Rotterdam Rules: Between Old Problems and New Solutions Jana Rodica May 2009

Introductory outline General Introduction Slovenia: -bound by the 1924 Hague Rules -Maritime code provisions regulating carriage of goods by sea are based on the Hague - Visby rules as amended by the 1979 Protocol -The Regime adopted is in part obsolete - not in conformity with of today’s maritime trade

Need for a new Regime Unification of Transport Laws Liability of the Carrier Documentary Problems Nationalistic Reflex Exoneration Clauses Electronic Communication

Major Changes brought by the Rotterdam Rules Scope of Application: Multimodal (or Door-to- Door) Coverage Figure 1-: rapid growth in containerized shipping. Source: Drewry Shipping consultants 2006 and 2007

Volume contracts The rules primary establishes mandatory liability both for carriers and shippers But: “Volume contracts are exempt from mandatory application of the Rules” Therefore: most of provisions could be modified or contracted out

Volume Contracts Defined as: “contract of carriage for the carriage of a specified quantity of goods in a series of shipments during an agreed period of time” (Ocean Liner Service Agreements) Under Art. 80 Volume Contracts cannot derogate from - carriers obligations under Art. 14 to exercise due diligence a) to make the ship seaworthy b) to crew, equip and supply her properly under Art. 29 –(shipper’s obligation to provide information, instructions and documents) under Art. 32 – (relating to dangerous goods) Potential Consequences: - Volume contracts between parties of unequal bargaining power Position of European Shippers Council – March 2009

3. Balance of Risk Between Carriers and Cargo Interests The Error in Navigation Defence – has been deleted Continuing Obligation of Seaworthiness Liability for Delay

4. 3. Balance of Risk Between Carriers and Cargo Interests Higher Limitation Amounts - Limits of liability under different Regimes - one new limit: Economic loss due to delay - 2,5x freight LIMITS OF LIABILITY IN THE CARRIAGE BY SEA REGIMES HGR 1924 HVR 1986 HMR 1978 RTR 2008 Per Package/ Unit Per Kilo 100 £ SDR 835 SDR 875 SDR 2 SDR 2. 5 SDR 3 SDR HGR: Hague Rules 1924 HVR :Hague – Visby Rules 1968 HMR: Hamburg Rules 1978 RTR: Rotterdam Rules

Expanded Shippers’ Obligations and Liabilities Shipper’s obligation to provide information, instructions and documents Liability in respect of breach of obligations under Art. 27 and Art. 29 based on fault Liability in respect of breach of obligations under Art. 31 and Art. 32 is strict and the burden of proof is on the carrier

Maritime Performing Parties “Any person other than the carrier that performs any of the carrier’s obligations under a contract of carriage” The carrier is liable for the acts or omissions of a performing party which may give rise to a breach of the carrier’s obligations under the convention

Electronic Transport Records Today most documents systems are still paper-based: - Problems with paper – based documents Electronic systems can: - Speed up changes - Reduce errors - Result in cost saving (e.g. perishable goods) Main Concerns: - All parties in each transaction need to be included - Security concerns - Concerns related digital signatures

Comments and Recommendations 1.Conclusion 2. The Big question: Shall Slovenia adopt the Rotterdam Rules? a)maintain the Status Quo or b) adopt the Rotterdam Rules

The End “SS Rotterdam” a hotel ship