Multimodal cargo carrier liability and insurance: in search of … · 2013. 12. 20. · MTC United Nations Convention on International Multimodal Transport of Goods 1980 MTO Multimodal

Faculteit Rechtsgeleerdheid Universiteit Gent

Academiejaar 2012-13

Multimodal cargo carrier liability and

insurance:

in search of suitable regime

Masterproef van de opleiding

‘Master in de Rechten’

Ingediend door

Caroline Colebunders

(studentennr. 00600403)

Promotor: Prof. Dr. Kristiaan Bernauw

Commissaris: Patrick Allary

SUMMARY1 Deze Masterproef vormt het sluitstuk van de opleiding ‘Master in de Rechten’ aan de

Universiteit Gent. Zij kadert in de toepasselijke regelgeving betreffende de aansprakelijkheid

van de multimodale vervoerder en biedt een juridische analyse van de huidige

probleemstelling hieromtrent.

Het concept ‘multimodaal vervoer’ omvat het transport van goederen binnen het kader van

eenzelfde vervoersovereenkomst, gesloten met één vervoerder, waarbij meer dan één

vervoersmiddel wordt aangewend om de goederen te vervoeren van een specifieke plaats in

land A naar een specifieke plaats in land B (‘door-to-door transport’).

De probleemstelling is dat ingeval van schade, verlies of vertraging in levering van de

goederen, de multimodale vervoerder als eerste aansprakelijk wordt gesteld. Het is echter niet

altijd duidelijk aan welke aansprakelijkheidsregels er in dat geval moet worden voldaan. Door

de afwezigheid van een uniform internationaal en/of Europees juridisch kader, wordt de

multimodale vervoerder geconfronteerd met een kluwen aan wetgeving, hetgeen leidt tot

onzekerheid en onvoorspelbaarheid in hoofde van de vervoerder. Het huidig juridisch kader

bestaat uit nationale wetgeving en internationale unimodale verdragen, die telkens andere

aansprakelijkheidsregels voorschrijven. Vooral ingeval van een ‘unlocalized loss’2, is het

moeilijk te bepalen welke regels de aansprakelijkheid van de vervoerder precies regelen.

Als oplossing, stelt de UNCTAD drie mogelijke basisregimes voor: een netwerk regime, een

uniform regime en een aangepast regime dat kenmerken bevat van beide andere regimes. De

internationale gemeenschap ondernam op basis hiervan pogingen ter opstelling van een

uniform multimidaal regime, maar (voorlopig) zonder resultaat. Door een tekort aan

ratificaties, zal de recente ‘Convention of Contracts for the International Carrying of Goods

Wholly or Partly by Sea 2008’, wellicht niet in werking treden. De Europese Unie volgt

ondertussen haar eigen weg naar de harmonisatie van het multimodaal vervoersrecht. Binnen

het kader van haar Gemeenschappelijk Vervoersbeleid, erkent de Unie het belang van een

goed werkend multimodaal transportnetwerk. Maar haar wetgevend voorstel dreigt hetzelfde

lot te ondergaan. Door een gebrek aan het vereist aantal ratificaties blijft een finaal juridisch

bindend resultaat uit.

Niet alleen de multimodale contractpartijen ondervinden negatieve implicaties. Ook de

verzekeringswereld is afhankelijk van een duidelijk internationaal of Europees wetgevend

beleid, dat als basis dient ter opstelling van hun verzekeringspolissen. Een vereenvoudigd

stelsel zou de noodzakelijkheid van aparte en bijkomende verzekeringen doen minderen en de

totale transportkost verlagen. Een bindend verdrag betreffende de

aansprakelijkheidsverzekering van een multimodale vervoerder is echter geen optie. Gezien

dit de verzekeraar zijn beslissingsvrijheid zou ontnemen in het bepalen van welke risico’s hij

wilt verzekeren en welke niet.

1 In accordance with article 2.5.3. of ‘Reglement Masterproef Rechten 2012-2013’, www.ugent.be/re/nl/onderwijs/reglementen/masterproef-rechten.pdf. 2 D.i. wanneer de schade, het verlies of de vertraging in levering van de goederen niet kan worden gelinkt aan een bepaalde vervoersfase.

http://www.ugent.be/re/nl/onderwijs/reglementen/masterproef-rechten.pdf

TABLE OF CONTENTS INTRODUCTION

PART I – THE CONCEPT OF MULTIMODAL TRANSPORT

1. A brief history of multimodal transport: the rise of containerization ................................................ 2

2. Terminology ............................................................................................................................................................... 3

2.1. Multimodal transport of goods ................................................................................................................. 3

2.2. The multimodal transport operator ....................................................................................................... 3

3. The benefits of multimodal transport .............................................................................................................. 4

3.1. Save time ............................................................................................................................................................ 4

3.2. Environment ..................................................................................................................................................... 4

3.3. Save money........................................................................................................................................................ 4

3.4. Judicial benefits ............................................................................................................................................... 4

4. The purpose and objective of multimodal transport law ........................................................................ 5

5. Why do we need to unify? ..................................................................................................................................... 5

PART II - THE INTERNATIONAL MULTIMODAL CONTRACT FOR THE CARRIAGE OF GOODS

1. Definition and main characteristics .................................................................................................................. 7

1.1. A single contract .............................................................................................................................................. 9

A. Subcontracting carriage ............................................................................................................................... 9

1.2. More than one mode of transportation .............................................................................................. 10

2. The contracting parties ....................................................................................................................................... 10

3. Obligation of result ............................................................................................................................................... 11

4. Mandatory regimes ............................................................................................................................................... 11

5. Applicable jurisdiction ........................................................................................................................................ 12

6. Determining the applicable law ...................................................................................................................... 12

7. Standard trading conditions ............................................................................................................................. 14

PART III - THE CURRENT LIABILITY REGIMES FOR MULTIMODAL TRANSPORT OF GOODS

1. A unimodal transport regime ........................................................................................................................... 15

1.1. The carrier’s liability under the Maritime Conventions .............................................................. 15

A. Origins of the applicable Maritime Conventions ............................................................................ 15

B. Contracting states ........................................................................................................................................ 17

C. Scope of application .................................................................................................................................... 17

i. The Hague-Visby Rules ........................................................................................................................... 17

ii. The Hamburg Rules .................................................................................................................................. 18

iii. The Rotterdam Rules ............................................................................................................................... 18

D. Duties of the carrier .................................................................................................................................... 19

i. Hague-Visby Rules .................................................................................................................................... 19

ii. Hamburg Rules ........................................................................................................................................... 20

iii. Rotterdam Rules ........................................................................................................................................ 20

E. Liability of the carrier ................................................................................................................................ 20


ii. Hamburg Rules ........................................................................................................................................... 20


F. Exoneration of liability .............................................................................................................................. 23


ii. Hamburg Rules ........................................................................................................................................... 24


G. Limitation of liability .................................................................................................................................. 25


ii. Hamburg Rules ........................................................................................................................................... 26


H. The carrier’s liability in subcontracting carriage ........................................................................... 27

i. Hamburg Rules ........................................................................................................................................... 27

ii. Rotterdam Rules ........................................................................................................................................ 28

I. Claim ................................................................................................................................................................. 28


ii. Hamburg Rules ........................................................................................................................................... 28


J. The carrier’s liability in the case of multimodal transport of goods ...................................... 29


ii. Hamburg Rules ........................................................................................................................................... 30


K. A mandatory regime ................................................................................................................................... 30


ii. Hamburg Rules ........................................................................................................................................... 31


1.2. The carrier’s liability under the Warsaw and Montreal Conventions ................................... 31

A. Origins of the Warsaw and Montreal Conventions ........................................................................ 31

B. How to determine the applicable international air convention? ............................................. 32

C. Contracting states ........................................................................................................................................ 33

D. Field of application ...................................................................................................................................... 33

E. Duties of the carrier .................................................................................................................................... 34

F. Liability of the carrier ................................................................................................................................ 34

i. Destruction of cargo ................................................................................................................................. 35

ii. Loss .................................................................................................................................................................. 36

iii. Damage .......................................................................................................................................................... 36

iv. Delay ............................................................................................................................................................... 36

G. Exoneration of liability .............................................................................................................................. 36

i. Exoneration in case of delay ................................................................................................................. 36

ii. Exoneration in case of destruction, loss and damage ................................................................ 37

H. Limitations of liability ................................................................................................................................ 37

I. Claim ................................................................................................................................................................. 38

J. The carriage performed by successive air carriers ....................................................................... 38

K. The carrier’s liability in subcontracting carriage by air .............................................................. 39

L. The carrier’s liability in the case of multimodal transport of goods ...................................... 39

M. A mandatory regime .................................................................................................................................. 41

1.3. The carrier’s liability under the CMR Convention.......................................................................... 41

A. The origins of the CMR .............................................................................................................................. 41




E. The liability of the carrier ........................................................................................................................ 43

i. The basis of liability ................................................................................................................................. 43

ii. The scope of liability in time ................................................................................................................. 43

iii. Loss ................................................................................................................................................................. 43

a. Partial loss ............................................................................................................................................. 43

b. Total loss ................................................................................................................................................ 43

iv. Delay ............................................................................................................................................................... 44

v. Damage .......................................................................................................................................................... 44


i. General exoneration grounds ............................................................................................................... 45

ii. Special exoneration grounds ................................................................................................................ 45


H. Liability in case of successive road carriers ..................................................................................... 46

L. Claim ................................................................................................................................................................. 47

I. The carrier’s liability in the case of multimodal transport of goods ...................................... 47

J. A mandatory regime ................................................................................................................................... 49

1.4. The carrier’s liability under the COTIF Convention ...................................................................... 49

A. The origins of the COTIF Convention .................................................................................................. 49

B. Contracting States........................................................................................................................................ 50



E. The liability of the carrier ........................................................................................................................ 51


i. General exoneration grounds ............................................................................................................... 52

ii. Special exoneration grounds ................................................................................................................ 52

G. Limitation of Liability................................................................................................................................. 53

H. Claim ................................................................................................................................................................. 53

I. Liability in case of Successive carriage ............................................................................................... 53

J. The carrier’s liability in the case of subcontracting carriage .................................................... 54

K. The carrier’s liability in the case of Multimodal transport of goods ...................................... 54

i. Supplemental internal carriage by road or inland waterway ................................................. 54

ii. Supplemented international carriage by inland waterway or by sea ................................. 55

iii. In all other cases of multimodal transport ..................................................................................... 55

L. A mandatory regime ................................................................................................................................... 55

1.5. The carrier’s liability under the CMNI Convention ........................................................................ 55

A. The origins of the CMNI ............................................................................................................................ 55




E. Liability of the carrier ................................................................................................................................ 57

i. Loss, damage or delay ............................................................................................................................. 57

ii. Act or omission of servants and agents ........................................................................................... 57



i. Loss of right to limit liability ................................................................................................................ 59

H. Claim ................................................................................................................................................................. 59

I. The carrier’s liability in case of a multimodal transport of goods ........................................... 59

i. Combination carriage by sea and inland waterways.................................................................. 60

J. A mandatory regime ................................................................................................................................... 60

1.6. Conclusion - Conventions in conflict?.................................................................................................. 61

2. International multimodal transport regimes ............................................................................................ 67

2.1. Past attempts to establish a uniform multimodal transport regime ...................................... 67

2.2. Common features and differences ........................................................................................................ 69

2.3. ICC Rules 1975 .............................................................................................................................................. 70

2.4. Multimodal Transport Convention 1980 ........................................................................................... 71

2.5. UNCTAD/ICC Rules 1992 ......................................................................................................................... 73

3. Conclusion ................................................................................................................................................................ 74

PART IV - A NEW LIABILITY REGIME

1. Possible forms of a new regime ....................................................................................................................... 75

1.1. The uniform system .................................................................................................................................... 75

1.2. The network system ................................................................................................................................... 76

1.3. The modified system .................................................................................................................................. 77

1.4. Absorption system ...................................................................................................................................... 77

2. A future International multimodal transport regime ............................................................................. 78

3. A future European Multimodal transport regime .................................................................................... 80

3.1. The EU Draft on uniform liability rules for intermodal transport........................................... 82

4. Conclusion ................................................................................................................................................................ 84

PART V - MULTIMODAL TRANSPORT INSURANCE POLICY

1. Transport liability insurance ............................................................................................................................ 86

2. The relationship between the carrier and the insurer .......................................................................... 87

2.1. Organization of the multimodal carriage of goods ........................................................................ 87

2.2. The insurance broker ................................................................................................................................. 88

2.3. Treatment of risks by the insurer ......................................................................................................... 88

2.4. The insurance contract .............................................................................................................................. 89

3. Carrier’s liability insurance for multimodal carriage ........................................................................ 89

3.1. The sea carrier’s liability insurance ................................................................................................ 89

A. P&I Clubs ......................................................................................................................................................... 89

B. TT-CLUB .......................................................................................................................................................... 90

3.2. The air carrier’s liability insurance ................................................................................................. 91

3.3. The road carrier’s liability insurance ............................................................................................. 91

3.4. The rail carrier’s liability insurance ................................................................................................ 92

3.5. The carrier’s liability insurance for inland navigation ............................................................ 92

3.6. Other liability insurance covers offered by the International community ..................... 92

A. The ASEAN Framework Agreement on Multimodal Transport ................................................ 92

B. The FIATA Multimodal Transport Bill of Lading ............................................................................ 92

4. Conclusion ........................................................................................................................................................... 93

CONCLUSION

BIBLIOGRAPHY

1. Legislation ............................................................................................................................................................... i

1.1. International Law ............................................................................................................................................ i

General ...................................................................................................................................................................... i

International carriage by sea ........................................................................................................................... i

International carriage by air ............................................................................................................................ i

International carriage by road ....................................................................................................................... ii

International carriage by rail .......................................................................................................................... ii

International carriage by inland waterways ............................................................................................ ii

International multimodal carriage ............................................................................................................... ii

1.2. European Law .................................................................................................................................................. ii

1.3. Varia ................................................................................................................................................................... iii

2. Literature .............................................................................................................................................................. iii

2.1. Books ................................................................................................................................................................. iii

2.2. Articles ................................................................................................................................................................ v

2.3. Varia .................................................................................................................................................................... ix

3. Case law .................................................................................................................................................................. xi

Australia ................................................................................................................................................................. xi

Belgium ................................................................................................................................................................... xi

Canada ..................................................................................................................................................................... xi

European Court of Justice ............................................................................................................................. xii

France .................................................................................................................................................................... xii

Germany ............................................................................................................................................................... xii

Italy ......................................................................................................................................................................... xii

Lebanon ............................................................................................................................................................... xiii

The Netherlands ............................................................................................................................................... xiii

Switzerland ........................................................................................................................................................ xiii

The United Kingdom ...................................................................................................................................... xiii

United States of America .............................................................................................................................. xiv

LIST OF ABBREVIATIONS Art. Article

CIM Uniform Rules concerning the Contract of International

Carriage of Goods by Rail

CIV Uniform Rules concerning the Contract of International

Carriage of Passengers by Rail

CMI Comité Maritime Internationale

CMNI Budapest Convention on the Contract for the Carriage of

Goods by Inland Waterways

CMR UN Convention on the Contract for the International

Carriage of Goods by Road

COTIF Convention concerning International Carriage by Rail

(COTIF)

ECJ European Court of Justice

Etc. Et cetera

EU European Union

EU proposal Report 2005 on Integrated services in the intermodal

chain (ISIC)

Hague Rules International Convention for the Unification of Certain

Rules of Law relating to Bills of Lading

Hague-Visby Rules The Hague Rules as amended by the Brussels Protocol

1968

Hamburg Rules United Nations Convention on the Carriage of Goods by

Sea 1978

Kg Kilogram

ICC International Chamber of Commerce

ICC Rules 1975 Uniform Rules for a Combined Transport Document

Montreal Convention Convention for the Unification of Certain Rules for

International Carriage by Air

MTC United Nations Convention on International Multimodal

Transport of Goods 1980

MTO Multimodal Transport Operator

Para. Paragraph

Rotterdam Rules United Nations Convention on Contracts for the

International Carriage of Goods Wholly or Partly by Sea

SDR Special Drawing Rights

UN United Nations

UNCITRAL United Nations Commission on International Trade Law

UNCTAD United Nations Conference on Trade and

Development

UNCTAD/ICC Rules 1992 UNCTAD/ICC Rules for Multimodal Transport

Documents 1992

UNIDROIT International Institute for the Unification of Private Law

VC Vienna Convention on the Law of Treaties

Warsaw Convention Convention for the Unification of Certain Rules relating

to International Carriage by Air

LIST OF FIGURES

Figure 1 Unimodal or segmented transport

Figure 2 Multimodal transport with (partially) subcontractors

Figure 3 Subcontracting carriage

Figure 4 Overview of international carriage conventions per transport mode

Figure 5 Overview over the relevant period of carrier’s liability

Figure 6 Application International Air Carriage Conventions

1

INTRODUCTION Since the 1970s, multimodal transport

3 has become standard practice in international trade.

Characterized by a door-to-door-delivery under one single contract and with one party bearing

contractual responsibility, it is a very desirable and useful means of transporting goods all

over the world.4

However, in case of loss, damage or delay, the current legal framework fails to offer a clear

and efficient liability regime. Instead, it consists of a complex array of international

conventions and national legislations designed to regulate unimodal carriage5, contractual

arrangements and professional practices.6 As a consequence, multimodal carriers

7 face many

difficulties in estimating the liability risks that they incur.8

This thesis shall specifically focus on the carrier’s liability for loss, damage or delay in

delivery of cargo in international multimodal transport operations. It shall be divided into five

main Parts. Part I shall explain the concept of multimodal transport and the reasons why we

need to unify. Part II shall address the importance of the multimodal contract for the carriage

of goods in determining the applicable liability rules. Part III shall present a detailed overview

of the existing carrier’s liability regimes and the past attempts made to unify the carrier’s

liability regime, both on international level as by the European Union. Subsequently, Part IV

shall focus on the possibilities of creating a new multimodal carrier’s liability regime and the

future plans of the International community and the European Union in that respect. In the last

Part, Part V, a brief disquisition of the multimodal transport insurance policy shall be

exemplified. This thesis shall conclude with a general conclusion and a critical view on this

matter.

3 International multimodal transport means the carriage of goods by at least two different modes of transport on the basis of a multimodal transport contract from a place in one country at which the goods are taken in charge by the multimodal transport operator to a place designated for delivery situated in a different country. Art. 1 (1) United Nations Convention of 24 May 1980 on International Multimodal Transport of Goods, http://treaties.un.org/doc/Treaties/1980/05/19800524%2006-13%20PM/Ch_XI_E_1.pdf (hereafter ‘MTC’). 4 H.M. KINDRED and M.R. BROOKS, Multimodal transport rules, The Netherlands, Kluwer Law International, 1997, 11-26. 5 Carriage of goods using one single mode of transport. 6 M. FAGHFOURI, “International regulation of liability for multimodal transport - In search of uniformity”, WMU Journal of Maritime Affairs 2006, vol. 5, no. 1, 95-114. 7 A ‘multimodal carrier’ is also referred to as a ‘Multimodal Transport Operator’ (MTO). A MTO is any person who on his own behalf or through another person acting on his behalf concludes a multimodal transport contract and who acts as a principal, not as an agent or on behalf of the consignor or of the carriers participating in the multimodal transport operations, and who assumes responsibility for the performance of the contract. Art. 1 (2) MTC. 8 M. HOEKS, Multimodal transport law. The law applicable for the multimodal contract for the carriage of goods, The Netherlands, Kluwer Law International, 2010, 13-15.

http://treaties.un.org/doc/Treaties/1980/05/19800524%2006-13%20PM/Ch_XI_E_1.pdf


2

PART I - THE CONCEPT OF MULTIMODAL

TRANSPORT

1. A brief history of multimodal transport: the rise of containerization

Traditionally, a system of unimodal transport was used. Cargo was carried by a single carrier

using one single mode of transportation. Later on, since the 1970s, door-to-door-services

began to dominate the market for the delivery of goods. As circumstances of the transport

sector improved, the sophistication and efficiency of international transportation increased.

This is particularly due to the augmented usage of the container. A large steel box built in a

certain number of standard sizes to allow transportation of cargo by truck, ship, train and

plane. The impact of this simple technology was initially felt in the shipping industry.

However, the use of containers expanded rapidly. Affecting not only the shipping business,

but global trade as a whole.9

In the 1950s, most goods transported over long distances, were transported by sea and shipped

by so-called break bulk shipping, whereby goods were transported loose or packed in several

boxes, barrels, bags, or other relatively small containers, depending on the type of the good. A

lot of time and labor was spent loading and unloading vessels at portsides, causing a great risk

of damage to the goods. An analysis in the late 1950s shows that 60-75% of the transport cost

was made up of portside costs. Cargo handling made up around 37% of the total costs,

including labor, losses of time and damage (for instance theft) to the cargo waiting to be

loaded onto a vessel while other cargo was being offloaded.10

A former American trucking company, Malcolm McLean, started using metal shipping

containers, similar to those used in the US Military, in seizes capable of being transported by

truck or train, with a possibility to load the containers on board of a ship. Manufacturers

located far away from the portside, could now load their goods in containers and send them to

the other side of the globe. A truck would carry the container from the factory to the port of

departure, where the container would be loaded onto a ship. The vessel would on its turn carry

the container to the port of destination, where it is offloaded and transported by another truck

or train to the final point of destination, being a warehouse or even the point of sale.11

Later on, containers became more and more developed, using specific standard sizes across

the shipping industry, and adapted to particular circumstances, such as the seize of the ship,

the type of cargo, legal limits on the weight etc.. Afterwards, in the early 1960s, international

and industry-wide agreements on container sizes were reached. The compromises developed

back then, are among the most common sizes today.12

The container proved to be the means

9 J. TOMLINSON, History and impact of the Intermodal Shipping Container, Pratt Institute, 2009, 1, www.johntomlinson.com/docs/history_and_impact_of_shipping_container.pdf and P. TODD, Cases and materials on international trade law, London, Sweet and Maxwell limited, 2002, 753-754. 10 M. LEVINSON, The Box: how the shipping container made the world smaller and the world economy bigger, United States of America, Princeton University Press, 2006, 21 and 33-34 and B.J. CUDAHY, “The container revolution: Malcolm McLean’s 1956 innovation goes Global”, TR News 2006 , 246, 5-9. 11 M. LEVINSON, The Box: how the shipping container made the world smaller and the world economy bigger, United States of America, Princeton University Press, 2006, 54-68. 12 M. LEVINSON, The Box: how the shipping container made the world smaller and the world economy bigger, United States of America, Princeton University Press, 2006, 127-149.

http://www.johntomlinson.com/docs/history_and_impact_of_shipping_container.pdf

3

of transporting cargo by different modes of transportation, facilitating smooth door-to-door

transits.13

However, multimodal transport did not came into being solely due to the so-called

‘containerization’. Multimodal transport already existed before containers were built. But the

importance and use of multimodal transport has certainly increased due to the emergence and

development of containers.14

2. Terminology

2.1. MULTIMODAL TRANSPORT OF GOODS

Since the core question of this thesis is which liability regime may apply in case of

multimodal transport, a sketch of what is meant by the term may be in place.

The current prevailing definition of ‘multimodal transport’ resembles the one in article 1 of

the United Nations Convention on International Multimodal Transport of Goods, signed in

Geneva on 24 May 1980 (hereafter ‘MTC’).15

‘International multimodal transport’ means ‘the carriage of goods by at least two different

modes of transport on the basis of a multimodal transport contract from a place in one

country at which the goods are taken in charge by the multimodal transport operator to a

place designated for delivery situated in a different country. The operations of pick-up and

delivery of goods carried out in the performance of a unimodal transport contract, as defined

in such contract, shall not be considered as international multimodal transport’.

2.2. THE MULTIMODAL TRANSPORT OPERATOR

According to article 1(2) MTC, a multimodal transport operator (MTO) is ‘any person who on

his own behalf or through another person acting on his behalf concludes a multimodal

transport contract and who acts as a principal, not as an agent or on behalf of the consignor

or of the carriers participating in the multimodal transport operations, and who assumes

responsibility for the performance of the contract’.

The MTO accepts full responsibility to perform the transport contract and thus has the

obligation to achieve a certain result. He must deliver the goods at the place of destination in

the same conditions as wherein they were received.16

Only the MTO is able to co-ordinate all

modes of transportation used in the performance of a multimodal transport contract. Shippers

and consignees are not. It is up to the MTO to determine the best route and/or the best price.17

13 M. HOEKS, Multimodal transport law. The law applicable for the multimodal contract for the carriage of goods, The Netherlands, Kluwer Law International, 2009, 3. 14 A. VAN BEELEN, Multimodaal vervoer. Het kameleonsysteem van boek 8 BW, Amsterdam, W.E.J. Tjeenk Willink, 1996, 8-11; Y. HAYUTH, “The overweight container problem and international intermodal transportation”, Transportation Journal Winter 1994, 18-19 and H.M. KINDRED and M.R. BROOKS, “New and improved? The UNCTAD/ICC Multimodal Rules reviewed”, Transportation Journal Spring 1994, 5-6. 15 R. DE WIT, Multimodal Transport: carrier liability and documentation, London, Lloyd’s of London Press, 1995, 3. 16 A. VAN BEELEN, Multimodaal vervoer. Het kameleonsysteem van boek 8 BW, Amsterdam, W.E.J. Tjeenk Willink, 1996, 4. 17 X, Chapter 2: multimodal transport: its evolution and application, 19, www.bus.tu.ac.th/usr/ruth/thesis/chapter2.pdf.

http://www.bus.tu.ac.th/usr/ruth/thesis/chapter2.pdf

4

3. The benefits of multimodal transport

Opting for multimodal transport of goods has some very practical advantages. Not only does

it save time in certain situations, it may also limit the negative impact on the environment and

reduce costs. Besides these practical advantages, there are also specific judicial elements

favoring multimodal transportation.

3.1. SAVE TIME

In case of transporting goods over long distances by a single mode of transportation, it can in

certain situations take months to deliver the goods at the place of delivery. For instance, when

a customer or cargo owner prefers to transport cargo from the United States of America to

Belgium, the carriage can be performed by plane or by sea. If the customer prefers the latter,

it takes more time to deliver the goods, then it would have been if the goods were transported

by air. Still, the Belgian port or airport is not the final point of destination. A new contract of

carriage has to be concluded with another carrier, for instance a road carrier, to get the cargo

to the right place. And this at each transport stage. Not really an attractive manner of doing

business. Moreover, in order to perform the carriage smoothly, the cargo has to be delivered

on time by one mode of transportation, in order to be loaded on the subsequent transport

mode. This is mostly beyond the customer’s control.

In the case of a multimodal transport contract, the customer may combine rail, air, sea and

road under one single contract, within a time frame acceptable to the customer. No efforts

have to be made to conclude new contracts with other carriers during the voyage. This may

save precious time, since the customer does not have to find a new carrier or lose time

negotiating contractual terms at each transport stage.

3.2. ENVIRONMENT

Multimodal transport offers the possibility of incorporating less polluting means of

transportation into the transport chain. An effective multimodal transportation ensures the use

of the most efficient mode of transportation at each stage, reducing energy expenditure,

pollution and congestion.

3.3. SAVE MONEY

Multimodal transportation can also be used to decrease shipping costs. Customers may ask

various options available with the shipment and determine if a given combination of transport

modes would in fact result in a lower shipping cost. Also the carrier himself may stipulate a

better price, because of the more sophisticated service he provides.

3.4. JUDICIAL BENEFITS

There are also certain judicial advantages in choosing a contract on multimodal transport of

goods, instead of contracting with separate carriers for each transport stage.

Firstly, because the shipper or cargo owner needs to conclude separate contracts with different

carriers. He must ensure that the cargo is delivered at the right time and the right place in

order to transfer the cargo to the subsequent carrier. When this is not the case, a temporary

storing needs to be arranged, delaying the transport operation and more importantly,

increasing the transport cost. Secondly, each carrier has its own contractual stipulations and

5

separate documents are being used. This makes it sometimes difficult to obtain for instance a

documentary credit. Third and lastly, in case of damage or loss, each carrier’s liability is

limited to the carriage performed by him. It is often difficult to determine the point at which

the damage or loss occurred, since the shipper is not travelling together with its cargo.

Providing proof of liability of one of the carriers used, is not an easy task. The cargo owner

might then be forced to claim against all carriers involved, which shall lead to additional

expenses.18

In case of a multimodal transport contract, one contract is concluded to perform the whole

transport operation with only one carrier who will be held liable when damage, delay or loss

occurs. The cargo owner won’t have any difficulties in pinpointing the moment at which the

damage, delay or loss occurred. He is bound by one single contract with one single carrier,

and shall be able to sue and claim compensation under that contract.

4. The purpose and objective of multimodal transport law

When different transport modes are used to perform one transport operation, different liability

regimes apply, depending on the transport mode used. Crossing borders can alter the rules

applicable. Therefore, parties may use their party autonomy to choose a set of rules that

should govern their contractual relationship.

However, since specific conventions per transport mode often provide mandatory provisions

concerning the liability of the carrier, parties are not allowed to derive from these rules. In

practice, this complicates the contractual and legal relationship between a shipper and the

carrier. Especially since these mandatory rules sometimes conflict with each other, creating

uncertainty for both contracting parties.

5. Why do we need to unify?

Since international trade expanded rapidly, door-to-door transport services have become a

popular means of doing business. However, in case things go wrong, multimodal transport

becomes less attractive since there is no uniform liability regime in force that governs the

carrier’s liability.

The prevailing national and international regulations for unimodal transport regimes had been

unable to simplify or regulate the complex network of relationships with regard to the

assignment of risks and liabilities in case of damage, loss or delay. Each regime governs a

part of the multimodal transport operation. None governs the whole. In case the cargo owner

and the multimodal carrier want to insert a contractual stipulation to apply a specific liability

regime, it is not always allowed because of the mandatory nature of most of the liability

regimes governed by the specific regulations per transport mode. This leads to commercial

and legal uncertainties concerning the application of different principles in order to determine

the applicable liability regime and its limitations for the carriers on each mode of

transportation. Also, to determine the prescription to start proceedings may differ from one

legal regime to another and there is no general rule on what to do when mandatory provisions

conflict.

18 A. VAN BEELEN, Multimodaal vervoer. Het kameleonsysteem van boek 8 BW, Amsterdam, W.E.J. Tjeenk Willink, 1996, 9-11.

6

Another problem, typical for multimodal transport of goods, is unlocalized loss.19

Unlocalized

loss occurs when the transport stage where it was caused cannot be determined. This severely

complicates the determination of the applicable legal regime. If the loss cannot be attributed

to one of the transport stages, none of the unimodal carriage conventions shall govern the

ensuing claim for redress, unless the applicable convention foresees otherwise. When no

international convention applies, it must be determined which national law needs to be used.

This is generally the law applicable to the contract of carriage. However, not all national legal

regimes provide rules on multimodal transport of goods.20

This makes it unpredictable and

very complicated for the carrier. Moreover, claims are generally time-barred after a relatively

short period. Prescription periods may vary depending on the applicable uniform carriage

regime. It is important to determine the length of the prescription period and at which point in

time said period starts. This is not always easy to determine when different transport modes

are used.21

These issues led to the ambition to establish a uniform set of principles allocating

responsibilities of the multimodal carrier under a multimodal transport contract.22

A unified

set of rules would simplify the complex network on legal rules and facilitate a smooth flow of

international trade and export promotion. However, it is not clear which form of legal regime

is the most suitable to apply.

19 D. DAMAR, “Breaking the liability limits in multimodal transport”, Tul. Mar. L.J. 2011-2012, vol. 36, 679-681. 20 M. HOEKS, Multimodal transport law. The law applicable for the multimodal contract for the carriage of goods, The Netherlands, Kluwer Law International, 2009, 17. 21 An example is a case before the national court in Haarlem (The Netherlands). This case concerned a carriage by road and by air of fresh flowers from Miami (USA) via London (UK) to Amsterdam (the Netherlands). It was unclear where the heat that damaged the flowers had been generated. Since neither the CMR, nor the Warsaw Convention provides a solution concerning the applicable prescription period, Dutch law applied. Rb. Haarlem 6 July 1999, S&S 2000, 88. 22 H.M. KINDRED and M.R. BROOKS, Multimodal transport rules, The Netherlands, Kluwer Law International, 1997, 1-2.

7

PART II - THE INTERNATIONAL MULTIMODAL

CONTRACT FOR THE CARRIAGE OF GOODS

1. Definition and main characteristics

International carriage conventions often provide a specific definition of the contract of

carriage. They describe the obligations taken upon the carrier and/or the consignee when

entering in such a contract.23

A common characteristic in these definitions is the consensual

nature of the contract. The carrier undertakes the obligation to carry cargo for which in return

he receives a payment of freight or another kind of reward.

A distinction is made between a unimodal and a multimodal transport contract. A unimodal

transport contract is a contract whereby the carrier is obliged to transport goods by one and

the same mode of transportation. For instance a carriage of goods by sea.

Consignor A

Carrier B

Ghent •

Carrier C

Antwerp •

Hamburg •

Carrier D

Krakow •

Figure 1: Unimodal or segmented transport

Separate unimodal contracts are concluded between the Consignor A and each carrier: road carrier

B, sea carrier C and road carrier D.

23 For instance art. 1(6) Hamburg Rules; art. 1(1) CMNI and art. 6(1) COTIF-CIM.

8

In a multimodal transport contract, different modes of transportation are used. Multimodal

transport contracts can be concluded in two different ways:

different contracts can be concluded at each transport stage, with no connection

between the different contracts concluded24

, or

the whole transport operation can be based on one single contract. This is called ‘a

multimodal transport contract’.25

Consignor A (Cargo owner)

Multimodal carrier B (MTO) Ghent Krakow • •

Consignor B (MTO)

MTO Ghent •

Subcarrier C Antwerp •

Hamburg •

Subcarrier D

Krakow

•

Separate transport contract 1

Separate transport contract 2

Figure 2: Multimodal transport with (partially) subcontractors.

A multimodal contract of carriage is concluded between A and B, concerning the carriage of cargo

from Ghent to Krakow. The MTO promises to carry the cargo from Ghent to Krakow, but only

possesses a truck to perform the first multimodal transport stage. The MTO will then subcontract

partially by concluding a separate unimodal contract with each carrier: sea carrier C and road

carrier E. In the latter two contracts, the MTO is the consignor.

24 Designated as ‘broken’ or ‘segmented’ transport. 25 Rule 2.1. UNCTAD/ICC Rules for Multimodal transport Documents, International Chamber of Commerce, 1992, no. 481 and A. VAN BEELEN, Multimodaal vervoer. Het kameleonsysteem van boek 8 BW, Amsterdam, W.E.J. Tjeenk Willink, 1996, 6.

9

1.1. A SINGLE CONTRACT

The first characteristic of a multimodal transport contract is that the carriage should be based

on one single contract between a carrier and a consignor. Once the contract is signed, the

carrier agrees to be responsible for the entire voyage, even though in practice it is unlikely

that the carrier will carry the cargo with its own means of transportation. Therefore, many

multimodal services are offered with the use of subcontractors.26

A. SUBCONTRACTING CARRIAGE The subcontracting carriage is a common practice in multimodal transport operations.

Different subcontracts may be concluded per transport stage, whereby the carrier is acting as a

consignor in its relation with the subcontracting carrier(s). This may result in two or more

contract levels in multimodal carriage: one for the contract between the carrier and the

original consignor, and one or more for the subcontractors.27

The subcontractors who actually

perform the carriage are sometimes referred to as the ‘actual carriers’ or ‘performing

carriers’.28

Consignor A (Cargo owner)

Multimodal carrier B (MTO) Ghent Krakow • •

Consignor B (MTO)

Subcarrier C Ghent •

Subcarrier D Antwerp •

Hamburg •

Subcarrier E

Krakow

•

Separate contract 1

Separate contract 2

Separate contract 3

Figure 3: Subcontracting carriage

26 A. VAN BEELEN, Multimodaal vervoer. Het kameleonsysteem van boek 8 BW, Amsterdam, W.E.J. Tjeenk Willink, 1996, 5 and H.M. KINDRED and M.R. BROOKS, Multimodal transport rules, The Netherlands, Kluwer Law International, 1997, 5. 27 A. VAN BEELEN, Multimodaal vervoer. Het kameleonsysteem van boek 8 BW, Amsterdam, W.E.J. Tjeenk Willink, 1996, 14. 28 M. HOEKS, Multimodal transport law. The law applicable for the multimodal contract for the carriage of goods, The Netherlands, Kluwer Law International, 2009, 5.

10

A multimodal contract of carriage is concluded between A and B, concerning the carriage of cargo

from Ghent to Krakow. The MTO promises to carry the cargo from Ghent to Krakow, but does not

possess the required transport modes to perform the multimodal contract. The MTO will then

subcontract the various stages of the carriage by concluding separate unimodal contracts with

separate subcarriers: road carrier C, sea carrier D and road carrier E. In these contracts, the MTO is

the consignor.

Although the subcontractors have a duty of care for the cargo, only the multimodal carrier

(MTO) shall be held liable in the case of a loss, damage or delay. This because there is no

contractual relationship between the shipper and the subcontractor(s), only with the

multimodal carrier.29

However, this does not entail that the subcontractor remains free from

responsibility for its own fault or action at all times. A distinction is made between

attributable and non-attributable damage or loss. If a subcontractor causes damage to the

cargo, the MTO will be held liable vis-à-vis the cargo owner or its insurer, but may claim an

indemnity against the defaulter when the damage is attributable to a particular subcontractor.

However, if the damage or loss cannot be attributed to a subcontractor, the MTO will mostly

be fully responsible for the damages and losses occurred. The latter degree of responsibility is

more likely since it is not always possible to pinpoint the cause or occasion of the loss to a

particular mode of transportation or stage of movement.30

1.2. MORE THAN ONE MODE OF TRANSPORTATION

The second characteristic of multimodal transport contracts is that more than one mode of

transportation is used to perform the carriage. Now what exactly is ‘a mode of

transportation?’.

To begin with, a mode of transportation is not the same as a medium of transportation. A

medium of transportation refers to ‘the medium in which transportation can take place, such

as air, land or water’.31

The mode of transportation designates the vehicles, crafts or vessels

used for transport.

2. The contracting parties

The parties to a contract of carriage are traditionally called ‘the consignor’ and ‘the carrier’.32

In order to identify the carrier, it often occurs that the party that contracts to carry the goods

for another, the consignor, does not perform the carriage itself, but arranges for a third party

to do so (subcontracting carriage). Nonetheless, it is the party that concludes a multimodal

transport contact as a principal, ‘not as an agent for the consignor or for the carriers

participating in the multimodal transport operations’, and assumes responsibility for the

performance of the contract, who is considered to be the ‘contractual carrier’.33

However, in

29 M. HOEKS, Multimodal transport law. The law applicable for the multimodal contract for the carriage of goods, The Netherlands, Kluwer Law International, 2009, 2-9. 30 H.M. KINDRED and M.R. BROOKS, Multimodal transport rules, The Netherlands, Kluwer Law International, 1997, 3-6. 31 M. HOEKS, Multimodal transport law. The law applicable for the multimodal contract for the carriage of goods, The Netherlands, Kluwer Law International, 2009, 52. 32 J. BASEDOW, Der Transportvertag, Tübingen, Mohr Siebeck, 1987, 59. 33 M. HOEKS, Multimodal transport law. The law applicable for the multimodal contract for the carriage of goods, The Netherlands, Kluwer Law International, 2009, 40.

11

case of, for example charter contracts, the identification of the contractual carrier is not

always that clear.34

The identification of the consignor, on the other hand, is less problematic. The consignor is

the party that entered into the contract with the carrier. This is not always the person who

delivers the goods to be transported to the carrier at the beginning of the transport operation.35

Besides the original parties to the contract, the consignor and the carrier, also third parties

may be involved. This can be the ‘consignee’, who ‘gains all rights of suit as if he had been a

party to the contract’.36

Although the consignee does not become a party to the contract, he is

granted the right to demand delivery and, depending on the circumstances, specific rights

referring to the cargo before reaching its destination.37

3. Obligation of result

The stringent responsibility of the carrier is the obligation to deliver a certain result, namely to

deliver the goods to the agreed point of destination in the same condition as in which they

were received. Not merely to try to do so.38

When the promised result is not materialized, compensation will be claimed. The consignor

merely has to prove that the damage or loss occurred while the goods were in charge of the

carrier. A burden of proof that obviously is far easier to bear than proving the exact cause of

the damage suffered by the claimant, which is born by the carrier in order to be freed from

damage claims. After the consignor has proved the absence of the promised outcome, a

breach of contract is assumed and it’s the carrier’s turn to prove the contrary. If the carrier is

able to establish an uncontrollable cause, like for instance a force majeure (Act of God) or an

inherent vice to defects of the goods themselves, he will not be held liable for the damages

suffered by the claimant, despite the contract is breached. This fault liability usually means

that the carrier is only responsible for ‘the consequences of the negligent acts and omissions

that are committed by itself or its employees or agents’.39

4. Mandatory regimes

Under most of the current liability regimes, the carrier is not allowed to depart from the

provisions governing its liability to the detriment of the consignor. The latter is deemed to be

the economically weaker party who requires protection against the contractual exonerations

dictated by the carrier. Due to the mandatory nature, parties may not derogate by differing

contractual terms or trade practices, unless the applicable legislation states otherwise.40

34 L.A. COLLINS, A.V. DICEY and J.H.C. MORRIS, Dicey, Morris and Collins on the conflict of laws, London, Sweet & Maxwell, 2006, vol. 2, 1772-1773. 35 L.A. COLLINS, A.V. DICEY and J.H.C. MORRIS, Dicey, Morris and Collins on the conflict of laws, London, Sweet & Maxwell, 2006, vol. 2, 1774-1775. 36 Art. 2(1) of the English Carriage of Goods by Sea Act of 1992. 37 D. RICHTER-HANNES and R. RICHTER, Möglichkeit und Notwendigkeit der Vereinheitlichung des internationalen Transportrechts, Potsdam-Babelsberg, Akademie für Staats- und Rechtswissenschaft der DDR, 1978, 9. 38 An obligation of conduct, which is an obligation to attempt to realize a certain result. 39 H.M. KINDRED and M.R. BROOKS, Multimodal transport rules, The Netherlands, Kluwer Law International, 1997, 3. 40 M. HOEKS, Multimodal transport law. The law applicable for the multimodal contract for the carriage of goods, The Netherlands, Kluwer Law International, 2009, 39.

12

5. Applicable jurisdiction

Which court to address in case one of the parties want to start proceedings against its

contractor, is a very important question that needs to be approached carefully. The outcome of

the entire action depends on the claimant’s decision when choosing the applicable

jurisdiction. Whether the court will accept the claimant’s choice, is determined by the national

law of the court seized.

In Europe, the Brussels I Regulation41

applies. Its basic rule is that parties to a contract are

free to determine which court will have jurisdiction in case of disputes arising from the

contract. Such jurisdiction shall be considered exclusive, unless the parties have stipulated

otherwise.42

If parties failed to agree on the applicable jurisdiction, the courts of the Member

State wherein the defendant is domiciled shall be competent.43

Unless there is a closer

connection with another forum, which would justify the application of an alternative

jurisdiction.44

Parties may only derogate from this basic rule where the Regulation so

allows.45

Article 5(1) of the Brussels I Regulation specifically provides special jurisdiction in

matters relating to a contract. Section 4 of the Brussels I Regulations governs the applicable

jurisdiction in the case of a consumer contract.

Nonetheless, there are international conventions excluding the applicability of the Brussels I

Regulation. When a claim is covered by the CMR46

, COTIF-CIM47

, the Hamburg Rules48

, the

Warsaw or Montreal Conventions49

, Brussels I only applies insofar as it does not conflict with

the rules on jurisdiction in these international unimodal transport conventions.50

In case of

conflict between the Brussels I Regulations and the mentioned conventions, the conventions

shall take priority over Brussels I. The qualification given by the parties to the contract at

hand is thus crucial before choosing the applicable jurisdiction. If however, the contract

concerns more than one transport mode and thus the application of more than one carriage

convention, the contract should first be qualified, in order to determine whether one of the

above mentioned conventions apply.51

6. Determining the applicable law

After the competent court has been assigned, the search for the applicable law may

commence. Hereby, the rules on private international law apply.

In order to determine which private international law system has to be used, the dispute in

question should be qualified as belonging to a specific category governed by private

41 Council Regulation (EC) No 44/2001, 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ.L. 16 January 2001, 12, 1-23 (hereafter: ‘Brussels I Regulation’). 42 Art. 23 Brussels I Regulation. 43 Art. 2 Brussels I Regulation. 44 Para. 12 Preamble Brussels I Regulation. 45 ECJ C-281/02, ECR 2005, I, 01383. 46 International Convention on the carriage of goods by road. 47 International Convention on the carriage of goods by rail. 48 International Convention on the carriage of goods by sea. 49 International Conventions on the carriage of goods by air. 50 Art. 7(1) Brussels I Regulation; art. 31 CMR; art. 46 COTIF-CIM; art. 21 Hamburg Rules; art. 28 Warsaw Convention; art. 33 Montreal Convention and P. DE MEIJ, Samenloop van CMR-Verdrag en EEX-Verordening, Groningen, Kluwer, 2003, 255, 259, 262, 264, 266-268, 270-272, 273, 274-275 and 292-293. 51 G. RENNERT, “Is elimination of forum shopping by means of international uniform law an ‘impossible mission?”, MqJBL 2005, 122.

13

international law. This qualification can be performed in accordance with either the lex fori52

,

the lex causae53

or comparatively54

. Generally, the lex fori approach is used, unless the

potentially applicable rule of conflict law conflicts with a rule of international uniform law

that also applies.55

In the latter case, the dispute has to be qualified on the basis of the

definitions provided by the convention in question.56

An example. If the dispute arises from

an international carriage of goods by air, the Warsaw or Montreal Convention applies. This

means that the rules provided by these conventions can be used to qualify the dispute at

hand.57

A contract involving international carriage should thus be qualified in accordance with

the rules provided by the carriage conventions. Hereby, the main goal of international law is

preserved: international legal uniformity.58

However, in the case of a multimodal transport of goods, there is no international convention

at hand. The relevant unimodal carriage conventions are to be considered fit for the

multimodal dispute in question, although they can only apply if the dispute is based on their

own merits.59

If a unimodal carriage convention applies, it usually does not cover the whole

multimodal transport operation. But there are some exceptions. For instance in case of

international rail transport combined with domestic road transport under the same contract.

This contract will be governed by the COTIF-CIM Convention in its entirely.60

Still, it is

more common that a unimodal carriage convention applies to a part of the multimodal

transport contract, instead to the contract in its entirely.

As is mentioned above, the carriage conventions apply in case the applicable national law

conflicts with international rules set out in these conventions. In order to find the applicable

national law, European national courts are bound to apply the Rome I Regulation on the law

applicable to contractual obligations.61

As a first step, the contract has to be qualified.

Secondly, it must be examined whether the parties have stipulated a choice of law in the

contract in dispute. If this is the case, then that choice of law shall prevail.62

If not, article 4 of

the Rome I Regulation applies. This article provides the applicable law, depending of the type

of contract in dispute. In case of a multimodal transport contract, article 5 of the Rome I

Regulation provides a specific set of rules. The law applicable shall be the law of the country

of habitual residence of the carrier, provided that the place of receipt or the place of delivery

or the habitual residence of the consignor is also situated in that country. If those requirements

are not met, the law of the country where the place of delivery as agreed by the parties is

situated shall apply.63

However, if it is clear from all the circumstances surrounding the

contract, that when the contract is manifestly more closely connected with a country other

52 Refers to the laws of the jurisdiction in which a legal claim is brought. 53 Qualification on the basis of the applicable law to the dispute. 54 By comparing different legal regimes. 55 K. FIRSCHING and B. VON HOFFMANN, Internationales Privatrecht, München, Beck, 1997, 208; L.A. COLLINS, A.V. DICEY and J.H.C. MORRIS, Dicey, Morris and Collins on the conflict of laws, London, Sweet & Maxwell, 2006, vol. 2, 39 and L. STRIKWERDA, Inleiding tot het Nederlandse internationaal privaatrecht, Deventer, Kluwer, 2005, 46. 56 L. STRIKWERDA, Inleiding tot het Nederlandse internationaal privaatrecht, Deventer, Kluwer, 2005, 44. 57 P. MANKOWSKI, “Entwicklungen im Internationalen Privat- und Prozessrecht für Transportverträge in Abkommen und speziellen EG-Verordnungen”, TranspR. 2008, 177. 58 K. FIRSCHING and B. VON HOFFMANN, Internationales Privatrecht, München, Beck, 1997, 209. 59 K. RAMMING, “Probleme der Rechtsanwendung im neuen Recht der Multimodalen Beförderung”, TranspR. 1999, 332. 60 Art. 1(3) COTIF-CIM. 61 Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations, OJ.L. 177, 4 July 2008, 6-16 (hereafter ‘Rome I Regulation’). 62 Art. 3 Rome I Regulation. 63 Art. 5(1) Rome I Regulation.

14

than the one indicated in article 5(1) of the Rome I Regulation, the law of that other country

shall apply.64

Again, when these rules conflict with uniform international law, set out in the

carriage conventions, the latter shall prevail.65

Air Warsaw Convention 1929 Montreal Convention 1999 Rail Convention concerning International Carriage by Rail (COTIF)

1980 Uniform Rules concerning the Contract of International Carriage

of Goods by Rail (CIM) 2006 Road Convention on the Contract for the International carriage of

Goods by Road (CMR) 1956 Sea Hague Rules 1924 Hague-Visby Rules 1968 Hamburg Rules 1978 Rotterdam Rules 2009 Inland Navigation Budapest Convention on the Contract for the Carriage of Goods

by Inland Waterway (CMNI) 2000 Figure 4: Overview of international carriage conventions per transport mode.

7. Standard trading conditions

When a contract between a shipper and a carrier is signed, the latter will negotiate the terms

and conditions of carriage with the parties involved in the logistics chain. These conditions

are called ‘standard trading conditions’ which are general contract terms between two

contracting parties in the case of a contract of transportation or storage of goods. Without

specific request by the shipper or cargo owner, it is the carrier’s free choice to stipulate the

standard contract terms. Since these terms will govern the commercial outcome in case of

loss, damage or delay, they are of great importance to the contractual relationship between the

cargo owner and the carrier.

The choice of standard terms adopted by the carrier depend predominantly on the bargaining

power of the carrier and each party involved in the logistics chain. Therefore, the conditions

may differ from document to document, each governing a part of the transport operation. Also

customers may have specific preferences they would like to spell out in their contracts of

sale.66

64 Art. 5(3) Rome I Regulation. 65 Art. 25 Rome I Regulation and J. ERAUW, Internationaal Privaatrecht, Mechelen, Wolters Kluwer Belgium NV, 2009, 793-794. 66 H.M. KINDRED and M.R. BROOKS, Multimodal transport rules, The Netherlands, Kluwer Law International, 1997, 23-26.

15

PART III - THE CURRENT LIABILITY REGIMES

FOR MULTIMODAL TRANSPORT OF GOODS

1. A unimodal transport regime

The international multimodal transport of cargo is governed by national laws and international conventions designed to regulate unimodal transport of goods. What all conventions have in common is their aim to facilitate international trade by increasing uniformity in international transport law. As a result, a unimodal transport regime has been created whereby each mode of transportation is governed by a different set of international rules. In a unimodal transport regime, there is the assumption that international carriage of goods occurs primarily by one single mode of transportation, while the other transport modes used for that carriage, are incidental and therefore involve a different and separate legal relationship.67 A uniformity of law, but confined within each transport mode.

This type of regime exposes multimodal carriers to substantial uncertainty with respect to the laws governing their liability. As a reaction, the International community and the European Union started to create a uniform multimodal regime. The complexity and difficulties faced by the multimodal carriers today, shall be further outlined in this Part. First, an overview shall be given of the carrier’s liability regimes applicable per each transport mode and the application of the unimodal transport conventions to cases of multimodal transport of goods. Second, a comparison shall be made between these unimodal liability regimes to analyze the problems that multimodal carriers face under the international unimodal conventions. And thirdly, an overview shall be given of the past attempts made to create a uniform set of rules.

1.1. THE CARRIER’S LIABILITY UNDER THE MARITIME CONVENTIONS

A. ORIGINS OF THE APPLICABLE MARITIME CONVENTIONS

At this point, there is no such thing as a uniform international law on the carriage of goods by

sea.68

This because of the existence of not one, but four international conventions covering

this area of law, namely:

the Hague Rules 1924;

the Hague-Visby Rules 1968;

the Hamburg Rules 1978; and

the Rotterdam Rules 2008.

The first to be drafted were the Hague Rules 1924.69

This Convention represented the first

attempt by the International community to deal with the problem of cargo owners being

67 Maritime Transportation Research Board, Legal Impediments to International Intermodal Transportation 46, 1971 (MTRB Report). 68 L.S. PALLARES, “A brief approach to the Rotterdam Rules: between hope and disappointment”, Tex. Int’l L.J. 2011, vol. 42, 453-455.

16

disadvantaged due to contractual stipulations excluding sea carriers from all liability for loss

of or damage to the cargo. The drafters of the Hague Rules wanted to establish a set of

uniform rules relating to the bills of lading, by incorporating standard clauses, defining the

risks which must be borne by the carrier and the maximum protection that the carrier could

claim from exclusion and limitation clauses. The Hague Rules entered into force on June, 2nd

1931 and have been referred to as one of the most successful maritime conventions of all

time.70

In 1968, the Hague Rules 1924 were amended by the Hague-Visby Rules71

. The Hague-Visby

Rules were the outcome of the successful deliberations of the ‘Comité Maritime

Internationale’ (CMI)72

Conference in Stockholm in 1963.73

Despite the good solutions

offered by the Hague-Visby Rules on problems arisen since the Hague Rules 1924 entered

into force, the Hague-Visby Rules were subject of much criticism. Many states wanted an

extensive discussion during the Stockholm Conference, but were not allowed to do so.

Representatives of both developing as developed countries realized that their nationals, who

were cargo owners, did not enjoy an equal bargaining power with the carriers. Further

criticism relates to the fact that the Hague-Visby Rules were not designed to deal with

multimodal carriage, citing to the burden of proof and the exoneration grounds on the carrier’s

liability provided for by these Rules.74

This lead to the adoption of a new set of rules under

the auspices of the UNCITRAL in 1978, better known as the Hamburg Rules75

.76

The Hamburg Rules entered into force on November, 1st 1992, but did not gain the success as

was expected it to have. It has not been able to capture the major maritime states, nor was it

considered acceptable by the shipping and insurance industries.77

As a consequence, the

Hague Rules and the Hague-Visby Rules continued to apply.78

In an effort to create a uniform set of rules governing international sea carriage, the CMI

commenced drafting a new convention in 1999. The CMI completed its draft in 2001 and

transmitted the project to the remit of UNCITRAL, for further development. In December

2008, the ‘UN Convention on Contracts for the International Carriage of Goods Wholly or

69 International Convention of 25 August 1924 for the Unification of Certain Rules of Law relating to Bills of Lading, www.iew.unibe.ch/unibe/rechtswissenschaft/dwr/iew/content/e3870/e3985/e6006/e6338/sea_1_HagueRules1924_ger.pdf (hereafter ‘Hague Rules 1924’). 70 W. TETLEY, “Package and Kilo Limitations and The Hague-Visby and Hamburg Rules”, JMLC 1995, vol. 26, 133-155. 71 The Hague Rules as amended by the Brussels Protocol 1968, www.jus.uio.no/lm/sea.carriage.hague.visby.rules.1968 (hereafter ‘Hague-Visby Rules’). 72 The CMI is a non-governmental not-for-profit international organization. It was established in Antwerp (Belgium) in 1897. The aim of the CMI is to contribute by all appropriate means and activities to the unifications of maritime law in all its aspects. For more information, see www.comitemaritime.org. 73 J.F. WILSON, Carriage of goods by sea, England, Pearson Education Limited, 2008, 173. 74 L. SINGH, The law of carriage of goods by sea, West Sussex, Bloomsbury Professional Ltd., 2011, 39. 75 United Nations Convention of 13 March 1978 on the Carriage of Goods by Sea (the Hamburg Rules), www.jus.uio.no/lm/un.sea.carriage.hamburg.rules.1978/doc.html (hereafter ‘Hamburg Rules’). 76 UNCITRAL, Working Group on the Revision of the Hague Rules, first session, Doc. TD/B/289, 456th plenary meeting and second session, Doc. TD/B/C.4/86, fourth plenary meeting, 1970 and ICJ, “Conference on Development, Human Rights and the Rule of Law”, RICJ 1981, vol. 26, 1-2. 77 J. HUNDT, “The Importance of Hamburg Rules in the International Sea Carriage of Goods”, www.globaleconsulting.co.uk/soaiblaw/The%20Importance%20of%20Hamburg%20Rules%20in%20the%20International%20Sea%20Carriage%20of%20Goods.htm. 78 X, “Chapter 1: application of the rules generally”, www.dutchcivillaw.com/legislation/Hague-Visby%20Comments.pdf.

http://www.iew.unibe.ch/unibe/rechtswissenschaft/dwr/iew/content/e3870/e3985/e6006/e6338/sea_1_HagueRules1924_ger.pdf


http://www.jus.uio.no/lm/sea.carriage.hague.visby.rules.1968

http://www.comitemaritime.org/

http://www.jus.uio.no/lm/un.sea.carriage.hamburg.rules.1978/doc.html

http://www.globaleconsulting.co.uk/soaiblaw/The%20Importance%20of%20Hamburg%20Rules%20in%20the%20International%20Sea%20Carriage%20of%20Goods.htm


http://www.dutchcivillaw.com/legislation/Hague-Visby%20Comments.pdf


17

Partly by Sea’, better known as the Rotterdam Rules79

, was opened for signing. The aim of the

Convention is to extend and modernize the existing international rules by replacing the Hague

Rules, the Hague-Visby Rules and the Hamburg Rules. However, due to a lack of signatory

states, the Rotterdam Rules have not (yet) entered into force.80

B. CONTRACTING STATES

Convention Member States The Hague Rules 1924 77 81 The Hague-Visby Rules 21 82 Hamburg Rules 34 83 Rotterdam Rules Not (yet) in force, 24 signatories 84 Hereafter, the Hague-Visby Rules, the Hamburg Rules and the Rotterdam Rules shall be

further discussed.85

C. SCOPE OF APPLICATION

i. The Hague-Visby Rules

The Hague-Visby Rules apply to every bill of lading relating to the carriage of goods between

ports in two different states, if:

the bill of lading is issued in a contracting State; or

the carriage is from a port in a contracting State; or

the contract contained in or evidenced by the bill of lading provides that these Rules

or legislation of any State giving effect to them are to govern the contract,

whatever may be the nationality of the ship, the carrier, the shipper, the consignee, or any

other interested person.86

The carriage of goods covers the period from the time when the

goods are loaded on to the vessel and the time they are discharged. If the carrier never

receives the goods, even when a bill of lading is issued, the Hague-Visby Rules shall not

79 United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea 2008, www.rotterdamrules.com/sites/default/files/pdf/convention.pdf (hereafter ‘Rotterdam Rules’). 80 UNCITRAL, 2008-United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea – The Rotterdam Rules, www.uncitral.org/uncitral/uncitral_texts/transport_goods/2008rotterdam_rules.html and W. VERHEYEN, “La Convention de Rotterdam: une revolution dans le transport maritime?”, Le droit des affaires – het ondernemingsrecht D.A.-O.R. 2010, vol. 94, no. 2, 117-118. 81 Convention internationale pour l’unification de certaines règles en matière de connaissement et protocole de signature, http://diplomatie.belgium.be/fr/binaries/I-4a_tcm313-79747.pdf. 82 Protocole portant modification de la convention internationale pour l’unification de certaines règles en matière de connaissement du 24 aout 1924, telle qu’ amendée par le protocole de modification du 23 février 1968, http://diplomatie.belgium.be/fr/binaries/I-4c_tcm313-79762.pdf. 83 Status 1978 – United Nations Convention on the Carriage of Goods by Sea, www.uncitral.org/uncitral/en/uncitral_texts/transport_goods/Hamburg_status.html. 84 www.rotterdamrules.com. 85 More details concerning the application of these Conventions per State Party, see W. TETLEY, “An update on the per package limitation and national intentions regarding future carriage of goods by sea legislation”, Journal of Maritime Law and Commerce July 1983, vol. 14, no. 3, 331-346. 86 Art. X Hague-Visby Rules.

http://www.rotterdamrules.com/sites/default/files/pdf/convention.pdf

http://www.uncitral.org/uncitral/uncitral_texts/transport_goods/2008rotterdam_rules.html

http://diplomatie.belgium.be/fr/binaries/I-4a_tcm313-79747.pdf

http://diplomatie.belgium.be/fr/binaries/I-4c_tcm313-79762.pdf

http://www.uncitral.org/uncitral/en/uncitral_texts/transport_goods/Hamburg_status.html

http://www.rotterdamrules.com/

18

apply.87

This general rule is better known as ‘tackle to tackle’ principle.88

This means that the

Hague-Visby Rules apply from the moment when the ship’s tackle is hooked on at the loading

port until the moment that the ship’s tackle is unhooked at discharge. If shore tackle is used, it

is the moment when the goods cross the ship’s rail.89

Although the Hague-Visby Rules use the ‘tackle to tackle’-principle, which limits their scope

of application, parties may agree to apply these Rules to the whole contract of carriage,

including the entire loading and discharging.90

This also applies to the exclusion from the

scope of application of the carriage of live animals and deck cargo.91

Parties can thus decide

on their own terms which risks should attach to the contract of carriage by sea.92

In relation to

carriage on deck, the bill of lading must disclose that the goods will be carried on deck and

that they are in fact carried on deck. The courts tend to apply this exclusion narrowly.93

ii. The Hamburg Rules

The Hamburg Rules apply to all contracts of carriage by sea between two different states, if:

the port of loading as provided for in the contract of carriage by sea is located in a

Contracting State; or

the port of discharge as provided for in the contract of carriage by sea is located in a

Contracting State; or

one of the optional ports of discharge provided for in the contract of carriage by sea is

the actual port of discharge and such port is located in a Contracting State; or

the bill of lading or other document evidencing the contract of carriage by sea is issued

in a Contracting State; or

the bill of lading or other document evidencing the contract of carriage by sea

provides that the provisions of this Convention or the legislation of any State giving

effect to them are to govern the contract.

These Rules are applicable without regard to the nationality of the ship, the carrier, the actual

carrier, the shipper, the consignee or any other interested person.94

iii. The Rotterdam Rules

The Rotterdam Rules apply to contracts of carriage in which the place of receipt and the place

of delivery are in different States, and the port of loading of a sea carriage and the port of

discharge of the same sea carriage are in different States, if, according to the contract of

carriage, any one of the following places is located in a Contracting State:

87 Art. I(e) Hague-Visby Rules. 88 Supreme Court of Canada, Falconbridge Nickel Mines Ltd. et al v. Chimo Shipping Ltd. et al, Lloyd’s Rep. 1973, vol. 2, 469 and http://scc.lexum.org/decisia-scc-csc/scc-csc/scc-csc/en/item/5231/index.do. 89 Queen’s Bench Division, Pyrene Co Ltd v. Scindia Steam Navigation Co Ltd., Lloyd’s Rep. 1954, vol. 1, 321, http://pntodd.users.netlink.co.uk/cases/cases_p/pyrene.htm. 90 Art. VII Hague-Visby Rules. 91 Art. I(c) Hague-Visby Rules. 92 Art. VI Hague-Visby Rules. 93 United States District Court S.D. New York, Encyclopaedia Britannica v. SS Hong Kong Producer, Lloyd’s Rep. 1969, vol. 2, 536 and Queen’s Bench Division, Svenska Traktor AB v. Maritime Agencies (Southampton), Lloyd’s Rep. 1953, vol. 2, 124. 94 Art. 2(1) and (2) Hamburg Rules.

http://scc.lexum.org/decisia-scc-csc/scc-csc/scc-csc/en/item/5231/index.do

http://pntodd.users.netlink.co.uk/cases/cases_p/pyrene.htm

19

the place of receipt; or

the port of loading; or

the place of delivery; or

the port of discharge95

,

without regard to the nationality of the vessel the carrier, the performing parties, the shipper,

the consignee, or any other interested parties.96

The Convention shall not apply to the contracts in liner transportation as stipulated in article

6. There is no equivalent provision which has the same effect as article X(c) of the Hague-

Visby Rules, where contracting parties can expressly incorporate the Rules into the contract,

even when they would not have been applicable.

Hague Rules Hague-Visby Rules Hamburg Rules Rotterdam Rules

Tackle-to-tackle Tackle-to-tackle Port-to-port Door-to-door Figure 5: Overview over the relevant period of carrier’s liability

97

D. DUTIES OF THE CARRIER

i. Hague-Visby Rules

Before and at the beginning of the voyage, the carrier has the duty to exercise due diligence to

make the ship seaworthy, to properly man, equip and supply the ship and the make the holds,

refrigerating and cool chambers, and all other parts of the ship in which the goods are carried,

fit and safe for their reception, carriage and preservation.98

The carrier shall properly and

carefully load, handle, stow, carry, keep, care for, and discharge the goods carried.99

After

receiving the goods, the carrier, the master or an agent of the carrier, shall, on demand of the

shipper, issue to the shipper a bill of lading in accordance with article III(3) Hague-Visby

Rules. Such a bill of lading shall be prima facie evidence of the receipt by the carrier of the

goods as therein described.100

The carrier is only obliged to issue a bill of lading with the

required information to the shipper. No other lawful holder of the bill of lading can demand

the carrier to provide such information.101

The carrier may not deviate from the agreed

route.102

95 When the goods are discharged from the vessel to the customs, prior to declaration, it does not form a part anymore of the carriage by sea. Therefore, the carriage is not subject to the Rotterdam Rules, but is governed by the clauses concerning the subsequent domestic carriage, for instance by road. United States District Court – Central District Court California 16 January 2001, European Transport Law 2001, 360. 96 Art. 5 Rotterdam Rules. 97 S. TONG-JIANG and W. PENG, “Carrier’s liability under International Maritime Conventions and the UNCTIRAL Draft convention on contracts for the international carriage of goods wholly or partly by sea”, Transport 2009, 347. 98 Art. III(1) Hague-Visby Rules. 99 Art. III(2) Hague-Visby Rules. 100 Art. III(4) Hague-Visby Rules. 101 Ace Imports Pty Ltd. v. Companhia De Navegacao Lloyd Brasileiro, Lloyd’s Rep. 1988, vol. 1, 206. 102 M. BUNDOCK, Shipping Law Handbook second edition, London, LLP, 2000, 179-181.

20

ii. Hamburg Rules

The Hamburg Rules do not modify the rights or duties of the carrier, the actual carrier and

their servants or agents, provided for in international conventions or national laws relating to

the limitation of liability of ship owners.103

iii. Rotterdam Rules

The carrier shall, subject to the Rotterdam Rules and in accordance with the terms of the

contract of carriage, carry the goods to the place of destination and deliver them to the

consignee.104

During the period of responsibility, as defined in article 12, and subject to article

26 of the Rotterdam Rules, the carrier shall properly and carefully receive, load, handle, stow,

carry, keep, care for, unload and deliver the goods.105

The carrier is bound before, at the

beginning of, and during the voyage by sea to exercise due diligence to make and keep the

ship seaworthy, to properly crew, equip and supply the ship and keep the ship so crewed,

equipped and supplied through the voyage, make and keep the holds and all other parts of the

ship in which goods are carried, and any containers supplied by the carrier in or upon which

goods are carried, fit and safe for their reception, carriage and preservation.106

In accordance

with article 15 of the Rotterdam Rules, a carrier or a performing party may decline to receive

or load and take such other measures as are reasonable if the goods are or reasonably appear

to be an actual danger to persons, property or the environment.

E. LIABILITY OF THE CARRIER


The carrier shall be liable for loss or damage arising or resulting from unseaworthiness of the

vessel, if this is caused by want of due diligence on the part of the carrier. The burden of

proving the exercise of due diligence shall be on the carrier or the other person claiming

exemption under article IV.107

However, if defects arise in the vessel during the voyage or at

an intermediate port, the carrier shall not be liable for unseaworthiness of the vessel if the

vessel was seaworthy at the beginning of the voyage. The carrier’s obligation as to the

seaworthiness is a personal obligation, meaning that he’ll be liable for anyone whose actions

caused the unseaworthiness of the vessel.108

ii. Hamburg Rules

The Hamburg Rules adopt a system of a refutable presumed liability of the carrier. The carrier

shall be liable for loss resulting from loss of or damage to the goods, as well as from delay in

delivery, if the occurrence which caused the loss, damage or delay took place while the goods

were in his charge, unless the carrier proves that he, his servants or agents took all measures

that could reasonably be required to avoid the occurrence and its consequences.109

The

liability of the carrier covers the period during which the carrier is in charge of the goods at

103 Art. 25(1) Hamburg Rules. 104 Art. 11 Rotterdam Rules. 105 Art. 13(1) Rotterdam Rules. 106 Art. 14 Rotterdam Rules. 107 Art. III and IV Hague-Visby Rules. 108 House of Lords, Riverstone Meat Co. Pty Ltd v. Lancashire Shipping Co Ltd, AC 1961, 807, http://pntodd.users.netlink.co.uk/cases/cases_m/munc_c.htm. 109 Art. 5(1) Hamburg Rules.

http://pntodd.users.netlink.co.uk/cases/cases_m/munc_c.htm

21

the port of loading, during the carriage and at the port of discharge.110

The carrier is deemed

to be in charge of the goods:

from the time he has taken over the goods from the shipper, or a person acting on his

behalf, or an authority or other third party to whom, pursuant to law or regulations

applicable at the port of loading, the goods must be handed over for shipment;

until the time he has delivered the goods by handing over the goods to the consignee,

or in cases where the consignee does not receive the goods from the carrier, or by

handing over the goods to an authority or other third party to whom the goods must be

handed over.111

These rules do also apply in addition to the servants or agents, respectively of the carrier or

the consignee.112

Delay in delivery occurs when the goods have not been delivered at the port of discharge

provided for in the contract of carriage by sea within the time expressly agreed upon, or, in

the absence of such an agreement, within the time which it would be reasonable to require of

a diligent carrier, having regard to the circumstances of the case.113

The goods may be treated

as lost if they have not been delivered as required within 60 consecutive days after the expiry

of the time for delivery.114

Under the Hamburg Rules, the carrier is liable for:

loss or damage to the goods or delay in delivery caused by fire, if the claimant proves

that the fire arose from fault or neglect on the part of the carrier, his servants or agents;

such loss, damage or delay in delivery which is proved by the claimant to have

resulted from the fault or neglect of the carrier, his servants or agents, in taking all

measures that could reasonably be required to put out the fire and avoid or mitigate its

consequences.115

In case of a fire on board of the ship affecting the goods, the claimant or the carrier may hold

a survey in accordance with shipment practices, into the cause and circumstances of the fire.

A copy of the surveyor's report shall be made available on demand to the carrier and the

claimant.116

The carrier shall not be liable for the carriage of live animals in accordance with article 5(5)

Hamburg Rules and where loss, damage or delay in delivery resulted from measures to save

life or from reasonable measures to save property at sea.117

In the case of a fault or neglect of the carrier, his servants or agents, combined with another

cause to produce loss, damage or delay in delivery, the carrier is liable only to the extent that

the loss, damage or delay is attributable to such fault or neglect, provided that the carrier

proves the amount of loss, damage or delay not attributable thereto.118

110 Art. 4(1) Hamburg Rules. 111 Art. 4(2) Hamburg Rules. 112 Art. 5(3) Hamburg Rules. 113 Art. 5(2) Hamburg Rules. 114 Art. 5(3) Hamburg Rules. 115 Art. 5(4)(a) Hamburg Rules. 116 Art. 5(4)(b) Hamburg Rules. 117 Art. 5(5) and 5(6) Hamburg Rules. 118 Art. 5(7) Hamburg Rules.

22

Carriage of cargo on deck is allowed, insofar as this is reflected in the bill of lading.119


The carrier is liable for loss of or damage to the goods, as well as for delay in delivery120

, if

the claimant proves that the loss, damage or delay, or the event or circumstance that caused or

contributed to it, took place during the period of the carrier’s responsibility.121

Notwithstanding the exonerations foreseen by the Rotterdam Rules, the carrier shall be liable

for all or a part of the loss, damage or delay:

if the claimant proves that the fault of the carrier or of a person referred to in article 18

caused or contributed to the event or circumstance on which the carrier relies; or

if the claimant proves that an event or circumstance not listed in article 17(3)

contributed to the loss, damage, or delay, and the carrier cannot prove that this event

or circumstance is not attributable to its fault or to the fault of any person referred to in

article 18;122

or

if the claimant proves that the loss, damage or delay was (probably) caused by or

contributed to by the unseaworthiness of the ship, the improper crewing, equipping

and supplying of the ship, or the fact that the holds or other parts of the ship in which

the goods are carried, or any containers supplied by the carrier in or upon which the

goods are carried, were not fit and safe for reception, carriage and preservation of the

goods; and

if the carrier is unable to prove either that none of the events or circumstances referred

to in article 17(5) caused the loss, damage, or delay; or it complied with its obligation

to exercise due diligence pursuant to article 14.123

.

The carrier is presumed, in the absence of proof to the contrary, to have delivered the goods

according to their description in the contract particulars, unless notice of loss or damage was

given to the carrier or the performing party that delivered the goods in accordance with article

23 of the Rotterdam Rules. Goods shall be deemed to have remained undelivered under the

conditions set out in article 48 of the Rotterdam Rules.

The Rotterdam Rules adopt a door-to-door period of liability, starting when the carrier or the

performing party receives the goods for carriage and ending when the goods are delivered to

the consignee, in accordance with article 12 of the Rotterdam Rules.124

The carrier shall thus

be liable for any losses which occur when the goods are being transported inland, for example

where the goods are discharged from the vessel and taken to a storage facility.125

The carrier

shall thus be presumed liable if the shipper can prove that the carrier received the goods

undamaged and in full, or that the goods were subsequently damaged on route. The two tools

for such proof are a clean bill of lading126

, stating that the goods were shipped clean on board,

119 Art. 9 Hamburg Rules. 120 Delay in delivery occurs when the goods are not delivered at the place of destination provided for in the contract of carriage within the time agreed. Art. 21 Rotterdam Rules. 121 Art. 17(1) Rotterdam Rules. 122 Art. 17(4) Rotterdam Rules. 123 Art. 17(5) Rotterdam Rules. 124 Art. 12 Rotterdam Rules. 125 L. SINGH, The law of carriage of goods by sea, West Sussex, Bloomsbury Professional Ltd., 2011, 45. 126 This is only a prima facie evidence of the delivery of the goods in good conditions. As soon as the bill of lading is transferred to a new holder, the evidentiary value of this document is strengthened, because no counter-proof is admitted against a third party-claimant acting in good faith. Art. 41 Rotterdam Rules.

23

and the notice of the loss, damage or delay, restricting the timeframe in which the damages

would have occurred.127

The carrier may however exclude its liability during the periods where services are being

performed by another carrier, in case the loss or damage occurred while the goods were in the

care of the actual carrier.128

This condition must be agreed by both parties and must be

incorporated in their contract. For the purpose of determining the carrier’s period of

responsibility, the parties may agree on the time and location of receipt and delivery of the

goods. Such a provision shall however be void to the extent that the time of receipt of the

goods is subsequent to the beginning of their initial loading under the contract of carriage, or

that the time of delivery of the goods is prior to the completion of their final unloading under

the contract of carriage.129

F. EXONERATION OF LIABILITY


In the case of unseaworthiness of the vessel used to perform the carriage, the carrier can be

relieved from liability if he can prove that due diligence was exercised or that the damage

occurred after the vessel commenced its voyage.130

Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting

from131

:

an 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;

a fire, unless caused by the actual fault or privity of the carrier;

perils, dangers and accidents of the sea or other navigable waters;

an act of God;

an act of war;

an act of public enemies;

an arrest or restraint of princes, rulers or people, or seizure under legal process;

quarantine restrictions;

an act or omission of the shipper or owner of the goods, his agent or representative

strikes or lockouts or stoppage or restraint of labor from whatever cause, whether

partial or general;

riots and civil commotions;

saving or attempting to save life or property at sea;

wastage in bulk of weight or any other loss or damage arising from inherent defect,

quality or vice of the goods;

insufficiency of packing;

insufficiency or inadequacy of marks;

latent defects not discoverable by due diligence;

127 Art. 17(1) Rotterdam Rules and A. VON ZIEGLER, J. SCHELIN and S. ZUNARELLI, The Rotterdam Rules 2008: Commentary to the United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea, Alphen aan den Rijn, Kluwer Law International, 2010, 98-99. 128 Art. 13(2) and 17(3)(i) Rotterdam Rules. 129 Art. 12(3) Rotterdam Rules. 130 L. SINGH, The law of carriage of goods by sea, West Sussex, Bloomsbury Professional Ltd., 2011, 29. 131 Art. IV(2) Hague-Visby Rules.

24

any other cause arising without the actual fault or privities of the carrier, or without

the fault or neglect of the agents or servants of the carrier, but the burden of proof

shall be on the person claiming the benefit of this exception to show that neither the

actual fault or privities of the carrier nor the fault or neglect of the agents or servants

of the carrier contributed to the loss or damage.

These exonerations from liability will protect the carrier against a claim by the shipper or a

consignee. The carrier may agree to give up any of these exceptions132

, but he may not

increase his protection.133

If an action is not brought within the time limits foreseen by the

Hague-Visby Rules, the carrier shall in any event be discharged from all liability whatsoever

in respect of the goods.134

ii. Hamburg Rules

The list of exceptions provided for by the Hague-Visby Rules is removed. The carrier is

obliged to take all measures that could reasonably be required to avoid the occurrence of the

loss, damage or delay, and its consequences.135

Except in the case where the loss, damage or

delay is caused by a fire, if the claimant proves that the fire arose from a fault or a neglect on

the part of the carrier, his servants or agents.136


The carrier will be liable if the claimant can prove that the loss or damage occurred while the

goods were under the carrier’s responsibility, unless the cause or one of the causes of the loss,

damage or delay is not attributable to the carrier’s fault or the fault of the performing party.137

Alternatively, the carrier shall be relieved from liability if he proves that one or more of the

following events or circumstances caused or contributed to the loss, damage or delay138

:

act of God;

perils, dangers, and accidents of the sea or other navigable waters;

war, hostilities, armed conflict, piracy, terrorism, riots, and civil commotions;

quarantine restrictions, interference by or impediments created by governments, public

authorities, rulers, or people including detention, arrest, or seizure not attributable to

the carrier or any person referred to in article 18 of the Rotterdam Rules;

strikes, lockouts, stoppages, or restraints of labor;

fire on the ship;

latent defects not discoverable by due diligence;

act or omission of the shipper, the documentary shipper, the controlling party, or any

other person for whose acts the shipper or the documentary shipper is liable pursuant

to article 33 or 34 of the Rotterdam Rules;

loading, handling, stowage, or unloading of the goods performed pursuant to an

agreement in accordance with article 13(2), unless the carrier or a performing party

132 Art. V Hague-Visby Rules. 133 This would otherwise be in breach of article III(8) Hague-Visby Rules. 134 Art. III(6) Hague-Visby Rules and House of Lords, Aries Tanker Corporation v. Total Transport Ltd., Lloyd’s Rep. 1977, vol. 1, 334. 135 Art. 5(1) Hamburg Rules. 136 Art. 5(4) Hamburg Rules. 137 Art. 17(2) Rotterdam Rules. 138 Art. 17(3) Rotterdam Rules.

25

performs such activity on behalf of the shipper, the documentary shipper or the

consignee;

wastage in bulk or weight or any other loss or damage arising from inherent defect,

quality or vice of the goods;

insufficiency or defective condition of packing or marking not performed by or on

behalf of the carrier;

saving or attempting to save life at sea;

reasonable measures to save or attempt to save property at sea;

reasonable measures to avoid or attempt to avoid damage to the environment; or

acts of the carrier in pursuance of the powers conferred by articles 15 and 16 of the

Rotterdam Rules.

When the carrier is relieved of a part of his liability, the carrier is liable only for that part of

the loss, damage or delay that is attributable to the event or circumstance for which he is

liable pursuant to article 17 of the Rotterdam Rules.139

A difference with the Hague-Visby Rules, is that the exception in navigation or management

of the vessel and the catch-all-exception in article IV(2)(q) of the Hague Visby Rules, are not

incorporated in the Rotterdam Rules.

G. LIMITATION OF LIABILITY


In the case of bulk cargo or in general, when the nature and value of the goods have been

declared by the shipper before shipment and inserted in the bill of lading, the carrier’s liability

is limited to an amount not exceeding an equivalent of 666,67 units of account140

per package

or unit(s) of account per kilo of gross weight of the goods lost or damaged, whichever is the

higher.141

In the case of goods being shipped in containers, the number of packages or units

enumerated in the bill of lading as packed in such article of transport shall be deemed the

number of packages or units, as far as these packages or units are concerned. Except as

aforesaid, such article of transport shall be considered a package or unit.142

These limitations of liability shall apply in any action against the carrier in respect of loss or

damage to the goods covered by a contract of carriage.143

Except where the damage incurred

was caused by his own act or omission done with the intent to cause damage, or whether he

was reckless and it was foreseeable that such damage would occur.144

The carrier is allowed

to give up any of his rights or immunities or to increase his responsibilities and obligations as

long as they are included in the bill of lading issued to the shipper.145

However, the carrier

139 Art. 17(6) Rotterdam Rules. 140 Special Drawing Rights (SDR). The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries' official reserves. Its value is based on a basket of four key international currencies. SDRs can be exchanged for freely usable currencies (source: www.imf.org/external/np/exr/facts/sdr.htm). 141 Art. IV(5)(a) Hague-Visby Rules. 142 Art. IV(5)(c) Hague-Visby Rules. 143 Art. IV(1bis) Hague-Visby Rules. 144 Art. IV(5)(e) Hague-Visby Rules. 145 Art. V Hague-Visby Rules.

http://www.imf.org/external/np/exr/facts/sdr.htm

26

may not improve his position by limiting his responsibilities146

, unless it falls under article

VII of the Hague-Visby Rules.147

If an action is brought against a servant or an agent of the carrier, such servant or agent not

being an independent contractor, shall be entitled to avail himself of the defenses and limits of

liability which the carrier is entitled to invoke under the Hague-Visby Rules.148

The

independent contractor shall be able to protect himself from liability through contractual

clauses, such as, for example, a Himalaya clause149

.150

ii. Hamburg Rules

The carrier’s liability for loss resulting of or damage to the goods is limited to an amount

equivalent to:

835 units of account per package or other shipping unit, or

2,5 units of account151

per kilogram of gross weight of the goods lost or damaged,

whichever is the higher.152

In case of delay, the carrier’s liability is limited to an amount equivalent to two and a half

times the freight payable for the goods delayed, without exceeding the total freight payable

under the contract of carriage.153

In no case shall the carrier’s liability exceed the limitation

for total loss of the goods with respect to which such liability was incurred.154

For the purpose

of calculating which amount is the higher, article 6(2) Hamburg Rules provides specific

provisions that need to be applied. These limits may be fixed by agreement between the

carrier and the shipper.155

The carrier shall not be entitled to benefit of the limitation of liability, if it is proved that the

loss, damage or delay resulted from an act or omission of the carrier done with the intent to

cause such loss, damage or delay, or recklessly and with knowledge that such loss, damage or

delay would probably result.156

Article 8(2) Hamburg Rules extends this provision to the

actions of servants or agents of the carrier.


The carrier’s liability for breaches of his duties under the Rotterdam Rules is limited to:

875 units of account157

per package or other shipping unit, or

146 Art. III(8) Hague-Visby Rules. 147 The Rosa S, Lloyd’s Rep. 1988, vol. 2, 574. 148 Art. IV(2bis) Hague-Visby Rules. 149 A Himalaya clause is a clause in a transport contract purporting to extend liability limitations which benefit the carrier, to others who act as agents or servants for the carrier. Legal dictionary, www.duhaime.org/LegalDictionary.aspx. 150 Judicial Committee of the Privy Council, New Zealand Shipping Co. Ltd. v. A.M. Satterthwaite and Co. Ltd. (the Eurymedon), AC 1975, 154. 151 Unit of account means the unit of account mentioned in article 26 Hamburg Rules: art. 6(3) Hamburg Rules. 152 Art. 6(1)(a) Hamburg Rules. 153 Art. 6(1)(b) Hamburg Rules. 154 Art. 6(1)(c) Hamburg Rules. 155 Art. 6(4) Hamburg Rules. 156 Art. 8(1) Hamburg Rules. 157 This is the SDR as defined by the International Monetary Fund. Art. 59(3) Rotterdam Rules.

http://www.duhaime.org/LegalDictionary.aspx

27

3 units of account per kilogram of the gross weight of the goods that are subject of the

claim or dispute, whichever amount is the higher, except when the value of the goods

has been declared by the shipper and included in the contract particulars, or when a

higher amount than the amount of limitation of liability set out in article 59 has been

agreed upon between the carrier and the shipper.158

When the goods are carried in or on a container, pallet or similar article of transport used to

consolidate goods, or in or on a vehicle, the packages or shipping units enumerated in the

contract particulars as packed in or on such article of transport or vehicle are deemed

packages or shipping units. If not so enumerated, the goods in or on such article of transport

or vehicle are deemed one shipping unit.159

In the case of a loss caused by delay, compensation shall be limited to an amount equivalent

to two and one-half times the freight payable on the goods delayed. The total amount may not

exceed the limit that would be established in respect of the total loss of the goods

concerned.160

The carrier loses the right to avail himself of the limitation provisions, if the claimant proves

that the loss resulting from the breach of the carrier’s obligations under this Convention was

attributable to a personal act or omission of the person claiming a right to limit done with the

intent to cause such loss or recklessly and with knowledge that such loss would probably

result.161

Or if the delay in delivery resulted from a personal act or omission of the person

claiming a right to limit done with the intent to cause the loss due to delay or recklessly and

with knowledge that such los would probably result162

.163

H. THE CARRIER’S LIABILITY IN SUBCONTRACTING CARRIAGE

i. Hamburg Rules

The contractual carrier shall remain liable for the entire carriage of goods, even where the

carriage is performed by another carrier.164

The contract of carriage may provide that the

carrier is not liable for loss, damage or delay in delivery caused by an occurrence which takes

place while the goods are in charge of the actual carrier. Nevertheless, any stipulation limiting

or excluding such liability is without effect if no judicial proceedings can be instituted against

the actual carrier in a competent court. The burden of proof rests upon the carrier.165

All the provisions governing the carrier’s liability also apply to the responsibility of the actual

carrier for the carriage performed by him.166

As a consequence, the actual carrier is

responsible for loss, damage or delay in delivery caused by an occurrence which takes place

while the goods are in his charge.167

158 Art. 59(1) Rotterdam Rules. 159 Art. 59(2) Rotterdam Rules. 160 Art. 60 Rotterdam Rules. 161 Art. 61(1) Rotterdam Rules. 162 Art. 61(2) Rotterdam Rules. 163 K. LANNAN, “Behind the numbers: the limitation on carrier liability in the Rotterdam Rules”, Unif. L. Rev. 2009, vol. 14, 906-908. 164 Art. 10 Hamburg Rules. 165 Art. 11(1) Hamburg Rules. 166 Art. 10(2) Hamburg Rules. 167 Art. 11(2) Hamburg Rules.

28

ii. Rotterdam Rules

The Rotterdam Rules uses the term ‘performing party’ to refer to the person other than the

carrier that performs or undertakes to perform any of the carrier’s obligations under a contract

of carriage with respect to the receipt, loading, handling, stowage, carriage, care, unloading or

delivery of the goods, to the extent that such person acts, either directly or indirectly, at the

carrier’s request or under the carrier’s supervision or control.168

The carrier shall be liable for

acts or omissions of any performing party, the employees of the performing party and any

other person that performs or undertakes to perform any of the carrier’s obligations under the

contract of carriage, to the extent that the person acts, either directly or indirectly, at the

carrier’s request or under the carrier’s supervision or control.169

The liability of maritime

performing parties is governed by article 19 of the Rotterdam Rules. If the carrier and one or

more maritime performing parties are liable for the loss, damage or delay, their liability is

joint and several up to the limits provided under the Convention.170

I. CLAIM


Under the Hague-Visby Rules, a claim must be brought within one year of the delivery of the

goods or of the date when they should have been delivered. This period may be extended after

the cause of action has arisen and if the parties so agree.171

Where the goods have not been

loaded on the vessel, any resulting loss or damage would still be in relation to the goods, in

that it arose in relation to the loading, handling, stowage, carriage, custody, care and discharge

of the goods.172

If a claim is not brought within these time-limits, it will not be accepted.173

ii. Hamburg Rules

Under the Hamburg Rules, a claim must be brought within a period of two years from the day

on which the carrier has delivered the goods or part of the goods, or in cases where no goods

have been delivered, from the last day on which the goods should have been delivered by the

carrier.174

Before an action can be brought, the claimant must give notice of the damage, loss or delay to

the carrier. In case the loss or damage is apparent, notice should be given in writing and not

later than the working day after the day when the goods were handed over to the consignee.

Such handing over is prima facie evidence of the delivery by the carrier of the goods as

described in the document of transport or, if no such document has been issued, in good

condition.175

Where the loss or damage is not apparent, notice should be given within 15

consecutive days after the day when the goods were handed over to the consignee.176

In the

case of delay, notice should be given in writing to the carrier within 60 consecutive days after

168 Art. 1(6) Rotterdam Rules. 169 Art. 18 Rotterdam Rules. 170 Art. 20(1) Rotterdam Rules. 171 Art. III(6) Hague-Visby Rules. 172 Cargill International SA v. CPN Tankers (Bermuda) Ltd. (the Ot Sonja), Lloyd’s Rep. 1993, vol. 2, 435. 173 L. SINGH, The law of carriage of goods by sea, West Sussex, Bloomsbury Professional Ltd., 2011, 33. 174 Art. 20 Hamburg Rules. 175 Art. 19(1) Hamburg Rules. 176 Art. 19(2) Hamburg Rules.

29

the day when the goods were handed over to the consignee.177

The same rules apply if the

goods were delivered by an actual carrier, which shall have the same effect as if it had been

given to the carrier and vice versa.178


The time limit to bring a claim is two years from when the goods were delivered or ought to

have been delivered, or in cases in which no goods have been delivered or only a part of the

goods have been delivered, on the last day on which the goods should have been delivered.179

This time limit shall not be subject to suspension or interruption, but the person against which

a claim is made, may at any time during the running of the period extend this period by a

declaration to the claimant.180

An action can also be brought against the maritime performing

party.181

J. THE CARRIER’S LIABILITY IN THE CASE OF MULTIMODAL TRANSPORT OF GOODS


The Hague-Visby Rules make no mention of any kind of multimodal carriage of goods. The

relevant question than to ask, is whether the Hague-Visby Rules would apply to the

international sea carriage stage of a multimodal transport contract.

Under the Hague-Visby Rules, a contract of carriage is defined as a contract of carriage

covered by a bill of lading or any similar document of title, in so far as such document relates

to the carriage of goods by sea, including any bill of lading or any similar document as

aforesaid issued under or pursuant to a charter party from the moment at which such bill of

lading or similar document of title regulates the relations between a carrier and a holder of the

same.182

The Hague-Visby Rules do not apply to any other type of carriage, such as road, air,

rail or inland waterway. Only that part of the carriage where the goods are carried by sea.183

However, German academics do not agree. The prevailing view in Germany is that the

Hague-Visby Rules only apply to unimodal transport contracts, since they do not explicitly

mention multimodal transport.184

Italian Courts also follow this point of view.185

177 Art. 19(5) Hamburg Rules. 178 Art. 19(6) Hamburg Rules. 179 Art. 63 Rotterdam Rules. 180 Art. 63 Rotterdam Rules. 181 Art. 68 Rotterdam Rules. 182 Art. I(b) Hague-Visby Rules. 183 Rb. Rotterdam 17 September 2003, S&S 2007, 63; Hof Den Haag 22 March 2003, S&S 2005, 113; Hof Den Haag 26 September 2000, S&S 2001, 21; Rb. Rotterdam 10 April 1997, S&S 1999, 19; Queen’s Bench Division Commercial Court, Mayhew Foods Limited v. Overseas Containers Ltd., Lloyd’s Rep. 1984, vol. 1, 317; Court Canada, Captain v. Far Eastern Steamship Co., Llod’s Rep. 1979, vol. 1, 595 and Queen’s Bench Division, Pyrene Co Ltd v Scindia Steam Navigation Co Ltd., Lloyd’s Rep. 1954, vol. 1, 321, http://pntodd.users.netlink.co.uk/cases/cases_p/pyrene.htm. 184 R. HERBER, “Neue Entwicklungen im Recht des Multimodaltransports”, TranspR. 2006, 439; K. RAMMING, “Probleme der Rechtsanwendung im neuen Recht der Multimodalen Beförderung”, TranspR. 1999, 332; M. ROGERT, Einheitsrecht und Kollisionsrecht im internationalen multimodalen Gütertransport, Berlin, Logos Verlag, 2005, 117-120 and K.H. DREWS, “Zum anwendbaren Recht beim multimodalen Transport”, TranspR. 2003, 14. 185 Tribunale of Turin 5 June 2002, Chinese Polish Joint Stock Shipping Co. v. Zust Ambrosetti S.p.A., DM 2003, 1042 and Corte di Cassazione 2 September 1998, no. 8713, Andrea Merzario S.p.A. v Vismara Associate S.p.A. and others, DM 2000, 1349.


30

An important aspect of the Hague-Visby Rules, concerning multimodal carriage of goods, is

its basic principle, the tackle-to-tackle principle. The Hague-Visby Rules are only mandatory

for the period during which the goods are physically on board of the vessel, plus the time

needed for their loading and discharging. This makes it impossible for a multimodal contract

of carriage to be regulated by one single international legal regime.

ii. Hamburg Rules

Unlike the Hague-Visby Rules, a specific reference is made to multimodal carriage of goods.

Article 1(6) defines a contract of carriage as any contract whereby the carrier undertakes

against payment of freight to carry goods by sea from one port to another. However, a

contract which involves carriage by sea and also carriage by other means of transportation is

deemed to be a contract of carriage by sea for the purposes of this Convention, insofar as it

relates to the carriage by sea. The Hamburg Rules thus acknowledge that a contract of

carriage by sea can also involve a carriage of goods by other transport modes, while still

remaining a contract of carriage by sea. This does not however mean that the Hamburg Rules

apply to the whole of the multimodal transport contract. They are restricted to the

international sea stage.186

The sea carriage ends at the latest with the loading of the goods onto

the next means of transportation.187


A contract of carriage is defined as a contract in which a carrier, against the payment of

freight, undertakes to carry goods from one place to another. The contract shall provide for a

carriage by sea and by other modes of transport in addition to the sea carriage.188

If the

damage or loss occurs while the goods were being transported by another means of transport,

which is covered by another convention, the Rotterdam Rules will not apply.189

Where the

other conventions specifically provide for the carrier’s liability, limitation of liability or time

for suit, these other conventions will apply.190

The Rotterdam Rules shall not affect the

application of any of the international conventions, as stated in article 82, in force at the time

the Rules entered into force, including any future amendment to such conventions.191

K. A MANDATORY REGIME


Any clause, covenant or agreement in a contract of carriage relieving the carrier or the ship

from liability for loss or damage to, or in connection to, the goods, or lessen the liability

186 This is underlined by article 4(1) Hamburg Rules. 187 BGH 18 October 2007, European Transport Law 2008, 478. 188 Art. 1(1) Rotterdam Rules. 189 Art. 26 Rotterdam Rules. Originally, the purpose of the Rotterdam Rules was to regulate, besides the international sea carriage leg, the whole multimodal carriage which was not subjected to an international unimodal mandatory regime: www.uncitral.org, A/CN.9/WG.III/WP.21, Article 4.2.1 and A/CN.9/510, p. 9. This objective was not wholly achieved, since the new Convention also regulates parts of ‘wet’ multimodal carriage that are already subject to a mandatory unimodal regime: HAAK, K.F. and HOEKS, M.A.I.H., “Arrangements of intermodal transport in the field of conflicting conventions”, JIML 2004, 433. 190 Art. 26(b) and 82 Rotterdam Rules. 191 Art. 82 Rotterdam Rules.

31

otherwise than as provided by the Hague-Visby Rules, shall be null and void and of no

effect.192

ii. Hamburg Rules

Any stipulation in a contract of carriage by sea, in a bill of lading or any other document

evidencing the contract of carriage by sea, shall be null and void to the extent that it

derogates, directly or indirectly, from the provisions of the Hamburg Rules. The nullity of

such provisions shall however not affect the validity of the other provisions of the contract or

document of which it forms a part. A clause assigning benefit of insurance of the goods in

favor of the carrier, or any other similar clause, shall also be null and void.193

A carrier may

however increase his responsibilities and obligations under this Convention.194


Unless otherwise provided by the Rotterdam Rules, any term in a contract of carriage is void

to the extent that it:

directly or indirectly excludes or limits the obligations of the carrier or a maritime

performing party under this Convention;

directly or indirectly excludes or limits the liability of the carrier or a maritime

performing party for breach of an obligation under this Convention; or

assigns a benefit of insurance of the goods in favour of the carrier or a person referred

to in article 18 of the Rotterdam Rules.195

1.2. THE CARRIER’S LIABILITY UNDER THE WARSAW AND MONTREAL CONVENTIONS

A. ORIGINS OF THE WARSAW AND MONTREAL CONVENTIONS

As opposed to sea carriage, air carriage has a relatively short history. The first international

convention regulating air carriage of goods is the Warsaw Convention of 1929.196

Since its

entry into force on February, 13th

1933, the Warsaw Convention was subject of a major

reform.197

With respect to multimodal carriage, amendments have been introduced by the Hague

Protocol 1955198

and the Montreal Protocol No. 4 of 1998199

. However, not all amendments

192 Art. V(8) Hague-Visby Rules. 193 Art. 23(1) Hamburg Rules. 194 Art. 23(2) Hamburg Rules. 195 Art. 79(1) Rotterdam Rules. 196 Convention for the Unification of Certain Rules relating to International Carriage by Air of 12 October 1929, www.jus.uio.no/lm/air.carriage.warsaw.convention.1929/doc.html (hereafter: ‘Warsaw Convention’). 197 For more details concerning the history of the Warsaw Convention and its amendments, see B. CHENG, “A new era in the law of international carriage by air: from Warsaw (1929) to Montreal (1999), ICLQ 2004, 833-859 and UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT, “Carriage of goods by air: a guide to the international legal framework”, http://unctad.org/en/Docs/sdtetlb20061_en.pdf. 198 Protocol to amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air done at The Hague 28 September 1955, www.jus.uio.no/lm/air.carriage.warsaw.convention.hague.protocol.1955/doc.html. 199 Montreal Protocol No. 4 to amend the Convention for the Unification of Certain Rules relating to International Carriage by Air, Warsaw, 12 October 1929, as amended by the Protocol done at The Hague

http://www.jus.uio.no/lm/air.carriage.warsaw.convention.1929/doc.html

http://unctad.org/en/Docs/sdtetlb20061_en.pdf

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32

were ratified by all State Parties to the Warsaw Convention. This lead to a fragmented and

complex system, which could no longer be said to promote uniformity. Therefore, a new

convention was drafted to replace the old. This new Convention, the Montreal Convention,

was signed on May, 28th

1999.200

It was meant to modernize and consolidate the Warsaw

Convention and its related amendments into a single legal instrument. However, not all parties

to the former Warsaw Convention have ratified the Montreal Convention. So far only a little

over half of the total numbers of members of the Warsaw Convention have ratified this new

set of rules. As a consequence, all three systems201

are currently operating alongside each

other, which makes the international system on the carriage of goods by air rather complex.

Especially when it comes to the rules dealing specifically with multimodal transport of goods,

since other monetary limits to the carrier’s liability are applied.202

However, when it comes to

the basic philosophy, structure and features, the Warsaw Convention and the Montreal

convention are rather similar.203

B. HOW TO DETERMINE THE APPLICABLE INTERNATIONAL AIR CONVENTION?

The trigger to determine which international air convention applies is ‘the international

carriage by air’. All three Conventions (the original Warsaw Convention, the amended

Warsaw Convention and the Montreal Convention) use a single definition of ‘international

carriage’, which has not been altered in substance by the various amendments to the Warsaw

Convention and the adoption of the Montreal Convention. To determine whether a specific

contract of carriage constitutes an international carriage by air, there is a two-stage inquiry.

First, are the agreed places of departure and delivery situated in different states, or if not, is

there an agreed stopping place located in another state? Second, are the states contracting

parties to the same international air convention or not?

Concerning the first stage, the definition of international carriage will be further discussed

below. In case the contract of carriage is not an international carriage under the definitions

given by the Montreal and the Warsaw Convention, national law and/or the terms of the

contract shall apply.

When an international carriage has been established, article 30 Vienna Convention on the

Law of Treaties (VC)204

provides guidelines as to how it should be determined which

international air convention applies. Article 30(4) VC hereby determines that the newest

treaty205

to which both the state where the place of departure is situated, as well as the state

where the place of destination is situated, are party, shall govern the carriage of the cargo by

air. This ruling is in accordance with article 55 of the Montreal Convention, which states that

the Convention shall prevail over any rules which apply to international carriage of goods by

air in case both states are party to the Montreal Convention. The Montreal Convention thus

on 28 September 1955 signed at Montreal, 25 September 1975, www.jus.uio.no/lm/air.carriage.warsaw.convention.montreal.protocol.4.1975. 200 Convention for the Unification of Certain Rules for International Carriage by Air of 28 May 1999, www.jus.uio.no/lm/air.carriage.unification.convention.montreal.1999 (hereafter ‘Montreal Convention’). 201 The original Warsaw Convention, the amended Warsaw Convention and the Montreal Convention. 202 M.A. CLARKE, Contracts of carriage by air, London, Informa Professional, 2002, 13-18. 203 B. CHENG, “A new era in the law of international carriage by air: from Warsaw (1929) to Montreal (1999), ICLQ 2004, 845. 204 Vienna Convention on the Law of Treaties 23 May 1969, United Nations, Treaty Series, vol. 1155, 331 and http://untreaty.un.org/ilc/texts/instruments/english/conventions/1_1_1969.pdf (hereafter referred to as ‘VC’). 205 Also known as the ‘lowest common denominator’.

http://www.jus.uio.no/lm/air.carriage.warsaw.convention.montreal.protocol.4.1975

http://www.jus.uio.no/lm/air.carriage.unification.convention.montreal.1999

http://untreaty.un.org/ilc/texts/instruments/english/conventions/1_1_1969.pdf

33

does not prevail if only one of the states involved is a party to it.206

If both countries are party

to the same international air convention, that Convention shall apply.207

However, in case one

State has ratified the Hague Protocol 1955 and the other has only ratified the original Warsaw

Convention, the original Warsaw Convention applies.208

For illustrative purposes, some examples:

State of departure

State of delivery Applicable international air

convention

State A State A National law.

If stopover in State X, the Montreal

Convention applies.

State A State B The original Warsaw Convention.

State A State C If State A is also a State Party to the

amended Warsaw Convention, the

latter applies. If not: national law

and/or terms of the Contract of

Carriage shall apply.

State D State D National law and/or the terms of the

Contract of Carriage. Figure 6: Application International Air Carriage Conventions

State A: State Party to the Montreal Convention

State B: State Party to the Warsaw Convention

State C: State Party to the amended Warsaw Convention

State D: not a State Party to any of the Conventions

C. CONTRACTING STATES

The Warsaw Convention has been signed by 152 states. The Hague Protocol 1955 has 137

State Parties.209

The Montreal Convention is currently in force in 87 Contracting States210

,

including the European Union as a party in itself211

.

D. FIELD OF APPLICATION

Both the Warsaw and the Montreal Convention apply to the international carriage of persons,

baggage or cargo performed by an aircraft for reward. It applies equally to gratuitous carriage

by aircraft performed by an air transport undertaking.212

206 M. HOEKS, Multimodal Transport Law: the law applicable to the multimodal contract for the carriage of goods, The Netherlands, Kluwer Law international BV, 2010, 219-221. 207 R.H. MANKIEWICZ, The liability regime of the international air carrier: a commentary on the present Warsaw system, Deventer, Kluwer Law and Taxation publication, 1981, 2. 208 Art. XVIII The Hague Protocol 1955. 209 Contracting parties to the Warsaw Convention and the The Hague Protocol 1955, www.icao.int/secretariat/legal/List%20of%20Parties/WC-HP_EN.pdf. 210 UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT, “Carriage of goods by air: a guide to the international legal framework”, http://unctad.org/en/Docs/sdtetlb20061_en.pdf. 211 Council Decision 2001/539/EC of 5 April 2001 on the conclusion by the European Community of the Convention for the Unification of Certain Rules for International Carriage by Air (The Montreal Convention), OJ.L. 18 July 2001, 194, 38. 212 Art. 1 Warsaw Convention and art. 1 Montreal Convention.

http://www.icao.int/secretariat/legal/List%20of%20Parties/WC-HP_EN.pdf


34

International carriage means any carriage in which according to the agreement between the

parties, the place of departure and the place of destination, whether or not there be a break in

the carriage or a transshipment, are situated either within the territories of two State Parties, or

within the territory of a single State Party if there is an agreed stopping place within the

territory of another State, even if that State is not a party to the Convention. There must be a

cross border link before the Convention can be applied.213

Both the Warsaw Convention and the Montreal Convention do not apply to:

postal carriage;214

extraordinary circumstances215

, stowaways, the crew.216

E. DUTIES OF THE CARRIER

The air carrier has the duty to carry and deliver the goods to the agreed place of destination, in

accordance with the contract of carriage and the applicable law.

In respect of the carriage of cargo by air, an air waybill shall be delivered.217

An air waybill

evidences the existence and terms of the contract and serves as receipt by the carrier of the

cargo relating to the weight, dimensions and packing of the goods, as well as to the number of

packages.218

The contents of an air waybill or cargo receipt is determined by article 8 Warsaw

Convention and article 5 Montreal Convention. In case the cargo consists of more than one

package, separate air waybills or receipts may be made out.219

Non-compliance with the

relevant provisions concerning the documentation relating to cargo, shall not affect the

validity of the contract of carriage.220

The carrier shall deliver a cargo receipt to the consignor, permitting identification of the

consignment and access to the information contained in the record preserved by such other

means.221

Unless it is otherwise agreed, it is the duty of the carrier to give notice to the

consignee as soon as the goods arrive.222

F. LIABILITY OF THE CARRIER

The carrier is liable for damage sustained in the event of destruction or loss of, or damage to

the cargo, in condition that the event which caused the damage so sustained took place during

the carriage by air.223

It is for the claimant to establish the carrier’s liability by proving that

the loss, damage or destruction occurred during the carriage by air.224

Both Conventions thus

foresee a presumed liability which is refutable.

213 Art. 1(2) Warsaw Convention and art. 1(2) Montreal Convention. 214 Art. 2(2) Warsaw Convention and art. 2(2-3) Montreal Convention. 215 For instance rescue flights, even if it is performed by a commercial operator. 216 Art. 34 Warsaw Convention and art. 51 Montreal Convention. 217 Art. 5(1) Warsaw Convention and art. 4(1) Montreal Convention. 218 Art. 11 Warsaw and art. 11 Montreal Convention. 219 Art. 7 Warsaw Convention and art. 8 Montreal Convention. 220 Art. 9 Warsaw Convention and art. 9 Montreal Convention. 221 Art. 5(2) Warsaw Convention and art. 4(2) Montreal Convention. 222 Art. 13(2) Warsaw Convention and art. 13(2) Montreal Convention. 223 Art. 18(2) Warsaw Convention and art. 18(1) Montreal Convention. 224 Oberlandesgericht Frankfurt, 15 November 1983, RIW 1984, 69 and BGH 1 October 1986, NJW 1987, 590.

35

The carrier shall not be liable if he is able to prove that the destruction, loss or damage to the

cargo resulted from:

an inherent defect, quality or vice of that cargo;

defective packing of that cargo performed by a person other than the carrier or its

servants or agents;

an act of war or an armed conflict;

an act of public authority carrier out in connection with the entry, exit or transit of the

cargo.225

In the case of a willful misconduct or such default of the carrier that is considered to be

equivalent to a willful misconduct, in accordance with the law of the court seized in a specific

case, the carrier shall not be entitled to avail himself from liability.226

If the damage is caused

as aforesaid by any agent of the carrier acting within the scope of his employment, the carrier

shall similarly not be able to avail himself from liability.227

The carrier is liable for damage, loss or delay that took place during the carriage by air. This

period is defined as the period during which the cargo is in charge of the carrier, whether in an

airport or on board of an aircraft, or in the case of a landing outside an airport, in any place

whatsoever.228

The carriage by air must have an international character, meaning that the

place of departure and the place of destination are situated in different countries, or when a

stopover229

is made in a foreign country, in case both the places are situated in the same

state.230

Carriage by air thus includes a little more than the actual flight. Procedures and

actions incidental to movement are generally also accepted as carriage by air.231

For example

the period of waiting before an aircraft can take off. The purpose is to expand the liability

period of the carrier for the damage sustained to the goods beyond the period of the actual

flight.232

By this means, the scope of the regimes is extended to the period in which the goods

are in charge of the carrier within an airport and, under certain circumstances, also outside of

an airport.233

i. Destruction of cargo

Not only the physical disintegration is hereby envisaged, also the case of cargo which still

exists in such a form as to have some monetary value but which, nonetheless is commercially

valueless. Therefore it cannot be used by the consignee for the intended purposes. For

instance the Dalton v. Delta case, concerning racing greyhounds. In this case the greyhounds

were dead at the moment they were delivered by the carrier and was therefore treated as a

225 Art. 18(2) Warsaw Convention and art. 18(2) Montreal Convention. 226 Art. 25(1) Warsaw Convention and art. 22(5) Montreal Convention. 227 Art. 25(2) Warsaw Convention and art. 22(5) Montreal Convention. 228 Art. 18(3) and (4) Warsaw Convention and art. 18(3) and (4) Montreal Convention and G. MILLER, Liability in international air transport, The Netherlands, Kluwer, 1977, 143-153. 229 A stopover must be a commercial one, meaning a place where the carrier is permitted to embark or disembark passengers or goods. 230 R.H. MANKIEWICZ, The liability regime of the international air carrier: a commentary on the present Warsaw system, Deventer, Kluwer Law and Taxation publication, 1981, 1. 231 BGH 21 September 2000, TranspR. 2001, 29-34; OLG Frankfurt 21April 1998, TranspR. 1999, 24-27 and Clarke v. Royal aviation Group (1997) 34 Ord. (3d) 481. 232 BGH 21 September 2000, TranspR. 2001, 29-34; OLG Frankfurt 21 April 1998, TranspR. 1999, 24-27; P.S. DEMPSEY and M. MILDE, International air carrier liability: the Montreal Convention of 1999, Montreal, McGill University Centre for Research in Air and Space Law, 2005, 169; I..H. Ph. DIEDERIKS-VERSCHOOR, An introduction to Air Law, Deventer, Kluwer, 2001, 63 and 80-81 and L. GOLDHIRSCH, The Warsaw Convention Annotated: a legal handbook, The Hague, Kluwer Law International, 2000, 94. 233 BGH 2 April 2009, I ZR 61/06.

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case of destruction, since the consignee could no longer make use of the greyhounds for what

they were intended.234

ii. Loss

The loss of cargo includes the case of cargo missing or mislaid and cargo situated in a known

location but unavailable to the claimant. For instance when cargo is delivered to the wrong

person from whom there is no practical means of recovery in good time.235

iii. Damage

Damage can be a monetary loss236

and/or a physical damage237

. The meaning of physical

damage is however not apparent from the text of the Conventions and must be determined by

the applicable law to the contract of carriage.

iv. Delay

The carrier is liable for damage occasioned by delay in the carriage of cargo by air.238

The

notion ‘delay’ implies a discrepancy between the time when one party was entitled to expect

the performance of the delivery of the cargo and the time when the delivery was actually

performed. It refers to delay in the flight239

and in the transportation, meaning in any stage of

which the carrier has undertaken to perform240

.

G. EXONERATION OF LIABILITY

Once the claimant has proved the existence of a damage, loss or delay, the carrier is presumed

liable. It is then up to the carrier to prove that he should be relieved from liability.241

i. Exoneration in case of delay

If damage occurred due to delay, which can be attributed to the carrier, the carrier shall not be

liable if he proves that he, his servants or agents242

have taken all necessary measures to avoid

the damage or that it was impossible for them to take such measures.243

In recent times, the

term ‘all necessary measures’ is interpreted more strictly then what was intended by the

234 Dalton v. Delta, 570 F 2d 1244, 1247 (5 Cir. 1978) and H. KRONKE, Munchener Kommentar (Muko-HGB), Bd 7, Munich, 1997. 235 United States District Court S.D. New York, Hatzlachh Supply Inc. v. Tradewinds Airways Ltd., 738 F Supp. 714 (SD NY, 1990), www.leagle.com/xmlResult.aspx?xmldoc=19901452738FSupp714_11315.xml&docbase=CSLWAR2-1986-2006. 236 For example art. 17 and 19 Warsaw Convention. 237 For example art. 22(2)(b) Warsaw Convention. 238 Art. 19 Warsaw Convention and art. 19 Montreal Convention. 239 Bart v. British West Indian Airways Ltd., Lloyd’s Rep. 1967, 239, 1. 240 Court of Appeals Aix-en-Provence (France), Sté. Nationale Air France v. Sté. Arlab et Sté. Adruini, RFDA 1985, 478, note Légier. 241 G. MILLER, Liability in international air transport, The Netherlands, Kluwer, 1977, 154-160. 242 For what is meant by servants or agents in more detail, see M.A. CLARKE, Contracts of carriage by air, London, Informa Professional, 2002, 125-127. For instance a ground handling company: the ‘Oberlandesgericht Munchen’ (second instance - final) affirmed the prior opinions of two other German Appelate Courts that a ground handling company should be considered as an agent of the carrier within the meaning of article 20 Warsaw Convention. For German Courts, the decisive test of the status of agent is whether the actual possessor is bound to take care of the cargo and to return them at carrier’s will, without the agent being bound to comply with the carrier’s instructions on how to treat the goods. Oberlandesgericht Munchen (2nd Instance - final), 7.V.1 999 - (23 U 6113/98), Unif. L. Rev. 2000, vol. 5, 364-365. 243 Art. 20 Warsaw Convention and art. 19 Montreal Convention.

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drafters who required the application of reasonable care and skill. Now it has been described

as ‘utmost care’. The Conventions remain silent about how this term should be interpreted.

The competent judge shall therefore determine the scope of this exoneration.244

If the carrier acknowledges the existence of a loss of the cargo, or if the cargo has not arrived

at the expiration of seven days after the date on which it ought to have arrived, the consignee

is entitled to enforce his rights which flow from the contract of carriage against the carrier.245

ii. Exoneration in case of destruction, loss and damage

If the carrier proves that the destruction, loss or damage was caused by or contributed to the

negligence or another wrongful act or omission of the claimant or the person from whom he

derives his rights, the carrier shall be wholly or partly exonerated from liability to the extent

that such negligence or wrongful act or omission was caused or contributed to the damage.246

Contributory negligence is a question of fact, which shall be determined by the competent

court. This may include for example inadequate packing of the goods by the claimant.247

The

carrier will thus be presumed liable, unless he can prove that the destruction, loss or damage

was caused by an inherent vice, defective packing, war, ‘fait du prince’ or a contributory

negligence.

H. LIMITATIONS OF LIABILITY

The difference between the Warsaw Convention and the Montreal Convention lies in the

monetary limit of the carrier’s liability.248

While the Warsaw Convention foresees a limit to a

sum of 250 francs per kilogram249

, a limit to a sum of 17 SDR per kilogram is set by the

Montreal Convention. These monetary limits apply, unless the consignor has made, at the

time when the package was handed over to the carrier, a special declaration of interest250

in

delivery at destination, and has paid a supplementary sum if required. In the latter case, the

compensation due by the carrier may not exceed the declared sum, unless he proves that the

sum is greater than the consignor’s actual interest in delivery at destination.251

In the case of destruction, loss, damage or delay of a part of the cargo, or of any object

contained therein, the weight to be taken into consideration in determining the amount to

which the carrier’s liability is limited, shall be only the total weight of the package(s)

concerned. If it affects the value of other packages covered by the same air waybill, receipt or

record preserved by the other means referred to by the Conventions, the total weight of such

package(s) shall also be taken into consideration.252

Article 22(5-6) Warsaw Convention and

article 23 Montreal Convention further foresees a conversion of monetary units. Both

244 M.A. CLARKE, Contracts of carriage by air, London, Informa Professional, 2002, 127-128 and 132-136 and G. MILLER, Liability in international air transport, The Netherlands, Kluwer, 1977, 161-167. 245 Art. 13(3) Montreal Convention. 246 Art. 21 Warsaw Convention and art. 21 Montreal Convention. 247 X, “Lg Hamburg”, TranspR. 1995, 76. 248 A. TOBOLEWSKI, Monetary limitations of liability in air law: legal, economic and socio-political aspects, Montreal, De Daro Publishing, 1986, 11-18 and 22-26. 249 Art. 22(2) Warsaw Convention. 250 A special declaration of interest is a contractual stipulation in the contract of carriage whereby the limit of liability, based on the law, is either removed or increased. 251 Art. 22(2)(b) Warsaw Convention and art. 22(3) Montreal Convention. 252 Art. 22(2)(c) Warsaw Convention and art. 22(4) Montreal Convention.

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Conventions allow a carrier to stipulate higher limits of liability than those provided for or no

limits of liability whatsoever in the contract of carriage.253

I. CLAIM

An action must be brought within two years, reckoned from the date of arrival at the

destination, from the date on which the aircraft ought to have arrived, or from the date on

which the carriage stopped.254

The method of calculating the period of limitation shall be

determined by the competent court.255

This period can be extended by the parties, but it

cannot be shortened.256

In the case an action is brought directly against a servant or an agent

of the carrier, such servant or agent shall be entitled to avail themselves of the conditions and

limits of liability which the carrier himself is entitled to invoke, if they prove that they acted

within the scope of their employment.257

This shall however not be possible if it is proved that

the damage resulted from an act or omission of the servant or agent done with the intent to

cause damage or recklessly and with the knowledge that damage would probably result.258

The claimant must give timely notice of his complaints to the carrier. If no complaint is made

within the time-limits foreseen by the Conventions, no action shall lie against the carrier, save

in the case of fraud on its part.259

J. THE CARRIAGE PERFORMED BY SUCCESSIVE AIR CARRIERS

For cargo to reach its destination, it often takes a combination of air carriers. In order to

prevent a limitation of the scope of the Conventions by requiring that each stage, performed

by a different carrier, has to be international, both Conventions deem a carriage performed by

successive air carriers to be one undivided carriage, if the following conditions are met:

the carriage is considered by the parties as a single operation, whether it had been

agreed upon under the form of a single contract or of a series of contracts; and

the carriage is to be performed by several successive air carriers.

The carriage does not lose its international character merely because one contract or a series

of contracts has to be performed entirely within the territory of a single state.260

Each carrier

who accepts the cargo is subject to the rules set out by the Conventions and is deemed to be

one of the contracting parties to the contract of carriage, insofar as the contract deals with that

part of the carriage which is performed under his supervision.261

Concerning the liability of a successive carrier, each carrier is liable if the loss, destruction,

delay of, or damage to the cargo has occurred during that part of the carriage which has been

performed under his supervision.262

If loss, damage or delay occurs, the consignor has a right

253 Art. 26 Warsaw Convention and art. 25 Montreal Convention. 254 Art. 29 Warsaw Convention and art. 35 Montreal Convention. 255 Art. 29 Warsaw Convention and art. 32 Montreal Convention. 256 Oberlandesgericht Frankfurt 15 September 1999, TranspR. 2000, 183 and BGH 22 April 1982, NJW 1983, 516. 257 Art. 25 Warsaw Convention and art. 30(1) Montreal Convention. 258 Art. 25 Warsaw Convention; art. 30(3) Montreal Convention and Cass. 27 January 1977, Justel no. N-19770127-2, www.juridat.be. For more details, see G. MILLER, Liability in international air transport, The Netherlands, Kluwer, 1977, 193-223. 259 Art. 26 Warsaw Convention and art. 31 Montreal Convention. 260 Art. 1(3) Warsaw Convention and art. 1(3) Montreal Convention. 261 Art. 30(1) Warsaw Convention and art. 36(1) Montreal Convention. 262 Art. 30(2) and (3) Warsaw Convention and art. 36(3) Montreal Convention.

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39

of action against the first carrier263

and the consignee against the last carrier264

. Since the

consignor normally only knows the first carrier, the latter is liable for any damage caused

during any part of the carriage performed, irrespective whether it is performed by himself or

by a successive carrier. However, the claimant’s right of action is not limited to the first or the

last carrier. An action can also be brought against the carrier who performed the part of the

carriage during which the destruction, loss, damage or delay was caused, irrespective of the

liability of the first or the last carrier. All carriers shall be jointly and severally liable to the

consignor or the consignee.265

However, it will depend on the applicable national law whether

the carrier sued can require another carrier to be joined in the proceedings and whether he has

a recourse action against any of them.266

K. THE CARRIER’S LIABILITY IN SUBCONTRACTING CARRIAGE BY AIR

With the requirement that the actual carriage needs to be performed by several successive

carriers, successive carriage is distinguished from carriage which involves sub-carriers,

whereby one carrier promises to carry the goods while the actual carriage is performed by a

subcontracting carrier who has no contractual relationship with the original carrier.267

If an

actual carrier performs the whole or a part of the carriage, both the contracting carrier and the

actual carrier shall, except as otherwise provided by the Montreal Convention, be subject to

the rules of the Convention, the former for the whole of the carriage contemplated in the

contract, the latter solely for the carriage which it performs.268

The acts and omissions of the

actual carrier and his servants or agents acting within the scope of their employment, shall be

deemed to be also those of the contracting and the actual carrier.269

Article 43 of the Montreal

Convention further governs the liability of the servants and the agents of the actual carrier.

L. THE CARRIER’S LIABILITY IN THE CASE OF MULTIMODAL TRANSPORT OF GOODS

Both the Warsaw and the Montreal Convention foresee a separate chapter to regulate

multimodal transport of goods.270

The Warsaw and Montreal regimes do not apply to the

entire multimodal contract.271

Only the carriage by air is covered by the Conventions.272

The

263 The first carrier is the carrier named in the air waybill as first carrier. Normally the consignor only knows the first carrier. That’s why he will be presumed liable in case a damage, loss, destruction or delay occurs during any part of the carriage performed by himself or by a successive carrier. Art. 30(3) Warsaw Convention; art. 36(3) Montreal Convention; Court of Appeals Paris, S.A.S. v. La Fortune, RFDA 1972, 49 and Court of Appeals Zurich 4 March 1966, ASDA Bulletin 1966, no. 2, 8. 264 Because the consignee only knows the last carrier, he has the right to sue the latter for any loss, damage, destruction or delay caused during the successive carriage, even if the damage was caused during a part of the carriage performed by another carrier. Art. 30(3) Warsaw Convention and art. 36(3) Montreal Convention. Only the consignee mentioned in the air waybill is a consignee in the meaning of art. 30(3) Warsaw Convention and art. 36(3) Montreal Convention. Court of Appeals Bremen (Germany) 24 February 1966, European Transport Law 1968, 1254 and Court of Appeals Beyrouth (Lebanon) 23 May 1967, RFDA 1968, 213. 265 Art. 30(3) Warsaw Convention; art. 36(3) Montreal Convention; United States Court of Appeals (Ninth Circuit), Mary C. Johnson v. American Airlines Inc., 834 F 2d 721 (9 Cir, 1987), https://bulk.resource.org/courts.gov/c/F2/834/834.F2d.721.86-2802.html and M.A. CLARKE, Contracts of carriage by air, London, Informa, 2002, 108. 266 R.H. MANKIEWICZ, The liability regime of the international air carrier: a commentary on the present Warsaw system, Deventer, Kluwer Law and Taxation publication, 1981, 95-97. 267 Art. 39 Montreal Convention. 268 Art. 40 Montreal Convention. 269 Art. 41 Montreal Convention. 270 Chapter IV Warsaw Convention and Chapter IV Montreal Convention. 271 Art. 1 Warsaw and Montreal Convention.

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period of carriage by air is not extended to any carriage by land, sea or inland waterway

performed outside an airport.273

However, contemporary airports are large and there are more

and more road movements within the commercial area of an airport. To this type of carriage,

the air regime can apply.274

Also when an air carrier provides an ancillary service, for instance

by road or by rail to the airport, loss or damage which might have occurred during that service

is presumed to have been caused by an event occurred during the carriage by air, unless the

contrary is proved. In the latter case, the liability is not covered by the Conventions, but by

the applicable law governing the movement by that other transport mode.

For the presumption to apply, the service must be one that takes place in the performance of

the contract for carriage by air.275

The period of the carriage by air does not extend to any

carriage by land, by sea or by river performed outside an airport.276

If however, such carriage

takes place in the performance of a contract for carriage by air, for the purpose of loading,

delivery or transshipment277

, any damage is presumed, subject to proof of the contrary, to

have been the result of an event which took place during the carriage by air. Damage resulting

from carriage by another transport mode for the purpose of loading, delivery or transshipment,

performed outside an airport, based on a contract of carriage by air, is only presumed as an

event that took place during the carriage by air when it concerns unlocalized loss. The

presumption can only have effect if the cause of the damage or loss remains concealed. In that

case, the Conventions shall apply to carriage which involves modes of transport other than by

air.278

However, not all national courts seem to acknowledge the applicability of this

presumption in case of unlocalized loss. For example the German ‘Bundesgerichtshof’ (BGH)

in a case involving a transport by road and air of two packages from Germany to Troy (USA)

in October 2000.279

The BGH did not apply the Warsaw Convention in this case, despite the

fact that it was unclear where the damage had been caused. The BGH established that since

the place of damage could not be determined, German national law should be applied.280

The

German Court did not even touch upon the presumption of article 18 of the Warsaw

Convention. However, it should be taken into account that the prevailing opinion in German

literature is that when a multimodal contract of carriage is concluded, it is precluded from

being a contract for carriage by air. As a consequence, the air carriage regimes do not

apply.281

272 Art. 18(3) and 31 Warsaw Convention and art. 18(4) and 38 Montreal Convention. 273 Rb. Haarlem 15 October 2008, LJN BG1240. 274 Maitland Chambers (United Kingdom), Rolls-Royce plc & Ors v. Heavylift-Volga DNEPR Ltd. & Ors, Lloyd’s Rep. 2000, vol. 1, 653; M. HOEKS, “Multimodal carriage with a pinch a sea salt: door-to-door under the UNCITRAL Draft Instrument”, European Transport Law 2008, 260-261 and M.A. CLARKE, “’Carrier’s liability in cross-border air cargo substitute transportation”, TranspR. 2005, 183. 275 M.A. CLARKE, Contracts of carriage by air, London, Informa, 2002, 201-202. 276 United States of America Court of Appeal (Ninth Circuit), Read-Rite Corp. v. Burlington Air Express, 27.IX.1999, Unif. L. Rev. 2000, vol. 5, 370-371. 277 Shipments to and from airports for interim storage in warehouses outside the airport perimeters is not deemed loading, delivery or transshipment. Such movements must occur at either the start or finish of the transports or concern surface transports between two airports. OLG Hamburg 11 January 1996, TranspR. 1997, 267-270. 278 Rb. Haarlem 19 February 2003, S&S 2005, 83 and United States Court of Appeals (Second Circuit) 23 October 2003, Commercial Union Insurance Company v. Alitalia Airlines, 347F.3d448, https://bulk.resource.org/courts.gov/c/F3/347/347.F3d.448.02-7272.02-7202.html. 279 The Montreal Convention had not entered into force when the carriage was performed. 280 BGH 29 June 2006, TranspR. 2006, 466-468. 281 G. KIRCHHOF, “Der Luftfrachtvertrag als multimodaler Vertrag im Rahmen des Montrealer Übereinkommen”, TranspR. 2007, 134.

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If a carrier, without the consent of the consignor, substitutes carriage by another mode of

transport for the whole or a part of the carriage intended by the agreement between the parties

to be a carriage by air, such carriage by another transport mode is deemed to be within the

period of carriage by air.282

Parties are allowed to apply expressly by contract to insert the

Montreal Convention to other modes of transport used.

M. A MANDATORY REGIME

Any contractual provision tending to relieve the carrier from liability or to fix a lower limit

than foreseen by the Conventions, shall be null and void. The nullity of any such provision

shall however not involve the nullity of the whole contract, which shall remain subject to the

provisions of the Conventions.283

According to the Warsaw Convention, this will not apply to

provisions governing loss or damage resulting from the inherent defect, quality or vice of the

cargo carried.284

1.3. THE CARRIER’S LIABILITY UNDER THE CMR CONVENTION

A. THE ORIGINS OF THE CMR

‘Having recognized the desirability of standardizing the conditions governing the contract for

the international carriage of goods by road, particularly with respect to the documents used

for such carriage and to the carrier’s liability’285

, 64 states signed the Convention on the

Contract for the International Carriage of Goods by Road286

on May, 19th

1956, whereby 55

of them became actual parties.287

The Convention is generally known as ‘the CMR’, referring

to its title in French: ‘Convention relative au Contrat de Transport International de

Marchandises par Route’.

The CMR was devised by the United Nations Economic Commission for Europe (ECE) and

entered into force on 2 July 1961.288

As regards the UK, it entered into force on 19 October

1967 under the Carriage of Goods by Road Act 1965.


The following states are party to the CMR:

Albania, Armenia, Austria, Azerbaijan, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria,

Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany,

Greece, Hungary, Iran (Islamic Republic of), Ireland, Italy, Jordan, Kazakhstan, Kyrgyzstan,

Latvia, Lebanon, Lithuania, Luxembourg, Malta, Mongolia, Montenegro, Morocco,

Netherlands, Norway, Poland, Portugal, Republic of Moldova, Romania, Russian Federation,

282 Art. 18(4) Warsaw Convention and art. 18(4) Montreal Convention. 283 Art. 23 Warsaw Convention and art. 26 and 49 Montreal Convention. 284 Art. 23(2) Warsaw Convention. 285 The preamble to the CMR. 286 UN Convention on the Contract for the International Carriage of Goods by Road of 19 May 1956, www.jus.uio.no/lm/un.cmr.road.carriage.contract.convention.1956/doc.html (hereafter ‘CMR’ or ‘CMR Convention’). 287 http://treaties.un.org/pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XI-B-11&chapter=11&lang=en. 288 As in accordance with art. 43 CMR.

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Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Syrian Arab Republic, Tajikistan, the

former Yugoslav Republic of Macedonia, Tunisia, Turkey, Turkmenistan, Ukraine, United

Kingdom of Great Britain and Northern Ireland, Uzbekistan.289

.


The CMR applies to every contract for the international carriage of goods by road in vehicles

for reward, when the place of taking over of the goods and the place designated for delivery

are situated in two different countries. At least one of those countries needs to be a party to

the CMR, irrespective of the place of residence and the nationality of the contracting

parties.290

‘Vehicles’ are defined as motor vehicles, articulated vehicles, trailers and semi-

trailers.291

Carriage by mail performed under the terms of any postal convention, funeral

consignments and furniture removal are excluded from the scope of application.


The carrier has the duty to achieve a certain result, namely the delivery of the goods in

conformity with the contract of carriage.292

On taking over the goods, the carrier has the duty to check the accuracy of the statements

made in the consignment note293

, as to the number of packages and their marks and numbers,

and the apparent condition of the goods and their packing. If he fails to do so, the goods will

be presumed to have been received in good condition and in full quantity.294

This duty only

concerns the external condition of the package and the visible safety of the goods. No

specialized or professional knowledge can be expected from the road carrier.295

The carrier shall obey the orders of the consignor, who has the right to dispose of the goods

by asking the carrier to stop the goods in transit, to change the place at which delivery has to

take place or to deliver the goods to a consignee other than the consignee indicated in the

consignment note.296

The carrier shall however be entitled to sell the goods without waiting

for instructions from the person entitled to dispose of the goods, if the goods are perishable or

their condition required sale, or when storage costs are disproportionate to the value of the

goods, if the person entitled to dispose of the goods did not give contrary instructions to the

carrier within a reasonable period of time.297

From the moment, the second copy of the

consignment note is handed over to the consignee, the consignor’s power of disposal ceases to

exist. From that time onwards, the carrier shall obey the orders of the consignee.298

The

exercise of the right of disposal is subject to conditions set out in article 12(5) CMR. If the

289 List of contracting parties to the CMR, www.unece.org/trans/maps/un-transport-agreements-and-conventions-25.html. 290 Art. 1(1) CMR. 291 Art. 1(2) CMR. 292 Antwerp 27 June 2005, 2003/AR/1344, NJW 12 April 2006, no. 12, 320-322. 293 Art. 5 and 6 CMR. 294 Art. 8 CMR. 295 Antwerp 8 October 1986, Justel no. N-19861008-5, www.juridat.be. 296 Art. 12(1) CMR. 297 Art. 14 and 16(3) and (4) CMR. Art. 14 CMR is applicable when the carrier is unable to obtain instructions from the person entitled to the goods. 298 Art. 12(2) CMR.

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carrier fails to obey the instructions given by the consignor or the consignee, he shall be

liable.299

E. THE LIABILITY OF THE CARRIER

Under article 17(1) CMR, the carrier shall be liable for the total or partial loss of the goods

and the damage thereto occurred between the time when they were taken over by the carrier

and the time of delivery, as well as for any delay in delivery. However, this presumed liability

is not absolute. The carrier may be relieved from liability in the cases provided for by the

CMR. The CMR thus entails a presumed liability which is refutable.

i. The basis of liability

The carrier has the duty to achieve a certain result, namely the delivery of the goods to the

place agreed upon in the contract of carriage in the same condition as wherein they were taken

over by the carrier.300

If the carrier is not able to meet this obligation, he will be presumed

liable. In that case, article 17(1) CMR is the first step to take. It establishes four grounds of

liability: total loss, partial loss, damage and delay. If the claimant is able to prove that loss,

damage or delay occurred after the goods were taken over by the carrier and at the moment

they reached their destination, the carrier will be presumed liable. In case the goods are not

delivered, total loss shall be presumed, unless the carrier can be exonerated.301

The claimant

may prove a partial loss or damage, if it can show that there is a difference in quality, quantity

or condition of the goods at the point of destination in comparison with the moment when

they were taken over by the carrier. In the case of delay, the claimant must prove a difference

between the promised time of delivery and the actual time of delivery.302

ii. The scope of liability in time

Although the CMR applies to the contract of carriage303

, its liability rules only apply to loss,

damage or delay occurred between taking over and delivery of the goods. A period that may

be shorter than the lifespan of the contract itself or the period to which the contract of carriage

relates. What happens before the take over and after the delivery is performed, is not governed

by the CMR. In the latter case, the contract provisions or the applicable national law apply.

iii. Loss

The CMR holds the carrier liable in case of loss. Hereby, a distinction is made between a total

loss and a partial loss.

a. Partial loss

Partial loss occurs when the goods, taken over by the carrier, are delivered to the agreed

destination in a quantity, weight or volume less than that taken over. Reference should be

made to the contract of carriage and, if applicable, the consignment note that records it.

b. Total loss

When none of the goods, taken over by the carrier in performance of the contract, reach their

destination, the situation is defined as being a total loss. It is not essential that the goods are

299 Art. 12(7) CMR. 300 H.J. DORRESTEIN, Recht van het internationale wegvervoer: met name het tractaat CMR d.d. 19 mei 1956, Zwolle, W.E.J. Tjeenk Willink, 1977, 171-172. 301 Art. 20 CMR. 302 M.A. CLARKE, International carriage of goods by road: CMR, London, Informa, 2009, 183-185. 303 Art. 1(1) CMR.

44

damaged or destroyed. There may also be a total loss if the goods have been mislaid, stolen or

delivered to the wrong person.

In case the goods have not been delivered within thirty days following the expiry of the

agreed time-limit, or if there is no agreed time-limit, within sixty days from the time when the

carrier took over the goods, the goods may be treated as lost.304

iv. Delay

Delay arises when the goods have not been delivered within the agreed time-limit or when,

failing an agreed time-limit, the actual duration of the carriage having regard to the

circumstances of the case, and in particular in partial loads, the time required for making up a

complete load in the normal way, exceeds the time it would be reasonable to allow a diligent

carrier.305

A time-limit is agreed when the contract of carriage requires the carrier to deliver

the goods by a fixed date or within a certain period of time. The agreed time-limit can be

proved by any appropriate means. It does not have to be stated in the consignment note.306

In the absence of an agreed time-limit, the actual duration of the carriage exceeds the time it

would be reasonable to allow a diligent carrier to deliver the goods.307

The CMR does not

define the term ‘a reasonable time’. The circumstances of the case should therefore be taken

into account.308

In general, the carrier is obliged to do all that can reasonably be done to meet

the delivery date. When the goods have not been delivered within thirty days following the

expiry of the agreed time-limit, or when there is no agreed time-limit, within sixty days from

the time when the carrier took over the goods, the goods will be considered lost.309

v. Damage

Under the CMR, damage is not a synonym for partial loss. Damage concerns the state or

condition of the goods, while partial loss refers to the weight, quantity or volume of the

goods.310

The sender shall be liable to the carrier for damage, unless the defect was apparent

or known to the carrier at the time he took over the goods without making reservations

concerning it.

The carrier shall be liable for the amount by which the goods have diminished in value,

calculated by reference to the value of the goods fixed in accordance with article 23,

paragraphs 1, 2 and 4.311

The amount of compensation in limited by article 25(2) CMR.


If the carrier is presumed liable, he may seek exoneration by raising the defenses in article

17(2) and (4) CMR. If these defenses fail, the carrier’s liability may be limited to the amount

indicated in article 23 CMR. When the carrier is not under any liability in respect some

factors causing the loss, damage or delay. He shall only be liable to the extent that those

304 Art. 20(1) CMR. 305 Art. 19 CMR, see also art. 13 and 20 CMR. Art. 13(1) CMR allows the consignee, in the case of loss or non-delivery of the goods to use the rights provided by the contract of carriage against the carrier: Cass. 13 June 1980, Justel no. N-19800613-7, www.juridat.be. 306 M.A. CLARKE, International carriage of goods by road: CMR, London, Informa, 2009, 194. 307 Art. 19 CMR. 308 M.A. CLARKE, International carriage of goods by road: CMR, London, Informa, 2009, 195. 309 Art. 20(1) CMR. 310 M.A. CLARKE, International carriage of goods by road: CMR, London, Informa, 2009, 188. 311 Art. 25(1) CMR.


45

factors for which he is liable under article 17 CMR, have contributed to the loss, damage or

delay.312

In case the carrier is presumed liable, the total amount of compensation shall be due unless the

carrier can be relieved of liability. The burden of proof is borne by the carrier. The CMR

makes a distinction between general exoneration grounds and special exoneration grounds.

i. General exoneration grounds

The general exoneration grounds are described in article 17(2) CMR. The carrier will be

relieved of liability if he is able to prove that the loss, damage or delay was caused by:

a contributory negligence of the consignor or consignee313

;

an inherent vice of the goods carried314

; or

a force majeure315

.

These exoneration grounds require a strict burden of proof by the carrier.316

The carrier shall

not be relieved of liability by reason of the defective condition of the vehicle used to perform

the carriage or by reason of the wrongful act or neglect of the person from whom he may have

hired the vehicle or of the agents or servants of the latter.317

ii. Special exoneration grounds

The CMR also foresees special circumstances wherein the carrier could be relieved from

liability. These are the following:

the use of an uncanvassed vehicle, when its use was expressly agreed and specified in

the consignment note;

lack of or defective condition of packing in the case of goods which, by their nature,

are liable to wastage or to be damaged when not (properly) packed318

;

when the handling, loading, stowing, lashing, unloading of the goods is performed by

the consignee, the consignor or the person acting on behalf of the consignee or the

consignor;

the nature of the cargo which exposes it to total or partial loss or to damage especially

through breakage, rust, decay, etc.;

insufficiency or inadequacy of marks and numbers on the packages;

carriage of livestock319

.320

When the carrier establishes that the loss, damage or delay was caused by one of the special

exoneration grounds mentioned above, it will be presumed that the loss, damage or delay was

so caused. The claimant shall be entitled to prove that the loss or damage was not, in fact,

312 Art. 17(5) CMR. 313 This is a wrongful act or neglect of the claimant or when the loss, damage or delay is caused by the instructions of the claimant given otherwise than as the result of a wrongful act or neglect on the part of the carrier. For example during loading. 314 When the loss, damage or delay is caused through circumstances which the carrier could not avoid and the consequences of which he was unable to prevent. If the cargo itself or its package was defective. 315 For instance the weather, a terrorist attack or a traffic accident caused by a third person. 316 Art. 18(1) CMR. 317 Art. 17(3) CMR. 318 Antwerp 8 October 1986, Justel no. N-19861008-5, www.juridat.be. 319 For instance live animals. 320 Art. 17, (4), (a-f) CMR.


46

attributable either wholly or partly to one of these risks.321

This presumption shall however

not apply in case:

the carrier used an uncanvassed truck and there has been an abnormal shortage or a

loss of any package;322

the carriage is performed in vehicles specially equipped to protect the goods from the

effects of heat, cold, variations in temperature or the humidity of the air, unless he

proves that all steps incumbent on him in the circumstances with respect to the choice,

maintenance and use of such equipment were taken and that he complied with any

special instructions issued to him;323

and

of carriage of livestock, unless the carrier proves that all steps normally incumbent on

him in the circumstances were taken and that he complied with any special

instructions issued to him.324


When under the CMR, a carrier is held liable for a total or partial loss of the goods,

compensation shall be calculated by reference to the value of the goods at the place and time

at which they were accepted for carriage.325

The value of the goods is fixed to the commodity

exchange price or, if there is no such price, according to the current market price or, if there is

no commodity exchange price or current market price, by reference to the normal value of

goods of the same kind and quality.326

Compensation shall not exceed 8.33 SDR per kilogram

of gross weight short. Articles 23 until 25 CMR further specify the limits in compensation for

total damage, total and partial loss. The carrier’s liability may be increased if a declaration is

made in the consignment note, that the goods are of a value that exceeds the Convention’s

limit and an agreed surcharge is paid to the carrier by the sender.327

The carrier shall however not be entitled to avail himself of or limit his liability when the loss,

damage or delay has been caused by the willful misconduct of the carrier or of his agents,

servants or other persons employed by the carrier to perform the carriage328

; or in case of a

declared value of the cargo329

or when a declaration of special interest is made.330

H. LIABILITY IN CASE OF SUCCESSIVE ROAD CARRIERS

When a single contract of carriage is performed by successive road carriers, each of them is

responsible for the performance of the whole operation, the second carrier and each

succeeding carrier becoming a party to the contract of carriage, under the terms of the

consignment note and on the receipt of reservations as specified by the CMR in article 8(2).331

To be successive carriers in the meaning of article 34 CMR, the carriers must only perform

the carriage governed by a single contract of carriage and carry under a single consignment

321 Art. 18(2) CMR. 322 Art. 18(3) CMR. 323 Art. 18(4) CMR. 324 Art. 18(5) CMR. 325 Art. 23(1) CMR. 326 Art. 23(2) CMR. 327 Art. 24 CMR. 328 Belgian Supreme Court 27 January 1995, first chamber, Arr.Cass. 1995, 93. 329 A so-called ‘Ad valorem clause’. Art. 23(6) CMR. 330 Art. 29 and 26 CMR. 331 Art. 34 CMR and Court of Appeal (United Kingdom) 13 January 1977, Ulster-Swift Ltd. v. Taunton Meat Haulage Ltd., www.unidroit.info/case.cfm?pid=4&do=case&id=1364&step=FullText.

http://www.unidroit.info/case.cfm?pid=4&do=case&id=1364&step=FullText

47

note.332

Legal proceedings may only be brought against the first carrier, the last carrier or the

carrier carrying the goods at the transport stage wherein the loss, damage or delay occurred.333

The carrier who has paid compensation may recover it from the carrier responsible for the

damage or loss.334

L. CLAIM

An action arising out of a carriage by road shall be one year, irrespective the kind of loss that

occurred. In the case of a willful misconduct, this limitation period is three years. The period

to bring an action shall begin from the date of delivery (partial loss)335

or from the thirtieth

day after the expiry of the agreed time-limit or where there is no agreed time-limit, from the

sixtieth day from the date on which the goods were taken over by the carrier (total loss).336

The day on which the period of limitation begins to run shall not be included.337

It can neither

be suspended by a claim in writing in accordance with article 32 CMR.338

No compensation shall be payable unless a reservation has been sent in writing to the carrier,

within the time-limits foreseen in article 30 CMR and according to the fact whether the

condition of the cargo was checked in the preserve of the carrier.339

The CMR makes a

distinction between apparent and non-apparent damage or loss.340

Reservations made in the

case of a loss or a damage which is not apparent, shall be in writing.341

No particular form is

required. As regards apparent loss or damage, the reservations may be sent by letter or telex,

by word or by mouth.342

I. THE CARRIER’S LIABILITY IN THE CASE OF MULTIMODAL TRANSPORT OF GOODS

Road carriage plays an important role in multimodal transport of goods, as it forms a part in

nearly all contracts of this type. It is often the only option to carry goods to and from

infrastructure hubs such as sea or airports, warehouses, railway stations, etc.. Whether the

CMR applies to stages of road carriage in multimodal transport operations, has however been

subject to discussion since the CMR only makes partial provision for multimodal transport in

article 2 CMR.

Article 2 only covers the ‘roll-on-roll-off’ variety of multimodal carriage operations. The lack

of clarity on its position concerning other types of carriage enables different opinions on the

scope of application of the CMR.343

An example is the differing judgments by the Court of

332 Queen’s Bench Division (United Kingdom) 25 June 1985, Arctic Electronics Co. (UK) Ltd. v. McGregor Sea and Air Services Ltd., www.unidroit.info/case.cfm?pid=1&do=case&id=1352&step=FullText. 333 Queen’s Bench Division (United Kingdom) 21 July 1982, Worldwide Carriers Ltd. and another v. Ardtran International Ltd. and others, www.unidroit.info/case.cfm?pid=1&do=case&id=1321&step=FullText. 334 Art. 37 CMR; Court of Appeal (United Kingdom) 10 February 1988, ITT Schaub Lorenz Vertriebsgesellschaft m.b.H. and others v. Birkart Johann Internationale Spedition G.m.b.H. & Co. and others, www.unidroit.info/case.cfm?pid=1&do=case&id=1359&step=FullText and Cass. 30 May 1980, Justel no. N-19800530-5, www.juridat.be. 335 Art. 32(1)(A) CMR. 336 Art. 32(1)(B) CMR. 337 Art. 32(1), last sentence CMR. 338 Brussels 16 November 1977, Justel no. N-1977116-12, www.juridat.be. 339 Art. 30(3) CMR. 340 Art. 8 and 9 CMR. 341 Art. 30(1) CMR. 342 M.A. CLARKE, International carriage of goods by road: CMR, London, Informa, 2009, 203-204. 343 A. MESSENT and D.A. GLASS, Hill & Messent: CMR: Contracts for the international carriage of goods by road, London, LLP, 2000, 39.






48

Rotterdam. In 2006, the Court of Rotterdam rendered the CMR inapplicable in a case because

the truck did not cross a border within a multimodal transport operation.344

It had transported

goods solely within the borders of a State. However, in an older judgment that same Court

decided that for the CMR to be applied, it was sufficient that the place of taking over of the

goods at the beginning of the multimodal transport operation and the place designated for

delivery at the end of the entire multimodal carriage, were situated in two different

countries.345

In Belgium, the Antwerp Court of Commerce made clear that the CMR applies,

when liability for damage that arose during the road part.346

In case the vehicle containing the goods is carried over part of the journey by sea, rail, inland

waterways or air347

, and the goods are not unloaded from the vehicle, the CMR shall apply to

the whole of the carriage.348

Unless:

the loss, damage or delay occurred during the carriage by the other mode of

transportation;

the loss, damage or delay was not caused by act or omission of the road carrier;

the loss, damage or delay is not due to the road carriage;

the liability regime of the other transport mode used is mandatory.349

In case the parties enter into a multimodal contract without specifying the modes of transport

to be used, this contract will be considered a contract of carriage by road for the part that the

goods are actually carried by road, as long as the contract allows the transport to be carried

out wholly or partly by road.350

This interpretation makes it impossible to extend another

transport regime over the road leg. On the other hand, the German Federal Court of Justice

held that apart from cases falling under article 2 CMR, the whole transport contract had to be

a contract for the carriage by a motor vehicle in order for the CMR to be applied. A

multimodal contract, including a road leg, was not sufficient.351

This contrast may be

explained by the results of non-application in both cases. In Quantum352

, the standard

344 Rb. Rotterdam 3 May 2006, S&S 2007, 114; Rb. Rotterdam 5 June 1992, S&S 1993, 107 and Rb. Rotterdam 24 January 1992, S&S 1993, 89. 345 Rb. Rotterdam 19 March 1998, S&S 1999, 42. 346 Kh. Antwerpen (ninth chamber) 25 February 2000, European Transport Law 2000, 527. 347 Except where article 14 CMR is applicable. 348 Art. 2(1) CMR. Also where the goods are shipped without trailer by sea, after they have been carried by road, the CMR shall apply only to the international road stage: BGH 24 June 1987, TranspR. 1987, 447-454. This network approach did however not avail the German Court much in this case. Since the loss could not be localized, the German Court ruled that the multimodal carrier was to be held liable based on the unimodal regime which is the most favorable for the cargo claimant. This approach resulted from the fact that, as a matter of general German law, the burden of proof in respect of the place of damage lies on the carrier. Another case before a German Court deemed it inappropriate that a carrier should benefit from a breach of contract. Therefore, the liability regime attached to the mode of carriage the carrier actually used, should be seen as a minimum responsibility of the carrier. The application of unimodal convention which would be more advantageous to the carrier cannot be applied: BGH 17 May 1989, TranspR. 1990, 19-20 and NJW 1990, 639-640. 349 Art. 2(1) CMR. 350 Queen’s Bench Division (United Kingdom) 10 April 2001, Quantum Corporation Ltd. and Others v. Plane Trucking Ltd. and Another, www.unidroit.info/case.cfm?pid=1&do=case&id=1016&step=FullText. Also in a case before a Court in Koln, the CMR was deemed applicable to the road carriage segment in a multimodal carriage: Oberlandesgericht Köln 25 May 2004, TranspR. 2004, 359-361. A similar decision was also taken in the Resolution Bay case: Rb. Rotterdam 28 October 1999, S&S 2000, 35. 351 BGH 17 July 2008, I ZR 181/05, TranspR. 2008, 365. 352 The Quantum case concerned the loss of a consignment of hard disks, which were to be transported by air from Singapore to Paris by Air France and then transported by road pursuant to a subcontract with Plane Trucking from Paris to Dublin. As a result of a purported hijacking involving certain employees from


49

conditions would have led to an exclusion of liability, whereas German law, in the German

case, provides for an alternative regime.353

German case law suggests that the CMR should be

applied where German law is not applicable.354

The carrier’s liability shall not be determined by the CMR when the loss, damage or delay

occurred during the carriage of the goods by the other means of transportation used to perform

the contract of carriage355

and it was not caused by an act or omission of the carrier by road,

but by some event which could only have occurred in the course of and by reason of the

carriage by that other means of transportation, if a contract of the carriage of the goods had

been made alone by the sender with the carrier by the other means of transport in accordance

with the conditions prescribed by law for the carriage of goods by that means of transport. If,

however, there are no such prescribed conditions, the liability of the carrier by road shall be

determined by the CMR.356

If the road carrier is also himself the carrier by the other means of transportation, his liability

shall be determined in accordance with the provisions of article 12(2) CMR, as if the carrier

were two separate persons in his capacity as carrier by road and carrier by another means of

transportation.357

J. A MANDATORY REGIME

The CMR makes clear that any stipulation which would directly or indirectly derogate from

its provisions shall be null and void, except where the CMR itself allows a derogation.

However, the nullity of such a stipulation shall not involve the nullity of the contract.358

1.4. THE CARRIER’S LIABILITY UNDER THE COTIF CONVENTION

A. THE ORIGINS OF THE COTIF CONVENTION

The Convention concerning International Carriage by Rail (COTIF)359

is the eldest instrument

of uniform carriage law.360

The original COTIF was signed on May, 9th

1980 and entered into

Plane Trucking, the goods had been lost. The Court of Appeal ruled that the carriage by road from Paris to Dublin was covered by the CMR and that the Convention was applicable to the road leg of a larger contract insofar there was an unconditional promise to carry by road, there was an unconditional promise to carry by road while the carrier reserved its right to opt for an alternative means of transportation for all or part of the carriage, the mode of transport was left open if one of the potential options was carriage by road and in the circumstances that the carrier may have undertaken to carry by another means of transport, but reserved either a general or a limited option to carry by road. Queen’s Bench Division (United Kingdom) 10 April 2001, Quantum Corporation Ltd. and Others v. Plane Trucking Ltd. and Another, www.unidroit.info/case.cfm?pid=1&do=case&id=1016&step=FullText. 353 S. LAMONT-BLACK, “Claiming damages in multimodal transport: a need for harmonization”, Tul. Mar. L.J. 2011-2012, vol. 36, 717-718. 354 For references to case law and more details, see I. KOLLER, Transportrecht: Kommentar zu Spedition, Gütertransport und Lagergeschäft, Rechtsstand: voraussichtlich 15. November 2009, Germany, Beck C.H., 2010, 997. 355 Oberlandesgericht Celle 24 October 2002, European Transport Law 2003, 751 and Rb. Rotterdam 24 January 1992, S&S 1993, 89. 356 Art. 2(1) CMR. 357 Art. 2(2) CMR. 358 Art. 41(1) CMR. 359 Convention concerning International Carriage by Rail (COTIF) of 9 May 1980 in the version of the Protocol of modification of 3 June 1999, www.cit-rail.org/en/rail-transport-law/cotif/ (hereafter ‘COTIF’).


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50

force on May, 1st 1985. The need to set up a uniform system of law for international rail

transport of cargo, gave rise to the International Convention concerning the Carriage of Goods

by Rail (CIM). Through periodical revisions, the legal texts were constantly adapted to the

new needs of international traffic by rail.

The aim of the COTIF is to promote, improve and facilitate, in all respects, international

transport by rail.361

Part of this goal, is to establish systems of uniform law including the

contract of international carriage of goods. The rules on the Contract of Carriage by rail were

incorporated in two Appendices, called ‘CIV Uniform Rules’362

, concerning passengers, and

‘CIM Uniform Rules’363

, concerning the transport of goods.364


The State Parties to the COTIF are the following:

European Union, Albania, Algeria, Armenia, Austria, Belgium, Bosnia and Herzegovina,

Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Finland, Former Yugoslav Republic of

Macedonia, France, Germany, Greece, Hungary, Iran, Iraq, Ireland, Italy, Latvia, Lebanon,

Liechtenstein, Lithuania, Luxembourg, Monaco, Montenegro, Morocco, Netherlands,

Norway, Poland, Portugal, Romania, Russia, Serbia, Slovakia, Slovenia, Spain, Sweden,

Switzerland, Syria, Tunisia, Turkey, Ukraine, United Kingdom.365


The CIM applies to every contract of carriage of goods by rail for reward when the place of

taking over the goods and the place designated for delivery are situated in two different

Member States, irrespective of the place of business and the nationality of the parties to the

contract of carriage.366

The CIM also applies when at least one of the states, wherein the place

of taking over and the place of delivery of the goods is situated, is a State Party, and the

parties to the contract have agreed that the contract is subject to the CIM.367

Contracting

parties can thus cause the CIM rules to apply to a rail transport form State A to State B, even

though State B is not a Member State, merely by entering their wish to make it so into the

contract of carriage.

In the case a carriage is performed between stations situated on the territory of neighboring

States, when the infrastructure of these stations is managed by one or more infrastructure

managers, subject to only one of those States, the CIM shall not apply.368

360 M. HOEKS, Multimodal transport law. The law applicable for the multimodal contract for the carriage of goods, The Netherlands, Kluwer Law International, 2010, 261. 361 Art. 2(1) COTIF. 362 Uniform Rules concerning the Contract of International Carriage of Passengers by Rail (CIV) - Appendix A to the Convention concerning International Carriage by Rail (COTIF) of 9 June 1999, www.cit-rail.org/en/rail-transport-law/cotif/. 363 Uniform Rules concerning the Contract of International Carriage of Goods by Rail (CIM) - Appendix B to the Convention concerning International Carriage by Rail (COTIF) of 9 June 1999, www.cit-rail.org/en/rail-transport-law/cotif/ (hereafter ‘CIM’). 364 I., CARR, International Trade Law (fourth edition), Oxon, Routledge-Cavendish, 2010, 361-362 and C-J., CHENG, Basic documents on international trade law, London, Martinus Nijhoff Publishers, 1990, 235-236. 365 State Parties to the COTIF, www.otif.org/index.php?id=143&L=2. 366 Art. 1(1) CIM. 367 Art. 1(2) CIM. 368 Art. 1(5) CIM.





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51


The carrier must hand over the consignment note369

and deliver the goods to the consignee at

the place designated for delivery against receipt and payment of the amounts due according to

the contract of carriage.370

The carrier has the obligation to achieve a certain result, namely

the delivery of the goods at the place so agreed in the contract of carriage. In the case the

goods have been handed over, in accordance with the prescriptions in force at the place of

destination, to customs or octroi authorities at their premises or warehouses, when they are

not subject to the carrier’s supervision, and when the goods have been deposited for storage

with the carrier, a forwarding agent or in a public warehouse, it shall be equivalent to delivery

to the consignee.371

A person entitled may refuse to accept the goods, even when he has received the consignment

note and paid the charges resulting from the contract of carriage, as long as an examination of

the goods has not been carried out.372

In case the consignor disposes the goods or modifies the contract of carriage, in accordance

with article 18 and 19 CIM, the carrier is obliged to carry out these instructions. When the

carrier cannot carry out the orders which he receives, he must immediately notify the person

from whom the orders emanate.373

If circumstances prevent the carriage of goods, the carrier

shall decide whether it is preferable to carry the goods by modifying the route, or ask, in the

interest of the person entitled, for instructions. In case it is impossible to continue carrying the

goods, the carrier shall ask for instructions from the person who has the right to dispose of the

goods. Only if he is unable to obtain instructions within a reasonable time, he must take such

steps as seem to him to be in the best interests of the person entitled to dispose of the

goods.374

When circumstances prevent the delivery of the goods, the carrier must without

delay inform the consignor and ask him for instructions, unless the consignor requested to

return the goods to him as a matter of course in the event of circumstances preventing

delivery.375

E. THE LIABILITY OF THE CARRIER

The carrier shall be liable for the loss or damage resulting from the total or partial loss of, or

damage to, the goods between the time of taking over the goods and the time of delivery, and

for damage or loss resulting from the transit period being exceeded, whatever the railway

infrastructure used.376

The carrier shall be liable for his servants and other persons whose

services he makes use of in the performance of the carriage, when these servants and other

persons are acting within the scope of their functions.377

In the case the consignor modifies the contract or makes use of his right to dispose of the

goods, the carrier shall be liable for the consequences of failure to carry it out (properly).378

369 See for more details art. 6 until 12 CIM. 370 Art. 17(1) CIM. 371 Art. 17(2) CIM. 372 Art. 17(4) CIM. 373 Art. 19(5) CIM. 374 Art. 20 CIM. 375 Art. 21 CIM. 376 Art. 23(1) CIM. 377 Art. 40 CIM. 378 Art. 19(6) CIM.

52

The CIM also foresees a liability in the case of a carriage of railway vehicles as goods379

and

for wastage in transit380

. The carrier thus falls under a presumed liability which is refutable.


In order for the carrier to be relived of liability, he must prove that the loss, damage or delay

was due to one of the causes specified in the CIM.381

The CIM makes a distinction between

general exoneration grounds and special exoneration grounds.

i. General exoneration grounds

The carrier shall be relieved of liability to the extent that the loss or damage or the exceeding

of the transit period was caused by:

the fault of the person entitled;

an order given by the person entitled other than as a result of the fault of the carrier;

an inherent defect in the goods (decay, wastage, etc.);

force majeure.382

ii. Special exoneration grounds

The carrier shall be relieved of liability to the extent that the loss or damage arises from the

special risks inherent to one or more of the circumstances set out in article 23(3) CIM. These

are:

carriage in open wagons;

absence or inadequacy of packaging of goods which by their nature are liable to loss

or damage when not packed (properly);

loading of the goods by the consignor or unloading by the consignee;

the nature of certain goods which particularly exposes them to total or partial loss or

damage;

irregular, incorrect or incomplete description or numbering of packages;

carriage of live animals;

carriage which must be accompanied by an attendant, if the loss or damage results

from a risk which the attendant was intended to avert.

When the carrier establishes that the loss or damage could have arisen from one or more of

the special risks mentioned above, it shall be presumed that it did so arise. The person entitled

shall, however, have the right to prove that the loss or damage was not attributable either

wholly or in part to one of those risks.383

This presumption shall not apply in case of a

carriage in open wagons, if an abnormally large quantity has been lost or if a package has

been lost.384

379 Art. 24 CIM. 380 Art. 31 CIM. 381 Art. 25 CIM. 382 Art. 23(2) CIM and J. RAMBERG, International commercial transactions, London, Kluwer Law International, 2000, 179-180. 383 Art. 25(2) CIM. 384 Art. 25(3) CIM.

53


The CIM foresees a monetary limitation for compensation in case of loss, damage or delay. In

the case of loss, compensation shall not exceed 17 units of account per kilogram of gross mass

short.385

When damage occurs, the compensation shall not exceed, if the whole consignment

has lost value through damage, the amount which would have been payable in case of total

loss, or, if only part of the consignment has lost value, the amount which would have been

payable had that part been lost.386

If a partial loss occurs when the transit period has exceeded,

the compensation shall not exceed four times the carriage charge in respect of that part of the

consignment which has not been lost.387

In no case shall the total of compensation exceed the

compensation which would be payable in case of total loss of the goods.388

In the case the goods have been disposed or the contract of carriage has been modified by the

consignor in accordance with articles 18 and 19 CIM, and the carrier incurred liability for the

consequences of failure to carry out an order or failure to carry it out properly, any

compensation payable shall not exceed that provided for in the case of loss of the goods.389

The limits provided for in article 15(3), article 19(6) and (7), article 30 and articles 32 to 35

CIM shall not apply if it is proved that the loss or damage results from an act or omission,

which the carrier has committed either with the intent to cause such loss or damage, or

recklessly and with knowledge that such loss or damage would probably result.390

H. CLAIM

In case a loss of the goods is established or if the goods have not arrived on the expiry of the

period mentioned for in article 29(1) CIM, the consignee may assert, in his own name, his

rights against the carrier under the contract of carriage.391

In all cases where the CIM applies, any action in respect of liability, on whatever grounds,

may be brought against the carrier only subject to the conditions and limitations laid down in

the CIM. The same applies to any action brought against the servants or other persons for

whom the carrier is liable pursuant to article 40.392

The claims procedure is further detailed in

articles 43 until 48 CIM. The period of limitation for an action shall be one year. This period

can be extended up to two years in the circumstances provided for by the CIM.393

I. LIABILITY IN CASE OF SUCCESSIVE CARRIAGE

In case of successive carriage, the successive carriers shall become a party to the contract of

carriage in accordance with the terms of that document, and shall assume the obligations

arising there from. Each carrier shall be responsible in respect of the carriage over the entire

route up to delivery.394

When a carrier has paid compensation, he shall have a right of

recourse against the carriers who have taken part in the carriage in accordance with article 50

385 Art. 30(2) CIM. 386 Art. 32(2) CIM. 387 Art. 33(3) CIM. 388 Art. 33(5) CIM. 389 Art. 19(6) CIM. 390 Art. 36 CIM. 391 Art. 17(3) CIM. 392 Art. 41 CIM and Cass. 8 April 1988, Justel no. N-19880408-6, www.juridat.be. 393 Art. 48 CIM. 394 Art. 26 CIM.


54

CIM. The procedure for recourse is laid down in article 51 CIM. Carriers are however

allowed to conclude agreements which derogate from articles 49 and 50 CIM.395

J. THE CARRIER’S LIABILITY IN THE CASE OF SUBCONTRACTING CARRIAGE

Where the carrier has entrusted the performance of the carriage, in whole or in part, to a

substitute carrier, whether or not in pursuance of a right under the contract of carriage to do

so, the carrier shall remain liable in respect to the entire carriage.396

The CIM rules governing

liability shall also apply to the liability of the substitute carrier for the carriage performed by

him.397

In case both the carrier and the substitute carrier are liable, their liability shall be joint

and several.398

Both parties may however invoke the limitation grounds, as provided by and in

accordance with the applicable rules of the CIM.399

K. THE CARRIER’S LIABILITY IN THE CASE OF MULTIMODAL TRANSPORT OF GOODS

The CIM does not have a specific provision concerning a multimodal carriage of goods. There

is no case law as yet with regards to the application of the CIM to parts of a multimodal

transport contract. Also the legal literature is limited in offering information.400

However,

when looking at the scope of the CIM regime, it is not entirely restricted to carriage by rail

alone. Besides the expansion of the scope in relation to substitute carriers, the CIM regime

also annexes other modes of transport, namely road, sea and inland waterway. 401

According

to articles 1(3) and 1(4) CIM, the CIM shall apply to the entire multimodal transport contract,

in case the primary focus is on the carriage by rail.402

i. Supplemental internal carriage by road or inland waterway

When international carriage being subject to a single contract, includes carriage by road or

inland waterway in internal traffic of a Member State as a supplement to transfrontier carriage

by rail, the CIM shall apply.403

The CIM shall equally apply to carriage by road or inland

waterway in internal traffic of a Member State, in case both the carriage by rail and

complementary carriage by other means of transport is based on a single contract of carriage.

An example of such a contract of carriage was in a case brought before the Court of The

Hague in 2004. In this case pharmaceuticals were carried from Caponago (Italy) to the

railway station in Milan (Italy) by road, from Milan to Rotterdam (the Netherlands) by rail

and from there on by road to their destination in Spijkenisse (the Netherlands).404

Under the

CIM, not only the international rail carriage, but also the carriage by road would have been

covered by the uniform rail carriage regime. What is required is that the road or inland

395 Art. 52 CIM. 396 Art. 27(1) CIM. 397 Art. 27(2) CIM. 398 Art. 27(4) CIM. 399 Art. 27(5) CIM. 400 M. HOEKS, Multimodal transport law. The law applicable for the multimodal contract for the carriage of goods, The Netherlands, Kluwer Law International, 2010, 215; R. HERBER, “Neue Entwicklungen im Recht des Multimodaltransports”, TranspR. 2006, 439 and K. RAMMING, “Probleme der Rechtsanwendung im neuen Recht der Multimodalen Beförderung”, TranspR. 1999, 325-345. 401 Art. 1(3) and 1(4) CIM. 402 K.F. HAAK and M.A.I.H. HOEKS, “Intermodal transport under unimodal arrangements”, TranspR. 2005, 91-92. 403 Art. 1(3) CIM. 404 Hof Den Haag 25 May 2004, S&S 2004, 126. This was the appeal of a case brought before the Court of Rotterdam: Rb. Rotterdam 19 March 1998, S&S 1999, 42.

55

waterway carriage are expressly limited to internal carriage in a Member State. This in order

to avoid conflicts between the CIM regime and the CMR and CMNI.

ii. Supplemented international carriage by inland waterway or by sea

When international carriage being subject of a single contract of carriage, includes carriage by

sea or by inland waterway as a supplement to carriage by rail, the CIM shall apply if the

carriage by sea or by inland waterway is performed on services included in the list of services,

provided for in article 24(1) CIM.405

Also in this case, the CIM rules apply to all parts of the

transport.

iii. In all other cases of multimodal transport

Since the CIM does not have a specific provision governing multimodal transport of goods,

the question arises as to whether the contract of carriage should be governed by the CIM for

the part on the transport by rail or whether the CIM applies at all. Article 1(1) CIM states that

this Convention shall apply to every contract of carriage of goods by rail for reward when the

place of taking over the goods and the place designated for delivery are situated in two

different Member States. This may be interpreted that the CIM rules apply to the rail stage in

a case of a multimodal carriage of goods, which is not a supplemented internal carriage by

road or inland waterway, or a supplemented international carriage by inland waterway of by

sea.406

L. A MANDATORY REGIME

Any stipulation which, directly or indirectly, would derogate from the CIM, shall be null and

void, unless the CIM provides otherwise. The nullity of such a stipulation shall not involve

the nullity of the other provisions of the contract of carriage. A carrier may however assume a

liability greater and obligations more burdensome than those provided for by the CIM.407

1.5. THE CARRIER’S LIABILITY UNDER THE CMNI CONVENTION

A. THE ORIGINS OF THE CMNI

The Convention on the Contract for the Carriage of Goods by Inland Waterway (CMNI)408

,

better known as ‘the Budapest Convention’, was jointly elaborated by the United Nations

Economic Commission for Europe (UNECE), the Central Commission for the Navigation of

the Rhine (CCNR) and the Danube Commission (DC). It was adopted at a Diplomatic

Conference in 2000 and entered into force on April, 1st 2005.

409 For the first time, there was a

unified international legal regime for contractual responsibilities in inland navigation.410

405 Art. 1(4) CIM and art. 38 CIM. 406 M. HOEKS, Multimodal transport law. The law applicable for the multimodal contract for the carriage of goods, The Netherlands, Kluwer Law International, 2010, 274-275. 407 Art. 5 CIM. 408 Budapest Convention on the Contract for the Carriage of Goods by Inland Waterways of 22 June 2001, www.unece.org/fileadmin/DAM/trans/main/sc3/cmniconf/cmni.pdf (hereafter ‘CMNI’). 409 Art. 34(1) CMNI. 410 European Conference of Ministers of Transport (ECMT), Strenghtening inland waterway transport Pan-European Co-operation for progress, France, OECD Publications Service, 2006, 12 and 44.

http://www.unece.org/fileadmin/DAM/trans/main/sc3/cmniconf/cmni.pdf

56


The CMNI has been ratified by 15 states:

Belgium, Bulgaria, Croatia, Czech Republic, France, Germany, Hungary, Luxembourg,

Moldova, Netherlands, Romania, Russian Federation, Serbia, Slovakia and Switzerland.

Poland, Portugal and Ukraine have signed the CMNI, but the Convention has not yet been

ratified.411


The CMNI applies to any contract of carriage412

according to which the port of loading or the

place of taking over of the goods413

and the port of discharge, or the place of delivery of the

goods, are located in two different states. At least one of those states needs to be a State Party

to the CMNI.414

Regardless of the nationality, place of registration or home port of the vessel,

or whether the vessel is a maritime or inland navigation vessel, and regardless of the

nationality, domicile, registered office or place of residence of the carrier415

, the shipper416

or

the consignee417

.418

A court of law in a state which is not a State Party to the CMNI is of

course not bound by the CMNI rules and thus not obliged to apply them to the case brought

before it.419

The CMNI can not be applied to pure internal situations. The domestic carriage of

goods by inland navigation is governed by national law. If parties stipulate a delivery of the

goods at several ports or places, the port of discharge or the place of delivery to which the

goods have actually been delivered shall determine the choice.420


The carrier shall carry the goods to the place of delivery within the specified time, or within a

period that could reasonably be required of a diligent carrier, if no express time limit was

agreed421

, to the consignee and in the condition in which they were handed over to him.422

Unless otherwise agreed, the taken over and delivery of the goods shall take place on board of

the vessel.423

It is up to the carrier to decide which vessel is to be used to perform the carriage of the goods.

He shall ensure that, taking into account the goods to be carried, the vessel is in a state to

receive the cargo, is seaworthy, is manned and equipped as prescribed by the regulations in

411 Contracting parties to the Budapest Convention on the Contract for the Carriage of Goods by Inland Waterway (CMNI), www.unece.org/trans/main/sc3/sc3_cmni_legalinst.html. 412 Art. 1(1) CMNI. 413 See defined in article 1(7) CMNI. 414 Art. 2(1) CMNI. 415 The carrier is any person by whom or in whose name a contract of carriage has been concluded with a shipper. Art. 1(2) CMNI. 416 A shipper is any person by whom, in whose name or on whose behalf a contract of carriage had been concluded with a carrier. Art. 1(4) CMNI. 417 A consignee is the person entitled to take delivery of the goods. Art. 1(5) CMNI. 418 Art. 2(3) CMNI. 419 P. MANKOWSKI, “Entwicklungen im Internationalen Privat- und Prozessrecht für Transportverträge in Abkommen und speziellen EG-Verordnungen”, TranspR. 2008, 178. 420 Art. 2(1) CMNI. 421 Art. 5 CMNI. 422 Art. 3(1) CMNI. 423 Art. 3(2) CMNI.

http://www.unece.org/trans/main/sc3/sc3_cmni_legalinst.html

57

force and is furnished with the necessary national and international authorizations for the

carriage of the goods.424

If parties have agreed to perform the carriage by a specific vessel or

type of vessel, the carrier shall only be entitled to load or transship the cargo in whole or in

part to another (type of) vessel, without the consent of the shipper, if the conditions set out in

article 3(4) CMNI are met. The carrier shall further ensure that the loading, stowage and

securing of the goods do not affect the safety of the vessel.425

Carrying the goods on deck or

in open vessels is only allowed insofar it has been agreed with the shipper, and in accordance

with the usage of the particular trade or required by the statutory regulations.426

E. LIABILITY OF THE CARRIER

The CMNI entails two grounds for liability of the carrier. First, in the case of loss, damage or

delay occurred between receipt and delivery of the goods, and second, in the case of an act or

omission of his servants and agents of whose services he makes use during the performance of

the contract of carriage.

i. Loss, damage or delay

The CMNI holds the carrier liable for loss resulting from loss or damage to the goods caused

between the time when he took over the goods for carriage and the time of their delivery, or

resulting from delay in delivery, unless he can show that the loss was due to circumstances

which a diligent carrier could not have prevented, and the consequences of which he could not

have averted.427

In the case the loss or damage to the goods was caused during the time before

the goods are loaded on the vessel or the time after they have been discharged from the vessel,

the liability of the carrier shall be governed by the national law applicable to the contract of

carriage.428

If, in accordance with the particulars set out in the transport document, the goods

are placed in a container or in the holds of the vessel and sealed by other persons than the

carrier, his servants or his agents, and if neither the container nor the seals are damaged or

broken when they reach the port of discharge or the place of delivery, it shall be presumed

that the loss or damage to the goods did not occur during carriage.429

ii. Act or omission of servants and agents

When services of agents or servants are used by the carrier in the performance of the contract

of carriage, the carrier shall be responsible for their acts and omissions when such persons are

acting within the scope of their employment, as if such acts or omissions were his own.430

When an action is brought directly against a servant or an agent of the carrier, the servant or

agent is entitled to avail himself of the exonerations and limits of liability which the carrier is

entitled to invoke under the CMNI if he can prove that he acted within the scope of his

employment.431

424 Art. 3(3) CMNI. 425 Art. 3(5) CMNI. 426 Art. 3(6) CMNI. 427 Art. 16(1) CMNI. 428 Art. 16(2) CMNI. 429 Art. 12(3) CMNI. 430 Art. 17(1) CMNI. 431 Art. 17(3) CMNI.

58


In the case of loss, damage or delay occurred between receipt and delivery of the goods, the

carrier shall be exonerated if he proves that:

the loss was due to circumstances which a diligent carrier could not have prevented

and the consequences could not have been averted (force majeure)432

;

the loss, damage or delay are the result of one of the circumstances or risks listed in

article 18(1) CMNI;

he falls under the exonerations provided for in the contract of carriage, insofar these

contractual stipulations are in accordance with article 25 CMNI.433

If the carrier establishes that the damage could be attributed to one or more circumstances

listed in article 18(1) CMNI, it is presumed to have been caused by such a circumstance or

risk. This presumption shall not apply if the injured party proves that the loss suffered does

not result, or does not result exclusively, from one of the circumstances or risks listed in

article 18(1) CMNI.434

The compensation payable by the carrier shall be calculated in

accordance with article 19 CMNI.


In accordance with article 20 CMNI, the liability of the carrier is limited to435

:

666,67 units of account per package or other shipping unit; or

2 units of account per kilogram of weight, specified in the transport document, of the

goods lost or damaged whichever is higher.

If the package or other shipping unit is a container and if there is no mention in the transport

document of any package or shipping unit consolidated in the container, the liability of the

carrier shall be limited to the amount of:

1,500 units of account for the container without the goods it contains;

25,000 units of account for the goods which are in the container.

In case of delay, the carrier’s liability shall not exceed the amount of the freight.436

These limits of liability are not absolute. Where the nature and higher value of the goods or

articles of transport haven expressly been specified in the transport document and the carrier

has not refuted those specifications, or where the parties have expressly agreed to higher

limits of liability, the limit of liability mentioned above shall not apply.437

However, the

CMNI makes clear that the aggregate of the amounts of compensation recoverable from the

carrier, the actual carrier and their servants and agents for the same loss, shall not exceed

overall the limits of liability provided for in article 20 CMNI.438

432 Art. 16 CMNI. 433 Art. 22 and 25 CMNI. 434 Art. 18(2) CMNI. 435 Art. 20(1) CMNI. 436 Art. 20(3) CMNI. 437 Art. 20(4) CMNI. Ad valorem clause. 438 Art. 20(5) CMNI.

59

i. Loss of right to limit liability

The carrier or the actual carrier is not entitled to the exonerations and limits of liability

provided for by the CMNI or the contract of carriage, if it is proved that he himself caused the

damage by an act or omission, either with the intent to cause such damage, or recklessly, and

with the knowledge that such damage would probably result.439

This also applies to the

servants and agents acting on behalf of the carrier or the actual carrier.440

H. CLAIM

The acceptance of the goods by the consignee without any reservation, is prima facie evidence

of the delivery by the carrier of the goods in the same condition and quantity as when they

were handed over to him for carriage.441

The consignee has one year commencing from the

day when the goods were, or should have been, delivered by the carrier to the consignee, to

claim for compensation for loss, damage or delay against the carrier.442

This period can be

extended, suspended and interrupted under the conditions set out in article 24 CMNI.

First, the consignee must give notice of the damage to the carrier. In the case of apparent loss

or damage, any reservation on the part of the consignee must be formulated in writing

specifying the general nature of the damage. This must be done no later than the time of

delivery, unless the consignee and the carrier have jointly checked the condition of the

goods.443

In the case of a non-apparent loss or damage, any reservation on the part of the

consignee must also be notified in writing. Reservations must be made no later than seven

consecutive days from the time of delivery.444

In the case of delay, the consignee must prove

that he gave notice of the delay to the carrier within 21 consecutive days following the

delivery of the goods and that this notice reached the carrier. Otherwise no compensation shall

be due.445

I. THE CARRIER’S LIABILITY IN CASE OF A MULTIMODAL TRANSPORT OF GOODS

The CMNI’s main focus is the regulation of contracts for the carriage of goods by inland

waterways. In accordance with article 2(1) CMNI, the Convention applies to any contract of

carriage according to which the port of loading or the place of taking over of the goods are

located in two different States of which at least one is a state party to this Convention. A

contract of carriage is specified as any contract, of any kind, whereby a carrier undertakes

against payment of freight to carry goods by inland waterway.446

Although the CMNI does

not contain a specific ruling on multimodal transport of goods, articles 1(1) and 2(1) CMNI

can be seen as provisions having multimodal effect.447

However, the opinion is defended by

certain writers that the CMNI does not apply to multimodal transport contracts including

inland waterway stages, as these are not contracts whereby the carrier undertakes against

439 Art. 21(1) CMNI. Gross negligence or willful misconduct. 440 Art. 21(2) CMNI. 441 Art. 23(1) CMNI. 442 Art. 24 CMNI. 443 Art. 23(3) CMNI. 444 Art. 23(4) CMNI. 445 Art. 23(5) CMNI. 446 Art. 1(1) CMNI. 447 M. D. GUNER-OZBEK, The United Nations Convention on Contracts for the International Carriage of Goods wholly or partly by sea: an appraisal of the “Rotterdam Rules”, Berlin Heidelberg, Springer-Verlag, 2011, 137.

60

payment of freight to carry goods by inland waterway.448

This opinion is mostly held by

German writers and presumably influenced by considerations of German law on the

multimodal transport contract.449

Another interpretation is the application of the CMNI to

inland waterway carriage based on a multimodal contract. Hereby the CMNI would apply to

all international inland navigation instead of excluding contracts that add one or two other

transport modes to perform the carriage.450

i. Combination carriage by sea and inland waterways

Article 2(2) CMNI extends the application of the CMNI to a carriage of goods by sea, and this

only if the sea carriage451

complies with a set of strict conditions. These conditions are the

following:

the purpose of the contract of carriage is the carriage of goods, without transshipment,

both on inland waterways and in waters to which maritime regulations apply,

under the conditions set out in article 2(1) CMNI

unless:

a maritime bill of lading has been issued in accordance with the maritime law

applicable, or

the distance to be travelled in waters to which maritime regulations apply is the

greater.

The contracted carriage should be performed by the same vessel, otherwise the CMNI

Convention will not apply. Neither may the sea carriage be covered by a bill of lading which

meets the conditions of the applicable maritime law. However, the CMNI rules fail to

appropriate the carriage by sea stage, if the latter covers a larger distance than the river leg of

the transport operation. Only when the inland waterway stage is longer in geographical terms,

shall the CMNI apply to the sea carriage as well.452

J. A MANDATORY REGIME

Any contractual stipulation intended to exclude, to limit or to increase liability of the carrier,

the actual carrier or their servants or agents, to shift the burden of proof or to reduce the

periods for claims under the CMNI, shall be null and void. The CMNI also does not allow any

stipulation assigning a benefit of insurance of the goods in favor of the carrier.453

It is

however permissible to stipulate an exoneration for the carrier in case of a navigation error, a

fire, an explosion on board or vessel defects.454

448 B. CZERWENKA, “Das Budapester Ubereinkommen (CMNI)”, TransR. 2001, 277-284 and K. RAMMING, “Die CMNI-erste Fragen der Rechtsanwendung”, TranspR. 2006, 373-380. 449 M. HOEKS, “Multimodal carriage with a pinch a sea salt: door-to-door under the UNCITRAL Draft Instrument”, European Transport Law 2008, 263-264. 450 M.A. CLARKE, “Carrier’s liability in cross-border air cargo substitute transportation”, TransR. 2005, 183. 451 The carriage by sea stage is defined as the waters to which maritime regulations apply: art. 2(2) CMNI. 452 M. HOEKS, Mutlimodal transport law: the law applicable to the multimodal contract for the carriage of goods, The Netherlands, Kluwer Law International, 2010, 232. 453 Art. 25(1) CMNI. 454 Art. 25(2) CMNI.

61

1.6. CONCLUSION - CONVENTIONS IN CONFLICT?

In order to compare the different international unimodal regimes, the most important aspects

concerning the carrier’s liability can be summarized as followed.

62

Sea Air Road Rail Inland Waterway

Convention(s) Hague Rules 1924

Hague-Visby

Rules

Hamburg Rules

Rotterdam Rules

Warsaw

Convention

Montreal

Convention

CMR COTIF-CIM CMNI

Entry into force 2 June 1931

23 June 1977

1 November 1992

Not (yet)

13 February 1933

4 November 2003

2 July 1961

UK: 19 October 1967

1 May 1985 1 April 2005

Contracting States 77

21

34

24 signatories

152

87

55 47 15

Liability Presumed fault

liability for loss,

damage or delay –

refutable

Presumed fault

liability for loss,

damage, destruction

or delay – refutable

Presumed fault

liability for loss,

damage or delay -

refutable

Presumed fault

liability for loss,

damage or delay -

refutable

Presumed liability for

loss, damage or delay

– refutable

Period of liability In relation to the

loading, handling,

stowage, carriage,

custody, care and

discharge of the

goods (art. II

Hague-Visby)

While carrier is in

charge of goods at

port of loading,

during carriage

During the carriage

by air

Between time when

goods were taken

over by the carrier

and the time of

delivery

Between the time of

taking over the goods

and the time of

delivery

Between receipt and

delivery of the goods

63

and at port of

discharge (art. 4

Hamburg Rules)

When carrier

receives goods for

carriage until

goods delivered to

consignee (art. 12

Rotterdam Rules)

Exoneration(s) Art. IV Hague-

Visby Rules

Art. 5 Hamburg

Rules

Art. 17 Rotterdam

Rules

Delay: if all

necessary measures

were taken or force

majeure

Loss, destruction

or damage:

contributory

negligence or

another wrongful

act or omission of

the claimant or

person from whom

he derives his

rights

General

exoneration

grounds (art.

17(2))

Special

exoneration

grounds (art.

17(4))

General

exoneration

grounds (art.

23(2) CIM)

Special

exoneration

grounds (art. 25

CIM)

Force majeure

Risks art. 18(1)

CMNI

Exonerations

provided in

contract of

carriage, in

accordance with

art. 25 CMNI

Limitation of

liability 666,67 SDR per

package or Kg of

gross weight/

number of

packages/units in

B/L (art. IV(5)

Hague-Visby

Rules)

835 SDR per

250 francs per Kg

(art. 22(2) Warsaw

Convention)

17 SDR per Kg

(art. 22(3)

Montreal

Convention)

Unless special

declaration of

8.33 DR per Kg of

gross weight short 17 SDR per Kg of

gross mass short

Damage: not

exceed amount for

total loss or if that

part had been lost

Partial loss: 4

times the carriage

charge

2 SDR per Kg

666.67 per package

1,500 SDR per

container

25,000 SDR for

contents in

container

Delay: limited to

freight

64

package or other

shipping unit/2,5

SDR per Kg of

gross weight of

goods lost or

damaged/delay:2

and a half times

freight/never

exceed limitation

for total loss (art.

6 Hamburg Rules)

875 SDR per

package or other

shipping unit/3

SDR per Kg of

gross

weight/delay: two

and a half times

the freight/never

exceed limitation

for total loss (art.

59 and 60

Rotterdam Rules)

interest is made

Liability action 1 year, may be

extended by

parties (art. III(6)

Hague-Visby

Rules)

2 years (art. 20

Hamburg Rules)

2 years (art. 63

Rotterdam Rules)

2 years 1 year

3 years: willful

misconduct

Domestic carriage:

6 months

International

carriage: 1 year

1 year, unless

suspended, extended

or interrupted in

accordance with art.

24 CMNI

65

Multimodal carriage No mention

(Hague-Visby

Rules)

Restricted to sea

carriage

(Hamburg Rules)

If covered by

another

convention,

Rotterdam Rules

shall not apply

Only carriage by air

is covered by the

conventions.

If air carrier

provides ancillary

service by other

transport mode,

presumption that

loss, damage or

delay occurred

during carriage

by air, unless

contrary is proved

If goods not

unloaded from

vehicle, CMR

applies to whole

carriage, under

conditions set out

in art. 2 CMR

If road carrier is

also carrier by

other transport

means: art 12(2)

CMR

No specific

provision, but

interpretation CIM

applies to rail stage

If primary focus on

rail transport: CIM

applies to entire

multimodal

transport contract

If supplemental

internal carriage by

road or inland

waterway: CIM

applies

Although no specific

ruling, it could be

interpreted as

applying to inland

waterway stage.

Certain writers do not

agree that CMNI

applies to part by

inland waterway in

case of a multimodal

carriage of goods.

Only a specific ruling

in case of

combination carriage

by sea and inland

waterway (art. 2(2)

CMNI): CMNI shall

cover sea carriage if

conditions are met.

Mandatory? Yes Yes Yes Yes Yes

66

While the international maritime carriage is governed by a fragmented regime and the

international air carriage by two different conventions, the international carriage by road, rail

and inland waterway have a uniform set of rules. All of these conventions use the same kind

of liability: the carrier is presumed liable, unless the contrary is proved. Each of the

international unimodal conventions have a list of exonerations consolidated into their texts,

together with specific provisions concerning the limitation of liability of the carrier.455

However, when it comes to a multimodal carriage of goods, there is no general rule on which

liability regime, provided by the unimodal conventions, is to be used. Contracting parties are

not allowed to choose a set of rules that governs the entire multimodal carriage, due to the

mandatory nature of these unimodal conventions.456

If contracting parties derogate from

unimodal liability rules, their contractual stipulations shall be null and void.

Although the same kind of liability is used, there are major differences concerning the periods

of liability of the carrier, the limitation of his liability, the situations wherein a carrier may be

exonerated from liability and the time-limits for the claimant to bring a claim. This makes it

very complex and difficult in practice for multimodal carriers since they are not allowed to

use a single liability regime.457

Only the Warsaw458

, Montreal459

and Hamburg460

regimes

specifically state that they apply to the stages of a multimodal carriage of goods that concern

carriage by the mode of transport that they intend to regulate.

When looking at the scope of application of the various unimodal transport conventions, it is

not unthinkable that these contain seeds for conflict when multimodal carriage is at stake.

Also the articles concerning multimodal carriage of goods provided by the unimodal

conventions may conflict. For example between article 2 CMR, which extends the CMR’s

scope of application beyond mere road carriage, and article 1(3) COTIF-CIM for rail

transport. When the goods transported are not unloaded from the truck for the rail stage, but

are placed on a rail vehicle, and the goods are damaged during the pre-haulage, which is

performed uniquely by road, both the CMR and the COTIF-CIM shall apply if said pre-

haulage is domestic in nature. The question then is which of them should be given priority.

The unimodal conventions do not always provide an answer. Only the Montreal Convention,

the Hamburg Rules and the Rotterdam Rules entered ‘conflict of conventions provisions’ into

their text.461

Otherwise, the Vienna Convention on the Law of the Treaties or International

Private Law may offer a possible solution to the dispute.

However, if none of these instruments are able to determine the applicable liability regime,

there is currently only the alternative of letting courts of law decide on a case by case basis. A

uniform multimodal carriage convention could be able to offer a solution that suits.

455 H. BOOYSEN, “The liability of the international carrier of goods in international law”, Comp. & Int’l L.J.S. Afr. 1992, vol. 25, 310-311. 456 B. MARTEN, “Multimodal Transport Reform and the European Union: a Treaty change approach”, Tul. Mar. L.J. 2011-2012, vol. 36, 745-748. 457 F. BERLINGIERI, “A new Convention on the carriage of goods by sea: port-to-port or door-to-door?”, Unif. L. Rev. n.s. 2003, vol. 8, 269-273. 458 Art. 31 Warsaw Convention. 459 Art. 38 Montreal Convention. 460 Art. 1(6) Hamburg Rules. 461 Art. 25 Hamburg Rules, art. 55 Montreal Convention and article 82 Rotterdam Rules.

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2. International multimodal transport regimes

Unlike the unimodal transport regimes, multimodal transport remains unregulated by an

international convention. Questions on the liability of the carrier, who to sue, time-limits for

initiating action, etc. take on a new urgency. Several international attempts to bring order have

received a mixed response.

2.1. PAST ATTEMPTS TO ESTABLISH A UNIFORM MULTIMODAL TRANSPORT REGIME

In its 1911 and 1913 conferences, the CMI 462

devoted some attention to the subject of

multimodal carriage of goods. These conferences resulted in the ‘Code International

d’affrètement’, which regulated multimodal carriage including a sea leg. This proposal was

finally rejected on the basis that it would lead to a total eclipse of through transport if the last

carrier would bear the liability for the entire carriage.463

In the 1930s, the International Institute for the Unification of Private Law (UNIDROIT)464

started to work on a multimodal regime. At that time, however, regulating multimodal

carriage was not considered a priority until after the introduction of container transport on a

large scale. The UNIDROIT’s work resulted in the Bagge Draft 1948 and a draft containing a

pure network system in 1961, inspired by the CMI, which was finally transformed into the

UNIDROIT Draft in 1965. The CMI started thorough investigation into the legal issues

surrounding multimodal transport. Its efforts lead to the Genoa Draft Convention in 1967 and

the Tokyo Rules in 1969. While the UNIDROIT Draft was based on the international road

carriage law of the CMR and governed multimodal carriage of goods by containers, the

Tokyo Rules followed the maritime liability regime of the Hague Rules and only governed

multimodal transport involving a sea leg.465

Both the CMI’s Tokyo Rules and the UNIDROIT

Draft were finally combined and discussed during a meeting convened by the UNIDROIT in

1970 which lead to the adoption of the Draft Convention on the International Combined

Transport of Goods, better known as the Rome Draft of 1970. The latter in turn was subject of

discussions and negotiations at joint meetings of the ECE and the IMCO, which resulted in

yet another draft convention: the TCM Convention 1972. The Draft TCM Convention

provides for the creation of a Combined Transport Document to be issued by the multimodal

carrier.466

The Convention was meant to be applied voluntarily. The terms would only apply if

the parties agreed to the issuance of prescribed documentation in a form which would trigger

the Convention to be applied. The basic liability system imposed responsibility upon the

carrier for loss of damage occurring while the goods were in his custody. At the same time,

the Draft TCM Convention offered a sizable litany of circumstances under which the carrier

could find himself relieved from liability. Once the carrier had proved that the loss or damage

could be attributed to one of the causes mentioned in the Convention, the burden of proof

would shift to the party claiming against the carrier.467

When the damage or loss could

462 Comité Maritime International, www.comitemaritime.org. 463 R. DE WIT, Multimodal Transport: carrier liability and documentation, London, Lloyd’s of London, 1995, 148. For a detailed overview of the attempts to create uniform multimodal carriage law, see R. DE WIT, Multimodal Transport: carrier liability and documentation, London, Lloyd’s of London, 1995, 147-183. 464 UNIDROIT, www.unidroit.org. 465 M. FAGHFOURI, “International Regulation of Liability for Multimodal Transport – In search of uniformity”, WMU Journal of Maritime Affairs 2006, vol. 5, no. 1, 96. 466 C-J CHENG, Clive M. Schmitthoff’s Select Essays on International Trade Law, The Netherlands, Kluwer Academic Publishers, 1988, 369-370. 467 W. J. DRISCOLL, “The Convention on International Multimodal Transport: a Status Report”, J. Mar. L. & Com. 1977-1978, vol. 9, 443-447.

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reasonably be localized, the Draft Convention gave guidance to liability rules in the

applicable national law or international unimodal transport convention.468

The TCM limit of

liability only applied if the damage could not be determined to have occurred on a particular

transport leg of the carriage. However, despite the many efforts made in the preparatory work,

this draft suffered the same fate as its predecessors. A continued application of the various

unimodal conventions and the addition of yet another document to the already existing ones,

the TCM would not result in any simplification. Opposing views were not able to find a

consensus on a future liability regime.469

A convention on the multimodal carriage seemed to

remain an ambitious ideal.470

The UNCTAD continued its work. It became clear that the TCM Draft Convention would not

be used as a basis for negotiations and the drafting of a new convention commenced. W hen

the Hamburg Rules were concluded in 1978, the drafting process took a turn for the better.

The Hamburg Rules served as a template from which the multimodal regime only deviated

where it was necessary to include specific provisions.471

‘The developing countries sought to

maximize the protection of the shipper and to make increased developing country

participation in the business (and insurance) of intermodal transportation mandatory’. While

‘the developed countries sought to limit the coverage of the convention to ensure the

continued validity of existing (unimodal) national laws and international conventions, and to

minimize obligations to be imposed on carriers with respect to “buy developing country”

rules.’472

Not easy to find a compromise. But the drafters’ hard work paid off and a new draft

convention was born: the United Nations Convention on the Multimodal Transport of Goods

1980 (‘MTC’). Although this convention never reached the finish line, due to a lack of

signatory states, it came at least very close.473

As a consequence of the absence of a uniform set of rules, the ICC’s Uniform Rules for a

Combined Transport Document in 1975, better known as the ‘ICC Rules 1975’, served as an

alternative. These rules are available to be incorporated by the contracting parties into their

individual contract of carriage.

When it became obvious that the MTC would not enter into force soon, the UNCTAD was

requested to develop a voluntary set of rules. The UNCTAD established an International

Preparatory Group with the ICC and with participation of the full range of the private sector,

the ship owners, the shippers, FIATA and the insurers. This resulted in the adoption of the

UNCTAD/ICC Rules for Multimodal Transport Documents 1992, hereafter ‘UNCTAD/ICC

Rules 1992’, in 1992. The UNCTAD/ICC Rules 1992 thus served as a replacement of the ICC

Rules 1975, not to replace the MTC.474

These rules could be used by private parties which

may base their private contracts on these rules, but they are not supposed to serve as the basis

for legislation on multimodal carriage. Another alternative to solve the problem of liability of

468 This is the so-called ‘Network system’. More details, see Part IV. 469 K. NASSERI, “The Multimodal Convention”, Journal of Maritime Law and Commerce April 1988, vol. 19, no. 2, 235-236 and W.J. DRISCOLL, “The Convention on International Multimidal Transport: a status report”, J. Mar. L. & Com. 1977-1978, vol. 9, 443-447. 470 R. LOEWE, “Geschichte der Entwurfs des Übereinkommens über die gemischte Beförderung im internationalen Güterverkehr”, European Transport Law 1975, 591. 471 R. DE WIT, Multimodal Transport: carrier liability and documentation, London, Lloyd’s of London, 1995, 164. 472 K. NASSERI, “The Multimodal Convention”, Journal of Maritime Law and Commerce April 1988, vol. 19, no. 2, 236-237. 473

D.A. GLASS, Freight forwarding and multimodal transport contracts, London, LLP, 2004, 269. 474 W. DRISCOLL and P.B. LARSEN, “The Convention on International Multimodal Transport of Goods”, Tulane Law Review December 1982, vol. 57, no. 2, 193-196.

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the carrier was through the bill of lading.475

The carrier limited herein its liability for the part

of the carriage that he performed himself. Successive carriers were thus only liable for that

part of the transport stage that they performed.

In this thesis, three sets of international rules attempting to unify multimodal carriage of

goods will be further discussed: the ICC Rules 1975, the Multimodal Transport Convention

1980 and the UNCTAD/ICC Rules 1992. Starting, with the common features and differences

between these three international sets of rules.

2.2. COMMON FEATURES AND DIFFERENCES The common objective of all three sets of rules is to distribute the risks incident to multimodal

transport in the relation between the cargo owner and the contracting carrier. Each set of rules

determines the scope of responsibilities of the parties and the limitation of liability for the

carrier in the event of default resulting in loss, damage or delay. However, a distinction is

made between on the one hand, the loss of and damage to the cargo, being physical

causalities, and on, the other hand, delay in delivery. The difference is that in case the cargo is

lost or damaged, the cargo owner is permanently deprived of its use of the cargo. While in

case of delay, there is only a temporary deprivation. Therefore, all three sets of rules set out a

common basis for liability in case of loss or damage, and a separate one in case of delay.

Also for localized loss, ‘i.e. cargo injury that can be shown to be the result of an event which

occurred on a particular segment of transportation’476

, this distinction is made. By localizing

the loss, it is possible to attribute responsibility to the carrier who was in charge of that

specific part of the transport operation at the time the default occurred. However, it is not

always possible to establish the moment and cause of the damage, loss or delay suffered due

to an act or omission of the actual carrier. For instance when a damage to the cargo is

discovered at the moment of offloading and unpacking of the goods from the container. How

would it be possible then to establish the causality between different carriers in case of a

multimodal transport operation? Mostly, this question remains unsolved. The carrier remains

liable, unless the damage can be attributed to a particular subcontracting carrier. In the latter

case, the carrier might be able to excuse himself. However, there is no general rule under all

three sets of rules in the way and extent to which they govern the carrier’s responsibility.

Although all three provide a limitation of liability and a common approach to claims

exceeding these limits.

The most important difference between the three is their binding legal force. While the MTC

is meant to impose legal obligations on the State Parties and the parties falling under its scope

of application, the ICC Rules 1975 and the UNCTAD/ICC Rules 1992 are only binding upon

contracting parties insofar as they are included in the contract of carriage. The problem with

the binding nature of the MTC is that conflicts may arise with the existing unimodal

conventions. This because of three main reasons:

both the MTC and the existing unimodal conventions contain rules on multimodal

transport;

475 A. DIERCXSENS, “The insurance covering the liability of the insurer of a FIATA Combined Transport Bill of Lading” in Marine Insurance: Belgium, a perfect choice, Lloyd special, Antwerp, Lloyd NV, 1990, 48 and G. TANTIN, “Les documents de transport combine” in Internationaal Congres Gent 9 mei 1980 – Combined Transport problems – prospects, Ghent, 1980, 368-369. 476 H.M. KINDRED and M.R. BROOKS, Multimodal transport rules, The Netherlands, Kluwer Law International, 1997, 32.

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the integrated techniques used in transport through technical developments477

; and

the compulsory character of the MTC478

.

The draftsmen of the MTC were aware of the problems that could arise due to the mandatory

nature of the MTC and that of unimodal conventions. Therefore, articles 3(2), 13 and 19 MTC

are inserted in order to avoid a possible conflict between the international transport

conventions. Article 3(2) MTC excludes the application of the MTC in case the consignor

opts for a segmented transport instead of a multimodal transport of goods. Article 13 MTC

states that the issue of the multimodal transport document does not preclude the issue, if

necessary, of other documents relating to transport or other services involved in the

international multimodal transport, in accordance with the applicable international

conventions or national laws. The issue of such documents shall however not affect the legal

character of the multimodal transport document. The MTC adopted a uniform amount of

limitation of liability.479

This means that the rules apply uniformly, regardless of when or

where the loss, damage or delay of the goods occurred. However, in the case of localized loss,

article 19 MTC states that the (inter)national rules governing the relevant transport mode shall

apply, when they provide a higher limit of liability than the limit of liability of the MTO in

application of article 18(1) and (3) MTC.

Whether these provisions suffice to avoid the risk of conflict between the MTC and existing

unimodal conventions can however be doubted. First, in case of article 3(2) MTC, the MTO

may increase the amount of freight charges for multimodal transport over those for segmented

transport, thereby not leaving a possibility to the consignor to choose between multimodal

transport or segmented transport. Second, what is meant in article 13 MTC by ‘the issue of

such documents shall not affect the legal character of the multimodal transport document’

remains unclear. And third, in case of article 19 MTC it is unclear to see why the consignor

should be allowed to apply rules other than the other relevant existing rules on the amount of

limitation of liability of the carrier. It would be rather difficult to prevent the MTO from

excluding its liability if this is allowed under a specific unimodal convention. Despite these

specific provisions of the MTC, it remains unclear what to do in case of conflict with existing

unimodal legal regimes.480

Hereafter, a brief overview concerning each set of rules.

2.3. ICC RULES 1975

The ICC481

’s Uniform Rules for a Combined Transport Document482

(hereafter ‘ICC Rules

1975’) were designed to overcome practical difficulties of application concerning the

MTO483

’s liability in case of damage, loss or delay.484

Coming from a single mode tradition,

477 Today, the modes of transportation have lost much of their significance. Trucks are carried by boats, lorries by trains, …. For instance roll-on/roll-off ship transport, which combines the services of a container, a trailer and a cargo ship. On short voyages, the goods are not discharged from the transport mode. This might increase the risk on conflicts between the MTC and exiting unimodal conventions. 478 Art. 3(1) MTC makes clear that the application of the provisions of the Convention is mandatory. This may conflict with other mandatory rules on unimodal transport of goods. 479 Art. 18 MTC. 480 S. MANKABADY, “The multimodal transport of goods convention: a challenge to unimodal transport conventions”, The International and Comparative Law Quarterly January 1983, vol. 32, no. 1, 132-139. 481 International Chamber of Commerce, www.iccwbo.org. 482 International Chamber of Commerce, Uniform Rules for a Combined Transport Document, 1975, 20. 483 Combined Transport Operator (CTO): Rule 2(b) ICC Rules 1975. 484 Introduction to ICC Publication No. 298.

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wherein one transport document for each mode of transportation was used, applying only to

carriage by that mode, the ICC drafted a minimum set of rules to govern a ‘combined

transport’ document485

. One transport document instead of a series of separate unimodal

transport documents, which would hinder international trade. The ICC Rules 1975 may be

given legal effect by their incorporation in a contract between private parties to perform a

multimodal transport operation.486

According to the ICC Rules 1975, the MTO bears full responsibility for the performance of

the transport operation throughout the entire voyage.487

In the case of a loss, damage or delay,

the liability of the MTO is governed by:

In case of loss or damage:

- the appropriate single transport mode rules, in case the loss or damage can be

attributed to a particular stage of transportation488

, or;

- by the ICC Rules in case the loss or damage cannot be attributed to a particular

transport stage.489

In case of delay: by the single mode rules regarding delay, where such a rule exist,

applying to the stage of transportation wherein the delay occurred.490

Except to the extent that parties agree to increase responsibilities or obligations of the MTO in

their contract , the ICC Rules do not allow to derogate from its rules.491

The ICC Rules 1975 represent a major contribution towards the simplification of the

procedures used in international trade. Since the UNCTAD/ICC Rules 1992 entered into

effect on January, 7th

1992, the ICC Rules 1975 were subsequently withdrawn. Still, they

managed to maintain their commercial importance on old forms of transport documents.

2.4. MULTIMODAL TRANSPORT CONVENTION 1980 The second set of international rules governing multimodal transport of goods, is the United

Nations Convention on International Multimodal Transport of Goods 1980492

(hereafter

‘MTC’). More than 80 states, 15 specialized agencies and intergovernmental organizations

and 11 non-governmental organizations took part in the extensive deliberations held from

1973n when May, 24ste, 1980. The day whereon the MTC was finally adopted by the United

Nations Conference. Around 70 states signed the Final Act of the Conference, including many

important maritime countries.493

The MTC defines a multimodal transport contract as a contract whereby a MTO undertakes,

against payment of freight, to perform or to procure the performance of international

485 Rule 2(c) ICC Rules 1975. 486 I. CARR and P. STONE, International Trade Law (4th edition), Oxon, Routledge-Cavendish, 2010, 402-403. 487 Rule 5 ICC Rules 1975. 488 Rule 13 ICC Rules 1975. 489 Rules 11 and 12 ICC Rules 1975. 490 Rule 14 ICC Rules 1975. 491 Rule 1(c) ICC Rules 1975. 492 United Nations Convention of 24 May 1980 on International Multimodal Transport of Goods, http://treaties.un.org/doc/Treaties/1980/05/19800524%2006-13%20PM/Ch_XI_E_1.pdf (hereafter ‘MTC’). 493 United Nations Convention on International Multimodal Transport of Goods, UNCTAD Document TD/MT/CONJ/17, 1981, vol. 1.


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multimodal transport.494

The MTC applies to all contracts of multimodal transport between

places in two states, if the place for the taking in charge of the goods by the MTO, as provided

for in the multimodal transport contract, is located in a State Party, or if the place for delivery

of the goods by the MTO, as provided for in the multimodal transport contract, is located in a

State Party.495

The purpose of the MTC was to correct the lack of uniform mandatory law by the adoption of

a uniform system of liability of the MTO. It envisages the issuance of one single document

(MT Document) to serve the entire transport operation and for the MTO’s liability to cover

the whole period in which he is ‘in charge’ of the goods.496

This is from the time he takes the

goods in charge until the time of delivery.497

The MTC provides liability rules to apply

irrespective of the unimodal stage of transport during which the damage, loss or delay

occurred.498

It uses the same principle of liability as the unimodal transport conventions and

the ICC Rules 1975, namely that the carrier shall be presumed liable, unless he can prove

otherwise. Regardless whether the loss can be localized or not.499

Concerning the limitation of liability, two alternative standards are used: a claim up to 920

SDR per package of goods or 2,75 SDR per kilograms by weight, whichever is more

favorable to the damaged party.500

However, in comparison with the most recent unimodal

standard for the carriage of goods by sea501

, these levels of liability are relatively low. This

could lead to inequality in compensation among shippers who have suffered a loss, depending

on whether they were operating in a unimodal or multimodal transport frame. Since the levels

of liability for physical loss and damage are significantly higher in case of transport by air,

road or rail, the shipper of goods by sea under a multimodal transport contract incorporating

the rules of the MTC would be greatly prejudiced. Consequently, the ICC Rules 1975 and the

MTC refer to the existing unimodal laws. However, both set of rules differ in how these

references are made. One of these differences occurs when a sea leg is involved. The MTC

substitutes a higher limit of liability, 8,33 SDR per kilogram502

, than the ICC Rules 1975.

In the case of a localized damage, an exception is foreseen concerning the limitation of

liability of the MTO. In the latter case, the limitation of liability will be determined by

reference to any applicable international convention or mandatory international law which

provides a higher limit of liability than that of the Convention.503

If the leg on which the loss

or damage occurred is unknown, the Convention’s default liability limit applies. The MTC

thus adopts a uniform system of liability.504

Despite the efforts made and the ambition to create a separate multimodal transport

convention, a set of rules which has the force of law, the MTC remained a written document

494 Art. 1(3) MTC. 495 Art. 2 and art. 3 MTC. 496 M. FAGHFOURI, “International regulation of liability for multimodal transport”, WMU Journal of Maritime Affairs 2006, vol. 5, no. 1, 97-99. 497 Art. 14 MTC. 498 Art. 16(1) MTC. 499 Art. 16 MTC. 500 Art. 18 and 31 MTC. 501 Hamburg Rules set limits of liability of 835 SDR per package or 2,50 SDR per kilogram, whichever is higher (art. 6 Hamburg Rules). 502 Art. 18(3) MTC. 503 Art. 19 MTC. 504 M.E. CORWLEY, “The limited scope of the cargo liability: regime covering carriage of goods by sea: the multimodal problem”, Tul. L. Rev. 2004-2005, vol. 79, 1496-1497. What is meant by an uniform liability regime will be analyzed in Part IV.

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of potential law.505

Only eleven states gave their support to the MTC, while a ratification was

needed by at least 30 states in order for the MTC to enter into force. However, the failure of

the MTC to attract wide international support did not render its rules irrelevant. As the ICC

Rules 1975 established modal contract terms, the MTC may be used as standard trading

conditions. As an intergovernmental agreement, the MTC creates expectations of compulsory

standards of conduct against which all the efforts of non-governmental organizations, such as

business associations, to regulate multimodal transport may be judged.506

2.5. UNCTAD/ICC RULES 1992 The UNCTAD/ICC Rules for Multimodal Transport Documents 1992 (hereafter

‘UNCTAD/ICC Rules 1992’)507

were the result of a cooperation between the UNCTAD

Secretariat, the International Chamber of Commerce (ICC) and other industry parties, as an

interim solution, since the MTC had not yet entered into force and so no international

convention then existed to regulate multimodal transportation. The preparations for the

UNCTAD/ICC Rules 1992 were completed in 1991 and published with effect from January,

7th

1992.508

The UNCTAD/ICC Rules share important characteristics of the ICC Rules 1975 and the

MTC. Firstly, like the two latter, they are voluntary rules. Not mandatory.509

This to make

them more acceptable by all sectors of the industry. Secondly, also the basis of liability for

loss, damage or delay is the same. Namely the principle of presumed fault liability of the

MTO. The MTO shall thus be held liable unless he can prove that the loss resulted through no

fault or neglect of its own, its employees, its agents and subcontractors. An important feature

distinguishing the UNCTAD/ICC Rules 1992 from its predecessors, is with regard to the

limitation of liability. When the multimodal transport operation includes a maritime segment,

the MTO will be excused from liability if, on the one hand, the loss was caused by the act,

neglect or default of the master, mariner, pilot or the servants of the carrier in the navigation

or the management of the ship, or, on the other hand, through fire, unless caused by the actual

fault or privity of the carrier.510

While the former permits the MTO to invoke the negligence

of its subcontracted sea carrier, the latter exempts it of liability in case of fire, absent the

personal negligence of the sea carrier. These two grounds for limitation of liability does not

seem to adhere to the objective of a multimodal regime, establishing one uniform standard of

liability for the cargo throughout the transport operation. In this way, modal differences are

allowed, which projects segmented carriage into a multimodal transport operation, in order to

limit the MTO’s liability. To the extent of liability, the UNCTAD/ICC Rules 1992 follows the

pattern of the MTC by providing a low measure of liability for non-attributable loss in case

when a sea leg is involved. Hereby, alternative limits by unit and weight are provided: 666.67

SDR per package as enumerated in the carriage document or 2 SDR per kilogram by

505 This may be attributed to a number of factors, as is shown by the UNCTAD secretary that conducted a large scale survey of industry and governments concerning the feasibility of establishing a new international legal instrument for multimodal transport. The results of the survey will not be further addressed in this thesis. I refer you to the UNCTAD Document ‘Multimodal Transport: The Feasibility of an International Legal Instrument, UNCTAD/SDTE/TLB/2003/I, 13 January 2003’ for more detailed information. 506 H.M. KINDRED and M.R. BROOKS, Multimodal transport rules, The Netherlands, Kluwer Law International, 1997, 37. 507 UNCTAD/ICC Rules for Multimodal Transport Documents, http://r0.unctad.org/en/subsites/multimod/mt3duic1.htm (hereafter ‘UNCTAD/ICC Rules 1992’). 508 ICC publication No. 481. 509 Rule 1.1. UNCTAD/ICC Rules 1992. 510 Rule 5.4. UNCTAD/ICC Rules 1992.

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weight.511

These matches the ceilings of liability under the Hague/Visby Rules for maritime

transportation. In case no sea leg is involved in the multimodal transport operation, a

considerably higher limit is established, similar to the MTC, of 8.33 SDR per kilogram.512

Although the UNCTAD/ICC Rules 1992 were not binding, they received considerable

support from the transport industry.513

However, it is important to note that the

UNCTAD/ICC Rules 1992 need to be incorporated in the contract of carriage, in order to

have any legal effect. Incorporation can be made in writing, orally or otherwise.514

Once

incorporated, they override any conflicting contractual provision , except insofar they increase

the responsibility or obligations of the MTO. Still, the UNCTAD/ICC Rules 1992 cannot be

applied contrary to mandatory rules of any international convention or national law applicable

to the multimodal contract of carriage.515

3. Conclusion

The lack of a uniform multimodal transport regime generate many difficulties for the

multimodal carrier in case of loss, damage or delay. International organizations and drafters

have tried to create a uniform set of rules, but their efforts seem to remain in vain.

Nevertheless, do the ICC Rules 1975 and the UNCTAD/ICC Rules 1992, give guidance to

contracting parties when drafting their multimodal transport contracts. These sets of

international rules, although not legally binding, have proved to be successful and gained the

support of the transport industry to create a uniform set of rules. However, the International

community does not seem to reach a consensus on which liability regime to apply. Unimodal

conventions sometimes conflict or overlap and do not allow contracting parties to derogate

from their liability rules. Despite the ICC’s success, uncertainty regarding the applicable legal

regime is not entirely lifted. Nevertheless, the aim to establish a uniform multimodal liability

regime remains. In the following Part of this Thesis, the possible forms of a new regime shall

be analyzed.

511 Rule 6.1. UNCTAD/ICC Rules 1992. 512 Rule 6.3. UNCTAD/ICC Rules 1992. 513 M. FAGHFOURI, “International regulation of liability for multimodal transport”, WMU Journal of Maritime Affairs 2006, vol. 5, no. 1, 99-100. 514 UNCTAD/ICC Rules 1992, http://rO.unctad.org/en/subsites/multimod/mt3duic1.htm. 515 Rule 1.3. UNCTAD/ICC Rules 1992.

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PART IV - A NEW LIABILITY REGIME

1. Possible forms of a new regime

In approaching the formulation of a uniform multimodal transport regime, the UNCTAD

presented three optional regimes: the uniform liability system, the network system and the

modified system.516

Also the absorption approach shall be discussed.

1.1. THE UNIFORM SYSTEM

The objective of a uniform system is to unify or harmonize and simplify the existing law on

the subject that it intends to regulate. It subjects the entire multimodal transport contract to the

same rules of liability, irrespective of the modes of transport that are actually used to perform

the transport operation and of the stage of transport during which damage, loss or delay

occurred.517

Unlocalized loss would thus be equally governed by the same set of rules.

The most prominent advantage of the uniform approach is its simplicity and transparency, as

the applicable rules governing the carrier’s liability are predictable from the outset and do not

depend on establishing during which transport stage the loss, damage or delay occurred.518

This may seem to create the most comfortable solution for the carrier and it would greatly

contribute towards the harmonization of international carriage law. However, due to the

fragmented nature of international carriage law, the uniform system would encounter a serious

impediment in the legal framework that exists today.519

When a conflict between two or more

applicable regimes of uniform carriage law is established, it becomes necessary to determine

which of these regimes prevail and should be applied to the dispute at hand. International

treaties, such as the Vienna Convention on the Law of Treaties520

, or generally accepted

international principles may offer a solution, but they do not seem very desirable. If there is

no provision on conflict of conventions to grant precedence, then it is up to the court that is

addressed to weigh all interests involved and to decide which of the conventions shall be

granted priority. While this might result in fair decisions, it is unlikely to generate

predictability and legal certainty.521

Furthermore, there are two main concerns that may arise from the point of view of the

multimodal carrier. First, there is the concern that the carrier would no longer be able to take

advantage of potentially less burdensome liability rules which may otherwise apply. This

more specifically, in the case wherein a localized loss can be established and the unimodal

conventions can be applied. Second, there is the concern that a subcontracting carrier who is

actually performing the stage of transport where the loss, damage or delay occurred, is bound

516 UNCTAD , “Multimodal transport; the feasibility of an international legal instrument”, 13 January 2003, UNCTAD/SDTE/TLB/2003/1, 16-20, http://unctad.org/en/docs/sdtetlb20031_en.pdf. 517 K.F. HAAK, “The harmonization of intermodal liability arrangements”, European Transport Law 2004, 41. 518 A. VAN BEELEN, Multimodaal vervoer. Het Kameleonsysteem van Boek 8 BW, Zwolle, Tjeenk Willink, 1996, 39. 519 R. DE WIT, Multimodal Transport: carrier liability and documentation, London, Lloyd’s of London, 1995, 143 and KOPPENOL-LAFORCE, M.E. (ed.), International contracts: aspects of jurisdiction, arbitration and private international law, London, Sweet & Maxwell, 1996, 236. 520 Art. 30 Vienna Convention. 521 M. HOEKS, Mutlimodal transport law: the law applicable to the multimodal contract for the carriage of goods, The Netherlands, Kluwer Law International, 2010, 399-401.

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only by the unimodal rules applicable to the (sub)contract of carriage between him and the

multimodal carrier, while the multimodal carrier would be held accountable by the claimant

under the uniform rules applicable to the multimodal contract of carriage. A multimodal

carrier could then be held liable for a higher amount of damages than he can recover from the

actual carrier. This creates a so-called ‘recourse gap’.522

These are the reasons why the transport industry tends to resist the uniform approach.523

1.2. THE NETWORK SYSTEM

In accordance with the network approach, the carrier’s liability shall be determined by the

stage of transport where the loss, damage or delay occurred and the applicable statute, treaty

or convention.524

It is also known as the ‘chameleon system’, which perfectly describes the

changing of the applicable legal regime depending on the stage where the goods are

transported in.525

The term ‘network’ was chosen by the Chairman of the CMI working group

that drafted the Genoa Rules, Kaj Pineus.526

Instead of having one system governing the liability of the carrier527

, the network approach

knits different liability regimes together, without an international multimodal transport

convention being needed to provide it with legitimacy.528

This because under a pure network

system, only those regimes are applied that according to their own scope of application apply

to the loss, damage or delay.

The network system does not provide substantive or material rules on its own. It merely links

existing sets of rules. Under this system, a multimodal carriage is divided into separate parts:

one part per transport mode incorporated in the contract. Each of these parts shall be

determined as if it were a separate contract, concerning only that transport means. The

multimodal transport contract thus becomes a chain of different regimes. By refraining to

introduce a new liability regime, conflicts with the existing unimodal conventions are

avoided. It also does not introduce a mandatory regime, where before it was governed by the

freedom of contract.529

The network approach is characterized by its flexibility. In case of an

amendment of one of the unimodal conventions, there is no need to modify the operative

network system.530

However, like all systems, also the network approach includes shortcomings. First, it may

give a somewhat disordered impression due to the variation of the applicable regimes. As is

stated above, there are significant differences between the unimodal conventions concerning

522 M.H. CLARINGBOULD, “Wegvervoerdersaansprakelijkheidsverzekering: een matig produkt!”, Weg en wagen 2005, vol. 49, 3-6. 523 UNCTAD Report on Multimodal Transport 3 March 2003, www.forwarderlaw.com. 524 S. SORKIN, “Limited liability in multimodal transport and the effect of deregulation”, TUL. MAR. L.J. 1988-1989, vol. 13, 305. 525 A. XERRI, “Combined transport: a new attempt at unification”, ULR 1980, 139-140. 526 A. VAN BEELEN, Multimodaal vervoer. Het Kameleonsysteem van Boek 8 BW, Zwolle, Tjeenk Willink, 1996, 34. 527 As is the case in a uniform approach. 528 K.F. HAAK, “The harmonization of intermodal liability arrangements”, European Transport Law 2004, 41 and I. KOLLER, “Quantum Corporation Inc. v. Plane Trucking Limited und die Anwendbarkeit der CMR auf die Beförderung mit verschiedenartigen Transportmitteln”, TranspR. 2003, 45-50. 529 H. SCHADEE, “Petite polémologie sur le dernier projet internationale sur le transport international combiné de marchandises”, DMF 1970, 540. 530 A. VAN BEELEN, Multimodaal vervoer. Het Kameleonsysteem van Boek 8 BW, Zwolle, Tjeenk Willink, 1996, 36.

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77

the liability of the carrier. At this point, it is important to establish at which stage the loss,

damage or delay occurred, in order to know which of the unimodal conventions should be

applied. A pure network system is not equipped to regulate unlocalized loss, which is exactly

one of the main problems with the existing fragmented legal framework today. Problems also

arise when the damage, loss or delay occurred gradually, spread over more than one transport

mode, or in case of a cumulative damage. Second, when does a transport stage end and

another stage begin? Is storage of the goods in a port, after being transported by sea and while

waiting for transport by road, accessory to the multimodal transport contract? Which

unimodal convention should then be applied? The rules regulating sea carriage or the rules

regulating carriage by road? The network system does not provide an answer.531

Instead of

providing clearness and legal certainty, the network system tends to make the situation more

complex. Thirdly, with the network system changing ‘color’ with every transport stage, there

are issues that are better tied to the entire agreement than to a single stage. For example the

time-limit to bring a claim. If this is attached to the stage where the goods incurred a loss,

damage or delay, it would be unfairly and unreasonably shortened to bring legal proceedings

or give notice of the damage, if this is not the last stage of the multimodal carriage. It must be

determined whether these time-bars commence at the end of the entire transport operation

instead of at the end of the specific transport stage.532

1.3. THE MODIFIED SYSTEM

The modified system covers the whole range of possibilities between a pure uniform and a

pure network approach. It is a compromise that tries to combine the best elements of both, to

find a middle-way, while offering the possibility to make the system more network or more

uniform oriented. An example where this kind of approach is used, is the MTC 1980.533

The advantage of such a system is that it may effectively provide a workable consensus,

taking into account conflicting interests and views of parties involved. However, it may also

make its provisions more complex, since it does not provide the full benefits of a uniform

approach, nor of a network approach. The uniform provisions will likely still conflict with

mandatory provisions attempting to regulate identical subjects, while the network provisions

will still lead to confusion in cases of cumulative or collaborating causes of damage.534

1.4. ABSORPTION SYSTEM

The absorption system entails the application of unimodal liability rules of a specific transport

mode to the whole multimodal carriage, even when the goods are transported by other means

of transportation. This system could have been workable when no unimodal liability regimes

were in force. Today, this system cannot be applied because of the mandatory nature of the

unimodal conventions.535

531 R. HERBER, “Nochmals: Multimodalvertrag, Güterumschlag und anwendbares Recht”, TranspR. 2005, 59-62 and K.H. DREWS, “Warenumschlag im Seehafen als Teilstrecke?”, TranspR. 2004, 450-454. 532 Ph. H.J.G. VAN HUIZEN, Het transportverzekeringsbedrijf: juridische en rechtsvergelijkende beschouwingen, Apeldoorn-Antwerpen, Maklu uitgevers, 1988, 340-343. 533 The MTC 1980 states that the carrier’s liability is governed by the Convention regardless of whether the loss or delay is localized or not, while the monetary limits are governed by the unimodal conventions in case the damage can be localized to a particular stage of the multimodal transport operation. 534 M. HOEKS, Multimodal transport law. The law applicable for the multimodal contract for the carriage of goods, The Netherlands, Kluwer Law International, 2009, 24-25. 535 S. SMITS, De verzekering van het multimodal transport, diss. lic. Haven- en Maritieme Wetenschappen, 1996, 35.

78

2. A future International multimodal transport regime

In 1996 a new project was launched on the unification of the international laws on carriage of

goods by sea. In the course of this task, there was a close collaboration between the

UNCTRAL and the CMI for a period of three and a half years (1998-2001), which resulted in

three drafts made by the CMI.

In 1998, the ICC established a MT Working Group to look into the issue of multimodal

transport legislation. It came to the conclusion that, while a greater harmonization of liability

regimes is desirable, a single universal liability regime was unrealistic in the short term. The

ICC suggested that greater use of the UNCTAD/ICC Rules 1992 should be promoted.

At present, the issue is being discussed internationally within the framework of the UN, in the

UNCTAD, as well as in the UNCITRAL. The UNCTAD’s current work arises from the Plan

of Action (TD/386) adopted by UNCTAD X, held in Bangkok in February 2000. The

UNCTAD secretariat prepared a study of the implementation of the laws and regulations

applicable to multimodal transport, whereby an Ad Hoc Expert Meeting on Multimodal

Transport was convened which reviewed the existing framework of legislation. The Meeting

recommended that the UNCTAD secretariat to take account of the views of all interesting

parties, both public and private, while performing its study on the feasibility of a new

international instrument. Results of this study show that the views, as regards to the most

suitable approach which might be adopted, are to a certain extent divided. Around two thirds

of respondents from both Governments and non-governmental quarters appear to prefer a new

international instrument or a revision of the existing MTC 1980. A number of respondents

expressed their support for a new legal instrument based on the UNCTAD/ICC Rules. A

minority of respondents appeared to favor the extension of an international sea-carriage

regime to all multimodal carriage contracts involving a sea-leg, while others support a Draft

Instrument on Transport Law which adopts this approach. Another minority of respondents,

mainly representatives of the road transport industry, favored the extension of an international

road carriage regime to all multimodal transport contracts, involving a road-leg.536

Though the preliminary Draft Instrument on Transport Law537

, set up by the UNCITRAL

Working Group on Transport Law538

in 2002539

, was initially conceived as a port-to-port

convention, the Working Group III took the reality of the wide-spread practice of door-to-

door transport into account.540

The UNCITRAL Commission approved this proposition. Also

for the first time, a freedom of contract clause was included in an international instrument

governing the carriage of goods. Parties could now deviate from the mandatory conventional

norm on the carrier’s liability and on the contract of carriage in general.

536 UNCTAD, “Multimodal Transport: the feasability of an international legal instrument”, UNCTAD/SDTE/TLB/2003/1, 13 January 2003, 3 and 27, http://unctad.org/en/docs/sdtetlb20031_en.pdf. 537 UNCTAD, “Transport Law. Preliminary Draft Instrument on the carriage of goods by sea”, 8 January 2002, A/CN.9/WG.III/WP.21, http://daccess-dds-ny.un.org/doc/UNDOC/LTD/V02/501/49/PDF/V0250149.pdf?OpenElement. 538 The Resports on the sessions held in the Working Group III (on Transport Law) are available on www.uncitral.org. 539 The most recent compilation of historical references regarding the legislative history of the draft instrument can be found in A/CN.9/WG.III/WP.100, www.uncitral.org/pdf/english/workinggroups/wg_3/ANNOTATED_PROVISIONAL_AGENDAA_CN9WG.IIIWP100_.pdf. 540 T. FUJITA, “The comprehensive coverage of the new Convention: Performing parties and the multimodal implications”, Tex. Int’l L.J. 2008-2009, vol. 44, 351-352.


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79

However, the Draft Convention seems to receive only a limited support. Many delegations

proved resistant to change the mandatory nature of unimodal liability rules.541

The need to

protect small shippers and small carriers against contractual counterparties with much greater

bargaining power was invoked.542

Since the Draft Convention requires a ‘wet multimodal

transportation’543

, it limits its scope. Each multimodal carriage including a sea leg would also

trigger the international unimodal conventions and unimodal national law. The absence of a

conflicting conventions-provision leads to an overlap of the Draft Convention with the

international conventions and national legislation on unimodal transport that will also apply to

the other transport leg in which the cargo was damaged or lost. The drafters incorporated

articles 27 and 89-90 as potential conflict of conventions-provisions.

Article 27 states the following:

‘1. When a claim or dispute arises out of loss of or damage to goods or delay occurring solely

during the carrier's period of responsibility but:

a. Before the time of their loading on to the ship;

b. After their discharge from the ship to the time of their delivery to the consignee; and,

at the time of such loss, damage or delay, provisions of an international convention or

national law:

(i) according to their terms apply to all or any of the carrier's activities under the

contract of carriage during that period, irrespective whether the issuance of

any particular document is needed in order to make such international

convention applicable, and

(ii) specifically provide for carrier's liability, limitation of liability, or time for suit,

and

(iii) cannot be departed from by private contract either at all or to the detriment of

the shipper, such provisions, to the extent that they are mandatory as indicated

in (iii) above, prevail over the provisions of this Convention.

2. Paragraph 1 does not affect the application of article 64(2).

3. Article 27 applies regardless of the national law otherwise applicable to the contract of

carriage.’

On the other hand, articles 89-90 provide:

Article 89. International instruments governing other modes of transport

‘Subject to article 92, nothing contained in this Convention prevents a Contracting State from

applying any other international instrument which is already in force at the date of this

Convention and that applies mandatorily to contracts of carriage of goods primarily by a

mode of transport other than carriage by sea.’

541 J.A.E. FARIA, “Uniform Law for International Transport at UNCITRAL: new times, new players, and new rules”, Tex. Int’l L.J. 2008-2009, vol. 44, 309-317. 542 R.I. ORTIZ, “What changes in international transport law after the Rotterdam Rules?”, Unif. L. Rev. 2009, vol. 14, 894-896. 543 Art. 1(a) and 8.1. UNCITRAL Draft Convention: the Convention applies to contracts of carriage that provide for carriage of goods either entirely by sea or by sea and other modes of transport. The contract of carriage must provide for carriage by sea and may provide for carriage for other modes of transport in addition to the sea carriage.

80

Article 90. Prevalence over earlier conventions

‘As between parties to this Convention, it prevails over those, Subject to article 102, this

Convention prevails between its parties over those of an earlier convention to which they may

be parties, that are incompatible with those of this Convention.’

The aim of these articles is to consider the proposed solutions to the possible conflicts that

may arise between the Draft Convention and the international unimodal conventions other

than sea carriage. However, the limited scope of article 27 prevents it from achieving its goal.

Article 27 only gives precedence to the mandatory provisions of the unimodal conventions

that cover the carrier liability, limitation of liability and time for suit. The Draft Convention

will thus be in conflict with other mandatory provisions of unimodal legislation. Articles 89

and 90 than provide a less limited scope Specifically as a result of article 90, the Draft

Convention would never conflict with other unimodal laws, as between parties to the Draft

Convention, the latter prevails. However, it is not clear whether both the contractual place of

receipt and the place of delivery need to be located in a State Party or whether what is meant

by ‘parties to this Convention’, has to be interpreted as also tied to ports of loading and

discharge, that they have to be situated in contracting states. Article 27 will thus not be able to

prevent all possible conflicts.544

There is however a significant scope for the exploration of other options with all interested

parties in transport.545

A consolidation of revised provisions for the Draft Convention on the

Carriage of Goods (wholly or partly) (by sea), prepared by the secretariat, can be found in

document A/CN.9/WG.III/WP.101546

. Changes to the consolidated text by the Working

Group are contained in documents A/CN.9/WG.III/WP.81 and

A/CN.9/WG.III/WG.81/Corr.1.547

The UN Convention on Contracts for the International

Carriage of Goods (Wholly or Partly) (by Sea) was finally adopted on 11 December 2008, but

did not enter into force (yet).548

Meanwhile, the European Commission is pursuing its own route on the harmonization of

multimodal transport legislation.549

3. A future European Multimodal transport regime

A Common European Transport Policy has been on the political agenda for many years,

starting with the ‘White Paper on the Future Development of the common transport policy – a

544 T. NIKAKI, “Conflicting laws in “Wet” multimodal carriage of goods: the UNCITRAL Draft Convention on the carriage of goods (wholly of partly) (by sea)”, Journal of Maritime Law and Commerce October 2006, vol. 37, no. 4, 532-542. 545 UNCTAD , “Multimodal transport; the feasibility of an international legal instrument”, 13 January 2003, UNCTAD/SDTE/TLB/2003/1, 27, http://unctad.org/en/docs/sdtetlb20031_en.pdf. 546 UNCITRAL, “Draft Convention on the Carriage of Goods (wholly or partly) (by sea)”, http://daccess-ods.un.org/TMP/8613569.14043427.html. 547 UNCITRAL, “Report of Working Group III (Transport Law) on the work of its twenty-first session (Vienna, 14-25 January 2008)”, A/CN.9/645, 30 January 2008, http://daccess-dds-ny.un.org/doc/UNDOC/GEN/V08/507/44/PDF/V0850744.pdf?OpenElement. 548 A. KOZUBOVSKAYA, “Brief overview of the state of negotiations of the UNCITRAL Draft convention on the carriage of goods (wholly or partly) (by sea)”, Neptunus 2007, vol. 13, ep. 3, www.droit.univ-nantes.fr/labos/cdmo/centre-droit-maritime-oceanique/cdmo/neptunus/volumes.php. 549 H. CARL, Future developments in the regulatory aspects of international multimodal transport of goods, UNCTAD, 13 September 1999, 10 p., www.aimu.org/IUMI%20PAPERS/LIABILITY/Future%20Developments%20in%20the%20Regulatory%20Aspects.pdf.

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81

global approach to the construction of a Community framework for sustainable mobility’.550

This White Paper was followed up by a ‘Communication from the European Commission on

Intermodality551

and Intermodal Freight Transport in the EU’ in 1997552

and the ‘White Paper

Roadmap to a Single European Transport Area’ in 2011553

.

The objective of a Common European Transport Policy is to develop a framework for an

optimal integration of different modes so as to enable an efficient and cost-effective use of the

transport system through seamless, customer-oriented door-to-door services whilst favoring

competition between transport operators.554

Intermodal transport is considered a sustainable

alternative to the extensive use of road transport. The European Commission recognizes the

need for a predictable, simplified European liability regime for international multimodal

transport in Europe.555

The European Commission does not only want to create a legal instrument for the EU, it also

wants to revitalize the international discussions to create an international multimodal transport

regime.556

It shall examine, in close cooperation with the Council, how to reopen the

discussion on the International Convention on Multimodal Transport as adopted by the

UNCTAD framework in 1980.557

The study “Intermodal transportation and carrier liability”,

finalized in June 1999, outlines the possibilities on establishing a European multimodal

transport regime.558

The study concludes that binding national rules should be taken into

account when working out Model Rules. This because a few legal systems have regulated

550 Supplement 3/93 to COM(92)494final, the future development of the common transport policy: a global approach to the construction of a Community framework for sustainable mobility, 2 December 1992, http://aei.pitt.edu/1116/1/future_transport_policy_wp_COM_92_494.pdf. 551 The European Union uses the term ‘intermodal transport’ instead of ‘multimodal transport’. For more details, see: COM(97)243final, Communication from the Commission to the European Parliament and the Council on intermodality and intermodal freight transport in the European Union: a system’s approach to freight transport, strategies and actions to enhance efficiency, services and sustainability, 1, ftp://ftp.cordis.europa.eu/pub/transport/docs/intermodal_freight_transport_en.pdf. 552 COM(97)243final, Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions - Intermodality and intermodal freight transport in the European Union - A system's approach to freight transport - Strategies and actions to enhance efficiency, services and sustainability, http://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!DocNumber&lg=en&type_doc=COMfinal&an_doc=1997&nu_doc=243. 553 COM(2011)144final, White Paper Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system, 28 March 2011, http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52011DC0144:EN:NOT. 554 Paragraph 4 Council Resolution 2000/C56/01 of 14 February 2000 on the promotion of intermodality and intermodal freight transport in the European Union, http://eur-lex.europa.eu/Notice.do?mode=dbl&lang=en&ihmlang=en&lng1=en,nl&lng2=da,de,el,en,es,fi,fr,it,nl,pt,sv,&val=240144:cs. 555 COM(97)243final, Communication from the Commission to the European Parliament and the Council on intermodality and intermodal freight transport in the European Union: a system’s approach to freight transport, strategies and actions to enhance efficiency, services and sustainability, II, ftp://ftp.cordis.europa.eu/pub/transport/docs/intermodal_freight_transport_en.pdf. 556 E. EFTESTOL-WILHELMSSON, “EU intermodal transport and carrier liability – content and context”, Helsinki Legal Studies Research Paper Series 2007, Paper No. 15, 144-145, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2001905. 557 Communication from the Commission to the European Parliament and the Council on intermodality and intermodal freight transport in the European Union: a system’s approach to freight transport, strategies and actions to enhance efficiency, services and sustainability, 14, ftp://ftp.cordis.europa.eu/pub/transport/docs/intermodal_freight_transport_en.pdf. 558 European Commission, Intermodal transportation and carrier liability, 2000, 42 p., http://bookshop.europa.eu/en/intermodal-transportation-and-carrier-liability-pbC32599285/.

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82

multimodal transport by law and the existence of mandatory national rules that govern the

single means of transportation. The European Union’s directorate general of Energy and

Transport has appointed some of the leading commentators on multimodal transport law to

prepare a first draft as proposal to the European Commission. The report was filed in October

2005 and revised by the Commission.559

A Draft set of uniform liability rules for multimodal

transport applicable on all international transports within the Union has accordingly been

produced.

3.1. THE EU DRAFT ON UNIFORM LIABILITY RULES FOR INTERMODAL TRANSPORT In contrast to the UNCITRAL Draft Convention, based on a network approach, the EU

proposal is based on a uniform liability regime.560

It is a strict voluntary liability regime with

an opt-out opportunity. Contracting parties may thus opt out the rules in their contract of

carriage, but if they do not, the liability rules shall mandatory apply, if the place for taking in

charge of the goods by the carrier561

or the place of delivery, as provided for in the contract, is

located in an EEC Member State.562

.

The carrier undertakes to perform or procure the transport of goods from a place in one

country to a place in another country, whether or not through a third country, involving at

least two different modes of transport, and to deliver the goods to the consignee.563

It shall be

liable for total or partial loss of or damage to the goods, as well as any delay in delivery. The

carrier’s liability period runs between the time it takes over the goods and the time of

delivery564

, except in the case of circumstances beyond the carrier’s control565

. The conditions

for liability of the carrier for loss, damage or delay of goods should be transparent, not mode

specific and without distinction between national and international transport. In addition to

covering the actual transport of goods, the rules must also cover the damage or loss that may

result from the performance of a value added logistics activity in the intermodal chain, for

example warehousing or product customization at the nodal point.566

559 M.A. CLARKE, R. HERBER, F. LORENTZON and J. RAMBERG, “Integrated services in the intermodal chain (ISIC). Final Report Task B: Intermodal liability and documentation”, Southampton, 28 October 2005, http://ec.europa.eu/transport/logistics/consultations/2006_04_26/doc/2006_03_31_logistics_consultation_task_b_en.pdf (hereafter ‘EU proposal’ or ‘EU Draft on uniform liability rules for intermodal transport’). 560 E. EFTESTOL-WILHELMSSON, “EU intermodal transport and carrier liability – content and context”, Helsinki Legal Studies Research Paper Series 2007, Paper No. 15, 149-150, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2001905. The results of a EU study show that a vast majority of stakeholders (50/58) are in favor of a uniform liability regime: http://ec.europa.eu/transport/themes/strategies/studies/doc/2009_05_19_multimodal_transport_executive_summary.pdf, 4. 561 The ‘carrier’ is referred to as the ‘Transport Integrator’ in the EU Draft, but I will continue using ‘carrier’ in order to retain conformity in this Thesis. The Transport Integrator is defined in article 1(1)(f) EU proposal. 562 Art. 2 EU proposal. 563 Art. 1(1)(a) EU proposal. 564 Art. 8(1) EU proposal. 565 Art. 8(4) EU proposal. 566 COM(97)243final, Communication from the Commission to the European Parliament and the Council on intermodality and intermodal freight transport in the European Union: a system’s approach to freight transport, strategies and actions to enhance efficiency, services and sustainability, 13-14, ftp://ftp.cordis.europa.eu/pub/transport/docs/intermodal_freight_transport_en.pdf.

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When the carrier is liable for loss resulting from loss of or damage to the goods, his liability

shall be limited to an amount not exceeding 17567

units per account568

per kilogram of gross

weight of the goods lost or damaged.569

In the case of liability for loss resulting from delay in

delivery, the liability shall not exceed twice the amount of the charge payable under the

contract of carriage.570

Both limitations shall not exceed the limit of liability for total loss of

the goods.571

By declaration of value or otherwise, the carrier and the consignor may agree on

limits of liability exceeding those as provided by the EU proposal.572

The carrier shall

however not be entitled to benefit from these limitations if it is proved that the loss, damage

or delay resulted from a personal act or omission of the carrier573

done with the intent to cause

such loss, damage or delay or recklessly and with knowledge that such loss, damage or delay

would probably result.574

The proposal does however not contain a provision on how to

calculate the loss for which the carrier will be liable. In the case the carrier loses its right of

limitation of liability, the EU proposal does not regulate how this loss should than be

calculated.

The consignee must notify the carrier of the loss or damage in writing and not later than the

working day after the day when the goods are handed over to the consignee.575

Where the loss

or damage is not apparent, notice should be given in writing within six consecutive days when

the goods are handed over to the consignee.576

In case of loss resulting from delay in delivery,

no compensation shall be payable, unless notice is given in writing to the carrier within 21

consecutive days when the goods have been delivered or when the consignee has been

notified that the goods have been delivered.577

Any action related to the contract of carriage

shall be time-barred within a period of nine months, from the day after the day on which the

carrier has delivered (part of) the goods or, where the goods have not been delivered, from the

day after the last day on which the goods should have been delivered.578

This period may be

extended in accordance with article 14(3) of the EU proposal.

Whether this EU proposal shall be able to create a uniform liability regime, must be evaluated

in the context of the European Transport Policy, in which the European multimodal transport

chain plays an essential role.579

567 The EU chose the amount of 17 SDR because it is based on the highest monetary limit found in unimodal regimes. EU proposal, 10-11. 568 This is the Special Drawing Rights as defined by the IMF. Art. 9(5) EU proposal. 569 Art. 9(1) EU proposal. 570 Art. 9(2) EU proposal. 571 Art. 9(3) EU proposal. 572 Art. 9(4) EU proposal. 573 This means that servants, agents or other persons engaged for the performance of their contractual obligations under the contract of carriage, are excluded: EU proposal, 16. If the carrier is a corporation, it must be an act or omission of a human being concerning an executive matter which that person is authorized to decide, without any reference to any other person in the managerial structure of the enterprise: EU proposal, 24. 574 Art. 10 EU proposal. 575 Art. 13(1) EU proposal. 576 Art. 13(2) EU proposal. 577 Art. 13(5) EU proposal. 578 Art. 14(1-2) EU proposal. 579 E. EFTESTOL-WILHELMSSON, “EU intermodal transport and carrier liability – content and context”, Helsinki Legal Studies Research Paper Series 2007, Paper No. 15, 165-166.

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4. Conclusion

Although the International community and the European Union invest many efforts on

establishing a multimodal transport regime, they have not been able to create a uniform

liability regime for multimodal carriage that has been received both as judicially

unproblematic as politically acceptable. It seems unlikely that the MTC 1980 will ever enter

into force, and also the Rotterdam Rules tend to share the same fate. Even if the Rotterdam

Rules would come into force, they are still only a partial solution as they are restricted to a

multimodal carriage of goods wholly or partially by sea. The European Union, on the other

hand, tries to handle the multimodal problem differently, by introducing the idea of a

voluntary multimodal liability regime with an opt-out opportunity, applicable within the EU.

It tries to reopen negotiations within the International community. A draft proposal governing

the carrier’s liability has been drawn in 2005. It imposes a strict uniform liability, which is

mandatory unless the contracting parties have actively opted out the application of these

Rules. The carrier’s liability is stricter than the existing unimodal regimes and the

international draft conventions. The European Commission presented its proposed liability as

the optimal solution in the European context, since a strict liability offers greater certainty to

the cargo interests. If multimodal carriers find that the EU proposal does not satisfy their

interests, for example because of the amount on limitation of liability, there is always a

possibility to opt out.

The UNCTAD presented three optional regimes: the uniform approach, the network of

chameleon approach and the modified approach. A uniform multimodal convention increases

the risks on conflicts with the existing unimodal conventions, while the network system

entails a risk of increasing complexity, unpredictability and legal uncertainty. A modified

approach therefore, seems a more appropriate approach to establish a multimodal transport

regime. The Draft UNCITRAL Convention is based on such a modified network regime.580

For efficiency reasons, a European multimodal regime seems to be the most appropriate form.

The Union has a great deal of experience with the unification of law.581

The decision-making

process on European level differs from that within the International community. The number

of negotiating countries is lower, the geographical territory is more limited and the European

Union has the advantage of having a legal infrastructure enabling it to take decisions and

create legally binding sets of rules582

, whose application and uniform interpretation is

‘protected’ or ‘guaranteed’ by the European Court of Justice.583

A control mechanism which

is mostly absent on the international level. The creation of a European law may take less time,

whereas it is unlikely to reach consensus that quickly within the International community.584

Admittedly, a restriction of the scope of a multimodal transport regime to the European Union

may not be ideal. Multimodal carriage of goods is a global concept and it should therefore

indeed be better governed by an international set of rules. However, it seems more feasible to

580 G. VAN DER ZIEL, “Multimodal Aspects of the Rotterdam Rules”, Unif. L. Rev. 2009, vol. 14, 989. 581 R. HERBER, “The European legal experience with multimodalism”, Tul. L. Rev. 1989-1990, vol. 64, 611. 582 Which shall also be binding as a whole or to a certain degree, depending on the kind of legal instrument used (regulation, directive,…), in domestic law. Report I of 21 November 2007 on the proposal for a regulation of the European Parliament and of the Council on the law applicable to contractual obligations (Rome I), COM(2005)0650 –C6-044/2005-2005/0261(COD), Committee on Legal Affairs. 583 G. RENNERT, “Is elimination of forum shopping by means of international uniform law an ‘impossible mission’?”, MqJBL 2005, 131. 584 Take for instance the work of the CMI. Their first conferences date back from 1911 and 1913. And still there is no legal instrument in force (yet). See more detailed information concerning the past drafts and the reasons for their failure: R. DE WIT, Multimodal Transport: carrier liability and documentation, London, Lloyd’s of London Press, 1995, 147-183.

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create a European regime than going for global success, as history has clearly shown. A

European set of rules can function as a role model for the further development of an

international convention.

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PART V - MULTIMODAL TRANSPORT

INSURANCE POLICY

The risk of liability of the carrier differs whether he is transporting goods by road, rail, air, sea

or inland waterway. Each transport mode has its own characteristics and thus entails different

kinds or risks.

‘Any substantial increase of carrier liability has implications for the structure of insurance

cover and may affect the existing market.’585

Under the unimodal conventions, carrier liability

is based on fault and subject to limitations (financial ceilings). With the rise of multimodal

carriage, the existing regulations did not seem able to handle the multimodal transport

problem and the increasing technological developments within the multimodal transport

sector. Insurers needed to adapt their insurance policies and specific insurance contracts

needed to be concluded. In this Part of the thesis, a brief overview shall be given of the efforts

made by the insurers to adapt their policies to the rising multimodal transport of goods.

Starting with a general outline of what needs to be understood under a ‘liability insurance’

and the relationship between the carrier (assured) and the insurer.

1. Transport liability insurance

An insurance is a legal act, under which the insurer takes full responsibility to cover the

insured party for all damages resulting from a risk which is covered by the insurance contract.

The insured party is obliged to pay an insurance premium, this is the insurance cost. An

insurance cover can be optional or imposed by contract or by law.

A liability insurance covers the insured’s liability for losses caused to third persons. A

distinction is made between the contractual carrier liability vis-à-vis the shipper and the extra-

contractual liability for damage caused in the course of the performance of the transport

operation.

The contractual liability insurance covers the carrier’s contractual liability for defective

performance of the contract of carriage vis-à-vis his contracting party, the shipper, for damage

caused to the goods that has been handed over to him in order to perform the carriage. The

extra-contractual liability insurance covers the carrier’s extra-contractual liability vis-à-vis

third persons for the damage caused by the operation of the transport mode. This type of

insurance cover is generally offered in combination with a hull insurance586

. However, the

carrier’s liability is considered a special risk that is covered specifically by a contractual

liability insurance, which guarantees financial protection against specified contingencies in

return for the payment of a premium.

585 European Commission, Intermodal transportation and carrier liability, 2000, 31, http://bookshop.europa.eu/en/intermodal-transportation-and-carrier-liability-pbC32599285/. 586 An insurance that provides cover against loss of or damage to the means of transportation. E.G. HINKELMAN, 8th edition Dictionary of International Trade: handbook of the Global Trade Community, Czech Republic, World Trade Press, 2008, 293.


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The multimodal transport carrier shall require financial protection against the following risks:

liability to his customer for loss of or damage to the cargo, delay or for his customer’s

financial loss arising from an error or omission;

liability to a third party for death, bodily injury, property damage, etc.;

liability to the Customs Administration; and

costs of a lawyer, surveyor, of disposing of damaged cargo, disinfecting contaminated

cargo or redirecting misdirected cargo.587

Also the form of the cargo is important to determine the carrier’s contractual liability

insurance.588

For instance the insurance of FCL cargo589

and LCL cargo590

. FCL cargo entails

a lower risk than LCL cargo, since there is an added risk of liability arising through theft,

damage to the cargo during storage, or while being handled out or in a container. Whether a

carrier is liable or not, is not a question of insurance law, but of transport law.591

2. The relationship between the carrier and the insurer

A multimodal transport operation comes with a price. The risk that something might go wrong

during the voyage is, as you can imagine, much higher than when transporting goods by one

single transport mode. Think of the increasing value of the goods transported and the

increasing capacity of transport modes to perform the carriage. International conventions

therefore limit the liability of the carrier by offering a clear liability regime, monetary

limitations and specific exoneration grounds for the carrier to be relieved from liability.

Nevertheless, when a claim is brought against the carrier for loss, damage or delay, the carrier

is usually unable to cope with the costs of these claims. Therefore, he shall often use the

services of an insurer to cover his liability.

2.1. ORGANIZATION OF THE MULTIMODAL CARRIAGE OF GOODS

A multimodal carriage of goods may be organized in different ways. The multimodal carrier

may perform the carriage with his own transport means, or he might opt for the use of other

carriers to perform the contract of carriage (subcontracting carriage). The latter is mostly

chosen in practice, since the carrier often does not possess all transport means necessary to

perform the multimodal carriage of goods.

A third possibility, is that the carrier does not perform any part of carriage himself, but

contracts with other carriers to perform the whole multimodal transport operation.592

Does the

multimodal transport carrier have to insure his liability separately per transport mode or

carrier used? Or may he insure his liability for the entire transport operation under one single

insurance? Are insurers prepared to insure an entire multimodal transport operation instead of

587 UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT, Multimodal Transport Handbook for Officials and Practitioners, May 1996, 183. 588 UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT, Multimodal Transport Handbook for Officials and Practitioners, May 1996, 187. 589 Full Container Load. 590 Less Container Load. This is an economical way to ship cargo if the shipment is not large enough to fit in a container, whereby the goods of different customers share a container or whereby goods are transported on pallets or other means. 591 T.C.M.ASSER INSTITUTE, Hague-Zagreb Essays on the Law of International Trade: Product liability, road transport, foreign law, The Netherlands, Springer, 2012, 132-133. 592 J. PUTZEYS, “L’évolution de la responsabilité du transporteur de marchandises”, JT 1973, 594.

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a specific unimodal part? An overview of the existing insurance policies for the multimodal

carriage of goods shall be presented below.

2.2. THE INSURANCE BROKER

An insurance broker is ‘usually an agent of the assured who effects policies of insurance but

is paid by the insurer’. He is an insurance intermediary who acts as a middleman between the

insurer and the insured, or person looking for an insurance. He’s generally not entrusted with

the possession or control of the goods or the documents of title thereto. An insurance broker

differentiates himself from an agent, since the latter acts on behalf of his customer, the

insurer. An agent represents an insurer under employment by it. While the broker does not.

Insurance brokers are held personally and solely responsible to the insurer for payment of the

premium by the insured. An insurance broker shall sell, negotiate or solicit insurance for

compensation. He will assist a prospective insured to find an insurance cover for his specific

risk profile.

The insurance broker plays a very important role in marine insurance practice. ‘His

knowledge of insurance and the insurance market available is invaluable to his client’.593

2.3. TREATMENT OF RISKS BY THE INSURER

A single risk may be divided between several insurers, with each insurer only taking a share

of the total risk. Smaller risks, where the potential losses are limited, may be placed by a

single insurer. Insurance is about the distribution of risk. Where risks are large and no single

insurer is able to underwrite the entirety of the placement, it is common practice in certain

insurance markets, that each participating insurer will only take a share of the risk. Mostly,

insurers will on their turn reinsure themselves, so that in case a compensation is due, their

losses are covered by their own insurer.594

When the multimodal carrier incurs liability, his liability may be limited or totally exonerated

by applicable legal provisions or contractual conditions applicable to the carrier. Therefore,

the insurer will want to know what these (contractual) limitation or exoneration conditions

exactly are. Also does the insurer want to know whether the contract has been adequately

drafted by his customer, the carrier and his contracting partner. This to make sure that no

unexpected judicial decisions will arise and to know which jurisdiction needs to be applied.

Ensuring conditions which are properly drafted is easier to accomplish than the prevention of

someone making an error which leads to damage, loss or delay. Such care will reduce the risk

of liability and therefore lower premiums. The insurer will also check the background of the

carrier, whether he’s more likely or not to incur claims.595

Also the cargo insurer has an

interest in the carrier’s liability insurance, since in the case he has to compensate the loss or

damage to the cargo to his customer, he shall try to seek compensation from the carrier for the

payments made.

593 N. KOULADIS, Principles of Law Relating to International Trade, The Netherlands, Springer, 2006, 239. 594J. BURLING and K. LAZARUS, Research handbook on International Insurance Law and Regulation, United Kingdom, Edward Elgar Publishing Limited, 2011, 6. 595 UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT, Multimodal Transport Handbook for Officials and Practitioners, May 1996, 188-189.

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2.4. THE INSURANCE CONTRACT

An insurance contract comes into being when party X makes an offer and the addressee, party

Y, makes a valid acceptance.

A more detailed definition is where:

' ... one party (the insurer) undertakes for a consideration to pay money to or for the benefit of

the other party (the assured) upon the happening of an event which is uncertain, either as to

whether it has or will occur at all, or as to the time of its occurrence, where the object of the

assured is to provide against loss or to compensate for prejudice caused by the event . . .‘596

Three elements are required:

the contract must provide that the assured will become entitled to compensation on the

occurrence of an insured event/risk;

the event/risk must be one which involves an element of uncertainty; and

the assured must have an insurable interest597

in the subject-matter of his policy.

The premium may consist of periodical payments or a lump sum. The document evidencing

the insurance, is called the ‘policy’ of insurance.598

3. Carrier’s liability insurance for multimodal carriage

Whether the unimodal carrier’s liability insurance covers suffice to cover the liability of the

multimodal carrier, a brief overview shall be given of insurance covers that exist today.

3.1. THE SEA CARRIER’S LIABILITY INSURANCE

The marine insurance was the earliest well-developed kind of insurance. It has basically

served as a model for the rest of the transport insurances. In the maritime sector, P&I Clubs

and TT Clubs play an important role in providing an insurance cover for the carrier’s liability.

A. P&I CLUBS

P&I is short for ‘Protection and Indemnity’. It is an insurance in respect of third party

liabilities and expenses arising from owning ships or operating ships as principals.599

A marine insurance policy usually covers 3/4th

of the insured’s liability towards third persons.

In order for ship owners to find an insurance cover for the remaining one-quarter liability, the

P&I Clubs came into play. The P&I Clubs are a mutual insurance system that will meet the

596 J. TEMPLEMAN, “Department of Trade and Industry v. St. Christopher Motorists Association Ltd.”, Lloyd’s Rep. 1974, vol. 17, 20. 597 An insurable interest is a ‘true, valid, determinable, and direct economic stake of an insurance policy holder (or of the beneficiary of the policy) in the continued existence or safety of the insured property or person.…an insurable interest means that the policy holder (or the beneficiary) must stand to suffer a direct financial loss if the event (against which the insurance cover was bought) does occur.’ Business Dictionary.com, www.businessdictionary.com/definition/insurable-interest.html#ixzz2UDaioGui. 598 N. KOULADIS, Principles of Law Relating to International Trade, The Netherlands, Springer, 2006, 240. 599 UK P&I Club, “Introductory guide to P&I cover”, www.ukpandi.com/fileadmin/uploads/uk-pi/Latest_Publications/Rules___ByeLaws/generalP%26Icover%20.pdf.

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shortfall in the third party cover. It is only intended to cover the costs of the assured when

defending a claim, not when the assured pursues a claim against a third party.600

Since the P&I Club only serves its own members, which are on their turn only ship owners,

ship-operators or demise charters, its role as an insurer for multimodal transport of goods is

considerably limited. Whether members of the P&I Clubs who offer multimodal transport

services may obtain an insurance cover for the entire multimodal carriage, depends on ‘the

Rules of the Club’.601

A member of the P&I Clubs may however include a liability insurance cover through Bill of

Lading. The Club shall than cover the liability for the cargo, even if the carriage is not

performed by the registered vessel. However, the administrators may also prohibit this

possibility of the ship owner to extend his liability insurance cover for loss or damage to the

cargo caused by another mode of transportation than the registered vessel.602

B. TT-CLUB

TT stands for ‘Through Transport’. The TT Club specializes in the insurance of liabilities and

equipment for multimodal operators, NVOCs, Freight Forwarders, Logistics Operators,

Marine Terminals, Stevedores, Port Authorities and Ship Operators.603

Standard covers include:

liabilities for loss of or damage to cargo;

liabilities for errors and omissions;

third party liabilities;

fines for regulatory breach including customs, pollution and safety at work;

costs including misdirection, investigation, defense, disposal and mitigation.604

The TT Club serves as a complementary insurance to the P&I Clubs. A ship owner who

provides multimodal transport services shall have to address a P&I Club for a traditional

liability insurance. What a P&I Club cannot insure, shall be insured by the TT Club. The TT

Club also offers protection of the property (containers) of the insured.605

What both the P&I Clubs as the TT Club have in common, is the ‘Omnibus Rule’. This rule

entails the discretionary power to compensate a member’s loss for all losses not mentioned

expressly or ruled out. 606

600 S.J. HAZELWOOD and D. SEMARK, P&I Clubs: law and practice, United Kingdom, Informa, 2010, 1 and S. HODGES, Cases and materials on Marine Insurance Law, Great Britain, Cavendish Publishing Limited, 1999, 535. 601 I. SOLLIE, “Over de regels van Hamburg, de Regels van Visby en de Regels van Den Haag en de verzekeringen daarbij betrokken”, VW 1980, afl. 208, 121, 123-125. 602 UNCTAD, Marine Cargo Insurance – Study by the UNCTAD Secretariat, 1978, TD/B/C.3/120, 7. 603 www.ttclub.com. 604 Transport operators, www.ttclub.com/who-we-insure/transport-operators. 605 E. VAN HOOYDONK, Expediteurs en scheepsagenten: het gewijzigde juridische landschap, Antwerpen-Apeldoorn, Maklu, 2003, 296 and P. MANCA, “International Maritime Law”, Eur. Vervoerr. 1971, 368-371. 606 S. SMITS, De verzekering van het multimodal transport, diss. lic. Haven- en Maritieme Wetenschappen, 1996, 54-55.

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3.2. THE AIR CARRIER’S LIABILITY INSURANCE

The Montreal Convention imposes the obligation on State Parties to require their carriers to

maintain an adequate insurance covering their liability under the Convention.607

Air carrier

liability insurance is heavily dictated by the European Union. An example is the Regulation

785/2004 on insurance requirements for air carriers and aircraft operators.608

An air transport insurance covers the liability as resulting from the air waybill. Usually, an

indemnity of an insured against the sums he may become liable to pay, is not covered in the

standard aircraft policy. Such cover may however be obtained by endorsement.609

As stated in

the Warsaw as well as in the Montreal Convention, the carrier is liable for damage, loss or

delay that took place during the carriage by air.610

The insurance shall not cover a greater risk

than what is stipulated in the air waybill and the Conventions. In case of a multimodal

carriage of goods, the multimodal carrier’s liability cover must be adapted.

3.3. THE ROAD CARRIER’S LIABILITY INSURANCE

The liability insurance of the road carrier is governed by the CMR Convention concerning the

liability of the carrier, the limitations of his liability and the exoneration grounds. The CMR

Convention imposes a limit to the carrier’s liability which must be taken into account by the

insurer. A benefit of insurance in favor of the carrier shall be null and void.611

The general conditions of the CMR Insurance Policy were drawn up by the Belgian Transport

Insurers Association (ABAM) on 24 October 1968. It covers the carrier’s liability vis-à-vis

the consignor/consignee in case of international road transport for reward. The CMR Policy

has been repeatedly renewed. In case of a multimodal transport, cover is also provided during

the carriage by another means of transportation, in principle only to the extent that the road

vehicle is carried together with the cargo by sea, rail, air or inland waterway.612

In Belgium the carrier’s liability for damage caused to third persons is legally imposed by the

Act of 21 November 1989 concerning the compulsory third party motor liability insurance.613

Another type of insurance is linked to the road waybill, namely the Assur-insurance.614

Also

the Assur-insurance covers the liability of the carrier as stipulated in the CMR Convention.

The difference with the CMR Policy, in case of a multimodal carriage of goods, is that the

Assur-insurance automatically covers the transport by sea. However, in practice, the Assur-

insurance seemed unworkable.615

607 Art. 50 Montreal Convention. 608 Regulation 785/2004 of the European Parliament and of the Council of 21 April 2004 on insurance requirements for air carriers and aircraft operators, OJ.L. 30 April 2004, 138, 1-6. 609 N. KOULADIS, Principles of Law Relating to International Trade, The Netherlands, Springer, 2006, 253-254. 610 Art. 18(1) Warsaw Convention and art. 18(1) Montreal Convention. 611 Art. 41(2) CMR Convention. 612 Roll-on/roll-off and piggy-back. 613 Wet 21 november 1989 betreffende de verplichte aansprakelijkheidsverzekering inzake motorrijtuigen, BS 8 december 1989, 20122. 614 J. PUTZEYS, Le contrat de transport routier de marchandises, Brussels, Bruylant, 1981, 329-330. 615 S. SMITS, De verzekering van het multimodal transport, diss. lic. Haven- en Maritieme Wetenschappen, 1996, 70-71.

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3.4. THE RAIL CARRIER’S LIABILITY INSURANCE

The liability insurance of a rail carrier covers only the damages specified in the transport

contract, if the carrier is the party responsible for the transport. This insurance is governed by

the international rail carriage convention, the COTIF, and specifically by the Uniform Rules

concerning the Contract of International Carriage of Goods by Rail, the CIM.

As public enterprises, most railway companies normally do not take insurance cover. In those

cases, it is the public State that serves as guarantee.616

3.5. THE CARRIER’S LIABILITY INSURANCE FOR INLAND NAVIGATION

The carrier’s liability insurance is governed by the Budapest Convention on the Contract for

the Carriage of Goods by Inland Waterway (CMNI), with regards to the carrier’s liability, its

liability limitations and exoneration grounds. Any stipulation assigning a benefit of insurance

of the goods in favor of the carrier, shall be null and void.617

In Belgium, liability cover is provided via the Antwerp Hull Policy for Inland Navigation of

28 March 1952.

3.6. OTHER LIABILITY INSURANCE COVERS OFFERED BY THE INTERNATIONAL

COMMUNITY

A. THE ASEAN FRAMEWORK AGREEMENT ON MULTIMODAL TRANSPORT

The ASEAN618

Framework Agreement on Multimodal Transport 2005619

indicates that a

multimodal carrier shall have an insurance coverage from a P&I Club (Protection and

Indemnity Club), or an alternative of a financial character to cover payment of obligations for

loss, damage or delay in delivery of goods under multimodal transport contracts, as well as

contractual risks.620

The ASEAN Framework Agreement on Multimodal Transport 2005 was signed on 17

November 2005 in Vientiane, Laos to facilitate regional trade through the development of an

efficient multimodal transport system. However, only Cambodia, the Philippines and Thailand

have ratified the agreement.621

B. THE FIATA MULTIMODAL TRANSPORT BILL OF LADING

The International Federation of Freight Forwarders Associations (FIATA) is a non-

governmental organization, representing an industry covering approximately 40,000

forwarding and logistics firms, also known as the "Architects of Transport", employing

around 8 - 10 million people in 150 countries. FIATA has consultative status with the

Economic and Social Council (ECOSOC), the UN, the United Nations Conference on Trade

616 R. ZELENIKA and others, “Multimodal Transport Operator liability insurance modal”, Promet-Traffic and Transportation 2011, vol. 23, no. 1, 28. 617 Art. 25(1) CMNI. 618 Association of South East Asian Nations represents the EU’s third largest trading partner outside Europe. For more detailed information, see www.asean.org. 619 ASEAN Framework Agreement on Multimodal Transport, 17 November 2005, 620 Art. 30(1)(c) ASEAN Framework Agreement on Multimodal Transport 2005. 621 UNCTAD, Implementation of multimodal transport rules, UNCTAD/SDTE/TLB/2, 25 June 2001, 28.

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and Development (UNCTAD) and the UN Commission on International Trade Law

(UNCITRAL).622

Intermediaries often use the FIATA Multimodal Transport Bill of Lading, whereby they bear

the same liability as the carrier. It is important that this liability is covered by an adequate and

specific insurance cover. The liability resulting from the FIATA Bill of Lading is

automatically covered by an insurance linked to this bill of lading.623

This form of document

is often used in multimodal carriage operations and the insurance linked often covers the

liability of the MTO in accordance with the insurance policy of the FIATA Bill of Lading.624

4. Conclusion

Due to the rise of multimodal carriage of goods, insurers had to adapt their transport insurance

policies. Large maritime liners make use of comprehensive insurances (global P&I and open

cover insurances), whereas insurances are less common for rail or inland navigation carriers.

The best students in class are the TT Club, in the maritime sector, and the insurance policy

linked to the FIATA Bill of Lading. Also the CMR Policy contains a specific provision for

insurance of a multimodal carriage of goods, insofar the road vehicle is carried together with

the cargo by sea, rail, air or inland waterway. The liability insurance cover depends on the

judicial provisions governing the liability of the carrier. Since no uniform multimodal

transport regime (yet) exists, a solid basis for insurers to draft a multimodal carrier’s liability

insurance policy remains absent. Although in most insurances, contracting parties may agree

to increase the carrier’s liability, by for instance including an express declaration of value in

the transport document, this is not an usual practice due to the risk of a disproportionate rise

in the freight rate. Even where ‘full’ liability is agreed, the need for separate cargo insurance

remains.625

An alternative to the absence of a uniform liability regime could be the creation of

a mandatory insurance cover for multimodal carriers, imposed on the insurers. However, this

would deprive insurers from discretion when deciding upon the risks that they are willing to

insure. Reasonably, insurers would be strongly opposed, since their discretion is an essential

part of their business.

622 Who is FIATA?, www.fiata.com/index.php?id=30. 623 A. DIERCXSENS, “The insurance covering the liability of the insurer of a FIATA Combined Transport Bill of Lading” in Marine Insurance: Belgium, a perfect choice, Lloyd Special, Antwerp, Antwerp Lloyd NV, 1990, 47-50. 624 Standard conditions governing the FIATA Multimodal Transport Bill of Lading, 1992, www.transportrecht.org/dokumente/FBL.pdf. 625 European Commission, Intermodal transportation and carrier liability, 2000, 31, http://bookshop.europa.eu/en/intermodal-transportation-and-carrier-liability-pbC32599285/.

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CONCLUSION In the late 1800s and the beginning of the 1900s, important steps were taken to unify

international transport law.626

Each transport mode became subjected to its own international

unimodal convention:

Sea carriage: Hague Rules, Hague-Visby Rules, Hamburg Rules and Rotterdam Rules;

Air carriage: Warsaw and Montreal Convention;

Road carriage: CMR Convention;

Rail carriage: COTIF-CIM Convention;

Inland navigation: CMNI Convention.

Due to the containerization, the interest naturally focused on carriage from door-to-door

whereby different modes of transport could be integrated in one single contract of carriage,

better known as ‘multimodal carriage’. However, since there is no uniform legal regime

governing such contracts and the international unimodal conventions do not provide clear

solutions with regards to the applicable liability regime, the International community started

to create a suitable legal regime. Efforts to create a new regime resulted in two important draft

conventions, namely the UN Multimodal Transport Convention 1980 and the Draft

Convention on the Carriage of Goods (wholly or partly) (by sea) 2008, better known as ‘The

Rotterdam Rules’. But both suffered the same fate: a lack of signatory States, and did not

enter into force (yet).

The European Union has recognized the importance of having a multimodal transport

regime.627

Within the Union, the adoption of such a regime could be easier. Europe already

has experience in unifying law. An effective enforcement of such rules is guaranteed thanks to

the work of the European institutions, and more specifically the European Court of Justice,

which plays an important role in the uniform interpretation of European legislation. But the

scope of application remains limited. The transport sector does not stop at the borders of the

Union. It is a much broader concept with enables mankind to carry goods all around the

world. A European multimodal transport regime would not suffice, but it would certainly be

of great importance to the European as well as the international trade, there it would serve as

an example or basis for the adoption of an international multimodal transport regime.

The efforts made on European level resulted in an EU proposal which imposes a strict

uniform liability with an opt-out opportunity. Contracting parties may thus decide for

themselves whether they would like to benefit from these rules or not. If no actively opt out is

made, the rules shall mandatory apply. Whether this proposal shall have effect in practice or

obtain force of law, must be evaluated in the context of the European Transport Policy.

The UNCTAD presented three optional approaches to create a uniform multimodal carrier’s

liability regime: the uniform approach, the network approach and the modified approach. The

latter seems the most favorable. However, it is also the one that demands the most efforts

from the international and European drafters to find a consensus, since the modified approach

demonstrates characteristics of both the uniform and the network regime, and parties must

decide for themselves which of these characteristics shall be included in their draft.

626 J. RAMBERG, “Global unification of transport law: a hopeless task?”, Penn. St. Int’l L. Rev. 2008-2009, vol. 27, 851. 627 C. LEGROS, “Relations between the Rotterdam Rules and Convention on the carriage of goods by road”, Tul. Mar. L.J. 2011-2012, vol. 36, 739-740.

95

The consequences of not having a uniform set of rules governing the liability of the carrier

imposes many practical difficulties and legal uncertainty for cargo owners, their customers

and the multimodal carrier himself. Due to the mandatory nature of the international unimodal

conventions, contracting parties are not allowed to derogate from unimodal transport rules,

while it remains unclear which liability regime should be applied. Uncertainties cost money,

which on its turn affect international trade.

But not only the contracting parties incur negative implications, also the transport insurers

depend on a clear international regime to serve as a basis for their insurance policies. Since

each unimodal convention has different rules governing the liability of the carrier, including

the period of liability, the exoneration grounds, limitations and time periods to bring a claim,

insurers need to constantly adapt the existing insurance policies to the needs of the

multimodal carrier in order to cover its liability in case things go wrong. Simplifying the

liability rules would reduce the need for separate insurances to some extent and thus reduce

costs. However, the insurance issue is complex.628

Certain insurers do not agree that a clear

liability pattern would make insurance less costly.629

Imposing a mandatory liability insurance

regime, on the other hand, would deprive insurers from discretion when deciding upon the

risks they are willing to insure, which is an essential feature of their business. Nevertheless,

would a clear liability regime provide a more solid basis for insurers to offer multimodal

carriers the liability insurance they need.

628 European Commission, Intermodal transportation and carrier liability, 2000, 31, http://bookshop.europa.eu/en/intermodal-transportation-and-carrier-liability-pbC32599285. 629 Examples are F. STURLEY, “Changing liability rules and marine insurance: conflicting empirical arguments about Hague, Visby and Hamburg is a vacuum of empirical evidence”, JMLC 1994, vol. 24, 119 and BULL, “Effects on insurance structure” in Swedish Maritime Law Association (ed.), Cargo Liability in Future Maritime Carriage, Stockholm, 1998, 240.

http://bookshop.europa.eu/en/intermodal-transportation-and-carrier-liability-pbC32599285

i

BIBLIOGRAPHY

1. Legislation

1.1. INTERNATIONAL LAW

General

United Nations Vienna Convention on the Law of Treaties 23 May 1969, Treaty Series, vol.

1155, 331 and http://untreaty.un.org/ilc/texts/instruments/english/conventions/1_1_1969.pdf.

International carriage by sea

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Partly by Sea 2008, www.rotterdamrules.com/sites/default/files/pdf/convention.pdf

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United Nations Convention of 13 March 1978 on the Carriage of Goods by Sea (the Hamburg

Rules), www.jus.uio.no/lm/un.sea.carriage.hamburg.rules.1978/doc.html (‘Hamburg Rules’).

The Hague Rules as amended by the Brussels Protocol 1968,

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Convention internationale pour l’unification de certaines règles en matière de connaissement

et protocole de signature, http://diplomatie.belgium.be/fr/binaries/I-4a_tcm313-79747.pdf.

Protocole portant modification de la convention internationale pour l’unification de certaines

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modification du 23 février 1968, http://diplomatie.belgium.be/fr/binaries/I-4c_tcm313-

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International Convention of 25 August 1924 for the Unification of Certain Rules of Law

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1_HagueRules1924_ger.pdf (‘Hague Rules 1924’).

International carriage by air

Convention for the Unification of Certain Rules for International Carriage by Air of 28 May

1999, www.jus.uio.no/lm/air.carriage.unification.convention.montreal.1999 (‘Montreal

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Montreal Protocol No. 4 to amend the Convention for the Unification of Certain Rules

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Protocol to amend the Convention for the Unification of Certain Rules Relating to

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ii

Convention for the Unification of Certain Rules relating to International Carriage by Air of 12

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International carriage by road

UN Convention on the Contract for the International Carriage of Goods by Road of 19 May

1956, www.jus.uio.no/lm/un.cmr.road.carriage.contract.convention.1956/doc.html (‘CMR’).

International carriage by rail

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Uniform Rules concerning the Contract of International Carriage of Passengers by Rail (CIV)

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Uniform Rules concerning the Contract of International Carriage of Goods by Rail (CIM) -

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International carriage by inland waterways

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June 2001, www.unece.org/fileadmin/DAM/trans/main/sc3/cmniconf/cmni.pdf (‘CMNI’).

International multimodal carriage

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United Nations Convention of 24 May 1980 on International Multimodal Transport of Goods,


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International Chamber of Commerce, Uniform Rules for a Combined Transport Document,

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1.2. EUROPEAN LAW Regulation (EC) No. 593/2008 of the European Parliament and of the Council of 17 June

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Regulation 785/2004, 21 April 2004 of the European Parliament and of the Council on

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iii

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xii

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xiii

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Hof Den Haag 26 September 2000, S&S 2001, 21.

Rb. Rotterdam 28 October 1999, S&S 2000, 35.

Rb. Haarlem 6 July 1999, S&S 2000, 88.

Rb. Rotterdam 19 March 1998, S&S 1999, 42.

Rb. Rotterdam 10 April 1997, S&S 1999, 19.

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xiv

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