On February 3, the Malta Maritime Law Association organised a public seminar on The Rotterdam Rules - A new international regime for Cargo Claims. The guest speaker was Charles Debattista, an arbitrator based at Stone Chambers, Grays Inn, London who is also Professor of Law at the University of Southampton.
The seminar was extremely well attended by 170 participants including members of the judiciary and a cross section of the shipping industry confirming that Malta has a thriving shipping and legal community eager to learn more about the latest developments in maritime law because this affects us directly as the versatile maritime nation that we are today. In fact it is one of the primary roles of the Malta Maritime Law Association - to bring quality presentations to as wide a shipping legal audience as possible.
The two main international regimes currently governing the carriage of goods by sea are The Hague and The Hague Visby Rules. Malta is not a signatory to either of these two conventions although the Hague rules are considered to be part of the law of Malta because they were incorporated into our law by virtue of the Carriage of Goods By Sea Act 1954. That said, our courts consistently apply The Hague Visby Rules when they are seized of a matter relating to a bill of lading incorporating The Hague Visby Rules. The Hague and The Hague Visby Rules have been around for many years, and for some time now it has been considered that time was ripe for a new convention.
We subsequently saw the emergence of the Hamburg Rules, however these were not particularly successful. On September 23 last year, the UNCITRAL-promoted United Nations Convention on Contracts for the International Carriage of Goods, wholly or partly by Sea was open for signature in Rotterdam. This convention will come into force 12 months after the ratification of the convention by 20 states. To date 23 member states have signed up (not ratified) including the USA, France, Italy, Spain, Greece, Poland, Holland naturally, Denmark, Ghana, Nigeria, Togo, Guinea, Gabon, Congo, Norway, Senegal and Switzerland. Although these states have not ratified the Convention observers are of the view that the convention will probably come into force during 2011.
This is a massive convention containing 96 articles. Many have criticised the size of the convention however it must be seen as an attempt to accommodate the requests of so many involved in the industry. The Rotterdam Rules apply to all international contracts of carriage if either the place of receipt, port of loading, port of discharge or place of delivery is in a "Contracting State" irrespective of whether a Bill of Lading is issued or not. Thus it will apply to many short sea and way bill movements which were previously outside the scope of The Hague and The Hague Visby Rules. They apply to multi modal transport that include carriages when even part of the journey is by sea unlike the current situation with The Hague and The Hague Visby Rules. As a result it has been described as a "Maritime Plus" Convention.
The Rotterdam Rules propose a number of solutions to the problems which exist under The Hague and The Hague Visby Rules such as the effects of deviation from the contractual route and the issue regarding the identity of carrier.
One main difference between the current regime and the Rotterdam Rules is that the latter abolishes the defence of "negligent navigation" which will naturally affect the extent of the carrier's liability and the amount which their P & I clubs will have to pay out. That said, the carrier has a greater "seaworthiness" obligation under the Rotterdam rules than under The Hague or The Hague Visby Rules because under the Rotterdam Rules the carrier must exercise due diligence to make the vessel seaworthy not only before and on the commencement of the voyage but also during the entire voyage.
Prof. Debattista delivered a first class and yet down to earth presentation on the Rules. He explained their current status, the history behind them coming into effect, some fundamental changes they bring in and finally whether they should be adopted.
His final take on the last matter was that the Rotterdam Rules are not perfect. However, in this sector, it is positively vital that we achieve uniformity and therefore it is the alternative to not adopting them which should convince states to adopt them. Failure to adopt the Rotterdam Rules will most probably mean that the industry will adopt or indeed come up with "regional regimes in different parts of the world." This would be the very opposite of what the international shipping industry should be seeking to achieve.
Whether Malta should sign up or not remains to be seen. The important thing is that we know about these rules and what they stand for. It is now up to us in the industry to do our home work and to think hard about whether we stand to lose or gain.
The author is president of the Malta Maritime Law Association and managing partner of Fenech and Fenech Advocates.