Global impact of UN Rules variable

Application of the UNCITRAL

Draft convention on contracts for the international carriage of goods wholly or partly by sea

, now known as the Rotterdam Rules, will mean that ‘Maritime Performing Parties’ will all be treated in a similiar way, having the same liabilities and obligations with no distinction between a shipping or terminal company.

Peter Stockli, legal counsel for TT Club, explained that, in essence, the older sea carriage conventions were applied from loading to unloading. Whereas the new Rules may also apply to the bits not usually covered – like storage of containers and so on.

This could have huge implications for many terminal operations, not least because in places like the UK, operators have been largely unfettered, and have been able to limit their liabilities to somewhat less than the proposed rules would allow. If they are applied, the Rules will override any contracts already in place.

For example, while the Rules apply a liability of 3SDR (or at present about £3,000 per tonne), the Port of Felixstowe has already quite clearly defined contracts already in place that limit its liability to less than half this. The Rules also allow for an alternative liability package of 875SDR per shipping unit which can be plumped for if it yields a higher claim.

However, Mr Stockli added: “Worldwide, as far as we are aware, the situations differ to quite a large extent.” He adds that in a few places like Argentina the Rotterdam Rules would be welcomed with relief, since the terminal operators there suffer from unlimited liability – if goods get damaged, the operators have to reimburse the entire value.

But Mr Stockli goes on to say that, despite these few cases, “it seems that the ports are often quite a bit better off without the rules, although it depends on the clout, and circumstances of the various parties, shipping lines and terminal operators…”

The Rotterdam Rules will not come into force anytime soon, since the legislation has to wait a year after gaining its mandatory 20 signatories, a process that which start in 2009. Even then it might leave out certain large players (like China and the UK who have both voiced concerns) but exactly who will sign up or not may be largely down to the lobbying of influential groups, said Mr Stockli.

There is also another subject for discussion on the agenda, said Mr Stockli, which goes right back to the definition of ‘Maritime Performing Parties’ (MMPs) because this states that MMPs are those which operate exclusively in the area of the port.

So it would seem, for example, a terminal that operates a shuttle that goes outside the port area might not, then, be an MMP after all. “All of which will give plenty of work to the lawyers,” said Mr Stockli.