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Rotterdam Rules and Combined Service

18.11.09

Rotterdam Rules have been worked up especially for liner trade and carriage of goods by sea.

Containerization of trade and transportation of cargo require relevant enforcement of law. International community makes efforts to create legal norms regulating relations in multimodal technology of contemporary transport, especially, marine transport. Private persons introducing such multimodal technologies have considerable legal departments. Due to the lack of the legal regulation in this sphere they create their own forms of transport documents. The main providers of multimodal transport are Maersk, COSCO, Evergreen, Hapag-Lloyd, Hanjin, CMA CGM, MSC. As a rule, they run their services in accordance with their own terms and conditions. Such terms and clauses are taken from the existing international and national acts. Our company “International Law Offices” takes part in this work, so we have the first-hand knowledge related to that problem. For example, MSC (Mediterranean Shipping Co.) formed up a pro forma of the Bill of Lading in accordance with the Hague-Visby Rules and the US Cogsa 1936.

Surely, such model of relations with clients is far from being perfect. Only universal international convention can meet the needs of the modern society.

There was an attempt to create such convention in May 24, 1980. The UN Convention on International Multimodal Transport of Goods was approved. This Convention did not come into effect up to this day and hardly ever does. The member nations, especially nations with strong shipping and other carriers of cargo considered that derogation from the existing legal provisions was too much for the benefit of freight forwarders. New type of party to transport process appears when the carriage has the multimodal character. This is a combined transport operator – (СTO). There are VO (Vessel operator), NV СTO (Non vessel сombined transport operator) and NVOCC (Non vessel operating common carrier) among them.

CTO operates as a carrier assuming responsibility for shipment even if it is a freight forwarder who does not own any vessel or other vehicle. That system is known as unified system of responsibility. If CTO doesn’t assume responsibility for the whole shipment, but as a carrier of any certain type of transport for certain phase of carriage that system is called network system of responsibility. Such cases are very widespread and make about 80 % of the claims towards CTO. However, quite often no one knows when the damage occurred or the contract was breached. Such situation can be seen in container carriage. In this case the multimodal contract of carriage is valid and CTO liability is stipulated by that contract.

Antagonism of interests between the nations was shown up at preparatory stage of the United Nations Convention on International Multimodal Transport of Goods (Geneva, 24 May 1980). Nevertheless, the compromise has been made in Article 19 of the Convention according to which the network would have remained only in relation to the limit of CTO responsibility that cannot be lower than the limit stipulated by the imperative rules. Another significant attempt to settle down the relations related to international direct intermodal carriage, that is the carriage under the single transport document by various modes of transport, are Rotterdam Rules. It stands for the United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea adopted in December 11, 2008. However, it is unknown whether the new Rules will be acceptable, namely, for liner operators and major associations of liner carriers. Approval of the Rules in the contemporary economic and political environment by the states participants of that Convention depends thereon.

It looks like they will not be acceptable. The liner operators have been made the usual legal mechanisms regulating their relations with the clients by their pro-forms of the Bill of Lading. Meanwhile the Rotterdam Rules change the legal regulation for carriage by sea stipulated by the Hague-Visby Rules and Hamburg Rules. The legal statements of the Rotterdam Rules are not clearly defined. Besides, they are too lengthy.

Taking into account that the Hamburg Rules are not popular among sea carriers, the very legal regulation stipulated by the Hague-Visby Rules still corresponds to the development of technologies related to the carriage by sea.

What is going on in Ukraine? Does the legal regulation of shipping relations correspond to our vision of Ukraine as a developed maritime nation? Unfortunately, neither the Ukrainian legislator nor private persons being interested in sea economy development pay attention to the attempts to regulate the relations regarding sea transportations. Our maritime legislation is in backward. And there is no even discussion around Rotterdam Rules.

Автор: Вячеслав Лебедев