Work resumes at UN on global cargo regime
Make-or-break issues are on the agenda as drafters of an international cargo convention resumed deliberations Monday at the United Nations in New York.
The United Nations Commission on International Trade Law (UNCITRAL)'s Working Group III (Transport Law) began its 17th session with a discussion of the right of control, meaning the right of a shipper under a contract of carriage to give an ocean carrier instructions in respect of the goods being transported.
As in previous spring sessions, the group's deliberations appeared to resume without missing a beat from a previous round held Nov. 28-Dec. 9 in Vienna. The current New York session ends April 12, cut short this year by the Easter holiday.
The next topics to be discussed include contract of carriage, transfer of rights, delivery of goods, scope of application and freedom of contract, shipper's obligations and transport documents. The thorniest by far to negotiate will be freedom of contract and shippers' obligations.
None of a sampling of delegates interviewed in the UN Trustees' Council chamber, where the Working Group meets, expected the full agenda to be covered in New York. The consensus was that at least two more twice-a-year sessions will be necessary, followed by other meetings to review and tidy up the final document prepared by the UNCITRAL secretariat.
As the New York session opened, the United States delegation released statements defining its positions on several of the issues that have been or are to be discussed.
One sticking point (draft article 45) has been a carrier's assertion of a lien or a right of retention when a consignee or other third party claims the goods that have been shipped.
The current draft of the convention confirms that the consignee or other third party does not have an obligation to pay the freight, but it does not explicitly address whether the carrier can retain the goods ' which would have the practical effect of forcing the consignee or other third party to pay the freight in order to take delivery.
The U.S. delegation suggested that if the statement 'freight prepaid' appeared in a negotiable transport document or electronic transport record, then a carrier could not 'assert against the holder or the consignee the fact that the freight has not been paid.'
A battle royal is expected over shipper's liability in regard to delayed cargo. The U.S. delegation noted its 'strong belief' that 'including delay in the draft convention for shippers potentially creates enormous, open-ended liability exposure for shippers.' That said, the delegation admitted it had found 'trying to develop an acceptable limitation of shipper liability for delay damages' to be 'an extremely difficult task.'
'The only equitable resolution to this dilemma is to remove the concept of delay damages' entirely from the draft, the delegation proposed.
On the issue of whether a shipper's liability should be subject to a fault-based regime or a strict liability regime, the U.S. delegation said, 'a breach of the shipper's obligations ' should be subject to a fault-based standard, whereas a failure to provide accurate information should be subject to strict liability.'
The European Shippers' Council, an observer to the Working Group, issued its own statement on issues, arguing against grounds 'for treating the shipper and the carrier differently,' which 'can be explained only by the existence of a long tradition of imbalance between shipowners and maritime transport users.'
The council dropped the gloves in expressing its displeasure of a provision that it described as 'allowing the carrier to evade' intermodal responsibilities. 'The council knows from experience about preprinted clauses in bills of lading (adhesion contracts) whereby carriers attempt to limit the period of their responsibility.
'If we accept this provision,' the council argued in its white paper, 'then 'contractual freedom' will in the future allow even a carrier performing door-to-door transport to assume no responsibility at all for it. The council cannot accept this return to practices that pre-date the Hague Rules and the uncertainty that arises from them.'
As the Working Group's deliberations proceed on these touchy points, the often-divergent interests of shippers and carriers must be entwined with care, or the knitting for this critical stretch of the evolving convention may unravel later under scrutiny in the broader trade community.
