2nd Global Shipping Summit 23-24 November 2007, Shenzhen, China, Multimodal Transport : International Regulation of Lia

1. 2nd Global Shipping Summit23-24 November 2007, Shenzhen, China, Multimodal Transport: International Regulation of Liability Dr. Mahin Faghfouri

2. Multimodal Transport: International regulation of liability I. Commercial significance of multimodal transport II. Attempts to develop a uniform legal regime at international level III. Current international liability framework and problems IV. On-going developments: UNCITRAL Draft Convention on the Carriage of Goods[Wholly or Partly] [By Sea]

3. 1. Commercial significance of multimodal transport 1. What is multimodal transport? • No single authoritative definition • carriage by two or more modes of transport • door-to-door transport • one contract with one party assuming responsibility throughout • one document • terms also used: intermodal transport, combined transport 2. Growth in world containerized trade

4. Growth in World Containerised Trade Source:Clarkson Research Services, Shipping Review Database, Spring 2007, Page 101.

5. Containerised Trade: Forecast Source: Drewry Shipping Consultant

6. II. Attempts at establishing a uniform legal regime at international level 1.1980 UN Convention on Multimodal Transport Not in force 2. 1992 UNCTAD/ICC Rules for Multimodal Transport Documents - need to be incorporated into contract - give precedence to mandatory law

7. III. Current liability framework: • No MT Convention in force • National/regional/subregional laws and regulations on multimodal transport • Localized loss: unimodal conventions on carriage by sea, road, rail, air (if applicable) • Standard term contracts (e.g. FIATA FBL 92, BIMCO MULTIDOC 95)

8. Problems Liability varies depending on: - stage of transport where loss or damage occur - applicable regime - causes of loss or damage Diversity of approach on key issues: e.g. liability basis, delay, limitation and time-bar

9. Summary • Multimodal transport is growing exponentially • Current legal framework • is fragmented and liability cannot be assessed in advance • is too complex and may not be cost effective • The proliferation of regional, subregional and national solutions further adds to complexity

10. IV. On-going developments:UNCITRAL Draft Convention on the Carriage of Goods [Wholly or Partly] [By Sea] • application tosea transport and multimodal transport [MT] including a sea leg • based on maritime concepts and existing maritime liability regimes, - but with significant changes in structure, substance and approach • it is extremely lengthy and complex (100 articles) only 3 arts. relate to MT: art. 1(1), 26 and [62(2)] (It is expected that a new convention will be adopted in 2008)

11. Suitability of the Draft Convention to govern modern multimodal transport? Central questions: • one party responsible throughout? • do the same liability rules apply throughout?

12. 1. One party responsible throughout? Period of responsibility: receipt to delivery(art.11)But: - time and location of receipt/delivery may be contractually determined Also: Carrier issuing transport document may not be responsible: - for parts of the carriage (art.12) - for functions such as loading, stowage and discharge (art. 14(2))

13. 1. One party responsible throughout? Thus, carrier mayonly be responsible: - During the period of responsibility as contractually defined - for parts of the multimodal transport, and - for some of a carrier’s functions Cargo interests may need to sue another carrier Particular problems for MT shipper/consignee

14. 2. Do the same liability rules apply throughout? Liability system:“modified network system” If loss is localized: -Draft Convention gives precedence to certainmandatory provisions of any international convention applicable to the segment of transport where loss or damage occurred Also: - A a Contracting State may apply its mandatory national law by means of declaration

15. Thus, applicable rules vary If loss is localized • provisions on liability, limitation of liability, time for suit of any applicable international unimodal convention or national law apply • Plus remainder of Draft Convention

16. And For non-localized loss or where no convention or national law applicable • Maritime liability regime of Draft Convention applies • Irrespective of how short the sea leg and how long the land leg may be

17. Conclusions? Improvement of status quo? Thank you President@immta.org

18. For further information see: UNCTAD Documents: (www.unctad.org/ttl/legal) - Commentary on Draft Instrument on Transport Law (UNCTAD/SDTE/TLB/4) - Multimodal Transport: The Feasibility of An International Legal Instrument (UNCTAD/SDTE/TLB/2003/1) - Implementation of Multimodal Transport Rules (UNCTAD/SDTE/TLB/2 and Add.1) UNCITRAL Documents: (www.uncitral.org - Working Group III) - Preparation of a Draft Instrument on Carriage of Goods by Sea A/CN.9/WG.III/WP.21, 32, 36, 39, 56 & 81(2007 draft) - IMMTA submission: A/CN.9/WG.III/WP.97 See also: Mahin Faghfouri, International Regulation of Liability for Multimodal Transport, WMU Journal of Maritime Affairs, April 2006.