On 23 September 2009, the United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea will be signed in Rotterdam. This UN convention, called ‘the Rotterdam Rules’ for short, describes the rights and obligations of parties involved in the carriage of goods by sea. The convention brings more clarity concerning who is responsible for what, when and where and to what extent they are responsible and accountable. The application of the new convention is conducive to international trade and will lead to a savings in costs.
The Rotterdam Rules will replace The Hague Rules (1924), the Hague-Visby Rules and the Hamburg Rules (1978), as these conventions have become outdated. Developments such as the transporting of goods using containers and electronic information exchange do not feature in these conventions. As a result, gaps have occurred in law and every judge had to reinvent the wheel by making individual rulings. Regional solutions are not efficient, however, as 90% of shipping takes place internationally. With the new convention, the rules will once again be in step internationally.
Clarification concerning liability
What will change with the Rotterdam Rules? In the case of a stranded ship, a stolen container or damage to a shipment, the Rotterdam Rules establish more clearly who is responsible and accountable for what. Unlike the old conventions, other parties in the chain, such as stevedores, are now also jointly liable. The liability for damage to the shipment has been increased for carriers, and the shipper’s obligations are also more clearly defined, like for instance the obligation to have the goods ready for transport in a timely manner. Containers and trailers should be loaded in such a way that they should be more than able to endure the sea journey. In addition, the legal procedure is made easier in case of damage. The time limit has been extended from one to two years and it is stipulated that the name and address of the carrier must appear on the transport document.
Transport over land and sea
The Rotterdam Rules will apply to contracts for the transport of goods over sea as well as their subsequent transport over land. In this way, multimodal transport can be carried out under a single contract, and just one statutory regime applies to it.
The Rotterdam Rules establish the legal infrastructure for the development of e-commerce in sea transport. This concerns not only electronic transport documents, but also transport that takes place entirely document-free. The processing of goods flows using IT is becoming more convenient, at the expense of the use of paper documents. The shorter processing times and smaller chance of error lead to cost savings.
Improving flow through in the ports
Shipping companies and terminals will have more options for storing cargo further away from the ship while they wait for acceptance from the consignee. This prevents congestion in the port.
The Rotterdam Rules are the result of inter-governmental negotiations that took place between 2002 and 2009. The negotiations took place under the auspices of the United Nations Commission for International Trade Law (UNCITRAL), after the Comité Maritime International (CMI) had prepared the foundational text for the convention. The General Assembly of the United Nations adopted the Rotterdam Rules on 11 December 2008.
On 23 September, the Rotterdam Rules will be officially signed by the countries that now already support them. The convention does not immediately take effect, however: first the ratification process needs to take place in the countries in question. Once 20 countries have ratified the convention, it will officially come into force.
Organisations such as the International Chamber of Commerce, the World Shipping Council, the Comité Maritime International, the National Industrial Transportation League (US shippers), the International Chamber of Shipping and the shipping organisation Bimco have expressed their support for the acceptance of the Rotterdam Rules.