Rotterdam Rules I

The Rotterdam Rules Scope

The Rotterdam Rules were prepared by the UN Commission on International Trade Law UNICITRAL. It was adopted by the Legal Committee of the General Assembly of the United Nations in 2008. They allow for electronic documentation and multimodal carriage involving sea carriage.

A contract of carriage is one by which the carrier undertakes to carry goods from one place to another for payment of freight. The contract is to provide for carriage by sea and may provide for carriage by other modes of transport in addition to sea carriage.

A performing party is a person other than a contractor who physically performs any of the responsibilities under the contract of carriage, to the extent that it directly or indirectly, at the carrier’s request or under its supervision or control. This is so regardless of whether the party is identified in or has legal responsibility under the contract of carriage. The performing party  does not include persons retained by the shipper or consignee or their employees or other agents.


Further Definitions

A carrier is the person who enters into the contract of carriage with a shipper. The carrier is also responsible for a performing party’s acts if it is a maritime performing party under the Convention. A maritime performing party is one who undertakes any of the resposnibilites of the carrier. An inland carrier is a maritime performing party only if it performs its services exclusively within the port area.

The shipper is the person who enters into a contract of carriage with the carrier. A documentary shipper is a person, other than the shipper, who accepts being named as the shipper in the transport document or electronic transport record. The holder of the document is the person in possession of the negotiable transport document. The holder will be the shipper or consignee or an endorsee. It is the bearer in the case of a blank endorsement.

A transport document is a document issued pursuant to a contract of carriage by the carrier or a performing party that evidences the carrier’s or performing party’s receipt of goods under a contract of carriage or evidences or contains a contract of carriage.


Transport Documents Covered

The Convention provides for negotiable and non-negotiable transport documents. A negotiable transport document is indicated by the use of the words “to order” or “negotiable” or other words recognised as having the equivalent effect by the governing law. It is presumed to be negotiable unless stated as being “non-negotiable” or “not negotiable”.

The Convention covers traditional bills of lading, straight bills of lading and waybills but not charter parties. In the case of non-liner trade, contracts for the use of space in a ship evidenced by a non-transport document are outside the Convention relative to the original parties.

The Convention covers negotiable and non-negotiable electronic records. The negotiable electronic record must be subject to governing rules which contain a provision for transfer of that record to a further holder. The documents required by the rules are to be it in writing, provided that electronic communication may be made with the consent of the party by which it is communicated and the person to whom it is communicated.

In the case of electronic communications, the contract particulars must contain the agreed rules of procedure in relation to the transfer to other holders, the manner in which the party may demonstrate he is a holder, the manner of confirmation that delivery has been made and that the electronic records cease to have effect. There is provision for switching from written documents into electronic documents and surrender of the written documents for this purpose.


Scope of Defences and Limitations

Any provision in the Convention that provides a defence or limits the liability of the carrier applies in any judicial or arbitral proceedings, whether founded in contract, tort, or otherwise, that are instituted in respect of loss or damage to or delay in delivery of goods covered by the contract of carriage or for the breach of other obligations under the Convention against any of:

  • the carrier or a maritime performing party;
  • the master, crew or another person that performs services on board the ship;
  • the employees of the carrier or a maritime performing party.

The provisions of the Convention that provide a defence for the shipper or documentary shipper apply in proceedings, against the shipper, the documentary shipper, their subcontractors, agents or employees.


Application of Convenction

The Convention applies to contracts of carriage where the place of receipt and delivery are in different States, and the port of loading of  sea carriage, 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:

  • the port of receipt;
  • the port of loading;
  • the port of delivery;
  • the port of discharge.

The Convention does not apply in liner transportation to charterparties and other contracts for the use of a ship or of any space thereon. It does not apply to contracts of carriage in non-liner transportation except when there is no charter party or other contract between the parties for the use of a ship or of any space thereon; and a transport document or an electronic transport record is issued.

Notwithstanding the above, the Convention applies as between the arrier and the consignee, controlling party or holder that is not an original party to the charterparty or other contract of carriage excluded from the application of the Convention. The Convention does not apply as between the original parties to a contract of carriage excluded above.


Duties of Carrier

The carrier must carry the goods to the place of destination and deliver them to the consignee. The agreement provides for the time and location of delivery. It must be no later than receipt subsequent to the initial loading of the goods for final delivery.

The carrier or performing party may refuse to take the load and may take other measures as are reasonable, including unloading, destroying, or rendering goods harmless, if the goods are, or appear likely to become an actual danger to persons or property or the environment during the period of the carrier’s responsibility.

The carrier is liable for loss of or damage to the goods, and for delay in delivery if the claimant proves that the circumstances or events that caused or contributed to the loss took place while the carrier was responsible for the goods.

Parties may sacrifice goods at sea where the sacrifice is reasonably made for the common safety or for the purpose of preserving from peril, human life or other property involved in the common adventure.

A deviation is a breach of contract.  The Convention defences or limitations apply, save to the extent specified in it. This reverses the common law position whereby any deviation may deprive the carrier of the rights and immunities and so that it is  converted to a common carrier.


Defences and Immunity of Carrier

The carrier is not liable if it proves that the cause or one of the causes of the loss, damage, or delay is not attributable to the fault or the fault of parties for whom it is responsible (see below).

The carrier is also immunised from liability if it shows that the any of the following circumstances caused or contributed to the loss, delay or damage. They are broadly similar to The Hague Rules:

  • act of God;
  • perils, dangers, and accidents of the sea or other navigable waters;
  • war, hostilities, armed conflict, piracy, terrorism, riots, and civil commotion;
  • strikes, lockouts, stoppages, or restraint of labour;
  • fire on the ship;
  • latent defects not discoverable by due diligence;
  • act or omission of the shipper, the documentary shipper, controlling party, or other person for whom the shipper or documentary shipper is liable;
  • loading, handling, stowing, or unloading of the goods performed pursuant to an agreement for the purposes of the Convention;
  • loading, handling, stowing, or unloading of the goods pursuant to an agreement, unless the carrier performs the activity on behalf of the shipper, documentary shipper or consignee;
  • wastage in bulk or weight or other loss or damage arising from inherent defect, quality, or vice of the goods;
  • insufficiency or a 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;

Defence Issues and Limitations

In the case of the above defences, the burden of proof is shifted to the claimant. The carrier is liable for all or part of the loss if the claimant can prove that the fault of the carrier or a person for whom it is responsible, caused or contributed to the event or circumstance on which the carrier relies.

There is a defence if an event or circumstances is not listed above contributed to the loss, damage or delay and the carrier can prove that the event or circumstances are not attributable to its fault or a person for whom it is responsible.

Where the carrier is relieved of part of its liability under the above previously mentioned relievng provision, the carrier is liable only for that part of the loss, damage, or delay, which is attributable to the event or circumstances for which it is responsible under the provision.


Liability of Carrier

The carrier remains liable 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, equipment or supplying of the ship
  • the fact that the holds or other parts of the ship in which the good was carried or any container supplied by the carrier or upon which the goods are carried were not fit and safe for their reception, carriage and preservation of the goods

and the carrier is unable to prove that none of the circumstances mentioned above caused the loss, damage or delay or that it complied with its obligations to exercise due diligence.

The carrier is responsible for

  • performing parties;
  • the master and crew of the ship
  • employees of the carrier or a performing party and
  • any other person including a performing party, subcontractors and agents who perform or undertakes to perform any of the carrier’s responsibility under the contract of carriage to the extent that the person acts either directly or indirectly, at the carrier’s request or under its supervision or control.

Obligation of Maritime Performing Party

Maritime performing parties may be subject to the same obligations as the carrier under the instrument for the period for which they have custody of the goods to the extent that they are participating in the performance of any of the activities under the contract of carriage.

They have the benefits of the carrier’s rights and immunities. During the relevant period, their liability is the same as no more than that of the carrier provided for under the Convention.

The carrier and other maritime performing parties may have joint and several liabilities up to the limits of the Convention. The total liability is not to exceed the Convention amount.


Damage and Delay

Compensation for loss of or damage to the goods is measured by reference to the value of the goods at the place and time of delivery. This is determined by the commodity exchange price. If there is no such price, it is determined according to their market price or, if there is no commodity exchange or market price, by reference to the normal value of the goods of the same kind and quality at the place of delivery.

There is a delay when the goods are not delivered at the place of destination provided for in the contract of carriage within the time agreed upon. This may be an express time or the time arising in accordance with the default obligation to proceed with reasonable dispatch.


Notice of Loss

There is a presumption that goods have been delivered by the carrier in accordance with their contractual description, unless notice of loss or damage is given setting out the general nature of the loss or damage to the carrier or the performing party before or at the time of the delivery.

If the loss or damage is not apparent, the notice it may be given within seven working days at the place of delivery. Notice is not required where the loss or damage is established by joint inspection.

No compensation for delay is allowed unless notice of loss due to delay was given to the carrier within 21 consecutive days of delivery of the goods. Failure to give notice does not affect the right to claim compensation for loss or damage to the goods. This does not apply to delay.


Carriage on Deck

Cargo may be carried on the deck,

  • where it is required by law;
  • goods are carried in or on containers that are specifically fitted to carry such containers;
  • carriage on deck is in accordance with the contract of carriage, or the customs, usages and practices in the trade in question.

Where carriage is permitted on deck, the Convention’s provisions on the limitation of liability of the carrier apply. However, in the first and third case above, the carrier is not liable where the loss or damage is caused by the special risks involved in deck carriage where deck carriage is not permitted. The carrier is liable for loss caused by the carriage on deck, and certain defences otherwise available are denied.

Where the loss or damage or delay occurs while the carrier is responsible prior to loading or after discharge, the Convention does not take precedence over other international instruments  which would have applied if the shipper made a separate and distinct contract in respect of that particular stage of the carriage. Where the event is causing the delay in delivering the occurred: specifically provided for the carrier’s liability, limitation of liability, on time for the suit; and cannot be departed from by contract either at all or to the detriment of the shipper under that instrument. This provision deals with the mandatory provisions of law under other Conventions dealing with multimodal transport.


References and Sources

Consumer Law  Long      2004

The Law of Transport and Road Haulage (1999) Canny

Consumer Law Rights & Regulation          Donnelly & White 2014

Commercial Law White  2nd ed    2012

Commercial & Economic Law in Ireland  White    2011

Commercial Law Forde  3rd ed    2005

UK Texts

Schmitthoff: The Law and Practice of International Trade 13th ed Carole Murray, David Holloway, Daren Timson-Hunt, Schmitthoffs 2018

Bills of Lading in Export Trade 4th ed Charles Debattista 2018

Arnould’s Law of Marine Insurance and Average 19th ed  Jonathan Gilman, Robert Merkin, Claire Blanchard, Mark Templeman 2018

O’May on Marine Insurance 2nd Ed Julian Hill 2018

Shipping Law 3rd ed  Sweet & Maxwell Ltd 2018

The UN Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea 2nd ed Michael Sturley, Tomotaka Fujita, Gertjan van der Ziel 2018

Commercial Maritime Law Edited by: Melis Ozdel 2018

Springer-VerlagScrutton on Charterparties and Bills of Lading 23rd ed: 1st Supplement

Scrutton on Charterparties and Bills of Lading 23rd ed: 1st Supplement (Book & eBook Pack) Scrutton on Charterparties and Bills of Lading 23rd ed: 1st Supplement (Book & eBook Pack)

Bernard Eder, Howard Bennett, Steven Berry, David Foxton, Christopher Smith 2017

The Bill of Lading: Holder Rights and Liabilities The Bill of Lading: Holder Rights and Liabilities

Frank Stevens 2017

Charterparties: Law, Practice and Emerging Legal Issues Edited by: Baris Soyer, Andrew Tettenborn 2017

Shipping and Trade Law 2017

Multimodal Transport Law Michiel Spanjaart 2017

Maritime Law 4th ed Edited by: Yvonne Baatz 2017