This chapter is concerned with the quantum of the carrier’s liability to the cargo interests, which is dealt with by Articles 23 to 29 of the Convention. Article 23 contains the basic provisions as to the extent of that liability, but before turning to a detailed consideration of those provisions, some general explanation is required concerning Article 23(3), which contains the general limit of that liability. In its original form 1 that limit was defined in terms of the gold franc. That formula was conceived in a world financial system whereby the price of gold remained stable, as a way of establishing a uniform fixed unit of account which would not vary from country to country despite fluctuations in the exchange rates of individual currencies. This system, however, was dependent on the artificial device of declared official gold parities by members of the International Monetary Fund (IMF), but since 1971 the price of gold has fluctuated freely, producing a situation where there were in effect two gold values: the artificial official rate, 2 and the free market rate, the latter being considerably higher than the former and, moreover, constantly fluctuating.
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