2009-12: Rotterdam Rules

Rotterdam Rules

The Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea, known as the Rotterdam Rules was adopted in December 2008 by the UN General Assembly and will enter into force twelve months after ratification by at least twenty states.

The P&I Club has published “Legal Briefing - What impact will the Rotterdam Rules have on your liability?” to illustrate the impact this new convention may have on your liability. (http://bit.ly/6ewfLK)

If brought widely into force, the convention will significantly increase cargo liability for maritime carriers. The Legal Briefing compares the Rotterdam Rules with current regimes using tables to summarise the various defences and limitations e.g. package limitation, error in navigation, etc.

There is a positive side. Although the new convention will increase shipowners’ liabilities, in doing so it offers the best prospects for updating carriage of goods by sea law in a uniform approach across the world. The alternatives of regional updating will certainly involve the same (or worse) problems of increased liabilities and legal uncertainties, but multiplied by the difficulties of conflicting, overlapping regimes. In common with fellow clubs in the International Group, the UK Club therefore supports the introduction of the Rotterdam Rules, notwithstanding the additional liability burden.

It should be noted, nonetheless, that the standard terms of contracts for carriage, for purposes of Club cover and for eligibility for Pooling, currently remain the Hague-Visby Rules. This will be reviewed in light of the support for the new convention which is forthcoming when it opens for ratification.

The European Shippers Council opposes the Convention, Nicolette van der Jagt, Secretary General of the ESC said; "I believe that one of the reasons that so few governments have signed could be that there are still so many unanswered questions. Transport Canada indicated in a press statement last week that they are not ready to sign because of concerns amongst a number of Canadian stakeholders and that they wanted more time to consult with them. This could be what other Member States are thinking." ESC's opposition to the Rotterdam Rules has been criticised on a number of occasions by a group of interests who took a leading part in the development and drafting of the text of the Rotterdam Rules and are naturally and understandably protective of their input. ESC's concerns are in fact shared by a wide spectrum of other interests ranging from States, trade associations and NGOs to experts from a number of different countries and legal systems. It is important that opinion in ministries and parliaments across the world should not be unduly influenced by those who may have been too close to their own work to see or acknowledge its imperfections.

The debate on liability is key to the harmonisation of transport documents and the development of e-Freight in Europe. At the moment it seems that despite the key role that a single transport document has in the Freight Transport Logistics Action Plan of DG-Tren, that the issue is almost permanently on hold whilst endless disagreements about liability ensue.

However much liability is stated as a non-issue by many operators, it has raised it's head as a potential problem for the whole global supply chain in 2009 with the Uniserve case. Now, to what extent can the liability issue be unpicked from the eFreight one?

Tom Zunder (expressions of opinion stated are those of the author and no other organisation)