The United Nations Commission on International Trade Law (“UNCITRAL”) Working Group on Transport Law recently adopted the final “Draft Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea”. This aims to overhaul the existing international maritime liability conventions, including
The current draft is the culmination of 12 years of discussions and detailed negotiations, by the Comite Maritime International (“CMI”) from 1996 to 2002, and by UNCITRAL from 2002 to the present, in co-operation with inter-governmental and non-government organisations. It will be presented to the UNCITRAL Commission for a final round of negotiations in
Some of you reading this may be sceptical. The Hamburg Rules were agreed in 1978 but did not come into force until 1992. The UN’s Multimodal Convention 1980 never attracted enough support to enter into force. The difference, we understand, is that this Draft has the backing of some very influential countries (including the
The Draft Convention aims to create a modern and uniform law concerning the carriage of goods which include an international sea leg, but it is not limited to port-to-port carriage of goods. As such, the Draft Convention may most accurately be described as a ‘maritime plus’ convention. Whilst there are many changes to the carriage of goods by sea regime envisaged by the Draft Convention, perhaps the most relevant of those concern the liability of the carrier, which we shall comment on briefly.
- The fault-based liability regime as contained in the Hague-Visby Rules, whereby the shipper must establish fault by the carrier, is maintained in the Draft Convention. However, the list of defences available to the carrier has been significantly reduced by the abolition of the ‘nautical fault’ defence which, under the Hague-Visby Rules, relieves the carrier from liability for any “Act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship”. Rather, under the Draft Convention, when a casualty is due to a navigational error (for example) the ‘nautical fault’ defence will no longer be available to the carrier. UNCITRAL’s rationale for such a change was that whereas in the 1920s and 1930s the master could not establish instant contact with the shipowners - and therefore such a defence was reasonable - that defence cannot be justified in an age of instantaneous communications.
- Under the Hague-Visby Rules the carrier has an obligation to exercise due diligence to make the ship seaworthy before and at the beginning of the voyage. Under the Draft Convention, this obligation has been extended, so that the carrier would be obliged to exercise due diligence to make “and keep” the ship seaworthy not only before and at the beginning of the voyage, but also “during the voyage”. This proposed continuing obligation to exercise due diligence throughout the voyage has also stemmed from today’s era of instantaneous communications, whereby it was felt that shipowners are capable of being kept informed of changing circumstances concerning the vessel’s seaworthiness throughout the voyage.
- Whereas the Hague-Visby Rules only govern the carriage of goods between loading onto the ship and discharge, the Draft Convention covers the period of carriage from ‘door-to-door’. As such, a further proposed amendment to the liability regime under the Draft Convention is that the carrier shall be responsible for the goods from receipt until delivery: “The carrier shall… properly and carefully receive, load, handle, stow, carry, keep, care for, discharge and deliver the goods.”
- The liability compensation levels have been raised in the Draft Convention. Under the existing Hague-Visby Rules, the carrier’s liability is limited to 2 special drawing rights (“SDRs”) per kilo or 666 SDRs per package, whichever is the higher. Under the existing Hamburg Rules, the carrier’s liability is limited to 2.5 SDRs per kilo or 835 SDRs per package. Under the Draft Convention, however, the carrier’s liability is limited to 3 SDRs per kilo or 875 SDRs per package.
- However, in the case of “volume contracts” (which could apply to a series of as little as 3 shipments a year), the parties will be free to contract out of most of the obligatory liability regime contained in the Draft Convention, provided the contract “contains a prominent statement that it derogates from this Convention”, and that the “volume contract is individually negotiated or prominently specifies the sections… containing the derogations”. Carriers will not be allowed, however, to contract out of their obligations to: exercise due diligence to make and keep the ship seaworthy; properly crew, equip and supply the ship, or; provide information, instruction and documents. Nor can carriers contract out of their unlimited liability for losses resulting from acts or omissions done with their reckless intent.
A full copy of the Draft Convention (A/CN.9/645) can be found annexed to: http://www.uncitral.org/uncitral/en/commission/working_groups/3Transport.html
We shall continue to monitor developments during the course of the year and will keep you updated in our quarterly Shipping E-Brief. Those of you with a keen interest in this may want to attend the CMI Conference in