Rotterdam Rules

Rotterdam Rules

On 11 December 2008 The UN General Assembly adopted the “Convention of Contracts for the International Carrying of Goods Wholly or Partly by Sea”and authorized a signing ceremony for the Convention to be held in Rotterdam, recommending the new Convention to be known as the “Rotterdam Rules”.

The Convention extends and modernizes the existing international rules relating to contract of maritime carriage of goods. The aim is that the Convention will replace The Hague rules, The Hague-Visby rules and the Hamburg rules and that it will achieve uniformity of law in the field of maritime carriage.

The Rotterdam Rules have been prepared in intergovernmental negotiations that lasted for over 10 years by the United Nations Commission for International trade law (UNCITRAL). On the other hand the Comité Maritime International (CMI) conducted the preparatory work on the Convention at the request of UNCITRAL including a preliminary draft text for the Convention. The signing ceremony was held in Rotterdam from 20 to 23 September 2009. In the meantime the following – 24- coutries have signed the Convention; Armenia, Cameroon, Congo, Democratic Republic of the Congo, Denmark, France, Gabon, Ghana, Greece, Guinea, Luxembourg, Madagascar, Mali, the Netherlands, Niger, Nigeria, Norway, Poland, Senegal, Spain, Sweden, Switserland, Togo, and the United States of America, all together representing 25% of the world’s trade. In the meantime Spain has become the first nation to ratify the Rotterdam Rules.

Also the European Community Shipowners’ Association (ECSA), the International Chamber of Shipping (ICS), BIMCO and the World Shipping Council (WSC) have greatly welcomed the clear recommendation by the European Parliament that EU Member States should move “speedily to sign, ratify and implement the UN Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea, known as the ‘Rotterdam Rules’, establishing the new maritime liability system” . The Rotterdam Rules, adopted by the United Nations Commission on International trade law (UNCITRAL) will replace the existing cargo liability regimes such as the Hamburg and Hague/Visby Rules. Shipowner organisations firmly believe that this will achieve greater global uniformity for cargo liability, facilitating e-commerce through use of electronic documentation, reflecting modern ‘door to door’ services involving other modes of transport in addition to the sea-leg and ‘just in time’ delivery practices. Following a thorough and detailed analysis of the Rotterdam Rules, ECSA, ICS, BIMCO and WSC have all concluded that this important new regime must be promoted by the industry to avoid the risk of a proliferation of regional cargo liability regulations. However, early ratification of the UNCITRAL Convention by major trading nations, such as EU Member States, will almost certainly give this process critical momentum, as can be read on www.bimco.org.

The Convention will come into force one year after ratification by the 20th UN Member state. Although there is reported to the widespread support for the Convention, the expectation is that it may be some time before the Rotterdam Rules enter into force.

Interpretation

Like most international Conventions, the Rotterdam Rules represent a compromise. For the correct interpretation the preparatory work and the commentary notes are essential, the more in terms of proper application in practice.
In general it can be remarked that most of the significant changes compared to The Hague-Visby rules are to the benefit of cargo owners, although signatory states are allowed to apply declarations in respect of certain options to allow carriers to seek full advantage by the contracting out of provisions, where permissible.

Some provisions of significant interest are the following:

Article 12 of the Rotterdam Rules states that the period of responsibility of the carrier of the goods under the Convention “begins when the carrier or a performing party receives the goods for carriage and ends when the goods are delivered”. The new Convention provides for door-to-door carriage where the Hague-Visby rules provide for a period of responsibility to govern the carriage of goods from loading on board until discharge.
The Rotterdam Rules maintain a fault-based regime where it comes to the carrier’s liability. The carrier is liable where cargo interests prove that the loss, damage or delay took place during the period of the carrier’s responsibility. However the carrier is relieved if it can prove that the cause is not attributable to its fault (which includes servants) or falls within the scope of listed defences, like for example fire and perils of the sea. If cargo interests can prove that the conduct of the carrier contributed to the loss, notwithstanding any applicable defences, the carrier remains liable. For example in case of a fire damaging the goods, the carrier can only rely of the defence as long as cargo interests can not prove the fire was caused by a fault of the carrier. This significantly limits the scope of the exemptions as presently applied under The Hague-Visby rules. It should be noted that where the carrier is released of part of its liability under one of this defences, it remains liable for that part of his liability to which the defence does not apply. This may consequently lead to complex disputes over apportionment.
The error of navigation exemption has been excluded, which from a practical point of view, significantly weakens the defences available to the carrier, as it concerns an excemption which is frequently relied upon by carriers in practice.
The obligation for the carrier to exercise due diligence to make the ship seaworthy before and at the beginning of the voyage has been extended to also cover the voyage by the wording “during the voyage by sea” as included in article 14.
The limits of liability have been increased. Compared to The Hague-Visby rules, the limits per kilogram have been increased from 2 up to 3 SDR, while the limit per package has been increased up to 875 SDR.
The time limit for commencement of legal proceedings in respect of cargo claims has been extended up to 2 years from the date of delivery in the Rotterdam Rules.
The Rotterdam Rules contain important changes regarding jurisdiction. Based on the principle that exclusive jurisdiction clauses may only be recognized if they meet the strict requirements of the Rotterdam Rules, jurisdiction may be found at the domicile of the carrier, the agreed place of receipt or delivery, or the place of the port where the goods are initially loaded or finally discharged.

Source: rotterdamrules.com

Further Reading

1. United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea (The Rotterdam Rules) (A/RES/63/122), 2 February 2009. For the text of the Convention in English, French and Spanish see Journal of Law and Economics Vol. XLIV No. 4 – 2009.

2. Francesco Berlingieri, Philippe Delebecque, Tomotaka Fujita, Rafael Illescas, Michael Sturley, Gertjan Van Der Ziel, Alexander Von Ziegler, Stefano Zunarelli, The Rotterdam Rules an Attempt to Clarify Certain Concerns that Have Emerged , 5 August, 2009.

3. Svante O. Johansson, A. Barry Oland, Kay Pysden, Jan Ramberg, Douglas G. Schmitt, William Tetley, A Response to the Attempt to Clarify Certain Concerns over the Rotterdam Rules Published 5 August 2009 , 1 September, 2009.

4. The following questions were submitted by the Canadian Delegation Spokesemen Barry Oland and Douglas Schmitt for consideration and answer by members of Panels speaking on the Convention on Contracts for International Carriage of Goods Wholly or Partly by Sea at the CMI (Comité Maritime International) Conference in Athens, Greece, 12-18 October, 2008: Questions for consideration at CMI Athens

5. D. Rhidian Thomas, Editorial Article of the Journal of International Maritime Law (JIML) “And Then There Were the Rotterdam Rules ,”(2008) 14 JIML at pp. 189-190.

6. European Shippers’ Council Position Paper on the Draft Maritime Instrument of the United Nations Commission on International Trade law (A/CN.9/WG.III/WP.81), April, 2007.

7. Position Paper of the Belgian Maritime Law Association Regarding the UNCITRAL Draft Convention on the Carriage of goods Wholly or Partly by Sea signed by the President of the Belgian Maritime Law Association Guy van Doosselaere and the Chairman Ralph de Witt, Antwerp, 10 October, 2008.

8. William Tetley, Summary of Some General Criticisms of the UNCITRAL Convention , 5 November, 2008.

9. David Maloof, As the UN General Assembly Nears Adoption of a New Proposed Shipper Compensation Treaty, Should the United States Ratify It or Simply Amend Existing Law , received on 30 October, 2008.

10. Questions and Answers Why the MLA Needs An Open Debate Concerning the “Volume Contracts” Exception to the Proposed Rotterdam Rules. , sent by David Maloof before 5 November, 2008.

11. William Tetley, Some General Criticisms of the Rotterdam Rules , 20 December, 2008

Conclusion

Notes

See Also

References and Further Reading

About the Author/s and Reviewer/s

Author: international

Mentioned in these Entries

Bills of Lading, Commercial law, International trade law, Trade law.


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