The Rotterdam Rules are described as a “maritime plus” approach. They adopt a “limited network principle”, where liability for damage that can be localized to a particular leg of non-sea transport will be determined by the relevant inland convention, such as the Convention on the Contract for the International Carriage of Goods by Road. Where damage cannot be localized the Rotterdam Rules take precedence.
As for the fundamentals, the Rotterdam Rules increased inflation-eroded package limits again but largely retained the carrier liability exceptions, save for negligent navigation. The carrier’s seaworthiness obligation was extended and the contractual carrier was also made responsible for acts and omissions of sub-contracting carriers, terminals and stevedores. When acting as “maritime performing parties” these sub-contractors were made jointly and severally liable together with the contractual carrier. Other new concepts included the ability to partly contract out of the Rotterdam Rules for volume contracts covering the carriage of goods in a series of shipments over a period of time. Ratifying states could also opt out of new compulsory jurisdictional provisions that would otherwise limit the effectiveness of contractual jurisdictional clauses.
There were high hopes for the Rotterdam Rules with 19 nations signing up, including the United States and France. Sixteen years later, however, that number is still less than 30 and less than a handful have gone on to ratify the Rotterdam Rules, well short of the 20 ratifications (which include denouncing other regimes) needed for their entry into force. As such, today most states continue to apply one of the other existing regimes. Around 30 nations still apply the Hamburg Rules and three times as many apply a version of the Hague or Hague-Visby Rules. The US Carriage of Goods by Sea Act (COGSA) is broadly similar to the Hague Rules with some differences in relation to application (inbound as well as outbound shipments) and a variation on package limitation which remains relatively favourable to carriers. Other states, such as Australia and Germany have amended the Hague-Visby Rules to create hybrid versions which are more favourable to cargo interests.
Some nations, such as Brazil, have not signed up to any rules and instead apply a cargo-friendly commercial code. How individual nations interpret and apply the same convention also differs.
No global
harmony but a guiding light
The Hague/Hague-Visby Rules themselves do not apply to charterparties but owners and charterers widely agree to apply them through standard forms or rider clauses with the effect that risk allocation is applied to more than cargo claims. An example of that is a recent English law decision that charterers bore the risk of lost time due to a vessel detained for anchoring in unauthorized waters. Hague/Hague-Visby Rule principles also provide the basis for P&I cargo liability cover and cargo insurance premiums reflect what can typically be recovered from a carrier. The recovery landscape has certainly changed over the last 100 years, and it has become more difficult for shipowners to distance themselves from the acts of and on their ships to avoid cargo liability. Advances in regulation (notably the ISM Code), industry standards (such as bridge procedures) and technology (eg data recorders) have resulted in swathes of evidence for lawyers and experts to pour over in the pursuit of fault. When things do go wrong there is much more transparency, especially for serious casualties through safety body reports.
Some significant judicial decisions have also shaped Hague/Hague- Visby Rules risk allocation, often in the favour of cargo interests. One recent example is the CMA CGM Libra where a defective passage plan rendered the vessel unseaworthy and the carrier was held liable for the failure of the master and deck officers to exercise due diligence at commencement of the voyage. The non-delegable nature of the seaworthiness duty was similarly upheld in the Cape Bonny due to the conduct of the ship’s engineers. A recent UK Supreme Court decision also ruled in favour of cargo interests in relation to the burden of proof.
138 | ISSUE 110 | DEC 2024 | THE REPORT
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