The Arrival Of The Rotterdam Rules

Review of the Rotterdam Rules, the latest liability regime on the international carriage of cargo.

On 23 September 2009, the opening ceremony took place for the signing of the United Nations Convention on Contracts for the International Carriage of Goods by Sea. This Convention, more commonly known as the Rotterdam Rules, is the latest liability regime on the international carriage of cargo.

The Rules will become international law one year after ratification by the 20th UN member state. To date, 21 states - including the USA, Greece, Holland and Norway - have signed up to the Rules. The act of signing does not necessarily mean that these states will go on to ratify the Rules but it does signify an intention to do so. The UK Government remains undecided as to whether to sign the Rules or not, and will enter into a full consultation exercise to be published early next year.

This update will provide a brief overview of the Rules and the effect that they are likely to have on the maritime industry.

Why do we need another maritime convention?

The premise behind the new Rules is clear; it makes greater commercial sense for the industry to be governed by a single multi-modal convention than numerous uni-modal conventions and domestic legislation. The intention is that the Rotterdam Rules will supersede the existing international maritime liability conventions - Hague, Hague Visby and Hamburg - on the basis that these regimes are outdated and do not take modern transport practices into account. The UN, according to the preamble to the Convention, anticipates that the Rules will enhance legal certainty, improve efficiency and commercial predictability in the international carriage of goods. But questions remain as to whether the Rotterdam Rules will be able to live up to such lofty ambitions.

What changes will the Rules make?

The Rotterdam Rules will apply to all international contracts of carriage with an international sea leg where either the place of receipt, place of delivery, port of loading or port of discharge of the cargo is in a contracting state. There are no documentary triggers needed for application - the Rules will apply whether a bill of lading has been issued or not. Although the Rules specifically exclude charterparty agreements, they can be incorporated by way of a clause paramount.

In order to bring a claim under the Rules, the claimant must first prove that the loss, damage or delay took place during the period of the carrier's...