Reflections on the Rotterdam Rules
* The views expressed in this article are those of the author and do not necessarily reflect those of the UNCTAD Secretariat.
1 United Nations Conventions on Contracts for the Carriage of Goods by Sea, 1978.
2 International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading, 1924 (Hague Rules), as amended by the Visby and SDR Protocols 1968 and 1979.
3 International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading, 1924.
4 The Convention was adopted by the United Nations General Assembly on 11 December 2008. The full text of the Convention is available on the UNCITRAL website at www.uncitral.org. Please note that there has been a correction regarding ‘certain errors in articles 1 (6) (a) and 19 (1) (b) of the authentic text’, effective 25 January 2013. The relevant text relates to the obligations and liabilities of a performing party. Also available on the UNCITRAL website (under ‘Working Group Documents’) are all working documents pertaining to the negotiations (Working Group III).
5 Spain was the first State to ratify the Convention on 19 January 2011, followed by Togo, on 17 July 2012. Relevant information about the status of ratification is available on the UNCITRAL website (www.uncitral.org).
6 It should be noted that Contracting States are required to denounce the Hague Rules, Hague-Visby Rules or Hamburg Rules upon ratification. Following entry into force, such denunciation is technically a condition for accession (Art. 89). As a result, States will not be able to adhere to any other maritime liability regime with respect to their trade with States that have chosen not to become party to the Rotterdam Rules.
7 See R Asariotis, ‘Allocation of Liability and Burden of Proof in the Draft Instrument on Transport Law’ (2002) LMCLQ 382; R Asariotis, ‘Main Obligations and Liabilities of the Shipper’ (2004) Transportrecht 284; R Asariotis, ‘The End of the Bill of Lading as we Know it?’ DC-PRO, 11 April 2008 (http://focus.dcprofessional.com/ExpertView.asp); R Asariotis, ‘What Future for the Bill of Lading as a Document of Title?’ (2008) JIML 75; R Asariotis, ‘Burden of Proof and Allocation of Liability for Loss Due to a Combination of Causes Under the Rotterdam Rules’ (2008) JIML 537; R Asariotis, ‘Loss Due to a Combination of Causes: Burden of Proof and Commercial Risk Allocation’, in D Rhidian Thomas (ed.), A New Convention for the Carriage of Goods by Sea – The Rotterdam Rules (Lawtext, 2009) 138; R Asariotis, ‘UNCITRAL Draft Convention on Contracts for the Carriage of Goods Wholly or Partly by Sea: Mandatory Rules and Freedom of Contract’, in A Antapassis, L Athanassiou and E Rosaeg (eds), Competition and Regulation in Shipping and Shipping Related Industries (Martinus Nijhoff, 2009), 349; R Asariotis, ‘The Rotterdam Rules: A Brief Overview of Some of their Key Features’ [2009] European Journal of Commercial Contract Law 111.
8 The relevant publications provide fuller analysis and discussion of individual aspects of the Rotterdam Rules (and of earlier draft versions of the Convention), as well as further references, in particular to other academic writing. A bibliography relating to the Rotterdam Rules is also available on the UNCITRAL website at www.uncitral.org/pdf/english/bibliography/Rotterdam_Rules.pdf.
9 The substantive scope of application and the provisions regulating the application of the Convention to multimodal transport remained controversial, even at the UNCITRAL Commission meeting at which the final text was agreed, with some States proposing to make the multimodal application of the new international regime optional, or proposing to provide for continued applicability of existing national law. Others expressed concern about the suitability of the substantive liability regime in the context of international multimodal transportation. See A/ 63/17 at paras 23, 93–98 and 270–78.
10 C 9.
11 C 11.
12 C 10.
13 See in particular c 3, dealing with electronic transport records.
14 C 14 and 15. For a considered analysis, see YM Baatz, in YM Baatz, C Debattista, F Lorenzon, A Serdy, H Staniland, M Tsimplis, The Rotterdam Rules: A Practical Annotation (London, Informa, 2009) 211 et seq.
15 Note that charterparties are expressly excluded, as are ‘other contracts for the use of a ship or for any space thereon’ and contracts of carriage in non-liner transportation, except where ‘there is no charterparty or other contract for the use of a ship or of any space thereon and a transport document or an electronic transport record is issued’ (Art 6). While the Convention does not apply as between original parties to any of these contracts, it does apply ‘as between the carrier and the consignee, controlling part or holder that is not an original party …’, see Art 7.
16 A Diamond, ‘The Rotterdam Rules’ [2009] LMCLQ, 445 (451–52).
17 However, it has been argued that despite the intention, inherent in Art 82, of avoiding conflict with existing unimodal transport conventions, the potential for such conflict remains, in particular in respect of the CMR. See Diamond, n 16 above, at 454–55 for a considered discussion.
18 Art 14.
19 Courts may of course imply such a duty but, as a matter of interpretation, application of Art 14 by analogy may be difficult to justify, given that the legislator has given its attention to the matter. The title of Art 14 makes it clear that the provision sets out ‘Specific obligations applicable to the voyage by sea’. A chapter entitled ‘Additional provisions relating to particular stages of carriage’ has been included in the Convention, but contains only three provisions. In addition to Art 26, (‘Carriage preceding or subsequent to sea carriage’), this includes Art 24 (‘Deviation’) and Art 25 (‘Deck cargo on ships’).
20 Volume contracts are discussed further below. See also Arts 79 and 80.
21 Art 19 specifies the circumstances under which a ‘maritime performing party’ is subject to the obligations and liabilities of a carrier. The concept is defined in Art 1(6) [performing party] and 1(7) [maritime performing party]. Accordingly, a ‘maritime performing party’ is a performing party to the extent that it performs or undertakes to perform any of the carrier’s obligations, at the carrier’s request or under its supervision, during the period between arrival of the goods at the port of loading of a ship and their departure from the port of discharge of a ship. An inland carrier is a maritime performing party only if it performs or undertakes to perform its services exclusively within a port area. See also n 4, above
22 875 SDR per package or other shipping unit or 3 SDR per kilogram of gross weight, whichever amount is the higher.
23 2.5 times the freight.
24 Unreasonable deviation is not a breach of obligation under the Convention. Art 24 does, however, stipulate that if deviation amounts to a ‘breach of obligation’ under the ‘applicable law’, the carrier and performing carrier remain entitled to rely on ‘any defence or limitation’ under the Rotterdam Rules. Under English common law, the question of whether a deviation amounts to a breach of contract is well established and would probably be easy to answer. If the applicable law is that of a civil law jurisdiction, the position may be less clear, in particular if and when national legislation based on the Hague-Visby Rules will have been replaced by the Rotterdam Rules.
25 See Art 25(1)(c). Under Art 25(1)(a) and (b), goods may also be carried on deck if ‘such carriage is required by law’ or ‘they are carried in or on containers or vehicles that are fit for deck carriage and the decks are specially fitted to carry such containers or vehicles’.
26 Note, however, the wide definition of ‘container’ in Art 1(26), which refers to ‘any type of container, transportable tank or flat, swap-body, or any similar unit load used to consolidate goods, and any equipment ancillary to such load’.
27 A contractual liberty to carry on deck will be sufficient to bind third parties that have acquired a negotiable transport document in good faith, see Art 25(4).
28 Regarding ‘the defences provided for in Article 17’, see below, text following n 32 and n 38.
29 cf Daewoo Heavy Industries Ltd v Klipriver Shipping Ltd (The Kapitan Petko Voivoda) [2003] EWCA Civ 451, where the Court of Appeal held that a carrier remains entitled to the limitation of liability in accordance with the Hague Rules. For a critical comment on the decision, see R Asariotis, ‘Kapitan Petko Voivoda Judgment Raises Weighty Questions’ (2003) Lloyd’s List 2 July 2003.
30 Note the text of Art 14(c):
Make and keep the holds and all other parts of the ship in which the goods are carried, and any containers supplied by the carrier in or upon which the goods are carried, fit and safe for their reception, carriage and preservation.
31 Art 14 sets out the carrier’s seaworthiness obligation but does not refer to the burden of proof regarding the exercise of due diligence. Art 17(5) contains detailed rules on the burden of proof in cases of unseaworthiness and, under Art 17(5)(b)(ii) the burden of proof regarding the exercise of due diligence is on the carrier. However, it is important to note that the application of the provision is restricted to cargo claims (see the title of c 5: ‘Liability of the carrier for loss, damage or delay’, as well as the wording used in Art 17(1), ‘The carrier is liable for loss of or damage to the goods, as well as delay in their delivery’) and, in contrast to Art IV, r 1 HVR, does not cover liability of a shipper, which is regulated separately, in c 7. See further text to n 68, below.
32 See below section B, text to n 37–47.
33 See Art 17(3) (f). Note that the relevant burden of proof regarding negligence on the part of the carrier’s servants, agents or subcontractors is on the claimant (see Art 17(4)).
34 The carrier may also become liable ‘for all or part of the loss’ in cases where the loss was ‘caused by or contributed to by’ unseaworthiness of the vessel and the carrier was unable to prove that ‘it complied with its obligation to exercise due diligence pursuant to Art. 14’ (see Art 17(5)). Thus, similar to the position under the Hague-Visby Rules, the carrier would be liable in cases where the underlying cause of the fire was the unseaworthiness of the vessel and the carrier was unable to establish the exercise of due diligence in the relevant respects, cf only Papera Traders Co Ltd v Hyundai Merchant Marine Co. Ltd and The Keihin Co Ltd (The Eurasian Dream) [2002] EWHC 118 (Comm) in particular at para 123 et seq. However, in cases where a loss was due both to fire and unseaworthiness, a carrier may be better off under the Rotterdam Rules: this is due to the fact that under Art 17, a carrier may be exempt from part of its liability without having to prove the proportion of loss not due to its breach/fault; see further n 43, below, and accompanying text.
35 See Art 17(3) (h). Explicit reference is made to ‘act or omission of the shipper, the documentary shipper, the controlling party, or any other person for whose acts the shipper or the documentary shipper is liable pursuant to article 33 or 34’. A ‘documentary shipper’ is defined in Art 1(9) as ‘a person, other than the [contracting] shipper, that accepts to be named as “shipper” in the transport document or electronic transport record’. Art 33 deals with ‘Assumption of shipper’s rights and obligations by the documentary shipper’ and makes it clear that the documentary shipper is subject to the same liabilities as the shipper; Art 34 covers ‘Liability of the shipper for other persons’ and makes it clear that the shipper is liable for ‘acts or omissions of any person … to which it has entrusted the performance of any of its obligations’, except for the carrier or a performing party acting on behalf of the carrier. The wording of Art 17(3) (h) appears to imply that the documentary shipper may also be liable for the acts or omissions of third parties it – or the shipper – engages.
36 See also Jindal Iron and Steel Co Ltd v Islamic Solidarity Shipping Co Jordan Inc (The Jordan II) [2004] UKHL 49, where the House of Lords considered similar clauses to be compatible with the Hague-Visby Rules. The fact that the question came to be decided by the House of Lords indicates that the legal position under the Hague-Visby Rules required judicial clarification. The House of Lords appears to have been reluctant to ‘rock the boat’ at a time when international negotiations on the Rotterdam Rules were underway (see the speech of Lord Steyn, at para 31), but may have underestimated the impact that its decision in the matter had on the outcome of the negotiations.
37 For detailed analysis, see Asariotis, ‘Burden of proof ’ (2008) and Asariotis, ‘Loss Due’ (2009). See also Asariotis, ‘Allocation of liability’ (2002) and Asariotis, ‘Main obligations’ (2004) relating to earlier draft versions of the Rotterdam Rules (n 7).
38 Note the title of the chapter ‘Liability of the carrier for loss, damage or delay’ which makes it clear that the relevant rules do not apply to liability of a shipper under c 7. See also n 31, above.
39 Art 18 states that the carrier is liable for the breach of its obligations under the Convention caused by the acts or omissions of any performing party (defined in Art 1(6)), the master or crew of the ship, employees of the carrier or a performing party or ‘any other person that performs or undertakes to perform any of the carrier’s obligations under the contract of carriage, to the extent that the person acts, either directly or indirectly, at the carrier’s request or under the carrier’s supervision or control’.
40 For different possible approaches to interpretation, see in more detail Asariotis, ‘Loss Due’ (2009), at 150 (n 7).
41 Art 17(6): ‘When the carrier is relieved of part of its liability pursuant to this article, the carrier is liable only for that part of the loss, damage, or delay that is attributable to the event or circumstance for which it is liable pursuant to this article’.
42 See Asariotis, ‘Loss Due’ (2009), at 145–58 (n 7).
43 See Art 5(7) Hamburg Rules. For jurisprudence to similar effect regarding the Hague and Hague-Visby Rules, see, in England, Gosse Millerd Ltd v Canadian Government Merchant Marine Ltd (1928) 32 Ll L Rep 91 (98), [1929] AC 223 (241) (HL), cited with approval in Silver v Ocean SS Co [1930] 1 KB 416 (430, per Scrutton LJ); Smith Hogg & Co v Black Sea & Baltic General Insurance Co Ltd [1940] AC 997, (1940) 67 Ll L Rep 253 (HL); Government of Ceylon v Chandris [1965] 3 All ER 48, [1965] 2 Lloyd’s Rep 204 (216); The Torenia [1983] 2 Lloyd’s Rep 210 (218); The Mekhanik Evgrafov and Ivan Derbenev [1987] 2 Lloyd’s Rep 634 (636); Northern Shipping Co v Deutsche Seerederei GmbH and Others, The Kapitan Sakharov [2000] 2 Lloyd’s Rep 255 (see particularly the statement by Auld, LJ, at 269–70). See also The Popi M