or some other type of transportation contract.
When used in a transportation contract, the clause provides the benefits allocated to the carrier to the employees of the carrier such as:
By utilizing the Himalaya clause, a carrier can use the benefits and protection provided to him or her by the owner of the product to also protect the individuals and businesses it hires to help transport, load, and unload products.
For instance, if a carrier employs a separate company to assist in loading and unloading products, and a product gets dropped and damaged, both the separate company and the carrier will use the Himalaya clause to protect themselves from liability.
Examples of Himalaya Clauses
The following are examples of Himalaya clauses:
- It is hereby explicitly granted that all agents, subcontractors, or employees of the carrier will be held liable to the owners, in any situation, for any misplacement, destruction, or setback resulting from actions taken while performing duties throughout this employment, and without bias, all benefits and rights given to the carriers will also be available to the employees, agents, and subcontractors.
- No agent, subcontractor, or servant of the carrier will be held liable to the owner for any misplacement, destruction, or setback of any kind due to any actions taken while carrying out duties required of the servant, agent, or subcontractor hired by the carrier; however, this does not forgo the liability in the case of intentional wrongful acts, fraud, neglect, or a breach of contract by the carrier or its employees, agents or subcontractors.
Himalaya Clauses Using Arbitration Clauses
The Himalaya clause came to be after the English court case, Adler v. Dickinson, declared that a ship called the Himalaya could include a clause protecting its employees from liability.
This clause is universally approved with the exception of common law authority.
While this clause may occasionally be found in a charterparty, it is almost always provided in bills of lading established by those who carry products overseas.
Usually, the carrier privy to the contract does not actually carry the products by sea, but instead, hires other parties to do the transporting for him or her.
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