APART from European objections to the Rotterdam Rules on cargo liability over conflicts with EU transport policy, Seattle law firm Lane Powell has identified a number of new concerns for the shipping community.
The rules, now ratified by 15 countries, with the US signing, the UK in consultation and China supporting but not signing yet, would not come into force until a year after 20 countries ratify what is formally known as the United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea .
The Rotterdam Rules would replace the current Hague Rules, Hague-Visby Rules and Hamburg Rules. Full ratification would bring "sweeping changes" to America's Carriage of Goods by Sea Act (COGSA).
"Jurisdiction and arbitration were among the most controversial subjects," said the Seattle legal study. "The Rules in Chapter 14 and 15 provide for forum selection clauses and the binding effect of arbitration clauses or agreements.
The chapters of the Rules permit the contracting state to opt-out of these provisions." Changes in burden-of-proof requirements in negligence cases were also important, said the Seattle lawyers.
The burden is now bestowed solely on the carrier. And where it appears that the injury to cargo is due either to sea peril or negligent stowage, or both, carriers must bear the entire loss of the shipper.
This marks a stark departure from the multi-causation system under the American law under COGSA. The Rotterdam Rules also do not provide an exemption of "error in navigation." Carriers will now not be exempted for damage or loss caused by navigational mishaps.
In cases of fire, however, carriers will no longer need to satisfy conditions to rely on the "immunity from liability" exemption provisions under COGSA. Though notwithstanding the exemption, if the claimant can prove that a carrier is at fault or negligent, liability may still be imposed, said the law firm.
The convention also further extends the due diligence requirement that allows carriers exemption from negligence liability for poor seaworthiness to include inspections during the voyage rather than just prior to the voyage.
The provisions in Chapter 10 on the right of control, meanwhile, exceed the scope of COGSA. Shippers or transport document holders can now instruct the carrier for disposal of the goods. The instructions, however, cannot substantially affect the carrier's performance.
Reimbursements will be imposed in cases where other cargo is lost or damaged. Regarding delays, carriers are now only liable when the goods are not delivered "within the time agreed."
Therefore, absent an agreed delivery time, there would be no delay claim, said the Lane Powell report.
The paper also said it is important to note that due to a redefining of the COGSA's interpretation of what a maritime performing party is, railroad and other inland carriers will not be protected under the Rotterdam Rules if they do not provide services exclusively within a port area.
The convention also redefines what a constitutes a "package." The resulting provision will include smaller units than those under COGSA. This will likely result in higher compensation amounts for limitation of liability.
The last point relates to the scope of the convention, which covers both negotiable and non-negotiable transport documents, but not charter parties or other contracts for use of space on a ship.
As per Article 12, a carrier's period of responsibility now commences from the receipt of the goods for carriage and ends when the goods are delivered. The inclusion of door-to-door coverage is now beyond the COGSA's tackle-to-tackle coverage.
Source : HKSG, 07.10.09
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