Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 1

Chapter: 482 MERCHANT SHIPPING (LINER CONFERENCES)
ORDINANCE

Gazette Number Version Date


Long title 30/06/1997


An Ordinance to provide for the implementation of the Convention on a Code of Conduct for Liner Conferences
signed at Geneva on 6 April 1974; and for connected purposes.

(Enacted 1995)


[14 July 1995]

(Originally 59 of 1995)

Section: 1 Short title 30/06/1997


This Ordinance may be cited as the Merchant Shipping (Liner Conferences) Ordinance.
(Enacted 1995)


Section: 2 Interpretation 30/06/1997


(1) In this Ordinance, unless the context otherwise requires-
"Article" means an Article of the Code;
"the Code" (《守則》) means the Convention on a Code of Conduct for Liner Conferences signed at Geneva on 6

April 1974 as set out in Schedule 1 and includes any revision thereof as defined in section 15(2);
"conciliation" (調解) means international mandatory conciliation under Chapter VI of the Code, and references to the

institution or completion of conciliation proceedings shall be construed in accordance with subsection (2);
"conference" (公會) has the meaning given to that term by Chapter I of the Code;
"judgment" (判決), in relation to proceedings arising out of the Code, means any judgment, decree, order, award,

recommendation or determination of any description given or made in such proceedings, and references to the
giving of a judgment shall be construed accordingly;

"mandatory provision" (強制性條文), in relation to the Code, means a provision identified as such by the Merchant
Shipping (Liner Conferences) (Mandatory Provisions) Regulations set out in Schedule 2;

"proceedings arising out of the Code" (《守則》所引起的程序) means legal proceedings, conciliation proceedings,
arbitration proceedings or any other proceedings for the determination or resolution of a dispute arising out of
the Code;

"trade" (貿易、貨載承運、貨運、航運、航線) has the same meaning as in the Code.
(2) For the purposes of this Ordinance, conciliation proceedings relating to a dispute are instituted when a party

to the dispute requests that it be referred to conciliation and are completed when the conciliators notify the parties of
their recommendation.

(Enacted 1995)

Section: 3 Application of the Merchant Shipping (Liner Conferences)

(Mandatory Provisions) Regulations
23 of 1998 01/07/1997



Remarks:
Adaptation amendments retroactively made - see 23 of 1998 s. 2


(1) Those provisions of the Merchant Shipping (Liner Conferences) (Mandatory Provisions) Regulations set
out in Schedule 2 which provide that the provisions of Chapters I to V of the Code shall apply-

(a) to a conference which has its seat in Hong Kong, so far as it serves the trade between States which are
Contracting Parties to the Code; and

(b) to a conference which does not have its seat in Hong Kong, so far as it serves the trade between Hong



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 2

Kong and another Contracting Party to the Code, (Amended 23 of 1998 s. 2)
shall so apply whether or not the law of Hong Kong would fall to be applied in accordance with the ordinary rules of
international law.

(2) For the purposes of subsection (1) a conference has its seat in Hong Kong if, and only if-
(a) it is incorporated or formed under the law of Hong Kong; or
(b) its central management and control is exercised in Hong Kong.

(Enacted 1995)

Section: 4 Implied terms in the Merchant Shipping (Liner

Conferences) (Mandatory Provisions) Regulations
30/06/1997



Where the Merchant Shipping (Liner Conferences) (Mandatory Provisions) Regulations set out in Schedule 2
provide that a mandatory provision of the Code has effect as an implied term of a contract, then-

(a) any agreed terms which are to any extent inconsistent with that term shall to that extent be of no effect;
and

(b) without prejudice to paragraph (a), any agreed provision for the settlement of disputes arising out of
the contract shall apply to disputes arising out of that term only if-
(i) the parties to the contract have expressly agreed that that provision shall apply to such disputes;

or
(ii) the parties to the dispute in question agree that it should apply to that dispute.

(Enacted 1995)

Section: 5 Power to exclude or restrict operation of the Code for lack

of reciprocity
64 of 1999 01/07/1997



Remarks:
Adaptation amendments retroactively made - see 64 of 1999 s. 3


Where, after consultation with the Chief Executive, it appears to the Central People's Government that-
(a) a State which is a Contracting Party to the Code has made reservations when becoming a party to the

Code or has materially failed to fulfil its obligations under the Code; and
(b) the implementation of those reservations or, as the case may be, the failure to fulfil those obligations is

damaging to or threatens to damage the shipping or trading interests of Hong Kong,
the Chief Executive in Council may, with the concurrence of the Central People's Government, by regulations exclude
or restrict the operation of all or any of the provisions of Chapters I to V of the Code, as they apply by virtue of
regulations made under this Ordinance, in relation to trade with that State or in relation to persons having any such
connection with that State as may be specified in the regulations.

(Amended 64 of 1999 s. 3)
(Enacted 1995)


Section: 6 Liability of members of conference to be in proportion to

their responsibilities
30/06/1997



(1) Where proceedings arising out of the Code are brought against a member of a conference in respect of
damage or loss suffered by any person and other members of the conference are also liable (whether jointly or
otherwise) in respect of the same damage or loss, the liability of that member to make good that damage or loss shall
be in proportion to his responsibility.

(2) The reference in subsection (1) to the liability of other members of the conference is to any such liability
which has been or could be established in proceedings brought before the same court or other tribunal by or on behalf
of the person suffering the damage or loss; and for the purposes of this subsection and subsection (1) it is immaterial
by reference to what law the issue of liability was or would be determined.

(3) In ascertaining the responsibility of a member of a conference for the purposes of subsections (1) and (2),
regard shall be had not only to the member's part (if any) in the particular matters giving rise to the proceedings but
also to his general involvement in the affairs of the conference as shown, for example, by his share of the conference
trade, the nature of pooling arrangements to which he is a party and the extent to which he contributes to the



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 3

administrative expenses of the conference.
(4) Subsections (1) to (3) apply to any proceedings in Hong Kong and to proceedings elsewhere in which the

extent of the liability of a member of a conference falls to be determined by reference to the law of Hong Kong.
(5) Where in proceedings arising out of the Code-

(a) judgment is given against a member of a conference in respect of damage or loss caused to any person;
and

(b) the extent of the member's liability is not determined by reference to subsections (1) to (3),
the member shall not, if it is sought to enforce the judgment in Hong Kong, be liable to make good any greater
proportion of that damage or loss than if the extent of his liability had been determined by reference to those
subsections.

(6) A member of an unincorporated conference against which judgment is given, whether in Hong Kong or
elsewhere, in proceedings arising out of the Code in respect of damage or loss caused to any person by a breach of
duty by the conference, shall not, by virtue of section 7(3), be liable to make good any greater proportion of that
damage or loss than he would have been liable for if the proceedings had been brought against him and the other
members of the conference in respect of a duty owed by all the members of the conference and the extent of his
liability had been determined by reference to subsections (1) to (3).

(7) Subsections (5) and (6) shall not affect the enforcement in Hong Kong of a judgment required to be
enforced in Hong Kong by virtue of the Foreign Judgments (Reciprocal Enforcement) Ordinance (Cap 319).

(Enacted 1995)

Section: 7 Proceedings by or against unincorporated conferences 30/06/1997


(1) A conference which is not a body corporate may sue and be sued in its own name in proceedings arising out
of the Code.

(2) Subsection (1) applies to any proceedings in Hong Kong and to proceedings elsewhere in which the
capacity of a conference to sue and be sued in its own name falls to be determined by reference to the law of Hong
Kong.

(3) A judgment given for or against an unincorporated conference in proceedings brought against the
conference in its own name, whether in Hong Kong or elsewhere, shall be binding on the members of the conference,
and such a judgment given against a conference shall be enforceable-

(a) against any property held in trust for the purposes of the conference, to the like extent and in the like
manner as if the conference were a body corporate; and

(b) subject to section 6(6), against any member of the conference.
(4) Subsection (3) applies to judgments given by a court of Hong Kong or which are enforceable or entitled to

recognition in Hong Kong.
(Enacted 1995)


Section: 8 Restrictions on legal proceedings L.N. 38 of 2011 01/06/2011


(1) Legal proceedings arising out of a dispute relating to the application or operation of the Code may be
brought in Hong Kong only in the Court of First Instance.

(2) Proceedings arising out of a dispute to which Article 23(2) applies (disputes to be resolved within the
framework of the national jurisdiction concerned) shall not be entertained by the Court of First Instance except as
permitted by Article 23(2).

(3) The Court of First Instance shall stay proceedings before it if on the application of a party to the
proceedings, made after appearance but before delivering any pleadings or taking any other steps in the proceedings, it
is shown that the proceedings arise out of a dispute to which Article 23(4) applies and that-

(a) the dispute has not been referred to conciliation in accordance with Article 23(4) or has been so
referred and conciliation proceedings are still in progress; or

(b) the parties to the dispute have made an agreement to which Article 25(1) applies (agreed procedures in
lieu of conciliation) which is capable of being, or has been, performed.

(4) The Court of First Instance may attach to a stay granted under subsection (3) such conditions as appear to it
appropriate, and in particular, conditions with respect to the institution or prosecution of conciliation or other
proceedings.

(5) The Court of First Instance may remove a stay granted under subsection (3) if any condition attached under



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 4

subsection (4) is not complied with or if at any time it appears to the Court of First Instance that the circumstances are
such that a new application for the stay would not be granted.

(6) In relation to an arbitration agreement to which Article 25(1) applies, subsections (3) to (5) of this section
shall apply in place of section 20 of the Arbitration Ordinance (Cap 609). (Amended 17 of 2010 s. 112)

(Amended 25 of 1998 s. 2)

Section: 9 Time for bringing legal proceedings 30/06/1997


(1) No legal proceedings arising out of a dispute relating to the application or operation of the Code shall be
brought in Hong Kong after the end of the period of 2 years from the date on which the cause of action accrued or, if
later, the end of the period of 6 months from the date on which conciliation proceedings relating to the dispute were
completed or abandoned.

(2) The following provisions of the Limitation Ordinance (Cap 347) shall apply to the limitation period
prescribed by subsection (1) as they apply to the limitation periods prescribed by that Ordinance-

(a) section 22(1) (extension of limitation period in case of disability);
(b) section 26 (postponement of limitation period in case of fraud, concealment or mistake);
(c) section 35 (provisions as to set off or counterclaim).

(Enacted 1995)

Section: 10 Recognition and enforcement of recommendations etc. of

conciliators
25 of 1998 01/07/1997



Remarks:
Adaptation amendments retroactively made - see 25 of 1998 s. 2


(1) Where a recommendation of conciliators has become binding as between 2 or more parties in accordance
with Article 37 then, subject to subsection (2)-

(a) it shall be recognized in Hong Kong as conclusive, as between those parties of the dispute to which it
relates; and

(b) any of those parties may apply to have the recommendation registered for enforcement in the Court of
First Instance.

(2) A recommendation shall not be so recognized or enforced if it is affected by any of the matters mentioned
in Article 39(2)(a) to (d) (disability, fraud, coercion, public policy or irregularity of composition or procedure of the
conciliators), unless the affected part can be severed as mentioned in Article 39(3) and the remainder of the
recommendation recognized and enforced.

(3) Where the costs to be borne by a party to conciliation proceedings in accordance with Article 43(1) (costs
of conciliation and its administration) have been determined, the person to whom those costs are to be paid may apply
to have the determination registered for enforcement in the Court of First Instance.

(4) A party in whose favour an award of costs has been made by conciliators under Article 43(3) (vexatious or
frivolous proceedings) may apply to have the award registered for enforcement in the Court of First Instance.

(5) Provision may be made by the rules of court as to-
(a) the manner in which application is to be made for registration of a recommendation, determination or

award under this section;
(b) the documents to be produced and the matters to be proved by a person seeking recognition of a

recommendation or enforcement of a recommendation, determination or award;
(c) the manner in which a recommendation, determination or award is to be registered under this section;
(d) the manner in which and the conditions subject to which a recommendation, determination or award so

registered may be enforced.
(6) Subject to any provision made under subsection (5)(d), a recommendation, determination or award

registered under this section shall, for the purposes of its enforcement, be of the same force and effect, the Court of
First Instance shall have the same powers in relation to its enforcement, and proceedings for or with respect to its
enforcement may be taken, as if the recommendation, determination or award had been a judgment or decree
originally given in the Court of First Instance and had (where relevant) been entered.

(7) Where a recommendation, determination or award is registered under this section, the reasonable costs or
expenses of and incidental to its registration are recoverable as if they were sums recoverable under it, except that they



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 5

carry interest as if they were the subject of an order for the payment of costs or expenses made by the Court of First
Instance on the date of registration.

(8) The power to make rules of court under section 54 of the High Court Ordinance (Cap 4) shall include power
to make rules of court for the purposes of this section.

(Amended 25 of 1998 s. 2)

Section: 11 Chief Executive to be appropriate authority L.N. 362 of 1997;

64 of 1999
01/07/1997



Remarks:
Adaptation amendments retroactively made - see 64 of 1999 s. 3


(1) The appropriate authority for the purposes of the Code is the Chief Executive, or any person authorized by
him in writing. (Amended 64 of 1999 s. 3)

(2) Information obtained by the Chief Executive or any authorized person as appropriate authority for the
purposes of the Code shall not, without the consent of the person from whom it was obtained, be disclosed except-

(a) for the purpose of the discharge by the Chief Executive or any authorized person of his functions in
connection with the Code; or (Amended 64 of 1999 s. 3)

(b) for the purpose of any proceedings arising out of the Code; or
(c) with a view to the institution of, or otherwise for the purposes of, any criminal proceedings, whether

under this Ordinance or otherwise.
(3) A person who discloses any information in contravention of subsection (2) commits an offence and is liable

on conviction to a fine at level 3.
(4) Proceedings for an offence under subsection (3) shall not be brought except by or with the consent of the

Secretary for Justice. (Amended L.N. 362 of 1997)
(Enacted 1995)


Section: 12 Exclusion of restrictive practice laws 30/06/1997


(1) No agreement shall so far as it relates to any restriction to which this section applies be unenforceable by
virtue of any rule of law about unreasonable restraint of trade.

(2) This section applies to restrictions of any of the following descriptions which relate to the trade between
States which are Contracting Parties to the Code and are accepted within the framework of a conference, that is to say-

(a) restrictions in respect of the provision of international liner services accepted by the operators of such
services under an agreement to which 2 or more such operators are parties;

(b) restrictions in respect of the international liner services accepted by operators of such services or
persons for whom such services are provided under an agreement to which one or more such operators
and one or more such persons are parties;

(c) restrictions in respect of the supply or acquisition of any service in connection with the operation of
international liner services accepted by operators of such services or persons in the business of
supplying such a service under an agreement to which one or more such operators and one such
supplier are parties.

(3) Where a restriction relates only in part to the matters mentioned in subsection (2), this section applies to the
restriction so far as it relates to those matters.

(Enacted 1995)

Section: 13 Regulations 64 of 1999 01/07/1997


Remarks:
Adaptation amendments retroactively made - see 64 of 1999 s. 3


(1) The Chief Executive in Council may make regulations for- (Amended 64 of 1999 s. 3)
(a) clarifying the meaning of the provisions of the Code;
(b) supplementing the provisions of the Code;
(c) identifying provisions of the Code as mandatory provisions;



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 6

(d) with respect to any mandatory provision, specifying-
(i) the content of the duties expressly or impliedly imposed; and
(ii) the persons owing those duties and the persons to whom those duties are owed;

(e) providing for excluding or restricting, in proceedings for the enforcement of a duty arising under a
mandatory provision, liabilities or remedies of any description specified in the regulations; and

(f) giving effect to the Code and generally for the better implementation of the provisions of this
Ordinance.

(2) Regulations under subsection (1) may make different provisions for different cases and circumstances, such
as for different trades or according to the nationality of the parties involved.

(Enacted 1995)

Section: 14 Schedules 2 and 3 64 of 1999 01/07/1997


Remarks:
Adaptation amendments retroactively made - see 64 of 1999 s. 3


(1) The Merchant Shipping (Liner Conferences) (Mandatory Provisions) Regulations set out in Schedule 2 are
deemed to have been made by the Chief Executive in Council under section 13 and may be amended by the Chief
Executive in Council by regulations under that section.

(2) The Merchant Shipping (Liner Conferences) (Conditions for Recognition) Regulations set out in Schedule 3
are deemed to have been made by the Chief Executive in Council under section 13 and may be amended by the Chief
Executive in Council by regulations under that section.

(3) For the avoidance of doubt, it is declared that the Merchant Shipping (Liner Conferences) (Mandatory
Provisions) Regulations and the Merchant Shipping (Liner Conferences) (Conditions for Recognition) Regulations in
subsections (1) and (2) are subsidiary legislation.

(Amended 64 of 1999 s. 3)
(Enacted 1995)


Section: 15 Revision of the Code 64 of 1999 01/07/1997


Remarks:
Adaptation amendments retroactively made - see 64 of 1999 s. 3


(1) The Chief Executive in Council may by order published in the Gazette amend Schedule 1 in accordance
with any revision to the Code which may apply to Hong Kong from time to time. (Amended 64 of 1999 s. 3)

(2) In this section, "revision" (修改) means an omission from, addition to or alteration of the Code, and
includes the replacement or amendment of the Code to any extent by another agreement and any revision of any such
agreement.

(Enacted 1995)

Section: 16 Power to certify Contracting Parties 64 of 1999 01/07/1997


Remarks:
Adaptation amendments retroactively made - see 64 of 1999 s. 3


The Chief Executive may by order certify which States are Contracting Parties to the Code, and in respect of
what countries they are parties, and any such order shall be conclusive evidence of the matters therein certified.

(Amended 64 of 1999 s. 3)
(Enacted 1995)


Section: 17 Repeal 30/06/1997


(1) The Merchant Shipping (Liner Conferences) (Hong Kong) Order 1985 (App. III, p. CL1) is repealed.
(2) Sections 23 to 25 of the Interpretation and General Clauses Ordinance (Cap 1) apply to the repeal of the

enactment mentioned in subsection (1) as they apply to the repeal of an Ordinance.



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 7

(Enacted 1995)

Schedule: 1 30/06/1997


[sections 2(1) & 15]


CONVENTION ON A CODE OF CONDUCT FOR LINER CONFERENCES


OBJECTIVES AND PRINCIPLES


The Contracting Parties to the present Convention,


DESIRING to improve the liner conference system,

RECOGNIZING the need for a universally acceptable code of conduct for liner conferences,

TAKING into account the special needs and problems of the developing countries with respect to the activities

of liner conferences serving their foreign trade,

AGREEING to reflect in the Code the following fundamental objectives and basic principles-
(a) the objective to facilitate the orderly expansion of world sea-borne trade;
(b) the objective to stimulate the development of regular and efficient liner services adequate to the

requirements of the trade concerned;
(c) the objective to ensure a balance of interests between suppliers and users of liner shipping services;
(d) the principle that conference practices should not involve any discrimination against the shipowners,

shippers or the foreign trade of any country;
(e) the principle that conferences hold meaningful consultations with shippers' organizations, shippers'

representatives and shippers on matters of common interest, with, upon request, the participation of
appropriate authorities;

(f) the principle that conferences should make available to interested parties pertinent information about their
activities which are relevant to those parties and should publish meaningful information on their activities,


HAVE AGREED as follows-




PART ONE


CHAPTER I: DEFINITIONS


Liner conference or conference


A group of two or more vessel-operating carriers which provides international liner services for the carriage of
cargo on a particular route or routes within specified geographical limits and which has an agreement or arrangement,
whatever its nature, within the framework of which they operate under uniform or common freight rates and any other
agreed conditions with respect to the provision of liner services.




National shipping line


A national shipping line of any given country is a vessel-operating carrier which has its head office of
management and its effective control in that country and is recognized as such by an appropriate authority of that
country or under the law of that country.

Lines belonging to and operated by a joint venture involving two or more countries and in whose equity the
national interests, public and/or private, of those countries have a substantial share and whose head office of
management and whose effective control is in one of those countries can be recognized as a national line by the



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 8

appropriate authorities of those countries.


Third-country shipping line


A vessel-operating carrier in its operations between two countries of which it is not a national shipping line.


Shipper


A person or entity who has entered into, or who demonstrates an intention to enter into, a contractual or other
arrangement with a conference or shipping line for the shipment of goods in which he has a beneficial interest.




Shippers' organization


An association or equivalent body which promotes, represents and protects the interests of shippers and, if those
authorities so desire, is recognized in that capacity by the appropriate authority or authorities of the country whose
shippers it represents.


Goods carried by the conference


Cargo transported by shipping lines members of a conference in accordance with the conference agreement.


Appropriate authority


Either a government or a body designated by a government or by national legislation to perform any of the
functions ascribed to such authority by the provisions of this Code.


Promotional freight rate


A rate instituted for promoting the carriage of non-traditional exports of the country concerned.



Special freight rate


A preferential freight rate, other than a promotional freight rate, which may be negotiated between the parties
concerned.




CHAPTER II: RELATIONS AMONG MEMBER LINES


Article 1


Membership


(1) Any national shipping line shall have the right to be a full member of a conference which serves the foreign
trade of its country, subject to the criteria set out in Article 1(2). Shipping lines which are not national lines in any
trade of a conference shall have the right to become full members of that conference, subject to the criteria set out in
Article 1(2) and (3) and to the provisions regarding the share of trade as set out in Article 2 as regards third-country
shipping lines.

(2) A shipping line applying for membership of a conference shall furnish evidence of its ability and intention,



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 9

which may include the use of chartered tonnage, provided the criteria of this paragraph are met, to operate a regular,
adequate and efficient service on a long-term basis as defined in the conference agreement within the framework of
the conference, shall undertake to abide by all the terms and conditions of the conference agreement, and shall deposit
a financial guarantee to cover any outstanding financial obligation in the event of subsequent withdrawal, suspension
or expulsion from membership, if so required under the conference agreement.

(3) In considering an application for membership by a shipping line which is not a national line in any trade of
the conference concerned, in addition to the provisions of Article 1(2), the following criteria, inter alia, should be
taken into account-

(a) the existing volume of the trade on the route or routes served by the conference and prospects for its
growth;

(b) the adequacy of shipping space for the existing and prospective volume of trade on the route or routes
served by the conference;

(c) the probable effect of admission of the shipping line to the conference on the efficiency and quality of
the conference service;

(d) the current participation of the shipping line in trade on the same route or routes outside the framework
of a conference; and

(e) the current participation of the shipping line on the same route or routes within the framework of
another conference.

The above criteria shall not be applied so as to subvert the implementation of the provisions relating to participation in
trade set out in Article 2.

(4) An application for admission or readmission to membership shall be promptly decided upon and the
decision communicated by a conference to an applicant promptly, and in no case later than six months from the date of
application. When a shipping line is refused admission or readmission the conference shall, at the same time, give in
writing the grounds for such refusal.

(5) When considering applications for admission, a conference shall take into account the views put forward by
shippers and shippers' organizations of the countries whose trade is carried by the conference, as well as the views of
appropriate authorities if they so request.

(6) In addition to the criteria for admission set out in Article 1(2), a shipping line applying for readmission shall
also give evidence of having fulfilled its obligations in accordance with Article 4(1) and (4). The conference may give
special scrutiny to the circumstances under which the line left the conference.



Article 2


Participation in trade


(1) Any shipping line admitted to membership of a conference shall have sailing and loading rights in the
trades covered by that conference.

(2) When a conference operates a pool, all shipping lines members of the conference serving the trade covered
by the pool shall have the right to participate in the pool for that trade.

(3) For the purpose of determining the share of trade which member lines shall have the right to acquire, the
national shipping lines of each country, irrespective of the number of lines, shall be regarded as a single group of
shipping lines for that country.

(4) When determining a share of trade within a pool of individual member lines and/or groups of national
shipping lines in accordance with Article 2(2), the following principles regarding their right of participation in the
trade carried by the conference shall be observed, unless otherwise mutually agreed-

(a) the group of national shipping lines of each of two countries the foreign trade between which is carried
by the conference shall have equal rights to participate in the freight and volume of traffic generated by
their mutual foreign trade and carried by the conference;

(b) third-country shipping lines, if any, shall have the right to acquire a significant part, such as 20 per
cent, in the freight and volume of traffic generated by that trade.

(5) If, for any one of the countries whose trade is carried by a conference, there are no national shipping lines
participating in the carriage of that trade, the share of the trade to which national shipping lines of that country would
be entitled under Article 2(4) shall be distributed among the individual member lines participating in the trade in
proportion to their respective shares.



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 10

(6) If the national shipping lines of one country decide not to carry their full share of the trade, that portion of
their share of the trade which they do not carry shall be distributed among the individual member lines participating in
the trade in proportion to their respective shares.

(7) If the national shipping lines of the countries concerned do not participate in the trade between those
countries covered by a conference, the shares of trade carried by the conference between those countries shall be
allocated between the participating member lines of third countries by commercial negotiations between those lines.

(8) The national shipping lines of a region, members of a conference, at one end of the trade covered by the
conference, may redistribute among themselves by mutual agreement the shares in trades allocated to them, in
accordance with Article 2(4) to (7) inclusive.

(9) Subject to the provisions of Article 2(4) to (8) inclusive regarding shares of trade among individual
shipping lines or groups of shipping lines, pooling or trade-sharing, agreements shall be reviewed by the conference
periodically, at intervals to be stipulated in those agreements and in accordance with criteria to be specified in the
conference agreement.

(10) The application of the present Article shall commence as soon as possible after entry into force of the
present Convention and shall be completed within a transition period which in no case shall be longer than two years,
taking into account the specific situation in each of the trades concerned.

(11) Shipping lines members of a conference shall be entitled to operate chartered ships to fulfil their conference
obligations.

(12) The criteria for sharing and the revision of shares as set out in Article 2(1) to (11) inclusive shall apply
when, in the absence of a pool, there exists a berthing, sailing and/or any other form of cargo allocation agreement.

(13) Where no pooling, berthing, sailing or other trade participation agreements exist in a conference, either
group of national shipping lines, members of the conference, may require that pooling arrangements be introduced, in
respect of the trade between their countries carried by the conference, in conformity with the provisions of Article
2(4); or alternatively they may require that the sailings be so adjusted as to provide an opportunity to these lines to
enjoy substantially the same rights to participate in the trade between those two countries carried by the conference as
they would have enjoyed under the provisions of Article 2(4). Any such request shall be considered and decided by
the conference. If there is no agreement to institute such a pool or adjustment of sailings among the members of the
conference, the groups of national shipping lines of the countries at both ends of the trade shall have a majority vote in
deciding to establish such a pool or adjustment of sailings. The matter shall be decided upon within a period not
exceeding six months from the receipt of the request.

(14) In the event of a disagreement between the national shipping lines of the countries at either end whose trade
is served by the conference with regard to whether or not pooling shall be introduced, they may require that within the
conference sailings be so adjusted as to provide an opportunity to these lines to enjoy substantially the same rights to
participate in the trade between those two countries carried by the conference as they would have enjoyed under the
provisions of Article 2(4). In the event that there are no national shipping lines in one of the countries whose trade is
served by the conference, the national shipping line or lines of the other country may make the same request. The
conference shall use its best endeavours to meet this request. If, however, this request is not met, the appropriate
authorities of the countries at both ends of the trade may take up the matter if they so wish and make their views
known to the parties concerned for their consideration. If no agreement is reached, the dispute shall be dealt with in
accordance with the procedures established in this Code.

(15) Other shipping lines, members of a conference, may also request that pooling or sailing agreements be
introduced, and the request shall be considered by the conference in accordance with the relevant provisions of this
Code.

(16) A conference shall provide for appropriate measures in any conference pooling agreement to cover cases
where the cargo has been shut out by a member line for any reason excepting late presentation by the shipper. Such
agreement shall provide that a vessel with unbooked space, capable of being used, be allowed to lift the cargo, even in
excess of the pool share of the line in the trade, if otherwise the cargo would be shut out and delayed beyond a period
set by the conference.

(17) The provisions of Article 2(1) to (16) inclusive concern all goods regardless of their origin, their destination
or the use for which they are intended, with the exception of military equipment for national defence purposes.



Article 3


Decision-making procedures



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 11


The decision-making procedures embodied in a conference agreement shall be based on the principle of equality

of all the full member lines; these procedures shall ensure that the voting rules do not hinder the proper work of the
conference and the service of the trade and shall define the matters on which decisions will be made by unanimity.
However, a decision cannot be taken in respect of matters defined in a conference agreement relating to the trade
between two countries without the consent of the national shipping lines of those two countries.



Article 4


Sanctions


(1) A shipping line member of a conference shall be entitled, subject to the provisions regarding withdrawal
which are embodied in pool schemes and/or cargo-sharing arrangements, to secure its release, without penalty, from
the terms of the conference agreement after giving three months' notice, unless the conference agreement provides for
a different time period, although it shall be required to fulfil its obligations as a member of the conference up to the
date of its release.

(2) A conference may, upon notice to be specified in the conference agreement, suspend or expel a member for
significant failure to abide by the terms and conditions of the conference agreement.

(3) No expulsion or suspension shall become effective until a statement in writing of the reasons therefor has
been given and until any dispute has been settled as provided in Chapter VI.

(4) Upon withdrawal or expulsion, the line concerned shall be required to pay its share of the outstanding
financial obligations of the conference, up to the date of its withdrawal or expulsion. In cases of withdrawal,
suspension or expulsion, the line shall not be relieved of its own financial obligations under the conference agreement
or of any of its obligations towards shippers.



Article 5


Self-policing


(1) A conference shall adopt and keep up to date an illustrative list, which shall be as comprehensive as
possible, of practices which are regarded as malpractices and/or breaches of the conference agreement and shall
provide effective self-policing machinery to deal with them, with specific provisions requiring-

(a) the fixing of penalties or a range of penalties for malpractices or breaches, to be commensurate with
their seriousness;

(b) the examination and impartial review of an adjudication of complaints, and/or decisions taken on
complaints, against malpractices or breaches, by a person or body unconnected with any of the
shipping lines members of the conference or their affiliates, on request by the conference or any other
party concerned;

(c) the reporting, on request, on the action taken in connexion with complaints against malpractices and/or
breaches, and on a basis of anonymity for the parties concerned, to the appropriate authorities of the
countries whose trade is served by the conference and of the countries whose shipping lines are
members of the conference.

(2) Shipping lines and conferences are entitled to the full co-operation of shippers and shippers' organizations
in the endeavour to combat malpractices and breaches.



Article 6


Conference agreements


All conference agreements, pooling, berthing and sailing rights agreements and amendments or other documents
directly related to, and which affect, such agreements shall be made available on request to the appropriate authorities
of the countries whose trade is served by the conference and of the countries whose shipping lines are members of the



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 12

conference.



CHAPTER III: RELATIONS WITH SHIPPERS


Article 7


Loyalty arrangements


(1) The shipping lines members of a conference are entitled to institute and maintain loyalty arrangements with
shippers, the form and terms of which are matters for consultation between the conference and shippers' organizations
or representatives of shippers. These loyalty arrangements shall provide safeguards making explicit the rights of
shippers and conference members. These arrangements shall be based on the contract system or any other system
which is also lawful.

(2) Whatever loyalty arrangements are made, the freight rate applicable to loyal shippers shall be determined
within a fixed range of percentages of the freight rate applicable to other shippers. Where a change in the differential
causes an increase in the rates charged to shippers, the change can be implemented only after 150 days' notice to those
shippers or according to regional practice and/or agreement. Disputes in connexion with a change of the differential
shall be settled as provided in the loyalty agreement.

(3) The terms of loyalty arrangements shall provide safeguards making explicit the rights and obligations of
shippers and of shipping lines members of the conference in accordance with the following provisions, inter alia-

(a) The shipper shall be bound in respect of cargo whose shipment is controlled by him or his affiliated or
subsidiary company or his forwarding agent in accordance with the contract of sale of the goods
concerned, provided that the shipper shall not, by evasion, subterfuge, or intermediary, attempt to
divert cargo in violation of his loyalty commitment.

(b) Where there is a loyalty contract, the extent of actual or liquidated damages and/or penalty shall be
specified in the contract. The member lines of the conference may, however, decide to assess lower
liquidated damages or to waive the claim to liquidated damages. In any event, the liquidated damages
under the contract to be paid by the shipper shall not exceed the freight charges on the particular
shipment, computed at the rate provided under the contract.

(c) The shipper shall be entitled to resume full loyalty status, subject to the fulfilment of conditions
established by the conference which shall be specified in the loyalty arrangement.

(d) The loyalty arrangement shall set out-
(i) a list of cargo, which may include bulk cargo shipped without mark or count, which is

specifically excluded from the scope of the loyalty arrangement;
(ii) a definition of the circumstances in which cargo other than cargo covered by (i) above is

considered to be excluded from the scope of the loyalty arrangement;
(iii) the method of settlement of disputes arising under the loyalty arrangement;
(iv) provision for termination of the loyalty arrangement on request by either a shipper or a

conference without penalty, after expiry of a stipulated period of notice, such notice to be given
in writing; and

(v) the terms for granting dispensation.
(4) If there is a dispute between a conference and a shippers' organization representatives of shippers and/or

shippers about the form or terms of a proposed loyalty arrangement, either party may refer the matter for resolution
under appropriate procedures as set out in this Code.



Article 8


Dispensation


(1) Conferences shall provide, within the terms of the loyalty arrangements, that requests by shippers for
dispensation shall be examined and a decision given quickly and, if requested, the reasons given in writing where
dispensation is withheld. Should a conference fail to confirm, within a period specified in the loyalty arrangement,
sufficient space to accommodate a shipper's cargo within a period also specified in the loyalty arrangement, the



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 13

shipper shall have the right, without being penalized, to utilize any vessel for the cargo in question.
(2) In ports where conference services are arranged subject to the availability of a specified minimum of cargo

(i.e. on inducement), but either the shipping line does not call, despite due notice by shippers, or the shipping line does
not reply within an agreed time to the notice given by shippers, shippers shall automatically have the right, without
prejudicing their loyalty status, to use any available vessel for the carriage of their cargo.



Article 9


Availability of tariffs and related conditions and/or regulations


Tariffs, related conditions, regulations, and any amendments thereto shall be made available on request to
shippers, shippers' organizations and other parties concerned at reasonable cost, and they shall be available for
examination at offices of shipping lines and their agents. They shall spell out all conditions concerning the application
of freight rates and the carriage of any cargo covered by them.



Article 10


Annual reports


Conferences shall provide annually to shippers' organizations, or to representatives of shippers, reports on their
activities designed to provide general information of interest to them, including relevant information about
consultations held with shippers and shippers' organizations, action taken regarding complaints, changes in
membership, and significant changes in service, tariffs and conditions of carriage. Such annual reports shall be
submitted, on request, to the appropriate authorities of the countries whose trade is served by the conference
concerned.



Article 11


Consultation machinery


(1) There shall be consultations on matters of common interest between a conference, shippers' organizations,
representatives of shippers and, where practicable, shippers, which may be designated for that purpose by the
appropriate authority if it so desires. These consultations shall take place whenever requested by any of the above-
mentioned parties. Appropriate authorities shall have the right, upon request, to participate fully in the consultations,
but this does not mean that they play a decision-making role.

(2) The following matters, inter alia, may be the subject of consultation-
(a) changes in general tariff conditions and related regulations;
(b) changes in the general level of tariff rates and rates for major commodities;
(c) promotional and/or special freight rates;
(d) imposition of, and related changes in, surcharges;
(e) loyalty arrangements, their establishment or changes in their form and general conditions;
(f) changes in the tariff classification of ports;
(g) procedure for the supply of necessary information by shippers concerning the expected volume and

nature of their cargoes; and
(h) presentation of cargo for shipment and the requirements regarding notice of cargo availability.

(3) To the extent that they fall within the scope of activity of a conference, the following matters may also be
the subject of consultation-

(a) operation of cargo inspection services;
(b) changes in the pattern of service;
(c) effects of the introduction of new technology in the carriage of cargo, in particular unitization, with

consequent reduction of conventional service or loss of direct services; and
(d) adequacy and quality of shipping services, including the impact of pooling, berthing or sailing



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 14

arrangements on the availability of shipping services and freight rates at which shipping services are
provided; changes in the areas served and in the regularity of calls by conference vessels.

(4) Consultations shall be held before final decisions are taken, unless otherwise provided in this Code.
Advance notice shall be given of the intention to take decisions on matters referred to in Article 11(2) and (3) Where
this is impossible, urgent decisions may be taken pending the holding of consultations.

(5) Consultations shall begin without undue delay and in any event within a maximum period specified in the
conference agreement or, in the absence of such a provision in the agreement, not later than 30 days after receipt of the
proposal for consultations, unless different periods of time are provided in this Code.

(6) When holding consultations, the parties shall use their best efforts to provide relevant information, to hold
timely discussions and to clarify matters for the purpose of seeking solutions of the issues concerned. The parties
involved shall take account of each other's views and problems and strive to reach agreement consistent with their
commercial viability.



CHAPTER IV: FREIGHT RATES


Article 12


Criteria for freight-rate determination


In arriving at a decision on questions of tariff policy in all cases mentioned in this Code, the following points
shall, unless otherwise provided, be taken into account-

(a) freight rates shall be fixed at as low a level as is feasible from the commercial point of view and shall
permit a reasonable profit for shipowners;

(b) the cost of operations of conferences shall, as a rule, be evaluated for the round voyage of ships, with
the outward and inward directions considered as a single whole. Where applicable, the outward and
inward voyage should be considered separately. The freight rates should take into account, among
other factors, the nature of cargoes, the interrelation between weight and cargo measurement, as well
as the value of cargoes;

(c) in fixing promotional freight rates and/or special freight rates for specific goods, the conditions of
trade for these goods of the countries served by the conference, particularly of developing and land-
locked countries, shall be taken into account.




Article 13


Conference tariffs and classification of tariff rates


(1) Conference tariffs shall not unfairly differentiate between shippers similarly situated. Shipping lines
members of a conference shall adhere strictly to the rates, rules and terms shown in the tariffs and other currently valid
published documents of the conference and to any special arrangements permitted under this Code.

(2) Conference tariffs should be drawn up simply and clearly, containing as few classes/categories as possible,
depending on the particular requirements of a trade, specifying a freight rate for each commodity and, where
appropriate, for each class/category; they should also indicate, wherever practicable, in order to facilitate statistical
compilation and analysis, the corresponding appropriate code number of the item in accordance with the Standard
International Trade Classification, the Brussels Tariff Nomenclature or any other nomenclature that may be
internationally adopted; the classification of commodities in the tariffs should, as far as practicable, be prepared in co-
operation with shippers' organizations and other national and international organizations concerned.



Article 14


General freight-rate increases


(1) A conference shall give notice of not less than 150 days, or according to regional practice and/or agreement,



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 15

to shippers' organizations or representatives of shippers and/or shippers and, where so required, to appropriate
authorities of the countries whose trade is served by the conference, of its intention to effect a general increase in
freight rates, an indication of its extent, the date of effect and the reasons supporting the proposed increase.

(2) At the request of any of the parties prescribed for this purpose in this Code, to be made within an agreed
period of time after the receipt of the notice, consultations shall commence, in accordance with the relevant provisions
of this Code, within a stipulated period not exceeding 30 days or as previously agreed between the parties concerned;
the consultations shall be held in respect of the bases and amounts of the proposed increase and the date from which it
is to be given effect.

(3) A conference, in an effort to expedite consultations, may, or upon the request of any of the parties
prescribed in this Code as entitled to participate in consultations on general freight-rate increases shall, where
practicable, reasonably before the consultations, submit to the participating parties a report from independent
accountants of repute, including, where the requesting parties accept it as one of the bases of consultations, an
aggregated analysis of data regarding relevant costs and revenues which in the opinion of the conference necessitate
an increase in freight rates.

(4) If agreement is reached as a result of the consultations, the freight-rate increase shall take effect from the
date indicated in the notice served in accordance with Article 14(1), unless a later date is agreed upon between the
parties concerned.

(5) If no agreement is reached within 30 days of the giving of notice in accordance with Article 14(1), and
subject to procedures prescribed in this Code, the matter shall be submitted immediately to international mandatory
conciliation, in accordance with chapter VI. The recommendation of the conciliators, if accepted by the parties
concerned, shall be binding upon them and shall be implemented, subject to the provisions of Article 14(9), with effect
from the date mentioned in the conciliators' recommendation.

(6) Subject to the provisions of Article 14(9), a general freight-rate increase may be implemented by a
conference pending the conciliators' recommendation. When making their recommendation, the conciliators should
take into account the extent of the above-mentioned increase made by the conference and the period for which it has
been in force. In the event that the conference rejects the recommendation of the conciliators, shippers and/or shippers'
organizations shall have the right to consider themselves not bound, after appropriate notice, by any arrangement or
other contract with that conference which may prevent them from using non-conference shipping lines. Where a
loyalty arrangement exists, shippers and/or shippers' organizations shall give notice within a period of 30 days to the
effect that they no longer consider themselves bound by that arrangement, which notice shall apply from the date
mentioned therein, and a period of not less than 30 days and not more than 90 days shall be provided in the loyalty
arrangement for this purpose.

(7) A deferred rebate which is due to the shipper and which has already been accumulated by the conference
shall not be withheld by, or forfeited to, the conference as a result of action by the shipper under Article 14(6).

(8) If the trade of a country carried by shipping lines members of a conference on a particular route consists
largely of one or few basic commodities, any increase in the freight rate on one or more of those commodities shall be
treated as a general freight-rate increase, and the appropriate provisions of this Code shall apply.

(9) Conferences should institute any general freight-rate increase effective in accordance with this Code for a
period of a stated minimum duration, subject always to the rules regarding surcharges and regarding adjustment in
freight rates consequent upon fluctuations in foreign exchange rates. The period over which a general freight-rate
increase is to apply is an appropriate matter to be considered during consultations conducted in accordance with
Article 14(2), but unless otherwise agreed between the parties concerned during the consultations, the minimum
period of time between the date when one general freight-rate increase becomes effective and the date of notice for the
next general freight-rate increase given in accordance with Article 14(1) shall not be less than 10 months.



Article 15


Promotional freight rates


(1) Promotional freight rates for non-traditional exports should be instituted by conferences.
(2) All necessary and reasonable information justifying the need for a promotional freight rate shall be

submitted to a conference by the shippers, shippers' organizations or representatives of shippers concerned.
(3) Special procedures shall be instituted providing for a decision within 30 days from the date of receipt of that

information, unless mutually agreed otherwise, on applications for promotional freight rates. A clear distinction shall



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 16

be made between these and general procedures for considering the possibility of reducing freight rates for other
commodities or of exempting them from increases.

(4) Information regarding the procedures for considering applications for promotional freight rates shall be
made available by the conference to shippers and/or shipper's organizations and, on request, to the governments and/or
other appropriate authorities of the countries whose trade is served by the conference.

(5) A promotional freight rate shall be established normally for a period of 12 months, unless otherwise
mutually agreed between the parties concerned. Prior to the expiry of the period, the promotional freight rate shall be
reviewed, on request by the shipper and/or shippers' organization concerned, when it shall be a matter for the shipper
and/or shippers' organization, at the request of the conference, to show that the continuation of the rate is justified
beyond the initial period.

(6) When examining a request for a promotional freight rate, the conference may take into account that, while
the rate should promote the export of the non-traditional product for which it is sought, it is not likely to create
substantial competitive distortions in the export of a similar product from another country served by the conference.

(7) Promotional freight rates are not excluded from the imposition of a surcharge or a currency adjustment
factor in accordance with Articles 16 and 17.

(8) Each shipping line member of a conference serving the relevant ports of a conference trade shall accept, and
not unreasonably refuse, a fair share of cargo for which a promotional freight rate has been established by the
conference.



Article 16


Surcharges


(1) Surcharges imposed by a conference to cover sudden or extraordinary increases in costs or losses of
revenue shall be regarded as temporary. They shall be reduced in accordance with improvements in the situation or
circumstances which they were imposed to meet and shall be cancelled, subject to Article 16(6), as soon as the
situation or circumstances which prompted their imposition cease to prevail. This shall be indicated at the moment of
their imposition, together, as far as possible, with a description of the change in the situation or circumstances which
will bring about their increase, reduction or cancellation.

(2) Surcharges imposed on cargo moving to or from a particular port shall likewise be regarded as temporary
and likewise shall be increased, reduced or cancelled, subject to Article 16(6), when the situation in that port changes.

(3) Before any surcharge is imposed, whether general or covering only a specific port, notice should be given
and there shall be consultation, upon request, in accordance with the procedures of this Code, between the conference
concerned and other parties directly affected by the surcharge and prescribed in this Code as entitled to participate in
such consultations, save in those exceptional circumstances which warrant immediate imposition of the surcharge. In
cases where a surcharge has been imposed without prior consultation, consultations, upon request, shall be held as
soon as possible thereafter. Prior to such consultations, conferences shall furnish data which in their opinion justify the
imposition of the surcharge.

(4) Unless the parties agree otherwise, within a period of 15 days after the receipt of a notice given in
accordance with Article 16(3), if there is no agreement on the question of the surcharge between the parties concerned
referred to in that Article, the relevant provisions for settlement of disputes provided in this Code shall prevail. Unless
the parties concerned agree otherwise, the surcharge may, however, be imposed pending resolution of the dispute, if
the dispute still remains unresolved at the end of a period of 30 days after the receipt of the above-mentioned notice.

(5) In the event of a surcharge being imposed in exceptional circumstances without prior consultation as
provided in Article 16(3), if no agreement is reached through subsequent consultations, the relevant provisions for
settlement of disputes provided in this Code shall prevail.

(6) Financial loss incurred by the shipping lines members of a conference as a result of any delay on account of
consultations and/or other proceedings for resolving disputes regarding imposition of surcharges in accordance with
the provisions of this Code, as compared to the date from which the surcharge was to be imposed in terms of the
notice given in accordance with Article 16(3), may be compensated by an equivalent prolongation of the surcharge
before its removal. Conversely, for any surcharge imposed by the conference and subsequently determined and agreed
to be unjustified or excessive as a result of consultations or other procedures prescribed in this Code, the amounts so
collected or the excess thereof as determined hereinabove, unless otherwise agreed, shall be refunded to the parties
concerned, if claimed by them, within a period of 30 days of such claim.



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 17




Article 17


Currency changes


(1) Exchange rate changes, including formal devaluation or revaluation, which lead to changes in the aggregate
operational costs and / or revenues of the shipping lines members of a conference relating to their operations within
the conference provide a valid reason for the introduction of a currency adjustment factor or for a change in the freight
rates. The adjustment or change shall be such that in the aggregate the member lines concerned neither gain nor lose,
as far as possible, as a result of the adjustment or change. The adjustment or change may take the form of currency
surcharges or discounts or of increases or decreases in the freight rates.

(2) Such adjustments or changes shall be subject to notice, which should be arranged in accordance with
regional practice, where such practice exists, and there shall be consultations in accordance with the provisions of this
Code between the conference concerned and the other parties directly affected and prescribed in this Code as entitled
to participate in consultations, save in those exceptional circumstances which warrant immediate imposition of the
currency adjustment factor or freight-rate change. In the event that this has been done without prior consultations,
consultations shall be held as soon as possible thereafter. The consultations should be on the application, size and date
of implementation, of the currency adjustment factor or freight-rate change, and the same procedures shall be followed
for this purpose as are prescribed in Article 16(4) and (5) in respect of surcharges. Such consultations should take
place and be completed within a period not exceeding 15 days from the date when the intention to apply a currency
surcharge or to effect a freight-rate change is announced.

(3) If no agreement is reached within 15 days through consultations, the relevant provisions for settlement of
disputes provided in this Code shall prevail.

(4) The provisions of Article 16(6) shall apply, adapted as necessary, to currency adjustment factors and
freight-rate changes dealt with in the present Article.



CHAPTER V: OTHER MATTERS


Article 18


Fighting ships


Members of a conference shall not use fighting ships in the conference trade for the purpose of excluding,
preventing or reducing competition by driving a shipping line not a member of the conference out of the said trade.



Article 19


Adequacy of service


(1) Conferences should take necessary and appropriate measures to ensure that their member lines provide
regular, adequate and efficient service of the required frequency on the routes they serve and shall arrange such
services so as to avoid as far as possible bunching and gapping of sailings. Conferences should also take into
consideration any special measures necessary in arranging services to handle seasonal variations in cargo volumes.

(2) Conferences and other parties prescribed in this Code as entitled to participate in consultations, including
appropriate authorities if they so desire, should keep under review, and should maintain close co-operation regarding
the demand for shipping space, the adequacy and suitability of service, and in particular the possibilities for
rationalization and for increasing the efficiency of services. Benefits identified as accruing from rationalization of
services shall be fairly reflected in the level of freight rates.

(3) In respect of any port for which conference services are supplied only subject to the availability of a
specified minimum of cargo, that minimum shall be specified in the tariff. Shippers should give adequate notice of the
availability of such cargo.




Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 18


Article 20


Head office of a conference


A conference shall as a rule establish its head office in a country whose trade is served by that conference, unless

agreed otherwise by the shipping lines members of that conference.



Article 21


Representation


Conferences shall establish local representation in all countries served, except that where there are practical
reasons to the contrary the representation may be on a regional basis. The names and addresses of representatives shall
be readily available, and these representatives shall ensure that the views of shippers and conferences are made rapidly
known to each other with a view to expediting prompt decisions. When a conference considers it suitable, it shall
provide for adequate delegation of powers of decision to its representatives.



Article 22


Contents of conference agreements, trade participation
agreements and loyalty arrangements


Conference agreements, trade participation agreements and loyalty arrangements shall conform to the applicable

requirements of this Code and may include such other provisions as may be agreed which are not inconsistent with
this Code.




PART TWO


CHAPTER VI: PROVISIONS AND MACHINERY FOR SETTLEMENT OF DISPUTES

A. GENERAL PROVISIONS



Article 23


(1) The provisions of this chapter shall apply whenever there is dispute relating to the application or operation
of the provisions of this Code between the following parties- (Amended 80 of 1997 s. 102)

(a) a conference and a shipping line;
(b) the shipping lines members of a conference;
(c) a conference or a shipping line member thereof and a shippers' organization or representatives of

shippers or shippers; and
(d) two or more conferences.

For the purposes of this chapter the term "party" means the original parties to the dispute as well as third parties which
have joined the proceedings in accordance with (a) of Article 34.

(2) Disputes between shipping lines of the same flag, as well as those between organizations belonging to the
same country, shall be settled within the framework of the national jurisdiction of that country, unless this creates
serious difficulties in the fulfilment of the provisions of this Code.

(3) The parties to a dispute shall first attempt to settle it by an exchange of views or direct negotiations with the
intention of finding a mutually satisfactory solution.

4) Disputes between the parties referred to in Article 23(1) relating to-
(a) refusal of admission of a national shipping line to a conference serving the foreign trade of the country



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 19

of that shipping line;
(b) refusal of admission of a third-country shipping line to a conference;
(c) expulsion from a conference;
(d) inconsistency of a conference agreement with this Code;
(e) a general freight-rate increase;
(f) surcharges;
(g) changes in freight rates or the imposition of a currency adjustment factor due to exchange rate

changes;
(h) participation in trade; and
(i) the form and terms of proposed loyalty arrangements,

which have not been resolved through an exchange of views or direct negotiations shall, at the request of any of the
parties to the dispute, be referred to international mandatory conciliation in accordance with the provisions of this
chapter.



Article 24


(1) The conciliation procedure is initiated at the request of one of the parties to the dispute.
(2) The request shall be made-

(a) in disputes relating to membership of conferences: not later than 60 days from the date of receipt by
the applicant of the conference decision, including the reasons therefor, in accordance with Articles
1(4) and 4(3);

(b) in disputes relating to general freight-rate increases: not later than the date of expiry of the period of
notice specified in Article 14(1);

(c) in disputes relating to surcharges: not later than the date of expiry of the 30-day period specified in
Article 16(4) or, where no notice has been given, not later than 15 days from the date when the
surcharge was put into effect; and

(d) in disputes relating to changes in freight rates or the imposition of a currency adjustment factor due to
exchange rate changes: not later than five days after the date of expiry of the period specified in Article
17(3).

(3) The provisions of Article 24(2) shall not apply to a dispute which is referred to international mandatory
conciliation in accordance with Article 25(3).

(4) Requests for conciliation in disputes other than those referred to in Article 24(2) may be made at any time.
(5) The time-limits specified in Article 24(2) may be extended by agreement between the parties.
(6) A request for conciliation shall be considered to have been duly made if it is proved that the request has

been sent to the other party by registered letter, telegram or teleprinter or has been served on it within the time-limits
specified in Article 24(2) or (5).

(7) Where no request has been made within the time-limits specified in Article 24(2) or (5), the decision of the
conference shall be final and no proceedings under this chapter may be brought by any party to the dispute to
challenge that decision.



Article 25


(1) Where the parties have agreed that disputes referred to in Article 23(4)(a), (b), (c), (d), (h) and (i) shall be
resolved through procedures other than those established in that Article, or agree on procedures to resolve a particular
dispute that has arisen between them, such disputes shall, at the request of any of the parties to the dispute, be resolved
as provided for in their agreement.

(2) The provisions of Article 25(1) apply also to the disputes referred to in Article 23(4)(e), (f) and (g), unless
national legislation, rules or regulations prevent shippers from having this freedom of choice.

(3) Where conciliation proceedings have been initiated, such proceedings shall have precedence over remedies
available under national law. If a party seeks remedies under national law in respect of a dispute to which this chapter
applies without invoking the procedures provided for in this chapter, then, upon the request of a respondent to those
proceedings, they shall be stayed and the dispute shall be referred to the procedures defined in this chapter by the court
or other authority where the national remedies are sought.



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 20




Article 26


(1) The Contracting Parties shall confer upon conferences and shippers' organizations such capacity as is
necessary for the application of the provisions of this chapter. In particular-

(a) a conference or a shippers' organization may institute proceedings as a party or be named as a party to
proceedings in its collective capacity;

(b) any notification to a conference or shippers' organization in its collective capacity shall also constitute
a notification to each member of such conference or shippers' organization;

(c) a notification to a conference or shippers' organization shall be transmitted to the address of the head
office of the conference or shippers' organization. Each conference or shippers' organization shall
register the address of its head office with the Registrar appointed in accordance with Article 46(1). In
the event that a conference or a shippers' organization fails to register or has no head office, a
notification to any member in the name of the conference or shippers' organization shall be deemed to
be a notification to such conference or organization.

(2) Acceptance or rejection by a conference or shippers' organization of a recommendation by conciliators shall
be deemed to be acceptance or rejection of such a recommendation by each member thereof.



Article 27


Unless the parties agree otherwise, the conciliators may decide to make a recommendation on the basis of
written submissions without oral proceedings.


B. International mandatory conciliation



Article 28


In international mandatory conciliation the appropriate authorities of a Contracting Party shall, if they so request,
participate in the conciliation proceedings in support of a party being a national of that Contracting Party, or in support
of a party having a dispute arising in the context of the foreign trade of that Contracting Party. That appropriate
authority may alternatively act as an observer in such conciliation proceedings.



Article 29


(1) In international mandatory conciliation the proceedings shall be held in the place unanimously agreed to by
the parties or, failing such agreement, in the place decided upon by the conciliators.

(2) In determining the place of conciliation proceedings the parties and the conciliators shall take into account,
inter alia, countries which are closely connected with the dispute, bearing in mind the country of the shipping line
concerned and, especially when the dispute is related to cargo, the country where the cargo originates.



Article 30


(1) For the purposes of this chapter an International Panel of Conciliators shall be established, consisting of
experts of high repute or experience in the fields of law, economics of sea transport, or foreign trade and finance, as
determined by the Contracting Parties selecting them, who shall serve in an independent capacity.

(2) Each Contracting Party may at any time nominate members of the Panel up to a total of 12, and shall
communicate their names to the Registrar. The nominations shall be for periods of six years each and may be renewed.
In the event of the death, incapacity or resignation of a member of the Panel, the Contracting Party which nominated
such person shall nominate a replacement for the remainder of his term of office. A nomination takes effect from the



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 21

date on which the communication of the nomination is received by the Registrar.
(3) The Registrar shall maintain the Panel list and shall regularly inform the Contracting Parties of the

composition of the Panel.



Article 31


(1) The purpose of conciliation is to reach an amicable settlement of the dispute through recommendations
formulated by independent conciliators.

(2) The conciliators shall identify and clarify the issues in dispute, seek for this purpose any information from
the parties, and, on the basis thereof, submit to the parties a recommendation for the settlement of the dispute.

(3) The parties shall co-operate in good faith with the conciliators in order to enable them to carry out their
functions.

(4) Subject to the provisions of Article 25(2), the parties to the dispute may at any time during the conciliation
proceedings decide in agreement to have recourse to a different procedure for the settlement of their dispute. The
parties to a dispute which has been made subject to proceedings other than those provided for in this chapter may
decide by mutual agreement to have recourse to international mandatory conciliation.



Article 32


(1) The conciliation proceedings shall be conducted either by one conciliator or by an uneven number of
conciliators agreed upon or designated by the parties.

(2) Where the parties cannot agree on the number or the appointment of the conciliators as provided in Article
32(1), the conciliation proceedings shall be conducted by three conciliators, one appointed by each party in the
statement(s) of claim and reply respectively, and the third by the two conciliators thus appointed, who shall act as
chairman.

(3) If the reply does not name a conciliator to be appointed in cases where Article 32(2) would apply, the
second conciliator shall, within 30 days following the receipt of the statement of claim, be chosen by lot by the
conciliator appointed in the statement of claim from among the members of the Panel nominated by the Contracting
Party or Parties of which the respondent(s) is(are) a national(s).

(4) Where the conciliators appointed in accordance with Article 32(2) or (3) cannot agree on the appointment
of the third conciliator within 15 days following the date of the appointment of the second conciliator, he shall, within
the following 5 days be chosen by lot by the appointed conciliators. Prior to the drawing by lot-

(a) no member of the Panel of conciliators having the same nationality as either of the two appointed
conciliators shall be eligible for selection by lot;

(b) each of the two appointed conciliators may exclude from the list of the Panel of conciliators an equal
number of them subject to the requirement that at least 30 members of the Panel shall remain eligible
for selection by lot.




Article 33


(1) Where several parties request conciliation with the same respondent in respect of the same issue, or of
issues which are closely connected, that respondent may request the consolidation of those cases.

(2) The request for consolidation shall be considered and decided upon by majority vote by the chairmen of the
conciliators so far chosen. If such request is allowed, the chairmen will designate the conciliators to consider the
consolidated cases from among the conciliators so far appointed or chosen, provided that an uneven number of
conciliators is chosen and that the conciliator first appointed by each party shall be one of the conciliators considering
the consolidated case.



Article 34


Any party, other than an appropriate authority referred to in Article 28, if conciliation has been initiated, may



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 22

join in the proceedings-
either

(a) as a party, in case of a direct economic interest,
or

(b) as a supporting party to one of the original parties, in case of an indirect economic interest,
unless either of the original parties objects to such joinder.



Article 35


(1) The recommendations of the conciliators shall be made in accordance with the provisions of this Code.
(2) When the Code is silent upon any point, the conciliators shall apply the law which the parties agree at the

time the conciliation proceedings commence or thereafter, but not later than the time of submission of evidence to the
conciliators. Failing such agreement, the law which in the opinion of the conciliators is most closely connected with
the dispute shall be applicable.

(3) The conciliators shall not decide ex aequo et bono upon the dispute unless the parties so agree after the
dispute has arisen.

(4) The conciliators shall not bring a finding of non liquet on the ground of obscurity of the law.
(5) The conciliators may recommend those remedies and reliefs which are provided in the law applicable to the

dispute.



Article 36


The recommendations of the conciliators shall include reasons.



Article 37


(1) Unless the parties have agreed before, during or after the conciliation procedure that the recommendation of
the conciliators shall be binding, the recommendation shall become binding by acceptance by the parties. A
recommendation which has been accepted by some parties to a dispute shall be binding as between those parties only.

(2) Acceptance of the recommendation must be communicated by the parties to the conciliators, at an address
specified by them, not later than 30 days after receipt of the notification of the recommendation; otherwise, it shall be
considered that the recommendation has not been accepted.

(3) Any party which does not accept the recommendation shall notify the conciliators and the other parties,
within 30 days following the period specified in Article 37(2), of its grounds for rejection of the recommendation,
comprehensively and in writing.

(4) When the recommendation has been accepted by parties, the conciliators shall immediately draw up and
sign a record of settlement, at which time the recommendation shall become binding upon those parties. If the
recommendation has not been accepted by all parties, the conciliators shall draw up a report with respect to those
parties rejecting the recommendation, noting the dispute and the failure of those parties to settle the dispute.

(5) A recommendation which has become binding upon the parties shall be implemented by them immediately
or at such later time as is specified in the recommendation.

(6) Any party may make its acceptance conditional upon acceptance by all or any of the other parties to the
dispute.



Article 38


(1) A recommendation shall constitute a final determination of a dispute as between the parties which accept it,
except to the extent that the recommendation is not recognized and enforced in accordance with the provisions of
Article 39.

(2) "Recommendation" includes an interpretation, clarification or revision of the recommendation made by the
conciliators before the recommendation has been accepted.



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 23




Article 39


(1) Each Contracting Party shall recognize a recommendation as binding between the parties which have
accepted it and shall, subject to the provisions of Article 39(2) and (3), enforce, at the request of any such party, all
obligations imposed by the recommendation as if it were a final judgment of a court of that Contracting Party.

(2) A recommendation shall not be recognized and enforced at the request of a party referred to in Article 39(1)
only if the court or other competent authority of the country where recognition and enforcement is sought is satisfied
that-

(a) any party which accepted the recommendation was, under the law applicable to it, under some legal
incapacity at the time of acceptance;

(b) fraud or coercion has been used in the making of the recommendation;
(c) the recommendation is contrary to public policy (ordre public) in the country of enforcement; or
(d) the composition of the conciliators, or the conciliation procedure, was not in accordance with the

provisions of this Code.
(3) Any part of the recommendation shall not be enforced and recognized if the court or other competent

authority is satisfied that such part comes within any of the subparagraphs of Article 39(2) and can be separated from
other parts of the recommendation. If such part cannot be separated, the entire recommendation shall not be enforced
and recognized.



Article 40


(1) Where the recommendation has been accepted by all the parties, the recommendation and the reasons
therefor may be published with the consent of all the parties.

(2) Where the recommendation has been rejected by one or more of the parties but has been accepted by one or
more of the parties-

(a) the party or parties rejecting the recommendation shall publish its or their grounds for rejection, given
pursuant to Article 37(3), and may at the same time publish the recommendation and the reasons
therefor;

(b) a party which has accepted the recommendation may publish the recommendation and the reasons
therefor; it may also publish the grounds for rejection given by any other party unless such other party
has already published its rejection and the grounds therefor in accordance with Article 40(2)(a).

(3) Where the recommendation has not been accepted by any of the parties, each party may publish the
recommendation and the reasons therefor and also its own rejection and the grounds therefor.



Article 41


(1) Documents and statements containing factual information supplied by any party to the conciliators shall be
made public unless that party or a majority of the conciliators agrees otherwise.

(2) Such documents and statements supplied by a party may be tendered by that party in support of its case in
subsequent proceedings arising from the same dispute and between the same parties.



Article 42


Where the recommendation has not become binding upon the parties, no views expressed or reasons given by
the conciliators, or concessions or offers made by the parties for the purpose of the conciliation procedure, shall affect
the legal rights and obligations of any of the parties.



Article 43




Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 24

(1) (a) The costs of the conciliators and all costs of the administration of the conciliation proceedings shall be
borne equally by the parties to the proceedings, unless they agree otherwise.

(b) When the conciliation proceedings have been initiated, the conciliators shall be entitled to require an
advance or security for the costs referred to in Article 43(1)(a).

(2) Each party shall bear all expenses it incurs in connexion with the proceedings, unless the parties agree
otherwise.

(3) Notwithstanding the provisions of Article 43(1) and (2), the conciliators may, having decided unanimously
that a party has brought a claim vexatiously or frivolously, assess against that party any or all of the costs of other
parties to the proceedings. Such decision shall be final and binding on all the parties.



Article 44


(1) Failure of a party to appear or to present its case at any stage of the proceedings shall not be deemed an
admission of the other party's assertions. In that event, the other party may, at its choice, request the conciliators to
close the proceedings or to deal with the questions presented to them and submit a recommendation in accordance
with the provisions for making recommendations set out in this Code.

(2) Before closing the proceedings, the conciliators shall grant the party failing to appear or to present its case a
period of grace, not exceeding 10 days, unless they are satisfied that the party does not intend to appear or to present
its case.

(3) Failure to observe procedural time-limits laid down in this Code or determined by the conciliators, in
particular time-limits relating to the submission of statements or information, shall be considered a failure to appear in
the proceedings.

(4) Where the proceedings have been closed owing to one party's failure to appear or to present its case, the
conciliators shall draw up a report noting that party's failure.



Article 45


(1) The conciliators shall follow the procedures stipulated in this Code.
(2) The Rules of Procedure annexed to the present Convention shall be considered Model Rules for the

guidance of conciliators. The conciliators may, by mutual consent, use, supplement or amend the rules contained in
the Annex or formulate their own rules of procedure to the extent that such supplementary, amended or other rules are
not inconsistent with the provisions of this Code.

(3) If the parties agree that it may be in the interest of achieving an expeditious and inexpensive solution of the
conciliation proceedings, they may mutually agree to rules of procedure which are not inconsistent with the provisions
of this Code.

(4) The conciliators shall formulate their recommendation by consensus or failing that shall decide by majority
vote.

(5) The conciliation proceedings shall finish and the recommendation of the conciliators shall be delivered not
later than six months from the date on which the conciliators are appointed, except in the cases referred to in Article
23(4)(e), (f) and (g), for which the time-limits in Articles 14(1) and 16(4) shall be valid. The period of six months may
be extended by agreement of the parties.


C. Institutional machinery



Article 46


(1) Six months before the entry into force of the present Convention, the Secretary-General of the United
Nations shall, subject to the approval of the General Assembly of the United Nations, and taking into account the
views expressed by the Contracting Parties, appoint a Registrar, who may be assisted by such additional staff as may
be necessary for the performance of the functions listed in Article 46(2). Administrative services for the Registrar and
his assistants shall be provided by the United Nations Office at Geneva.



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 25

(2) The Registrar shall perform the following functions in consultation with the Contracting Parties as
appropriate-

(a) maintain the list of conciliators of the International Panel of Conciliators and regularly inform the
Contracting Parties of the composition of the Panel;

(b) provide the names and addresses of the conciliators to the parties concerned on request;
(c) receive and maintain copies of requests for conciliation, replies, recommendations, acceptances, or

rejections, including reasons therefor;
(d) furnish on request, and at their cost, copies of recommendations and reasons for rejection to the

shippers' organizations, conferences and governments, subject to the provisions of Article 40;
(e) make available information of a non-confidential nature on completed conciliation cases, and without

attribution to the parties concerned, for the purposes of preparation of material for the Review
Conference referred to in Article 52; and

(f) the other functions prescribed for the Registrar in Article 26(1)(c) and 30(2) and (3).



CHAPTER VII: FINAL CLAUSES


(Articles 47 to 53 are not reproduced)



Article 54


Authentic texts-Deposit


The original of the present Convention, of which the Chinese, English, French, Russian and Spanish texts are
equally authentic, will be deposited with the Secretary-General of the United Nations.


ANNEX TO THE CONVENTION ON A CODE OF
CONDUCT FOR LINER CONFERENCES


Model Rules of Procedure for International

Mandatory Conciliation


Rule 1


(1) Any party wishing to institute conciliation proceedings under the Code shall address a request to that effect
in writing, accompanied by a statement of claim to the other party, and copied to the Registrar.

(2) The statement of claim shall-
(a) designate precisely each party to the dispute and state the address of each;
(b) contain a summary statement of pertinent facts, the issues in dispute and the claimant's proposal for the

settlement of the dispute;
(c) state whether an oral hearing is desired and, if so, and to the extent then known, the names and

addresses of persons to give evidence, including experts' evidence, for the claimant;
(d) be accompanied by such supporting documentation and relevant agreements and arrangements entered

into by the parties as the claimant may consider necessary at the time of making the claim;
(e) indicate the number of conciliators required, any proposal concerning the appointment of conciliators,

or the name of the conciliator appointed by the claimant in accordance with Article 32(2); and
(f) contain proposals, if any, regarding rules of procedure.

(3) The statement of claim shall be dated and shall be signed by the party.


Rule 2


(1) If the respondent decides to reply to the claim, he shall, within 30 days following the date of his receipt of
the statement of claim, transmit a reply to the other party and copy to the Registrar.

(2) The reply shall-



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 26

(a) contain a summary statement of pertinent facts opposed to the contentions in the statement of claim,
the respondent's proposal, if any, for the settlement of the dispute and any remedy claimed by him with
a view to the settlement of the dispute;

(b) state whether an oral hearing is desired and, if so, and to the extent then known, the names and
addresses of persons to give evidence, including experts' evidence, for the respondent;

(c) be accompanied by such supporting documentation and relevant agreements and arrangements entered
into by the parties as the respondent may consider necessary at the time of making the reply;

(d) indicate the number of conciliators required, any proposal concerning the appointment of conciliators,
or the name of the conciliator appointed by the respondent in accordance with Article 32(2); and

(e) contain proposals, if any, regarding rules of procedure.
(3) The reply shall be dated and shall be signed by the party.


Rule 3


(1) Any person or other interest desiring to participate in conciliation proceedings under Article 34 shall

transmit a written request to the parties to the dispute, with a copy to the Registrar.
(2) If participation in accordance with Article 34(a) is desired, the request shall set forth the grounds therefor,

including the information required under Rule 1(2)(a), (b) and (d).
(3) If participation in accordance with (b) of Article 34 is desired, the request shall state the grounds therefor

and which of the original parties would be supported.
(4) Any objection to a request for joinder by such a party shall be sent by the objecting party, with a copy to the

other party, within seven days of receipt of the request.
(5) In the event that two or more proceedings are consolidated, subsequent requests for third-party participation

shall be transmitted to all parties concerned, each of which may object in accordance with the present rule.


Rule 4


By agreement between the parties to a dispute, on motion by either party, and after affording the parties an
opportunity of being heard, the conciliators may order the consolidation or separation of all or any claims then
pending between the same parties.


Rule 5


(1) Any party may challenge a conciliator where circumstances exist that cause justifiable doubts as to his
independence.

(2) Notice of challenge, stating reasons therefor, should be made prior to the date of the closing of the
proceedings, before the conciliators have rendered their recommendation. Any such challenge shall be heard promptly
and shall be determined by majority vote of the conciliators in the first instance, as a preliminary point, in cases where
more than one conciliator has been appointed. The decision in such cases shall be final.

(3) A conciliator who has died, resigned, become incapacitated or disqualified shall be replaced promptly.
(4) Proceedings interrupted in this way shall continue from the point where they were interrupted, unless it is

agreed by the parties or ordered by the conciliators that a review or re-hearing of any oral testimony take place.


Rule 6


The conciliators shall be judges of their own jurisdiction and/or competence within the provisions of the Code.


Rule 7


(1) The conciliators shall receive and consider all written statements, documents, affidavits, publications or any
other evidence, including oral evidence, which may be submitted to them by or on behalf of any of the parties, and
shall give such weight thereto as in their judgement such evidence merits.

(2) (a) Each party may submit to the conciliators any material it considers relevant, and at the time of such
submission shall deliver certified copies to any other party to the proceedings, which party shall be
given a reasonable opportunity to reply thereto.



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 27

(b) The conciliators shall be the sole judges of the relevance and materiality of the evidence submitted to
them by the parties.

(c) The conciliators may ask the parties to produce such additional evidence as they may deem necessary
to an understanding and determination of the dispute, provided that, if such additional evidence is
produced, the other parties to the proceeding shall have a reasonable opportunity to comment thereon.


Rule 8


(1) Whenever a period of days for the doing of any act is provided for in the Code or in these rules, the day

from which the period begins to run shall not be counted, and the last day of the period shall be counted, except where
that last day is a Saturday, Sunday or a public holiday at the place of conciliation, in which case the last day shall be
the next business day.

(2) When the time provided for is less than seven days, intermediate Saturdays, Sundays and public holidays
shall be excluded from the computation.


Rule 9


Subject to the provisions relating to procedural time-limits in the Code, the conciliators may, on a motion by one
of the parties or pursuant to agreement between them, extend any such time-limit which has been fixed by the
conciliators.


Rule 10


(1) The conciliators shall fix the order of business and, unless otherwise agreed, the date and hour of each
session.

(2) Unless the parties otherwise agree, the proceedings shall take place in private.
(3) The conciliators shall specifically inquire of all the parties whether they have any further evidence to submit

before declaring the proceedings closed, and a noting thereof shall be recorded.


Rule 11


Conciliators' recommendations shall be in writing and shall include-
(a) the precise designation and address of each party;
(b) a description of the method of appointing conciliators, including their names;
(c) the dates and place of the conciliation proceedings;
(d) a summary of the conciliation proceedings, as the conciliators deem appropriate;
(e) a summary statement of the facts found by the conciliators;
(f) a summary of the submissions of the parties;
(g) pronouncements on the issues in dispute, together with the reasons therefor;
(h) the signatures of the conciliators and the date of each signature; and
(i) an address for the communication of the acceptance or rejection of the recommendation.


Rule 12


The recommendation shall, so far as possible, contain a pronouncement on costs in accordance with the

provisions of the Code. If the recommendation does not contain a full pronouncement on costs, the conciliators shall,
as soon as possible after the recommendation, and in any event not later than 60 days thereafter, make a
pronouncement in writing regarding costs as provided in the Code.


Rule 13


Conciliators' recommendations shall also take into account previous and similar cases whenever this would
facilitate a more uniform implementation of the Code and observance of conciliators' recommendations.

(Enacted 1995)




Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 28

Schedule: 2 MERCHANT SHIPPING (LINER CONFERENCES)
(MANDATORY PROVISIONS) REGULATIONS

23 of 1998; 64 of
1999

01/07/1997



Remarks:
Adaptation amendments retroactively made - see 23 of 1998 s. 2; 64 of 1999 s. 3


[sections 2(1), 3(1),
4 & 14(1)]


1. Citation and interpretation


(1) These Regulations may be cited as the Merchant Shipping (Liner Conferences) (Mandatory Provisions)
Regulations.

(2) In these Regulations-
"the Code" (《守則》) has the same meaning as in section 2(1) of the Ordinance;
"Conditions for Recognition Regulations" (《承認條件規例》) means the Merchant Shipping (Liner Conferences)

(Conditions for Recognition) Regulations set out in Schedule 3 to the Ordinance;
"conference" (公會) has the meaning given by Chapter I of the Code;
"conference agreement" (公會協議) means any agreement or arrangement referred to in the definition of "liner

conference or conference" in Chapter I of the Code;
"national shipping line" (國家航運公司) means a shipping line recognized as a Hong Kong shipping line under the

Conditions for Recognition Regulations or as a national shipping line of any other country by the appropriate
authority of that country;

"person" (人) includes an unincorporated conference;
"representative of shippers" (托運人代表) means a representative of shippers, as defined in the Conditions for

Recognition Regulations, who has been designated by the Chief Executive or any authorized person pursuant to
those Regulations; (Amended 64 of 1999 s. 3)

"shipper" (托運人) has the meaning given by Chapter I of the Code, except that in relation to the mandatory
provisions contained in Articles 11, 14(2) and (9), 16(3) and 17(2) of the Code and identified in the Schedule to
these Regulations, "shipper" (托運人) means such a shipper only if designated by the Chief Executive or any
authorized person pursuant to the Conditions for Recognition Regulations; (Amended 64 of 1999 s. 3)

"shippers' organizations" (托運人組織) means organizations recognized under the Conditions for Recognition
Regulations or, as the case may be, designated by the Chief Executive or any authorized person pursuant to those
Regulations; (Amended 64 of 1999 s. 3)

"the Table" (列表) means the Table of mandatory provisions of the Code set out in the Schedule to these Regulations.

2. Application of regulations


These Regulations (other than regulation 5) apply to any conference which-
(a) has its seat in Hong Kong, so far as it serves the trade between States which are Contracting Parties to

the Code; or
(b) which does not have its seat in Hong Kong so far as it serves the trade between Hong Kong and

another Contracting Party to the Code. (Amended 23 of 1998 s. 2)

3. Mandatory provisions


(1) The provisions of Chapters I to V of the Code (whether articles, paragraphs or sentences as the case may
be) listed in column 1 and column 8 of the Table are hereby identified as mandatory provisions, the operation of
certain of which are modified by the provisions of the Annex to the Table, as indicated in column 7 of the Table.

(2) A mandatory provision listed in column 1 of the Table in relation to which there is an entry-
(a) "SD" in column 2 of the Table shall be a statutory duty enforceable only at the suit of any person

mentioned in column 4 of the Table against any person listed in column 5;



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 29

(b) "IT" in column 2 of the Table shall have effect as an implied term of the contract or contracts referred
to in column 6 of the Table.

(3) The duties imposed by mandatory provisions referred to in subregulation (2) are supplemented by
mandatory provisions identified in relation thereto in column 8 of the Table; where a provision of the Code is
identified as such a supplementary statutory duty, then that statutory duty is owed by the same persons as the related
statutory duty listed in column 1, to which the duty in column 8 is supplementary.

(4) The provisions of the Code mentioned in columns 1 to 8 of the Table shall have effect subject to any entry
made in column 9 of the Table.


4. Incorporated conferences


Any reference to a conference in column 4 or 5 of the Table includes a reference to an incorporated conference

as well as to an unincorporated conference; and in the case of an incorporated conference referred to in column 5 the
members of the conference owe to the persons in column 4 a duty to take all reasonable steps to secure that the
conference fulfils the duty imposed on the conference by that entry in the Table.

5. Chapter VI of the Code


Chapter VI of the Code shall have effect as if-
(a) in Article 23(2) for the words "shipping lines of the same flag" there were substituted "shipping lines

which are incorporated or formed under the law of the same State and have their principal places of
business in that State"; and

(b) at the end of Article 23(3) there were added- "Where some or all of the parties to a dispute have settled
it by mutual agreement, there shall no longer be a dispute between those parties for the purposes of
Articles 24 to 45.".


SCHEDULE TO THE

MERCHANT SHIPPING (LINER CONFERENCES)
(MANDATORY PROVISIONS) REGULATIONS

[regulation 3]



TABLE OF MANDATORY PROVISIONS OF THE CODE


SCHEDULE TO THE [regulation 3]

MERCHANT SHIPPING (LINER CONFERENCES)
(MANDATORY PROVISIONS) REGULATIONS


TABLE OF MANDATORY PROVISIONS OF THE CODE



Article,
paragraph

or sentence
of the Code*

Whether
statutory
duty or
implied

term




Description



Right given
to


Right

enforceable
against




Contract
Relevant

provision of
the Annex to this

Table



Supplementary duty
in Code

Clarification or
supplement of

article, paragraph
or sentence of

the Code*
Article 1
(1) 1*

SD Admission to a
conference

National shipping
lines

Conferences Paragraph 1 1(4) and 1(5) In considering applications for
admission or re-admission the
conference shall have regard to
Article 1(2), and 1(6) as
appropriate.


(1) 2* SD Admission to a
conference

Shipping lines
other than
national shipping
lines

Conferences 1(4) and 1(5) In considering applications for
admission or re-admission the
conference shall have regard to
Article 1(2), 1(3) and 1(6) as
appropriate.


Article 2 (1)-(4) IT Participation in
conference trade

Conference
agreement

Paragraphs 2 to 9 2(5)-2(17) Without prejudice to the rights of
national shipping lines, the
reference in Article 2(1) to trades
covered by a conference relates
only to the particular trades
between contracting parties to the
Code defined in that shipping
line's agreements with other
conference members.

In Article 2(4)(b) for "right to
acquire" substitute "right to



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 30

acquire by commercial means".

In Article 2(13) 1* for "require"
substitute "request" in both places.

In Article 2(13) 3* add "acting
unanimously" after "both ends of
the trade".

In Article 2(14) 1* for "require"
substitute "request".

Article 3 IT Decision-
making
procedures

Conference
agreement

Paragraphs 10
and 11



Article 4 (1),
(2), (3) and (4)

IT Sanctions Conference
agreement



Article 5 (1) IT Self policing Conference
agreement



(1)(c) SD Reporting on self
policing

Appropriate
authority

Conferences

Article 6 SD Conference
agreements etc.

Appropriate
authority

Conferences
and member
lines



Article 7
(1) 2*
(1) 3*

IT Loyalty
arrangements

Loyalty
arrangem-
ents between
the conference
and shippers

7(2) and 7(3)

Article 8 IT Dispensation
from loyalty
arrangements

Loyalty
arrangem-
ents between
the conference
and shippers



Article 9
1*

SD Availability of
tariffs etc.

Shippers,
shippers'
organizations and
representative of
shippers and other
parties concerned
with the shipment
of goods in which
they have a
beneficial interest
on the routes
covered by
conferences


Conferences
and member
lines

9 2*

Article 10 1* SD Annual reports Shippers'
organizations and
representative of
shippers

Conferences

2* SD Annual reports Appropriate
authority

Conferences

Article 11 (1)1* SD Consultation
machinery

Conferences,
designated
shippers'
organizations,
shippers' and
representative of
shippers

Conferences,
designated
shippers'
organiza-
tions, shippers'
and representa-
tive of shippers

11(1)2*
11(1)
11(3)
11(4)
11(5)
11(6)

In Article 11(1) 2* insert
"reasonably" after "whenever".

For Article 11(5) substitute "At
the request of any party, to be
made within 30 days of receipt of
notice of a decision or proposal, or
such other time as the parties
agree, or the Code provides,
consultation shall begin without
undue delay, and in any event,
unless different periods of time are
provided in the Code.
(i) within a maximum
period specified in the conference
agreement and agreed with
shippers' organizations; or
(ii) if subparagraph (i)
does not apply not later than 30
days after receipt of the proposal
for consultation.".

(1)3* SD Consultation
machinery

Appropriate
authority,
representative of
shippers

Conferences,
designated
shippers'
organiza
tions, and
shippers




Article 13 (1)1*


SD Tariffs Shippers Conferences

(1)2* SD Tariffs Shippers Conferences
and members
lines

This provisions does not prevent
lower than published rates being
charged.



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 31


Article 14 (1) SD General freight

rate increases
(Notice)

Shippers'
organizations,
shippers,
representative of
shippers,
appropriate
authority

Conferences 14(8)

(2) SD General freight
rate increases
(consultation)

Shippers'
organizations,
shippers,
representative of
shippers,
conferences

Conferences 14(3)
14(5)

In Article 14(2) after "receipt of
the notice" insert "or in the
absence of agreement within 30
days of the receipt of the notice".

In Article 14(5) 1* for "and
subject to the procedures
prescribed in the Code" substitute
"or, if consultation has been
requested in accordance with
Article 14(2), within 60 days of
receipt of the notice given under
Article 14(1)".

In Article 14(5) 1* after "matter"
insert "at the request of one of the
parties concerned".

(6) 3* & 4* IT General freight
rate increases


Loyalty
agreement



(7) SD General freight
rate increases;
deferred rebates


Shippers Conferences

(9) 2* SD General freight
rate increases


Shippers Conferences Paragraph 10

Article 15 (3)
1*

SD Promotional
freight rates

Shippers,
shippers'
organizations, and
representative of
shippers

Conferences 15(2)
15(3) 2*
15(4)
15(5)



(8) IT Promotional
freight rates


Conferences
agreement



Article 16 (1)


SD Surcharges Shippers Conferences 16(2)

(3) SD Surcharges
(consultation)

Shippers,
shippers'
organizations, and
representative of
shippers

Conferences 16(4) 1*
16(5)



(2) IT Shipment
contract



Article 17 (1)2* SD Currency changes


Shippers Conferences 17(4)

(2) 1*,
2* & 3*

SD Currency changes
(consultation)

Shippers,
shippers'
organizations, and
representative of
shippers


Conferences 17(3)
17(4)



Article 18 SD Fighting ships Non-conference
shipping lines

Conferences

Article 19 (3)1*


SD Adequacy of
service

Shippers Conferences

Article 21 1* &
2*

SD Representa-
tion

Shippers'
organizations,
shippers, and
representative of
shippers

Conferences



* A numeral followed by an asterisk indicates that the reference is to that sentence in the paragraph.

(Amended 80 of 1997 s. 102)


ANNEX TO THE TABLE OF MANDATORY PROVISIONS


1. In the case of an existing conference, shipping lines established in Hong Kong which are members thereof
shall determine by commercial negotiation with another shipping line so established whether the latter may participate
as a national shipping line in the said conference. If a new conference is created, the shipping lines established in
Hong Kong shall determine by commercial negotiations which of them may participate as a national shipping line in
the future conference.



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 32


2. In a conference trade between Hong Kong and another Contracting Party to the Code which has made a

reservation disapplying Article 2 of the Code in respect of its trade with the People's Republic of China (hereinafter
referred to as "a relevant State"), a shipping line of a relevant State wishing to participate in the redistribution
provided for in paragraphs 3 to 7 of this Annex may do so subject to reciprocity defined at governmental or ship-
owners' level. (Amended 23 of 1998 s. 2; 64 of 1999 s. 3)


3. Where a liner conference operates a pool or a berthing, sailing and/or any other form of cargo allocation

agreement in accordance with Article 2 of the Code, the volume of cargo to which the group of national shipping lines
incorporated in Hong Kong and national shipping lines of all relevant States participating in that trade or the shipping
lines of Hong Kong and all relevant States participating in that trade as third-country shipping lines are entitled under
the Code shall be redistributed, unless a decision is taken to the contrary by all the lines which are members of the
Conference and parties to the present redistribution rules. This redistribution of cargo shares shall be carried out on the
basis of a unanimous decision by those shipping lines which are members of the conference and participate in the
redistribution, with a view to all these lines carrying a fair share of the conference trade.


4. The share finally allocated to each participant shall be determined by the application of commercial

principles, taking account in particular of-
(a) the volume of cargo carried by the conference and generated by the countries or territories whose trade

is served by it;
(b) past performance of the shipping lines in the trade covered by the pool;
(c) the volume of cargo carried by the conference and shipped through the ports of the countries or

territories concerned;
(d) the needs of the shippers whose cargoes are carried by the conference.


5. If no agreement is reached on the redistribution of cargoes referred to in paragraph 3, the matter shall, at the
request of one of the parties, be referred to conciliation in accordance with the procedure set out in paragraph 7. Any
dispute not settled by the conciliation procedure may, with the agreement of the parties, be referred to arbitration. In
that event, the award of the arbitrator shall be binding.


6. At intervals to be laid down in advance, shares allocated in accordance with paragraphs 3, 4 and 5 shall be

regularly reviewed, taking into account the criteria set out in paragraph 4 and in particular from the viewpoint of
providing adequate and efficient services to shippers.


7. The parties to the dispute shall designate one or more conciliators. Should they fail to agree on the matter,

each of the parties to the dispute shall designate a conciliator and the conciliators thus designated shall co-opt another
conciliator to act as chairman. Should a party fail to designate a conciliator or the conciliators designated by the
parties fail to reach agreement on the chairman, the President of the International Chamber of Commerce shall, at the
request of one of the parties, make the necessary designations. The conciliators shall make every endeavour to settle
the dispute. They shall decide on the procedure to be followed. Their fees shall be paid by the parties to the dispute.


8. Without prejudice to paragraph 9 of this Annex, Article 2 of the Code shall not be applied in conference

trades between Hong Kong and relevant States.

9. Paragraph 8 of this Annex shall not affect the opportunities for participation as third country shipping lines

in such trades, in accordance with the principles reflected in Article 2 of the Code, of the shipping lines of a
developing country which are recognized as national shipping lines under the Code and which are-

(a) already members of a conference serving these trades; or
(b) admitted to such a conference under Article 1(3) of the Code.


10. Articles 3 and 14(9) of the Code shall not be applied in conference trades between Hong Kong and relevant
States.


11. In trades to which Article 3 of the Code applies, the last sentence of that Article is to be interpreted as

meaning that-



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 33

(a) the two groups of national shipping lines will co-ordinate their position before voting on matters
concerning the trade between their two countries; and

(b) this sentence applies solely to matters which the conference agreement identifies as requiring the
assent of both groups of national shipping lines concerned, and not to all matters covered by the
conference agreement.


12. If any question arises as to whether a particular State is or is not a relevant State as defined in paragraph 2

of this Annex, or is or is not a developing country for the purposes of paragraph 9 of this Annex, that question shall be
referred to the Chief Executive and a certificate upon that question issued by or under the authority of the Chief
Executive shall be conclusive evidence of the facts stated in the certificate. (Amended 64 of 1999 s. 3)

(Enacted 1995)

Schedule: 3 MERCHANT SHIPPING (LINER CONFERENCES)

(CONDITIONS FOR RECOGNITION) REGULATIONS
23 of 1998; 64 of
1999

01/07/1997



Remarks:
Adaptation amendments retroactively made - see 23 of 1998 s. 2; 64 of 1999 s. 3


[section 14(2)]
1. Citation and interpretation


(1) These Regulations may be cited as the Merchant Shipping (Liner Conferences) (Conditions for
Recognition) Regulations.

(2) In these Regulations-
"the Code" (《守則》) has the same meaning as in section 2(1) of the Ordinance;
"conference" (公會) has the meaning given by Chapter I of the Code;
"representative of shippers" (托運人代表) means any person who represents directly shippers as an agent in making

arrangements for the shipment of goods;
"shipper" (托運人) has the meaning given by Chapter I of the Code;
"shippers' organization" (托運人組織) means an association or equivalent body which promotes, represents and

protects the interests of shippers.


2. National shipping lines incorporated in Hong Kong


(1) Subject to subregulation (4), a body corporate, being a vessel-operating carrier, shall be recognized as a
national shipping line incorporated in Hong Kong for the purposes of the Code in respect only of those conferences of
which it is a member if it is established in Hong Kong in accordance with subregulation (2).

(2) For the purpose of this regulation a shipping line is established in Hong Kong if it is incorporated or formed
under the law of Hong Kong, and has its principal place of business in Hong Kong.

(3) If any State does not permit bodies corporate falling within subregulation (1) to establish themselves
(whether by having a place of business in that State, or by means of a subsidiary company registered in that State or
otherwise) in such a State or to have an effective opportunity to ply for trade to and from that State or, if such a State
is party to the Code, to qualify as a national shipping line for the purposes of the Code in that State, then a body
corporate which is directed from that State shall not be recognized as a national shipping line incorporated in Hong
Kong.

(4) In deciding whether a body corporate is directed from a State regard shall be had to any relevant matter; in
particular a body corporate shall be treated as being directed from a State if a person (or group of persons) resident in
or a national of, or any agency or undertaking of such State- (Amended 23 of 1998 s. 2)

(a) has an interest in shares comprising more than 50% of the share capital of the body corporate or in any
body corporate which holds, whether directly or through other bodies corporate, more than 50% of
such shares; or

(b) has the power to appoint a majority of the directors of the body corporate; or
(c) is a person, agency or undertaking in accordance with whose instructions the body corporate is



Cap 482 - MERCHANT SHIPPING (LINER CONFERENCES) ORDINANCE 34

accustomed to act.


3. Shippers' organizations


The conditions for recognition by the Chief Executive or any authorized person as a shippers' organization in
relation to any conference so far as it serves the trade of Hong Kong and another State which is a Contracting Party to
the Code are- (Amended 64 of 1999 s. 3)

(a) the shippers' organization has its headquarters in Hong Kong; and
(b) compliance by the shippers' organization with either of the following-

(i) that the shippers' organization is a national organization representing those shippers who, taken
together, are the shippers of the greatest quantity of goods with that conference; or

(ii) that the shippers' organization can show that it represents shippers of such quantities of goods
with that conference as to make it reasonable for the conference to consult the organization,
unless the conference can show-
(A) that the majority of shippers represented by the organization are adequately represented by

shippers' organizations already recognized pursuant to this regulation; or
(B) that it would not be appropriate to consult the organization having regard to the number of

organizations which represent shippers of greater quantities of goods with the conference,
or the number of shippers of greater quantities of such goods; and

(c) notification by the shippers' organization in writing to the conference that it wishes to be so recognized
and of the address to which notices intended for it should be sent.



4. Cesser of recognition


A shippers' organization recognized in relation to any conference shall cease to be a recognized organization in
relation to that conference 3 months after it notifies the conference that it is to cease to be regarded as a shippers'
organization, but such notice shall not prevent the organization thereafter becoming again a recognized organization in
relation to the conference.


5. Designation


The Chief Executive or any authorized person may designate for the purpose of Article 11 of the Code
(consultation machinery) any recognized shippers' organization, any shipper, and any representative of shippers.
(Amended 64 of 1999 s. 3)

(Enacted 1995)