Some Comments on the Rotterdam RulesSuggestions for Amending National Laws of Carriage of Goods by Sea Christina Wang Following

the completion of the draft and declaration of the Rotterdam Rules, the amendment of laws of Carriage of Goods by Sea among States is undergoing consideration around the world. The full name of the Rotterdam Rules is “United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea” which completed drafting and was declared on Dec. 11, 2008. Twenty four states have signed and one state (Spain) has ratified. The States concerned represent 25% of world trade. Most States are therefore taking cognizance of the new Convention, carrying out further studies of it and considering amendments of the domestic laws concerned which would reflect the changes inherent in the Rules. The following are some key points to consider when reading the Rotterdam Rules. 1. Three bars to Understand the Rotterdam Rules 18 Chapters with 96 Articles in total containing the long text of Rotterdam Rules are in themselves a first difficulty to overcome. It seems some people have yet to read the Rotterdam Rules through before judging them! Most articles are stated repeatedly. Articles are repeated because the same issue is addressed in different alternatives. The repetition of statements has caused readers to puzzle. Readers who do not read the document article by article or item by item, may misunderstand. To comment upon or to judge a Convention without a complete reading of it is simply unfair to the Convention. . The second bar to climb over in reading and understanding the Rotterdam Rules is that the wording may be interpreted differently by different readers. This problem is caused by the backgrounds of readers in the reading of any convention and is not confined to those reading the Rotterdam Rules in particular. Business laws derive from business operations, professional techniques and business behaviors. Readers who lack experience of business operations or who do not understand the business concerned thoroughly may have difficulties understanding the law clearly. Readers who have no sense of business or business behavior, but accept the surface interpretation of the law may be making big mistakes when reading business law. Or they may even misinterpret statements in the Convention. This bar is difficult to

override. The third bar is due to the fact that the Rotterdam Rules are too practical to cause mis-understanding. The Rotterdam Rules set out state every variable of business even though this is hard to do and to express. This gives rise to complaints and doubts that some issues are dealt with and not others. One example of this is the telegram notification to release cargo without obtaining a B/L in return, as happens occasionally which is not addressed in the Rotterdam Rules. Another example arising out of popular practice in Taiwan is when freight is prepaid while freight forwarders may state “freight collect” in their house bill of lading and freight forwarders advance freight for cargo owners against the ship-operator’s master bill of lading which states “freight prepaid”. These are all business techniques used in competition at some risk. Is it proper for the law to deal with this sort of issue? The answer is “No” definitely! So long as the Rotterdam Rules are trying to rule every possible circumstance, complaints will be inevitable. The third problem causing further doubt and misunderstanding is that “volume contract” for the first time is addressed in the Convention. We do know of any convention in force addressing the issue or awaiting ratification that excludes charter parties. This is because charter parties are always contracted between ship owners and charterers who enjoy some sort of parity to negotiate terms, conditions or exceptions when contracting. There may be fair or unfair conditions to either party but these are subject to agreement by both. Both parties have to obey the conditions they agreed. While it is different in liner shipping, bill of lading statements are all designed by carriers or by their associations including ship owners or ship operators who have printed their own bills of lading irrespective of whether they are ship owners or freight forwarder-NVOCs. Shippers have no choice but to accept them when deciding upon which company to consolidate or which ship to carry their cargoes. Thus international or national laws have to lay down basic rights, obligations and liabilities to obey. These will lack validity when any clause conveying better rights, fewer obligations and lighter liabilities appear printed on their bills of lading. The new Rule applying to volume contracts and drafted as between the carrier and the shipper, a volume contract to which this Convention applies, may be a volume contract providing more or less rights, obligations and liabilities than those imposed by the Convention as per Article 80 -- “Special rules for volume contracts” --allows. People worry that “if ship owners or carriers take advantage of volume contracts to benefit themselves” or the “volume contract may conceal traps to harm shippers’

rights” this gives reason to delay the Rotterdam Rules from entering into force. . They worry too much! There is and there will be no one hundred percent fair and equal contract in this world. Since there is a contract there must be areas and issues where one party’s benefit over-rides another party’s interest. Or am I missing something? Furthermore, even if there were no such provision in the Rotterdam Rules; would the volume contract cease to exist? This worry is not at all necessary. 2. No Doubt to amend the Law of the Carriage of Goods to Follow up Rotterdam Rules There are some doubts as to which Convention should be the main one to follow up to amend national laws of Carriage of Goods by Sea : Should it be the Hague Rules, 1924? The Visby Amendments, 1968? The Brussels-Protocol, 1979? The Hamburg Rules, 1978 or the newest Rotterdam Rules, 2008? It is another needless worry in fact. The Rotterdam Rules are an assembly rules just as the Montreal Convention is for air transport. It is an assembly of every Convention concerned and is not contradictory to them but instead is a better advancement of the rules and a clearer statement of them than ever before. To take an example, although containerization commenced around 1960 in the world, none of the Conventions before the commencement of containerization exactly faced the fact that the normal loading of container vessel includes loading containers on deck. Nor for the matter did The Visby Amendments, 1968, the Brussels Protocol, 1979, the Hamburg Rules, 1978 or the United Nations Convention on International Multimodal Transport of Goods (Geneva, 24 May, 1980) which has yet enter into force. Only the Rotterdam Rules definitely deem the loading of containers on deck as normal for loading in container vessels. The 55/45 ratio of on deck/under deck loading of containers is currently the designed norm for container vessels. Under Article 25, 1-- applicable to “deck cargo on ships” under the Rotterdam Rules, there are only three situations to specify which are permitted ones. These are “(a) carriage is required by law; (b) They are carried in or on containers or vehicles that are fit for deck carriage, and the decks are specially fitted to carry such containers or vehicles; (c) the carriage on deck is in accordance with the contract of carriage, or the customs, usages or practices of the trade in question. 1 (a) or (c) are both the traditional situation while 1(b) is the first time Convention deals with the deck loading of containers on board a container vessel. “The provisions of this Convention relating to the liability of the carrier apply to the loss of, damage to or delay in the delivery of goods carried on deck pursuant to

paragraph 1 of this article (Article 25), but the carrier is not liable for loss of or damage to such goods, or delay in their delivery, caused by the special risks involved in their carriage on deck when the goods are carried in accordance with subparagraphs 1 (a) or (c) of the article. In other words, it means if the loading on deck is a situation described in like the situation 1(b), the carrier should be liable for loss of, damage to or delay in the delivery of goods carried on deck caused by the special risks involved in their carriage on deck. There is no excuse for the special risks involved out of on deck carriage as used to be. These are also other good points in the Rotterdam Rules which should be followed up when amending any laws of carriage of goods by sea as follows: (1) Carriers’ liability is still fault based. It is the same liability basis in previous Conventions. The only difference is the burden of proof is more detailed and clearer to understand. (2) The liability of carriers and shippers side is an opposing liability and this is the same in previous Conventions. (3) The principle of compensation for loss, damage or delay in delivery is based on the preceding Conventions since the Visby Amendments, 1968 with per unit of cargo or per kilo weight limit to be chosen by taking the higher amount subject to the cargo side’s choice but only as to increased amounts. (4) The exceptions of carriers’ liability are reprised except “for loss of or damage to the goods or delay in delivery caused by fire, if the claimant proves that the fire arose from fault or neglect on the part of the carrier, his servants or agents “in the Hamburg Rules, 1978. The Rotterdam Rules maintain the same exceptions of carrier’s liability as per Hague Rules, 1924 and Visby Amendments, 1968 but only delete “act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship” from the exceptions. Since the act, neglect and fault of masters, crew and servants of carriers used to be deemed unfair when compared with land transport by road or rail, or even as compared with air transport, there should be no objection in discussion at the deletion of this exemption. (5) Liability for delay in delivery of cargo has been stated in Hamburg Rules since 1978. The delay in delivery “occurs when the goods have not been delivered at the port of discharge provided for in the contract of carriage by sea”, and “... occurs when the goods are not delivered at the place of destination provided for in the contract of carriage within the time agreed.”While in the Rotterdam Rules, 2008 “delivered in place of destination” replaces the “port of discharge” which makes the carriers’ liability expand from port-to-port to door-to-door or gate-to-gate. The

occurrence when goods have “....not been delivered ... within the time expressly agreed upon” but “in the absence of such agreement, within the time which it would be reasonable to require of a diligent carrier, having regard to the circumstances of the case” is deleted as per Article 21 of “delay” in the Rotterdam Rules. However, the second occurrence of “in the absence of such agreement, within the time which it would be reasonable to require of a diligent carrier” may still exist in accordance with the essay of law theoretically. (6) We should take formal positive notice of the containers load on deck of container vessels provisions. There is no need as before to treat deck loads as special goods requiring special loading methods. It is a creative idea to accept containers being loaded on the decks of container vessels.. (7) The carriers’ obligation to maintain the sea-worthiness of the vessel is stricter under the Rotterdam Rules requiring it to be during the carriage and until the completion of voyage in place of the prior requirement of “before and at the commencement of the voyage”. This may avoid cases where carriers always assert that the vessel is sea-worthy by reason of the class certificate issued, meaning the vessel is sea-worthy before and at the commencement of the voyage. Taking the above-mentioned good points, we may confirm the Rotterdam Rules are more practical and more comprehensive; they embrace more problems and they face them more positively. The Rotterdam Rules are neither contradictory nor avoidable and cannot be used to remove lingering worries and doubts. There is in Article 90 a reservations rule that states “No reservation is permitted to this Convention” but this may not be influential when we examine alternatives to the Convention when amending our laws governing the carriage of goods by sea. 3. Should we adopt The Complete Convention into National Laws? Even though there are so many good points within the Rotterdam Rules, should we apply them completely in our laws or should we still refer to our own situations? We should agree that when applying any of the rules of conventions we should follow fully lest confusion be caused. To take an example, there are only three items in the least which should be stated in the description of cargo on any bill of lading which are leading marks necessary for identification of the goods, number of packages or pieces, or the quantity, or weight and the apparent order and condition of the goods in accordance with Hague Rules, 1924 and also in the Visby Amendments, 1968. There is a difference in Article 15 of the Hamburg Rules, 1978 where the statement of

particulars of bills of lading is increased to 15 items (from a-o). However, there is also a statement under paragraph 3 of Article 15 that “The absence in the bill of lading of one or more particulars .... does not affect the legal character of the document as a bill of lading ......” even where there is statement at the beginning “The bill of lading must include....”. Seven particulars should be stated in the descriptions of cargo in bills of lading under the Maritime Code of Taiwan. Under Article 54 of the Code, there is a “should be” requirement and in the absence of any description as per paragraph 3, this means these are the minimum requirement but come neither from Hague or Visby, nor from Hamburg Rules. However, since there are more particulars than the basic three, there is no statement of “The absence ...of ........ does not affect ....” etc. as per Hamburg Rules. This kind of rule has made the legal defense of a case along the lines of “though looking like a bill of lading, it is not a bill of lading at all” This is regrettable—it shows that in following up conventions it is better to follow up in full instead of in part. I would also like to give another example to express the idea that conventions should still consider the situation or environment of any given State. Maritime laws both cross Strait including Mainland China and Taiwan, the Chapter of “Carriage” covers carriage of goods as well as the carriage of passengers in different Sections. In Maritime Law of Mainland China, there are different definitions of “Carrier”, “Carriage Contract”, “Goods” etc. in Sections of “Carriage of Goods”. Whereas there are also definitions of “Carrier”, “Carriage Contract”, “Passengers” etc. in Sections of “Carriage of Passengers”. However, there is not so defined in Maritime Code in Taiwan. The result is in legal actions of death or injury of passengers quote the defense of carriage of goods to defend in passenger case. There are two levels of carriers’ compensation to passengers in the Athens Convention, 2002. The lower level is 250,000SDR per person for death or injury caused by shipwreck, collision, stranding, explosion or fire, or defect in the ship. Any case of shipwreck, collision, stranding, explosion or fire, or defect in the ship is presumed the fault of carriers with no need to supply a burden of proof. However, other causes need proof to condemn carriers. Another level is up to 400,000SDR which applies when the passenger’s side proved the harm occurred at a level over the first level compensation. Both levels of compensation are higher than current compensation standards, higher even than current standard of compensation for air transport. Since the definition and the principle of liability, the burden of proof and the duty to compensate are clear enough to refer to, the compensation level payable should still

consider the environment prevailing inside States to be compared with. The Athens Convention, 2002 has not yet taken into effect. We may take the principle of carriers’ liability for carriage of passengers in our Maritime Code but we should also take into consideration the compensation levels. Such a high compensation level is not yet suitable for our own situation. 4. Conclusion I have reviewed some of the bars we need to climb along with suitable references but our conclusion should be based on the outcome of discussions, which should lead to the development and resolution of the outstanding issues.