[220213.EN.SEA] US Delay In Passing UN's Marine Loss Rotterdam Rules Puts Treaty At Risk

THE United States Senate's delay in passing the Rotterdam Rules, an international agreement governing liability for damages to ocean goods adopted by the UN General Assembly in 2008, is threatening international support for the accord.

The rules, formally the United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea, has nearly two dozen countries approval but ratification by nations is stalled until the United States acts.

At different times Americans and Europeans have backed and criticised the Rotterdam Rules. In February 2010, the Europeans objected to it while the American Bar Association has voted in favour of it.

A review of the rules which provide a legal framework to the commercial development of the maritime industry by developing the Hague Rules of the 1920s that protected cargo interests is called for by the State Department from industry bodies of National Industrial Transportation League, World Shipping Council, and Maritime Law Association.

The delay of three years by the US in signing a treaty is key to international support, said Susan Biniaz, the US State Department deputy legal adviser of international affairs.

Industry bodies say the transmittal to the Senate for ratification will support the treaty's viability. Without it, there is a serious risk of losing a rare opportunity to modernise and harmonise this important area of international transport law, proponents say.

There has been considerable division over the Rotterdam Rules that in the US would replace the 1924 Carriage of Goods by Sea Act to cover liability for cargo that's damaged at sea or on land when part of a door-to-door intermodal move.

At the time the European Commission found fault with the rules because they are not in line with wider EU transport policy that seeks to reduce shipping complexity.

The European Shippers' Council (ESC) also opposed the rules with the then ESC secretary general Nicolette van der Jagt saying the rules were too complex and would discourage short-sea and coastal shipping in an intra-European, door-to-door logistics setting.

Before that in October 2009, a Seattle legal study also spotted areas of concern in the Rotterdam Rules, formally known as the United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea.

"Jurisdiction and arbitration were among the most controversial subjects," said the Seattle legal study. "The rules provide for binding arbitration," said the Seattle study.

Changes in burden-of-proof, now placing it solely on the carrier, was worrying aspect as was the assigning responsibility to carriers for the entire loss to the shipper if damage occurs at sea, a departure from the multi-causation system under US law.

Source : HKSG, 22.02.13.