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Specialists in Shipping, Marine Insurance & Transit Law, London |
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Your are here: Home >> Bulletins The Rotterdam RulesAs readers will no doubt be aware the United Nations Convention on Contracts or the International Carriage of Goods Wholly or Partly by Sea (otherwise known as The Rotterdam Rules) were open for signature in Rotterdam on 23rd September 2009. There has been much in the Maritime Press over the last few years regarding the Rotterdam Rules and the extent to which various transport, national and state organisations either support or criticise the Rotterdam Rules regime. However at the ceremony on 23rd September 16 countries signed up to the new Convention. This does not however mean that the Convention will be applicable in those states, as there will still need to be ratification or accession to the Convention. The Rotterdam Rules will only come into force one year after the Convention has been ratified by 20 contracting states. This therefore still appears some time away. The following countries (in alphabetical order) signed the Convention in Rotterdam - Congo, Denmark, France, Gabon, Ghana, Greece, Guinea, The Netherlands, Nigeria, Norway, Poland, Senegal, Spain, Switzerland, Togo and the United States of America. The UK government has stated that it was not in a position to sign the Convention and is still considering its national position. There is an indication that Germany will not sign and Japan are indicating that they may also not sign. The position of China has been to indicate support but a final position is still far from certain. It is unlikely that many other states will make their a decision until it is established if and to what extent the Rotterdam Rules obtain global acceptance, particularly from maritime trade nations. The Rotterdam Rules are intended, in the main, if universally accepted to replace the Hague, Hague Visby and Hamburg Rules regime of liability. They do however go further than the Hague Visby/Hamburg Rules regime in that the period of responsibility of the carrier extends beyond pure carriage by sea. Whilst the Rotterdam Rules are not a true multimodal convention covering loss, damage or delay to goods wherever it may occur they have been considered to be a maritime plus convention. This means that they deal primarily with carriage by sea but also with a carrier's period of responsibility both prior to and post loading, including potentially during some periods of inland carriage (Article 12). The Rotterdam Rules have not sought to override the applicability of certain unimodal conventions in set scenarios. Indeed Articles 26 and 82 deal with the continued applicability of unimodal conventions such as the CMR Convention, Warsaw Convention for Carriage by Air (including the Montreal Protocol) and the COTIF/CIM regimes for carriage by rail. The Rotterdam Rules also expand upon areas of carriers liability and include (albeit this Bulletin is not intended to set out in detail the Rules or Articles) the following:- Article 11 setting out the carriers obligation to carry and deliver the goods (a new proviso that was not present in the Hague/Hague Visby regime and opens the door for mis-delivery claims under the Rotterdam Rules); Article 12, dealing with the increased period of responsibility for the carrier; Article 13, setting out the basis of Article III Rule 2 Hague Visby obligations upon the carrier - albeit recognising the ability for a carrier to delegate certain tasks such as stowage); and Article 14 setting out the seaworthiness obligations. Article 14 is of particular interest to cargo interests at it provides an increased obligation upon the carrier to exercise due diligence to ensure that the vessel is in a seaworthy and cargo worthy state both prior to and at the beginning of the contractual voyage and to keep the vessel in a cargo and seaworthy state throughout the contractual voyage. This a substantial sea change in favour of cargo interests. However, there is also concern at provisions in the Rotterdam Rules for an apportionment of liability and exemptions or exclusions of liability wholly or in part. Article 17 of the Rotterdam Rules is the equivalent of Article IV Rule 2 of the Hague Visby Rules but should not be considered to exactly duplicate the Hague Visby Rules, and needs careful consideration. Of particular interest for cargo interests is the removal of the error/fault in navigation management defence (previously Article IV Rule 2 (a) of the Hague Visby Rules), the weakening of the carriers' fire defence so that if there is a fire on a ship which can be established to be caused by negligence of the carrier or their agents there is no exemption and the removal of the Article IV Rule 2 (q) catch-all defence. There are however additional defences such as actions taken to remove cargo that may be a danger to the ship/other cargo and/or measures taken to protect the environment. The Rotterdam Rules also provide an enhanced limit of liability (under Article 5) providing for 875 SDRs per package or 3 SDR's per kilo of gross weight. There is also an ability to claim for delay (albeit there are strict time limits in Article 23 for notification of a claim for delay) and some limits on the quantification of delay claims. Of further interest is the fact that the Rotterdam Rules provide a 2-year time limit for commencement of proceedings (as with the Hamburg Rules). However, there will need to be caution if the Rules are not universally accepted as certain jurisdictions such as China under the Chinese Maritime Code (if China do not become a party to the Rotterdam Rules) still apply regimes that may include a prohibition on agreeing consensual extensions to time limits under national law. It remains to be seen whether the Rotterdam Rules will obtain universal acceptance. Much will depend upon the attitude taken by the major maritime nations such as the US, China and Japan. We consider that should the Rules come into force this will impact upon cargo insurers' consideration of their policy terms, domestic carriage terms (and how private supply contracts operate in the Rotterdam Rules regime) and major ocean carriers/NVOCC's carriage terms. As such, we can only suggest that cargo underwriters should be aware of the Rotterdam Rules, consider making investigations as to the impact upon their business and "watch this space"? Should anyone have any queries they should not hesitate to contact Mark Lloyd, Christopher Dunn or Christopher Chatfield at this office. October 2009 Return to Bulletins |
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