The perils of the sea and Act of God defences are far from straightforward for a carrier today, requiring an assessment of what was reasonably foreseeable and whether reasonable care could have prevented the loss. Even when it comes to the cargo interests’ own obligations in relation to dangerous goods, strict liability for the consequences of failing to properly inform the carrier is usually tempered by what the carrier knew or ought to have known. What cannot be disputed is the substantial body of law that has developed around the Hague/Hague-Visby Rules, as evidenced by CMI’s own impressive database. All this has helped parties and practitioners to keep trade flowing and to resolve most disputes and claims amicably. Many disputes today arise from insufficient attention to clarity of contract. The shipper’s description of the goods in the bill and the applicable package limits that result is one example.
A look to the future
With relatively far fewer incidents of cargo damage/loss, the allocation of risk is maybe less prominent in contract negotiations than it was in the past. Freight rates and other performance parameters dominate discussions, though for customers concerned with the risk of cargo damage/loss, some liner operators provide extended liability products. For some extra freight, this will guarantee compensation for many cargo damage/loss scenarios. Whilst this takes a carrier outside mutual P&I cover, fixed bolt-on covers have long been available for distinct risks and the Hague/Hague-Visby Rules do not prevent a carrier from negotiating more beneficial terms for cargo interests. Where P&I clubs have drawn the line is in attempts to contractually apply whole conventions that have yet to enter into force.
The pursuit of more harmony across commercial maritime carriage contracts remains admirable. When the Rotterdam Rules came into being the P&I clubs and their shipowner members stood ready to live with them (when entering into force) for the good of uniformity, notwithstanding the additional
liability burden. Sixteen years have passed. Whilst shipowners are better connected with their ships than ever before, a digital and greener age also brings new risks. Lost or false GPS signals increase navigation risks, especially in conflict areas. Coastal waters are increasingly crowded with a combination of both traditional and renewable offshore activities. There are more extreme weather events and a heightened risk of latent defects on more sophisticated vessels, increasingly operating with riskier green fuels. Shipowners face challenges crewing their vessels in a society facing generational shifts and struggles with mental health.
The CMI is committed to reviving earlier enthusiasm for the Rotterdam Rules and has set up a committee to urge wider ratification. There are certainly aspects to commend a modern regime that addresses gaps in the Hague/Hague-Visby Rules and the Rotterdam Rules also does a useful job in tidying up some contentious issues in older regimes. However, the muted response from nations in the time elapsed continues to cast doubt that the Rotterdam Rules offers a viable way forward. At 90 articles (versus 16 for Hague/Hague- Visby Rules) the Rotterdam Rules are long and detailed. Its new concepts involve more diverse interest groups who need to be persuaded that the Rotterdam Rules would work for them. Influential ports in the USA have their doubts though it is argued detractors should better focus on the benefits for trade given most voyages are accident free. Cited here are the non-liability provisions that the Rotterdam Rules attempt to unify.
Venturing into matters traditionally dealt with by courts and tribunals (amongst them, the identity of the carrier, burden of proof, rights of control and delivery of the goods) the Rotterdam Rules aim to avoid conflicting laws and frictions in trade. However, if they come into force, they are likely to create many disputes on issues of drafting and interpretation against a backdrop of established case law. As for electronic contracts of carriage (the Rotterdam Rules does away with well-known bill of lading terminology), these are being recognised and regulated through other legislation and questions arise as to compatibility of Rotterdam Rules provisions with model law. There is also the question of how much uniformity would be achieved
THE REPORT | DEC 2024 | ISSUE 110 | 139
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