1.JAN RAMBERGs. 7
The Law of Transport Operators
in International Trade
1.NORSTEDTS JURIDIKs. 7
Table of Contents
Abbreviations 11
Introduction 19
1.1.1 The term »transport operator» 19s. 37
2.1.2 Risk distribution under charter parties 19s. 37
3.1.3 Liner trade 20s. 37
4.1.4 Carriage of goods by rail, road, and air 20s. 37
5.1.5 Containerisation and carriage by several modes 21s. 37
6.1.6 Expansion of carrier services and freight forwarders as contractings. 37
7.carriers 22s. 37
8.1.7 Unspecified transport and subcontracting 23s. 37
9.1.8 Transport documents as links to contracts of sale 23s. 37
Legal classification of transport operators 25
Legal classification of freight forwarders 27
1.3.1 Contract for work (mandatum) 27s. 37
2.3.2 The freight forwarder’s transition from agent to principal 27s. 37
3.3.3 International regulation of freight forwarder contracts 28s. 37
4.3.4 The freight forwarder as carrier 29s. 37
5.3.5 The freight forwarder as multimodal and transport logisticss. 37
6.operator 31s. 37
Attempts to unify multimodal transport 32
1.4.1 CMI Tokyo Rules and the FIATA FBL 32s. 37
2.4.2 TCM Draft 32s. 37
3.4.3 Nautical fault and fire defenses as an obstacle to unification 33s. 37
4.4.4 UNCTAD-ICC Rules for Multimodal Transport Documents 33s. 37
5.4.5 The undertaking to perform as criterion for the MTO 34s. 37
Carrier liability under international conventions 37
1.5.1 Inconsistencies in transport law 37s. 37
2.5.2 Particularities of maritime law 37s. 37
3.5.2.1 Risk sharing 37s. 37
Table of Contents
1.5.2.2 The Hague Rules compromise 39s. 6
2.5.2.3 The »nautical fault debate» and the Hamburg Rules 42s. 6
3.5.3 Non-maritime transport 45s. 6
4.5.4 Multimodal transport 48s. 6
5.5.4.1 Multimodal transport under unimodal regimes 48s. 6
6.5.4.2 The 1980 UN Convention on International Multimodals. 6
7.Transport of Goods 48s. 6
8.5.5 Monetary limits 50s. 6
9.5.5.1 Assessment of the average value of the goods carried 50s. 6
10.5.5.2 Declarations of value 51s. 6
11.5.5.3 Unit and per kilo limitation 51s. 6
12.5.5.4 The container formula 51s. 6
13.5.5.5 Per kilo limitation for non-maritime carriage 52s. 6
14.5.5.6 Increase of limits due to world inflation 52s. 6
15.5.6 Liability for delay 53s. 6
16.5.6.1 Reluctance of maritime carriers to accept liability fors. 6
17.delay 53s. 6
18.5.6.2 Declarations of interest in timely delivery 54s. 6
19.5.6.3 Converting prolonged delay to constructive loss ofs. 6
20.goods 54s. 6
21.5.6.4 Limits of liability for delay 55s. 6
22.5.7 Loss of right to limit liability 56s. 6
23.5.7.1 Reasonableness or practicability? 56s. 6
24.5.7.2 Imputation of misconduct to the carrier 58s. 6
25.5.7.3 Definition of behaviour required to defeat the right to limits. 6
26.liability 59s. 6
27.5.7.4 »Within the scope of their employment» 61s. 6
6The mixture of mandatory and non-mandatory law 62
1.6.1 Scope of mandatory carrier regimes 62s. 6
2.6.1.1 Period of responsibility 62s. 6
3.6.1.2 Type of loss covered 63s. 6
4.6.1.3 Misdelivery 64s. 6
5.6.1.4 Mixed carrier and agency function 69s. 6
6.6.1.5 Shipper’s liability 70s. 6
7.6.1.6 Payment and adjustment of freight 71s. 6
8.6.1.7 Deviation, hindrances and non-performance 72s. 6
9.6.1.8 General average 76s. 6
10.6.1.9 Added services 78s. 6
11.Table of Contents 7s. 7
12.6.2 Scope of non-mandatory freight forwarder services 79s. 7
13.6.2.1 The freight forwarder as service provider 79s. 7
14.6.2.2 Agency and disclaimer of carrier function 81s. 7
15.6.2.3 Adoption of liability as contracting carrier 87s. 7
16.6.3 The 1967 UNIDROIT Draft Convention on the Contract ofs. 7
17.Agency for Forwarding Agents relating to International Carriage ofs. 7
18.Goods 88s. 7
19.6.4 Regulation of freight forwarder contracts in general conditions 92s. 7
20.6.5 The 1996 FIATA Model Rules for Freight Forwardings. 7
21.Services 94s. 7
22.6.6 Warehousing by freight forwarders and the 1991s. 7
23.OTT-convention 96s. 7
24.6.6.1 Freedom of contract prevails 96s. 7
25.6.6.2 Lack of effective protection and the need to insure thes. 7
26.goods 97s. 7
27.6.6.3 The 1991 OTT convention 98s. 7
28.6.7 Distribution and value added services 100s. 7
Subcontractors and the piercing of the privity of contract barrier 103
1.7.1 Use of subcontractors 103s. 7
2.7.1.1 Through transport 103s. 7
3.7.1.2 Multimodal transport 104s. 7
4.7.1.3 Logistics service providers 105s. 7
5.7.2 Liability of subcontractors and the carrier’s vicarious liability 105s. 7
6.7.2.1 Different approaches 105s. 7
7.7.2.2 Solutions under international conventions 107s. 7
8.7.2.3 Identifying the carrier 108s. 7
9.7.2.4 Joint liability of contracting and performing carriers 109s. 7
10.7.3 Clauses for protecting subcontractors 110s. 7
11.7.3.1 Himalaya clauses 110s. 7
12.7.3.2 Circular indemnity clauses 112s. 7
13.7.3.3 Who is the claimant under the contract of carriage? 113s. 7
Linkage of contract of sale and contract of carriage 115
1.8.1 The bill of lading 115s. 7
2.8.2 Seawaybills 119s. 7
3.8.3 Electronic bills of lading 122s. 7
4.8.4 Freight forwarder documents 125s. 7
5.8.5 Stoppage of goods in transit 127s. 7
6.8.6 Seller’s obligation under Incoterms 2000 clauses A3 and A8 129s. 7
Table of Contents
1.8.6.1 Structure of Incoterms 2000 129s. 8
2.8.6.2 Contracts of carriage and insurance 130s. 8
3.8.6.3 Documents 133s. 8
4.8.7 Payment modalities 136s. 8
5.8.7.1 Payment on open account, contract guarantees, CAD ands. 8
6.COD 136s. 8
7.8.7.2 Liability for failure to carry out instructions 137s. 8
8.8.7.3 Documentary credits 138s. 8
9.8.8 Clearing goods for export and import 149s. 8
10.8.8.1 Obligations under Incoterms 2000 clauses A2 and B2 149s. 8
11.8.8.2 Exemptions from liability for failure to clear thes. 8
12.goods 150s. 8
Risk distribution under contracts of sale and contracts of carriage 152
1.9.1 Risk transfer at delivery point under Incoterms 2000 clauses A4/B4s. 8
2.and A5/B5 152s. 8
3.9.2 Incompatibility between seller’s liability under contract of sale ands. 8
4.liability of transport operators under contract of carriage 158s. 8
5.9.3 Cargo insurance 160s. 8
The transport operator’s right of retention and lien 164
1.10.1 Right of retention 164s. 8
2.10.2 Lien 165s. 8
Claims 168
1.11.1 Notice of claims 168s. 8
2.11.2 Time for suit 171s. 8
3.11.3 Dispute resolution 173s. 8
Shortcomings of the traditional approach 176
1.12.1 Focus on unimodal transport 176s. 8
2.12.2 Transport logistics 180s. 8
3.12.3 Logistics and freight forwarding 181s. 8
4.12.4 Particular rules for storage of goods? 183s. 8
5.12.5 The need for a new approach 184s. 8
6.12.6 Main ingredients of a prospective international convention 185s. 8
Appendices 189
1.I Legislation 191s. 8
2.1. The 1980 UN Convention on International Multimodal Transports. 8
3.of Goods (not in force).s. 8
4.Table of Contents 9 II Rules 204s. 9
5.1. The 1991 UNCTAD/ICC Rules for Multimodal Transports. 9
6.Documents (ICC publ. 481)s. 9
7.2. The 1996 FIATA Model Rules for Freight Forwardings. 9
8.Servicess. 9
9.3. CMI Uniform Rules for Sea Waybillss. 9
10.4. CMI Rules for Electronic Bills of Lading III Documents 223s. 9
11.1. FIATA FBL - Multimodal Transport Bill of Ladings. 9
12.2. Liner Bill of Lading (Conlinebill)s. 9
13.3. Multiwaybill 95s. 9
14.4. Gencon (voyage charterparty)s. 9
15.5. Baltime 1939 (time charter party) IV General Conditions 234s. 9
16.1. ADSp 2002 (German)s. 9
17.2. BIFA Standard Trading Conditions 2000 (English,s. 9
18.electronic version www.bifa.org.)s. 9
19.3. General terms of sale 2001 (Fédération des entreprises des. 9
20.transport et logistique de France)s. 9
21.4. NSAB 2000 (Nordic) Literature 261 Cases 272 Index 277s. 9
Abbreviations
1.A.C.Appeal cases, English Law Reports ADSpAllgemeine Deutsche Spediteurbedingungen AfSArkiv for Sjorett Am. J. Comp. L.American Journal of Comparative Law AMCAmerican maritime cases BGHBundesgerichthof BGHZEntscheidungen des Bundesgerichthofes ins. 11
2.Zivilsachen BIFABritish International Freight Association BIMCOBaltic and International Maritime Conference BTBulletin des Transport CACourt of Appeal CADCash Against Documents CFRCost and Freight CIFCost Insurance Freight CIFFACanadian International Freight Forwarderss. 11
3.Association CIPCarriage and Insurance Paid to Cir.Circuit CISGThe 1980 United Nations Convention on Contractss. 11
4.for the International Sale of Goods CMIComité Maritime International CMRConvention relative au contrat de transports. 11
5.international de marchandises par route CODCash On Delivery COGSA Carriage of Goods by Sea Act COTIF/CIMConvention internationale concernant les. 11
6.transport de marchandises par chemin de fer CPTCarriage Paid Tos. 11
7.12 Abbreviationss. 12
8.D. H.Danmarks Hojesterets. 12
9.DAFDelivered At Frontiers. 12
10.DDPDelivered Duty Paids. 12
11.DDUDelivered Duty Unpaids. 12
12.DEQ_Delivered Ex Quays. 12
13.DESDelivered Ex Ships. 12
14.Dir.Mar.Il diritto marittimos. 12
15.DMFDroit Maritime Françaiss. 12
16.E. C.E.United Nations Economic Commission for Europes. 12
17.E. E.C.European Economic Communitys. 12
18.ed.editors. 12
19.EDIElectronic Data Interchanges. 12
20.edseditorss. 12
21.ETLEuropean Transport Laws. 12
22.European PrinciplesPrinciples of European Contract Law I—IIIs. 12
23.EXWEx workss. 12
24.FFederal Reporters. 12
25.F 2d» , Second seriess. 12
26.F 3d» , Third seriess. 12
27.F Supp» , Supplements. 12
28.EH.Finlands Högsta Domstols. 12
29.F. I.O.Free in and Outs. 12
30.FBLFIATA Multimodal Transport Bill of Ladings. 12
31.FCAFree Carrier (named point)s. 12
32.FCRFIATA Certificate of Receipts. 12
33.FCTFIATA Certificate of Transports. 12
34.FHDFinnish Supreme Court casess. 12
35.FIATAFédération Internationale des Associations des. 12
36.Transitaires et Assimiléss. 12
37.FOBFree On Boards. 12
38.FWBFIATA WaybiHs. 12
39.Hague RulesBrussels Convention 1924 for the unification ofs. 12
40.certain rules of law relating to bills of ladings. 12
41.Hague Visby RulesProtocol 1968 to amend the 1924 Internationals. 12
42.Convention for the unification of certain rules of laws. 12
43.relating to bills of ladings. 12
44.Abbreviations 13 Hamburg Rules1978 United Nations Convention on carriage ofs. 13
45.goods by sea HGB Handelsgesetzbuch (Germany) HL House of Lords ICC International Chamber of Commerce IDITInstitut du Droit International des Transportss. 13
46.(Rouen) J.T.Juridisk Tidskrift vid Stockholms universitet JBL Journal of Business Law JMLC Journal of Maritime Law and Commerce KBKing's Bench Division I. T Law Times Reports L/C Letter of Credit LCLLess than full Container Loads I1. L.Lloyd's List Law Reports (1919-50) Lloyd's Rep Lloyd's List Law Reports (from 1951) LMCLQ_ Lloyd's Maritime and Commercial Law Quarterly LOTTLey de ordenacion de los Transportes Terrestres ofs. 13
47.1987 MT Convention1980 United Nations Convention on Internationals. 13
48.Multimodal Transport of Goods MT Multimodal Transport MTO Multimodal Transport Operator N.D. Cal.Northern District of California N.D.Nordiske Domme i Sjofartsanliggender N.J.Netherlands Supreme Court cases NCFFNational Commission of Freight Forwarderss. 13
49.(United Arabic Emirates) NHNorwegian Supreme Court NJANytt Juridiskt Arkiv, Swedish Supreme Court cases NSABNordiskt Speditörförbunds Allmänna Bestämmelser NVOCCNon-vessel operating common carrier NVO-MTONon Vessel Operating Multimodal Transports. 13
50.Operator OTT ConventionThe 1991 International Convention on Liability ofs. 13
51.Transport Terminals in International Trades. 13
52.14 Abbreviationss. 14
53.publ.publications. 14
54.QBQueen’s Bench Divisions. 14
55.RabelsZRabels Zeitschrift fur ausländisches unds. 14
56.internationales Privatrechts. 14
57.Rt.Norsk Retstidendes. 14
58.S.D. Fla.Southern District Floridas. 14
59.Scand. Stud. L.Scandinavian Studies in Laws. 14
60.SDRSpecial Drawing Rights. 14
61.SHSwedish Supreme Courts. 14
62.SimplyYearbook publ. by the Scandinavian Institute ofs. 14
63.Maritime Laws. 14
64.SMCSwedish Maritime Codes. 14
65.SoHaSjo og Handelsretten (Denmark)s. 14
66.SpVSpeditionsversicherungs. 14
67.Sup. Ct.Supreme Courts. 14
68.TCMTransport Combiné de Marchandisess. 14
69.THCTerminal Handling Chargess. 14
70.TOTransport Operators. 14
71.TranspRTransport- und Speditionsrechts. 14
72.U.S.United States Supreme Court casess. 14
73.UCP 500ICC Uniform Customs and Practice fors. 14
74.Documentary Credits (1993 version)s. 14
75.ULRUniform Law Reviews. 14
76.UNCITRALUnited Nations Commission on International Trades. 14
77.Laws. 14
78.UNCITRAL/Draft text of convention on carriage of goods by seas. 14
79.CMI Draft(early 2004)s. 14
80.UNCTADUnited Nations Conference on Trade ands. 14
81.Developments. 14
82.UNIDROITInstitut international pour l'unification de droits. 14
83.privés. 14
84.VersRVersicherungsrechts. 14
85.VO-MTOVessel Operating Multimodal Transport Operators. 14
86.WLRThe Weekly Law Reportss. 14
87.3 PLThird party logisticss. 14
88.3 PLSThird party logistics service providers. 14
89.Abbreviations15 4 PLFourth party logistics 4 PLSFourth party logistics service providers. 15
Foreword
1.This book aims to give an overall account of the law of carriage of goods and ancillary services from the perspective of sellers and buyers. It will ap pear that the present transport law is inappropriate due to the separate reg ulation of each mode (unimodalism) and the lack of appropriate rules for transport integration and added logistics services. In particular, the mixture of mandatory and non-mandatory law - where the former is attached to the means of transport and the latter to ancillary services - leads to unnecessary complexities and inconsistencies. A new methodology is required for the law of transport to function properly as a necessary link for the implemen tation of contracts for international sale of goods.s. 17
2.I am indebted to Professor Kurt Grönfors for his pioneer legal research with goods and contract rather than the vehicle of transportation in focus. Additionally, with practical sense and foresight he has addressed the diffi cult questions of successive carriage, multimodal transport, liability for servants, agents and subcontractors, the carrier’s liability for delay and, last but not least, modern documentary practice replacing bills of lading with sea waybills and electronic transmission. Thus, he has for me been a con tinuous source of inspiration.s. 17
3.If this book contributes to improving matters by creating awareness of the problems and the need for a new methodology, then it fulfills its pur pose.s. 17
4.Although it may be a hopeless task seeking to explain the intricacies of transport law, I have nevertheless dared to do so at the risk of being at times too simplistic when treating transport law as interrelated to the contract of international sale of goods. Regrettably, efforts of sellers and buyers to op timize the services of carriers, freight forwarders, and transport logistics service providers are not always assisted by a rational and well-functioning transport law and related commercial practice.s. 17
5.Without the able assistance of Kristina Lövenheim I would not have been able to achieve my manuscript. Christopher Goddard of Riga Grad uate School of Law has saved me from the danger of linguistic errors. Stif-s. 17
6.18 Forewords. 18
7.telsen Fakultetslitteratur and Institutet för rättsvetenskaplig forskning haves. 18
8.given me financial support. My sincere thanks to all of them!s. 18
9.Stockholm January 2005s. 18
10.Jan Rambergs. 18
Introduction
1
The term transport operator
1.The term multimodal is applied to transport operator to signify a carrier us ing two or more modes of transport to perform carriage. In this text, the term multimodal transport operator is abbreviated to the acronym MTO. In the absence of an international convention, or domestic legislation, regu lating multimodal transport1 - the MTO would not be subject to a man datory carrier regime in the same way as carriers by specific modes (unimodal transport). Transport operator (TO), as the term is used in the present study, signifies a carrier that does not undertake to perform the contract by any specific mode, or combination of specific modes, but merely undertakes to carry the goods from point to point {unspecified transport). This refers both to an undertaking actually to perform the transport in a physical sense and also to procure performance by using another party or parties as sub contractors.s. 1
Risk distribution under charterparties
1.In maritime law, the law and practice relating to carriage of goods tradi tionally only concerned shipments of commodities in ships engaged for a particular voyage or for a period. Contracts between the shipowner and the charterer were evidenced by voyage and time charterparties. The main ob ligation of the shipowner was to exercise due diligence in providing a sea worthy ship, while the risks following from commercial use of the ship were allotted to the charterer. The particular risk distribution under charterpar ties expresses the notion of the marine adventure. This meant, in principle, that the charterer assumed the risks for cargo damage or loss once the ship had left port. In contemporary charterparties, the shipowner often diss. 1
2.20 Introductions. 20
3.claims liability for the master and the crew, limiting liability to personal2,s. 20
4.want of due diligence. This means that an act or omission giving rise to lis. 20
5.ability of the shipowner as a legal entity has to be imputed to someone ons. 20
6.the managerial level, so that acts or omissions by master and crew will nots. 20
7.be sufficient.s. 20
Liner trade
1.In liner trade, risk distribution under charterparties is mirrored in the cars. 20
2.rier’s defense of error in navigation and management of the vessel32 . Thes. 20
3.distinction between charterparty trade and liner shipping was not reflecteds. 20
4.in any international convention until the 1920s. The transport documents. 20
5.{the bill of lading) used in liner shipping became the main instrument fors. 20
6.making the distinction. Most contracts of carriage made with shippings. 20
7.lines maintaining regular traffic between ports indicated in their announces. 20
8.ments and tariffs are evidenced by bills of lading. With the Hague Rules,s. 20
9.or corresponding domestic legislation, contracts covered by bills of ladings. 20
10.became subject to a mandatory carrier regime.4s. 20
Carriage of goods by rail, road, and air
1.Development of the law of carriage over land and by air differs from the des. 20
2.velopment of maritime law. The starting point here is rather a service ofs. 20
3.fered to customers at large and without discrimination. The carriers act ass. 20
4.Containerisation and carriage by several modes of transport 21 common carriers under strict liability.5 International legislation started in the late 1800s with railway carriage and co-operation between railways, often government-operated6. Carriage of goods by air became regulated with the 1929 Warsaw Convention, where initially the maritime defense of error in navigation appeared in the form of the defense of error in conducting and managing the aircraft7. However, this disappeared in the 1955 Protocol to the Warsaw Convention, so that the liability of the air carrier became sim ilar to the liability of the railway carrier.s. 21
5.The difficulty in air law in reaching international consensus relates to carriage of passengers, which is regulated in the same convention. Com pensation for death claims and for personal injuries differs considerably, with views differing accordingly as to the appropriate monetary limits for such claims. Hopefully, the debate will come to rest with the 1999 Montreal Convention, replacing the Warsaw Convention. International carriage of goods by road was not regulated until 1956 with the international conven tion on carriage of goods by road (CA7Æ). This to a large extent rested on the principles expressed in the international convention on carriage of goods by rail (COTIF/CIM) but with a lower monetary limit.s. 21
Containerisation and carriage by several modes
of transport
1.Although the problems of properly regulating combinations of different modes of transport were already addressed in international conventions for carriage by rail and road as well as by UNIDROIT,8 it was not until the advent of containerisation that a real commercial need arose to deal with the matter. As a container could easily move to and from the ship and be lifted off and on arriving or on-carrying trucks or railway wagons by mods. 21
2.22 Introductions. 22
3.ern cargo handling techniques, the container traffic expanded inland ands. 22
4.goods could be carried without re-loading of those stowed in the container.s. 22
5.Hence, goods in the container could move not only port-to-port but froms. 22
6.inland point to inland point - from door to door. As a result, the differents. 22
7.modes became mixed in one and the same contract of carriage so that thes. 22
8.transport became intermodal - expressed in legal terminology as multimos. 22
9.dal?s. 22
Expansion of carrier services and freight
forwarders as contracting carriers
1.Containerization changed the roles of carriers and freight forwarders in thes. 22
2.transport market. Carriers’ expansion of their services even appears in thes. 22
3.name of one of the most important pioneer shipping lines - Sealand. Oths. 22
4.ers were to follow, and manufactured goods are now normally carried ins. 22
5.container ships. Value-added services, previously only offered by freights. 22
6.forwarders, could now also be included in container line services - for exs. 22
7.ample, Maersk Logistics.s. 22
8.Freight forwarders, on the other hand, encroached upon the market pres. 22
9.viously controlled by the shipping lines. They did so by adopting the roles. 22
10.of contracting carriers, using the container lines as subcontracted performs. 22
11.ing carriers.9 10 This became particularly common as to shipments from sevs. 22
12.eral shippers consolidated in the same container (LCL cargo, LCL for Lesss. 22
13.than full Container Loads). Freight forwarders had long practiced the art ofs. 22
14.cargo consolidation in their rail and road traffic. Using a term from regulas. 22
15.tion of carriers in the United States, the freight forwarder became a nons. 22
16.vessel operating common carrier (NVOCC).11s. 22
17.Unspecified transport and subcontracting 23s. 23
Unspecified transport and subcontracting
1.Freight forwarders, in their general conditions, retain the right to perform transport as they think fit. At the same time, the customer often does not bother to request performance by a specific mode or combination of specif ic modes of transport.12 However, the shipping line may find it inappropri ate to conceal its main function of carrying goods by sea. Notwithstanding, it may of course use subcontractors for part or all of their performance of the contract - in the same way as a freight forwarder. Hence, both shipping lines and freight forwarders will in practice appear as TOs, although it is more likely that freight forwarders take on this function.13s. 23
Transport documents as links to contracts of
sale
1.The Hague Rules provide a link to the contract of sale in stipulating that the rules apply to govern the relationship between the carrier and the holder of the bill of lading.14 The seller is entitled to this document upon de mand.15 This, then, enables him to get the document needed under con tracts of sale requiring the seller to conclude the contract of carriage with the buyer as beneficiary (CFR and CIF contracts), to satisfy the buyer that he has fulfilled his duty to: • contract for carriage, • ship the goods as described in the bill of lading, and • provide the buyer with a document enabling him to transfer title to thes. 23
2.goods to somebody else and ensure delivery to the holder of the bill ofs. 23
3.lading at destination.s. 23
4.24 Introductions. 24
5.By contrast, contracts not requiring bills of lading but only the »usual»s. 24
6.transport document would make other trade terms appropriate (CPT ands. 24
7.CIP) for goods carried from point to point without intending to sell thems. 24
8.in transit. This is because the usual transport document would suffice, ass. 24
9.long as the buyer’s right to receive the goods from the carrier is ensured.16s. 24
Legal classification of Transport
2
Operators
1.The TO belongs to the category of carriers but, as we have seen, is not sub ject to any mandatory carrier regime of the same kind as appears in the unimodal international conventions relating to carriage by sea, rail, road, or air. The particular convention regulating multimodal transport (the 1980 MT Convention) has not entered into force. But even if it had, the TO would not be subject to it, as he has not undertaken to carry the goods by any combination of modes of transport. Therefore, his contract of carriage must be regarded as sui generis,1 as compared with contracts relating to a specified mode, or a combination of several modes. This may be considered unsatisfactory in so far as it seems to erode the purpose of mandatory law of carriage of goods. Hence, room exists for argument that the TO should be subjected to a mandatory regime. True, when the contract is made we do not yet know which regime will become applicable. That can only be as certained later, when the TO starts to perform his undertaking. In that case, the applicable regime would be triggered not by contract but by per formance - to the extent that he performs the carriage himself. The TO would be liable in the same way as subcontracted performing carriers might be liable for loss of or damage to goods that they have taken in charge. In deed, this solution sits well with commercial practice as, in many cases, TOs would not perform the transport themselves but would entrust per forming carriers to do it. If, in such cases, we permit an escape from the doctrine of privity of contract and allow direct action against non-contracts. 25
2.26 Legal classification of Transport Operatorss. 26
3.ing performing carriers, then this would suggest that the TO should also bes. 26
4.held liable in the capacity of performing carrier - in the same way as others. 26
5.performing carriers. When the TO does not perform the contract himself,s. 26
6.he would only be liable according to the contract. This, admittedly, coulds. 26
7.be sub-standard compared with the law applicable to the segment of thes. 26
8.transport where loss or damage occurred. But, again, if the principle of dis. 26
9.rect action against the performing carrier is allowed, then the protection ins. 26
10.tended by mandatory law comes into play, albeit by performance, as ops. 26
11.posed to contract.s. 26
[^3]Legal classification of Freight
Forwarders
Contract for work
1.- The classical Roman mandatum contract type is broad enough to ens. 3
2.compass all freight forwarder fonctions. However, the different variantss. 3
3.of this type of contract require forther classification. As to the transports. 3
4.itself, one would have to distinguish between the freight forwarder’ss. 3
5.fonction in acting:s. 3
6.• merely as agent for the customer or performing carrier,s. 3
7.• as contracting carrier, assuming carrier liability but without physicallys. 3
8.performing the carriage and, finally,s. 3
9.• as performing carrier.s. 3
The freight forwarder’s transition from agent to
principal
1.The problem of distinguishing between agent and principal is well known in commercial law. While the distinction is comparatively straight in An glo-American law,1 complications arise in continental European and Scan dinavian law. Here, an intermediate stage exists between the agent and the principal, namely the fonction of the commission agent, acting in his own name but for the account of the principal. In this case, by acting in his own name he would become a party to the contract thus concluded. However, in the agent-principal relationship he would have to give an account of the contract that he, as agent, entered into for the benefit of his principal.s. 3
2.28 Legal classification ofF reight Forwarderss. 28
3.Thus appears the important distinction that the commission agent bes. 28
4.comes the formal contracting party, while his principal becomes the partys. 28
5.directly interested in the contract but without being the formal contractings. 28
6.party. The commission agent may not avoid the status of a contracting pars. 28
7.ty by later disclosing his principal. It follows that an important differences. 28
8.exists between a commission agent under continental and Scandinavian laws. 28
9.and the status of an agent acting for an undisclosed principal in Anglo-s. 28
10.American law.2s. 28
International regulation of freight forwarder
contracts
1.In the absence of mandatory law applicable to freight forwarders, the legals. 28
2.relationship between freight forwarder and customer would usually appears. 28
3.from general conditions applicable to freight forwarding services. In mosts. 28
4.countries, such general conditions are offered through freight forwarders’s. 28
5.associations. In the Scandinavian countries, it is even a requirement fors. 28
6.membership in freight forwarder associations that members apply the gens. 28
7.eral conditions of the Nordic Association of Freight Forwarders in theirs. 28
8.business (these conditions are referred to as NSAB 2000). While freights. 28
9.forwarders and their associations usually elaborate general conditions unis. 28
10.laterally without consulting customer organizations, NSAB 2000 and thes. 28
11.German ADSp 2002 resulted from co-operation between organizationss. 28
12.representing both sides in the contractual relationship. Thus, NSAB 2000s. 28
13.and ADSp 2002 represent agreed documents. This, in turn, has made courtss. 28
14.of law and arbitration tribunals prone to accept the conditions in some cass. 28
15.es, even though they have not been expressly referred to in connection withs. 28
16.contracting.3s. 28
17.Owing to widely different approaches to the law of freight forwarding,s. 28
18.the Rome Institute for the Unification of Private law (UNIDROIT) elabos. 28
19.rated a draft international Convention (the 1967 UNIDROIT draft). Thes. 28
20.draft seeks to bridge the different approaches of - in particular - Germans. 28
21.and French law. The distinction between the freight forwarder as agent ands. 28
22.as carrier is achieved by subjecting the freight forwarder to carrier liabilitys. 28
23.in three instances, namely when he:s. 28
24.Thef reightf orwarder as carrier 29 • has issued a document evidencing carrier liability (French: titre de coms. 29
25.mission}', • acts as cargo consolidator, or • has offered a fixed price for the transport. Thus, it appears that the French notion of commissionaire de transport is reflected in the particular document referred to, the titre de commission, while the principles of German Law are reflected by the reference to cargo consolidation and fixed price. In view of the efforts to elaborate an interna tional Convention applicable to international multimodal transport, the 1967 UNIDROIT draft was shelved pending further developments. Thus, no international regime presently governs the law of freight forwarding.s. 29
The freight forwarder as carrier
1.Generally, the law of international carriage of goods is subject to mandatory rules. In a sense, the development of the law is rooted in the old concept of the »common carrier», who was subject to strict liability with few excep tions (force majeure, Acts of God, war, civil disturbances, government direc tions, and similar events). Originally, attention focused on the status of common carrier, while possibilities to avoid liability were limited. With the expansion of the principle of freedom of contract, carriers used the option to reduce their liability by disclaimers and low monetary limits of liability. However, as to rail carriage, which in most cases was managed by state rail ways, strict common carrier liability survived, as is reflected by the interna tional convention governing such carriage.4 5s. 29
2.A reaction towards what was considered an abuse of freedom of contract first appeared for maritime carriage in the United States with the 1893 Harter Actj whose basic principles were subsequently extended to the rest of the world by the 1924 Bill of Lading Convention, known as the Hague Rules. The expansion of international carriage of goods by road led to the 1956 Convention (CMR}, which was mainly built on the principles of the earlier railway law in CIMbut with a somewhat lower monetary limit.6 Ins. 29
3.30 Legal classification ofF reight Forwarderss. 30
4.addition, air carriage became subject to an international convention. Thiss. 30
5.was clearly based on the old notion of strict common carrier liability buts. 30
6.with higher monetary limits than those that applied to other modes ofs. 30
7.transport.7 8The law of carriage of goods by sea - although mandatory -s. 30
8.would offer the carrier a better position than carriers by other modes ofs. 30
9.transport. This is particularly so as to the defenses available in cases of errors. 30
10.in the navigation or management of the vessel and of fire. Moreover, thes. 30
11.monetary limits of liability applicable to carriage of goods by sea would ins. 30
12.most cases be lower than the Emits applicable to other modes of transport.s. 30
13.Even though a company might consider itself as basically freight fors. 30
14.warder or carrier, a freight forwarding company remains free to adopt thes. 30
15.function of a carrier, as indeed is a transport company to offer freight fors. 30
16.warding services. But, as we have seen, it is not easy to decide when as. 30
17.freight forwarder should be subject to carrier liability. However, if unders. 30
18.the circumstances the freight forwarder is taken to be exercising a carriers. 30
19.function - whether only contracting for carriage or actually performing it -s. 30
20.then the freight forwarder is subject to the same mandatory regime as cars. 30
21.riers. This is now clearly evidenced by the 1998 amendments to the Gers. 30
22.man Handelsgesetzbuch (HGB).9s. 30
23.In many cases, it would be easier to pinpoint the distinction between thes. 30
24.freight forwarder as agent and as carrier. This is because of the particulars. 30
25.documentation and routines that apply to particular modes of transport.s. 30
26.Thus, bills of lading, CIM, CMR or air consignment notes might clearlys. 30
27.indicate who should bear carrier responsibility.9 But, unfortunately, docus. 30
28.ments are not always issued with such precision, e.g., when signed by ans. 30
29.agent »for the carrier» or »for the master» but without identifying the cars. 30
30.rier. Moreover, in international road carriage the documentary proceduress. 30
31.are not always clear and consistent.10 For this reason, it is not always certains. 30
32.how to regard a company that offers transport by road/ferry from, say, Engs. 30
33.land to the European continent. A freight forwarder offering such trans-s. 30
34.Thef reight forwarder as multimodal and transport logistics operator 31 port, but without expressly declaring that he does it in his capacity as agent, would therefore risk being subject to the mandatory rules of any applicable convention relating to carriage of goods by road, such as the CMR.11s. 31
The freight forwarder as multimodal and
transport logistics operator
1.As for the distinction between the freight forwarder as agent and as carrier, the problems are basically the same irrespective of whether the transport is performed by a single mode of transport {unimodal transport) or by a com bination of different modes in the same contract {multimodal transport). However, as we have seen, the rules applicable to the different modes of transport differ as to basis as well as limitation of liability. Thus, if separate contracts apply to each segment of transport from place of dispatch to the final destination {segmented transport), then different rules would apply to each segment, depending upon the mode of transport. If, on the other hand, one contract is made for transport involving at least two different modes, then it is necessary to resolve whether the liability of such a carrier {the MTO) should be: • segmented, so that liability would depend upon localizing the loss ors. 31
2.damage to the particular mode of transport where the loss or damage ocs. 31
3.curred {the network liability system), or • one and the same {the uniform liability system). The network liability system has been preferred in the current rules and con ditions applicable to multimodal transport. Possibly, however, the develop ment of transport logistics services may call for a different solution.12s. 31
Attempts to unify Multimodal
4
Transport
CMI Tokyo Rules and the FIATA FBL
1.The problem of multimodal transport was dealt with in the 1960s by UNIs. 3
2.DROIT and the Comité Maritime International (CMI). This resulted ins. 3
3.the 1969 CMI Tokyo Rules. These constituted the basis for FIATAvs (nes. 3
4.gotiable) combined transport bill of lading {FBL), which first appeared ins. 3
5.1970, and the corresponding COMBICONBILL21 sponsored by the Baltics. 3
6.and International Maritime Conference {BIMCO) in Copenhagen. FBLs. 3
7.was later somewhat revised to conform to the 1975 ICC Rules for a coms. 3
8.bined transport document.3 Additionally, to conform to the ICC Rules,s. 3
9.BIMCO later presented a document called COMBIDOC.s. 3
TCM Draft
1.The practical importance of multimodal transport is, of course, enhanceds. 3
2.by the advent of containerization, since containers can move from ones. 3
3.mode of transport to another. In view of this, and because of the CMI ins. 3
4.itiative to present a draft international Convention by the 1969 Tokyos. 3
5.Rules, UNIDROIT decided to arrange Round Table Conferences, to joins. 3
6.efforts with CMI and to explore the commercial view of interested organs. 3
7.izations. As a result, UNIDROIT suggested a draft Convention referred tos. 3
8.as TCM 1971 (for Transport Combiné de Marchandises) In addition, thes. 3
9.TCM draft was based, as were the 1969 CMI Tokyo Rules, on the networks. 3
10.liability system. Further work towards an international convention on muls. 3
11.timodal transport took place within UNCTAD and resulted in the 1980s. 3
12.Nauticalfault andfire defenses as an obstacle to unification 33 United Nations Convention on International Multimodal Transport of Goods {MT Convention). This, however, basically followed the principle of uni form liability, although as to localized loss or damage a departure was made from the monetary limitation of the MT Convention whenever the loss or damage could be localized to a particular mode of transport. Here, accord ing to the applicable mandatory law, a higher limitation amount would ap ply.4s. 33
Nautical fault and fire defenses as an obstacle to
unification
1.Considerable difficulties confront efforts to establish uniform liability for the multimodal transport operator. This is particularly in view of the de fenses available to the carrier according to the rules for carriage of goods by sea (error in navigation and management of the vessel, as well as fire). However, this task would be considerably facilitated if the 1978 United Na tions Convention on the Carriage of Goods by Sea {the Hamburg Rules) effec tively replaced the traditional liability system within maritime law. This is because the Hamburg Rules remove the particular defenses available to the maritime carrier. In principle, the liability of the carrier according to both the Hamburg Rules5 and the MT Convention6 follows the principle of presumed fault. That is, the carrier must disprove negligence on his part or, as expressed in these conventions, assume liability unless he can prove »that he, his servants or agents took all measures that could reasonably be re quired to avoid the occurrence and its consequences».s. 33
UNCTAD-ICC Rules for Multimodal
Transport Documents
1.The success of the 1978 Hamburg Rules has been limited,7 while the MT Convention has not entered into force and probably never will in its present form. This being so, any necessary up-dating of the rules in various docu-s. 33
2.34 Attempts to unify Multimodal Transports. 34
3.ments used for multimodal transport would still be based on the traditionals. 34
4.liability system in maritime law, as reflected by the original Hague Ruless. 34
5.and their 1968 Protocol {the Hague/Visby Rules'). That is, unless the liabilitys. 34
6.of the maritime carrier significantly changes as a result of ongoing works. 34
7.within UNCITRAL in co-operation with CML Meanwhile, UNCTADs. 34
8.and ICC developed the 1991 Rules for Multimodal Transport Documents*s. 34
9.based on the traditional Hague-Visby liability system. It is these Rules thats. 34
10.are reflected or referred to in current Multimodal Transport Documentss. 34
11.such as FBL and MULTIDOC 1995.s. 34
The undertaking to perform as criterion for the
MTO
1.All the projects now referred to would define a multimodal transport opers. 34
2.ator as not only the enterprise actually performing the transport but alsos. 34
3.anyone undertaking to procure3 performance of multimodal transport. Thus,s. 34
4.it would be necessary to distinguish between vessel-operating MTOs (VO-s. 34
5.MTOs) and non-vessel-operating MTOs {NVO-MTOs). Freight forwarderss. 34
6.would fall into the latter category, but it would not affect their liability.s. 34
7.This constitutes an additional reason for synchronizing the liability of thes. 34
8.MTO with the liability that applies to the maritime carrier as such, sinces. 34
9.otherwise the NVO-MTO would have to assume a more extended liabilitys. 34
10.than would apply to a maritime carrier. If, for instance, the defense of errors. 34
11.in navigation and management of the vessel were available to the maritimes. 34
12.carrier in case of collisions and strandings and the NVO-MTO lacked thes. 34
13.possibility to invoke that defense against his customer, then liability woulds. 34
14.ultimately have to be borne by the MTO without possibility of recourses. 34
15.against the party who actually caused the loss or damage. Similarly, thes. 34
16.mere conversion of a maritime carrier into an MTO may well seem insufs. 34
17.ficient to deprive the carrier of the defenses available if he had contracteds. 34
18.for an ordinary port-to-port shipment. For this reason, it may be expecteds. 34
19.that any switch from the traditional network liability system to the uniforms. 34
20.liability system would depend upon whether the Hamburg Rules, or some-s. 34
21.The undertaking to perform as criterion for the MTO 35 thing similar to the Hamburg Rules, might successfully replace the tradi tional maritime liability system under the Hague and Hague /Visby Rules.s. 35
22.Significantly, the transport industry has been considerably re-organized in recent years. Attention is not to the same extent focused on the owner ship of the means of transport. Quite often, ships are not owned by their operators at all. They may be used by shipping lines under various charter and leasing arrangements or else by a joint organization that charters ships from partners in the joint venture. From a legal viewpoint, when deciding carrier status and carrier liability, one should therefore rather focus on the question whether or not the enterprise operates the respective means of transport. But what is meant by operate for the purpose of distinguishing between a performing and a contracting carrier if the controlling circum stance is no longer ownership as such?s. 35
23.Although it may well be easy to distinguish between a person responsir ble for the technical operation of the means of transport and somebody mere ly offering transportation services, the borderline would undoubtedly be somewhat blurred when the traditional ship-owning function is no longer decisive. Quite apart from this, what is decisive for responsibility in con tract is not whether you own the asset that you promise to sell or provide but, instead, whether you have undertaken to provide it. Thus, all the above rules and documents are based on the theory that they apply not only to an MTO physically performing the transport (e.g., a shipping line undertak ing MTO services) but also to someone who has merely undertaken to pro cure performance of the multimodal transport (e.g., a freight forwarder).10s. 35
24.This development is also recognized as to the document evidencing the transport. True, bills of lading issued by freight forwarders were tradition ally looked upon with suspicion in documentary credit transactions. In deed, such documents should be rejected, according to earlier versions of the ICC Uniform Customs and Practice for Documentary Credits (UCP). However, UCP 1983 expressly acknowledged freight forwarder docu ments, provided the freight forwarder has assumed liability as carrier. In deed, the FBL referred to above evidences the freight forwarder as a mul timodal transport operator. This was expressly mentioned as an acceptable document in UCP 1983.11 However, this reference was considered unnec essary in the 1993 version (UCP 50Ö). Thus, the modern development ofs. 35
25.36 Attempts to unify Multimodal Transports. 36
26.freight forwarding services and the advent of transport logistics operatorss. 36
27.has also resulted in a change of attitude within the field of banking law.12s. 36
Carrier liability under international
5
conventions
Inconsistencies in transport law1
1.The development of the law of carriage of goods has differed according to respective modes of transport. The reason for this is that the particularities of maritime law have not been absorbed by the other modes, but retained in maritime law. By far the largest volume of international carriage of goods is performed by maritime transport. Moreover, it is not to be expected that the rules and practice of carriage of goods by sea will basically change with in the foreseeable future. However, as a result of containerisation, maritime transport has confronted carriage by other modes, so that presumably some adaptation to the other modes will occur, either by particular regimes for multimodal transport or by a development of unimodal sea transport to comprise land transport as well. In the emerging area of unspecified trans port, maritime transport will necessarily remain an important element in the service of TOs.s. 37
Particularities of maritime law
1.5.2.1 Risk sharing Risk sharing is the hallmark of maritime law, where the marine adventure traditionally required a joint venture between the interested participants. The shipowner had to provide a suitable and seaworthy ship and, in prin ciple, the cargo owner shared with the shipowner the risk of perils of thes. 37
2.38 Carrier liability under international conventionss. 38
3.sea. Since, in the carriage of goods by sailing ships, navigation and manages. 38
4.ment of the ship was often difficult and hazardous, the cargo owner had tos. 38
5.assume risks following from errors in these respects. The concept of generals. 38
6.average was based on such sharing of risks and constituted a particular pros. 38
7.tection for the cargo owner, who got at least some compensation in the uns. 38
8.fortunate event that his cargo was thrown overboard to lighten the strandeds. 38
9.ship for refloating.2 If so, the sacrifice had to be borne by the saved valuess. 38
10.in proportion. That principle, which had appeared even before Roman laws. 38
11.in Lex Rhodia de jactu, became incorporated in the Roman Digest. Thiss. 38
12.particular sharing of maritime risks now appears in the 1994 York Antwerps. 38
13.Rules on General Average, drafted under the auspices of the Comité Mars. 38
14.itime International (CMI). As the rules have not generally taken the forms. 38
15.of statutory law, they are incorporated in maritime contracts by reference ins. 38
16.bill of lading and charterparty clauses.s. 38
17.One would, perhaps, have expected that shipowners would extend theirs. 38
18.obligation to provide a seaworthy ship, with an additional obligation to uns. 38
19.dertake appropriate measures to safeguard the cargo on board. However,s. 38
20.shipowners generally preferred to limit that obligation as much as possibles. 38
21.by extensive exemption clauses. In addition, the obligation to provide a seas. 38
22.worthy ship was regularly reduced to an obligation to exercise due diligences. 38
23.as to the seaworthiness of the vessel. This was considered all the more ims. 38
24.portant as the concept of seaworthiness comprised not only the ship itselfs. 38
25.but also the idea that the ship and its master and crew should be capable ofs. 38
26.bringing the cargo to the agreed destination. This required that the cargos. 38
27.should be properly stowed, trimmed, and secured. Hence, seaworthinesss. 38
28.includes cargo-worthiness.3 In order to combat extensive exemption clauss. 38
29.es, courts of law - particularly in Anglo-American jurisdictions - engageds. 38
30.in an interpretative exercise where the utmost specificity was required tos. 38
31.reach the shipowner’s objective to avoid liability as to the care and custodys. 38
32.of the cargo.4 As an illustration, an exemption only sufficed to cover thes. 38
33.Particularities of maritime law 39 shipowner when negligence on the part of himself or his servants or agents could be established if non-liability for negligence had been specifically ex pressed. 5.2.2 The Hague Rules compromise5 Shipowners’ extensive exemptions of liability triggered counter-measures in other form than merely an adverse interpretation method. The first re action occurred in the United States with the 1893 Harter Act. Some years thereafter the CMI was established6 with the objective »to contribute by all appropriate means and activities to the unification of maritime law in all its aspects». Regional legislation, such as the Harter Act, contributed to dis unity. This led the CMI to initiate efforts to reach global international con sensus as to cargo carried under bills of lading. These efforts resulted in the 1924 bill of lading convention known as the Hague Rules.7 With these rules, the shipowner became subject to mandatory liability. However, in principle the rules accepted traditional risk sharing, in particular by retain ing the defenses of error in the navigation and management of the vessel8 and of fire.9 10 In addition, the obligation as to seaworthiness of the vessel was expressed as an obligation to exercise due diligence.s. 39
34.The Hague Rules’ catalogue of exemptions11 reflects the customary ex emptions. In other than the enumerated events, the bill of lading holder may obtain compensation if the carrier cannot prove that »neither the acs. 39
35.40 Carrier liability under international conventionss. 40
36.tual fault or privity of the carrier nor the fault or neglect of the agents ors. 40
37.servants of the carrier contributed to the loss or damage».12 As a practicals. 40
38.matter, enumeration in the catalogue helps the carrier to avoid liability if hes. 40
39.succeeds in bringing himself within the exceptions mentioned. Neverthes. 40
40.less, a carrier invoking, e.g., »perils, dangers and accidents of the sea or oths. 40
41.er navigable waters»13 will always be met with the usually sustainable argus. 40
42.ment that the vessel ought to have been able to withstand these events:s. 40
43.modern vessels are built to cope with the not unusual difficulties of thats. 40
44.kind.s. 40
45.The defenses of error in the navigation and management of the vessel ass. 40
46.well as of fire are different. That is, they apply even if caused by the neglis. 40
47.gence »of the master, mariner, pilot, or the servants of the carrier» and, ass. 40
48.to fire, unless caused by »the actual fault or privity of the carrier». Excepts. 40
49.for these two defenses, the liability of the carrier under the Hague Rules iss. 40
50.basically liability for presumed fault and neglect with a lifting of the pres. 40
51.sumption as to the enumerated events14. The carrier may establish a primas. 40
52.facie case of non-liability if he succeeds in bringing himself within one ors. 40
53.several of the enumerated exceptions. However, if so, that may often be res. 40
54.butted if it follows from the evidence that loss or damage would not haves. 40
55.occurred if appropriate measures had been taken.15s. 40
56.The Hague Rules are mandatory and would thus defeat contractuals. 40
57.clauses departing from Art. 4. As a quid pro quo, the carrier benefits froms. 40
58.retaining the traditional due diligence obligation as to seaworthiness of thes. 40
59.vessel as well as the defenses of error in the navigation and the managements. 40
60.of the vessel and of fire. Further, the carrier is relieved of the risk that hiss. 40
61.contract clauses will be defeated by adverse interpretation, as the defensess. 40
62.have been given statutory support. Indeed, risk distribution under thes. 40
63.Hague Rules is often incorporated in bills of lading and charterparties outs. 40
64.side the scope of application of the convention by Paramount Clauses.16s. 40
65.The scope of application of the Hague Rules is limited to contracts covs. 40
66.ered by bills of lading or similar documents of title. If the bill of lading hass. 40
67.Particularities of maritime law 41 been issued under a charterparty, then the Hague Rules only apply from the moment at which the bill of lading regulates the relationship between a car rier and the holder of the bill of lading.17 This means that the terms of the charterparty apply as between the shipowner and the charterer, even if a bill of lading has been issued to the charterer for subsequent transfer to a third party. Upon such transfer, the Hague Rules would take effect to govern the relationship between transferee and carrier. Thus, it is clear that the man datory rules are primarily intended to protect third parties, such as buyers under CFR and CIF terms, where the seller has to conclude the contract of carriage for the benefit of the buyer. The seller’s obligation consists in pro viding a contract of carriage »on usual terms»18 and to provide a document that enables the buyer both to claim the goods from the carrier at the port of destination and also, unless otherwise agreed, to sell the goods in transit by transferring the document to a subsequent buyer.19 As only the bill of lading contains such a transferability function, the seller’s tender of a nego tiable bill ofl ading prevails when sale of goods in transit is contemplated and to some extent also otherwise.s. 41
68.To enable sellers to fulfil their CFR and CIF obligations, the carrier has to issue a bill of lading to the shipper upon demand.20 Normally, the FOB buyer who charters a ship to receive the goods on board would be protected in the same way as a CFR or CIF buyer. This is because the carrier would often issue the bill of lading to shippers order for further transfer by the ship per-seller to the consignee-buyer,21 even although the contract of carriage has been made with the FOB buyer.s. 41
69.In cases where no sale in transit is contemplated, a transferable bill of lading may not be required. Here would suffice a document naming the ul timate consignee, such as a sea waybill or a straight bill of lading. But, until recently, it was difficult to ensure that such documents would give the buyer a right independently of the seller to claim the goods at destination or sue the carrier in the event of damage to or loss of goods. This is now remedied by the 1992 English Carriage of Goods by Sea Act, which stipulates that the party entitled to delivery from the carrier under sea waybills and straight bills of lading enjoys the same protection as applies to the benefit of bill ofs. 41
70.42 Carrier liability under international conventionss. 42
71.lading holders under the Hague Rules. In the English case of TheRafaelaf1s. 42
72.the straight bill of lading is considered such a similar document of title f ass. 42
73.it is normally intended to be transferred once, namely to the buyer-con-s. 42
74.signee. In other words, further transferability was not required. It wass. 42
75.thought that any transferee should enjoy the protection of the Hagues. 42
76.Rules.22 2 423 The aim to protect the third party transferee is further developeds. 42
77.in the 1968 Protocol to the Hague Rules, referred to as the Hague-Visbys. 42
78.Rules. Here, the carrier is estopped from disproving the information as tos. 42
79.receipt of the goods as described in the bill of lading when it has been transs. 42
80.ferred to a third party acting in good faith.25s. 42
81.5.2.3 The nauticalfault debate and the Hamburg Ruless. 42
82.In a UNCTAD conference in the late 1960s, developing countries exs. 42
83.pressed concern about what they considered to be inequitable risk distribus. 42
84.tion under the Hague Rules. As a result, work was initiated under the auss. 42
85.pices of UNCITRAL to remedy any shortcomings. This resulted in thes. 42
86.1978 Hamburg Rules, which entered into force in 1992. The Rules as suchs. 42
87.have not had a significant impact on international trade but have triggereds. 42
88.domestic legislation incorporating some of its provisions. For example, thes. 42
89.Scandinavian States have used this option in their 1994 Maritime Codes,26s. 42
90.while maintaining their ratification of the Hague-Visby Rules.s. 42
91.Particularities of maritime law 43s. 43
92.The deliberations leading to the Hamburg Rules involved intense de bate regarding justification of the nauticalf ault defense.11 While considering this defense understandable in a historical perspective in view of difficulties for ships in mastering the perils of the sea, the majority held it to be anach ronistic, in that contemporary maritime transport requires skill in naval ar chitecture and navigation enhanced by modern equipment such as radar and GPS, using satellites for determining the exact position of the ship. In fact, the value for the carrier of the defense is considerably diminished in practice as it is difficult to commit an error in navigation if the ship has an able master and crew and the required sea charts and navigational instru ments are in good condition. Moreover, if that is not the case, then the de fense would be unavailable due to the carrier’s failure to exercise due dili gence in providing a seaworthy ship.2 287s. 43
93.Paradoxically, resistance to change was vigorously voiced by cargo insur ers apparently more anxious to safeguard the justification of cargo insur ance than to expand recourse possibilities against the carrier and his liability insurers. Time and again the necessity to maintain the correct equilibrium between cargo and liability insurance was stressed as well as the danger of accumulating excessive risks for loss of or damage to cargo concentrated in the ship on one >£<?<?/without the benefit of spreading the risk in the same way as was possible with cargo insurance. Further, it was observed that deleting the defense of nautical fault would reduce the importance of risk distribu tion in general average, since the shipowner would ultimately have to bear the costs in situations where the incident causing a general average distris. 43
94.44 Carrier liability under international conventionss. 44
95.bution had resulted from nautical fault (e.g. strandings and collisions).s. 44
96.Hence, the need for cover under minimum terms29 would be significantlys. 44
97.reduced. Considering the importance of cargo insurance, it is not surprisings. 44
98.that the cargo insurers’ criticism of deleting the defense of nautical fault uns. 44
99.der the Hamburg Rules contributed to the reluctance of States to ratify.s. 44
100.Whether this will change as to a new convention, possibly resulting froms. 44
101.the ongoing efforts in the project known as the UNCITRAL/CMIdraft, res. 44
102.mains to be seen.30s. 44
103.The Hamburg Rules, as well as the UNCITRAL/CMI draft, broadens. 44
104.the scope of application as compared with the Hague Rules. The ongoings. 44
105.deliberations within UNCITRAL even contemplate expanding the periods. 44
106.of responsibility to include preceding and subsequent carriage by others. 44
107.modes of transport to the extent that mandatory international conventionss. 44
108.or national law relating to other modes of transport are not allowed to pres. 44
109.vail. However, the carrier is intended to have a general choice to converts. 44
110.himself by express agreement into an agent as to carriage by another carriers. 44
111.or carriers. If so, a mixed contract of carriage and freight forwarding arises.s. 44
112.But, as we have seen (above 3.4), such »conversion» is far from easy unders. 44
113.a mandatory regime if the maritime carrier has charged freight also coverings. 44
114.carriage additional to carriage by sea.s. 44
115.A contract of carriage by sea broadly defines under the Hamburg Ruless. 44
116.as »any contract whereby the carrier undertakes against payment of freights. 44
117.to carry the goods by sea from one port to another». By comparison, thes. 44
118.UNCITRAL/CMI project expands the scope with the words »wholly ors. 44
119.partly by sea». As already indicated, charterparties may to a great extent bes. 44
120.considered contracts of carriage in spite of the confusing terminology {hires. 44
121.instead offreight)}1 The Hamburg Rules therefore explicitly exclude chars. 44
122.terparties from the mandatory regime,32 as is also contemplated in the UNs. 44
123.CITRAL/CMI draft, but preserve the protection of bill of lading holderss. 44
124.Non-maritime transport 45 when the bills of lading have been issued under or pursuant to charterpar ties. The drafting style of the Hamburg Rules differs from that of the Hague Rules, which mirror the traditional drafting technique used in bill of lading clauses. This might have discouraged States used to such drafting style from ratifying the Hamburg Rules, although the abstract formula of its Art. 5.1 does express the principle of presumed fault or neglect, which in essence also follows from the Hague Rules catalogue (with the exception of the nautical fault and fire defenses).s. 45
Non-maritime transport
1.The liability of the carrier in non-maritime carriage has developed in an other environment than maritime carriage. Indeed, as non-maritime car riage is normally performed by carriers as a public service made available to customers at large, liability rather rests on the status of the carrier than on contract. Consequently, possibilities to vary liability by contract clauses were restricted. Moreover, the contemporary law of carriage of goods by rail does not permit any departure from the regime established in COTIF/ CIM, the more so as the convention also regulates co-operation between the railways, most of which are governmentally owned or controlled. Sim ilarly, for carriage of goods by road, CMR does not permit any departure regardless of whether this would be to the detriment or the benefit of the customer.33 34s. 45
2.The basis of liability in COTIF/CIM and CMR conforms to the strict liability traditionally imposed upon common carriers,35 with exemptions limited to acts or omissions of the customer - which might include, e.g., missing or inadequate packing, faulty instructions, incorrect description and marking of the goods - as well as inherent vice of the goods causing their decay or wastage in transit. The rail and road carrier benefits from a presumption of non-liability in cases of special risks, such as carriage in open wagons or vehicles, inadequate packing or loading or unloading by the consignor or the consignee, and the nature of certain goods exposing thems. 45
3.46 Carrier liability under international conventionss. 46
4.to the danger of loss or damage in transit.36 37 Further, the carrier may ins. 46
5.voke the force majeure defense expressed as follows: »caused by ... circums. 46
6.stances which the carrier could not avoid and the consequences of which hes. 46
7.was unable to prevent». This exemption is akin to the notion of »impedis. 46
8.ment beyond control» expressed in Art. 79 CISG but different in so far ass. 46
9.it has not been mentioned that the circumstances must »not reasonably bes. 46
10.expected to have (been) taken into account at the time of the conclusion ofs. 46
11.the contract».s. 46
12.Interpreting such expressions involves determining whether the exemps. 46
13.tion is available:s. 46
14.• in every case where the circumstances were beyond control of the carriers. 46
15.in the individual case, ors. 46
16.• only in cases where they were ofs uch type as would fall outside the areas. 46
17.of risk to be borne by the carrier.s. 46
18.If the first alternative is chosen, then liability is reduced to that for pres. 46
19.sumed fault or neglect. However, if the second alternative is chosen, thens. 46
20.the exemption becomes akin to the force majeure defense. Possibly, it coulds. 46
21.be argued that Art. 17.3 CMR, expressing absolute liability for the defecs. 46
22.tive condition of the vehicle, represents a conclusive definition of the areas. 46
23.of risk. It would then follow that, in other cases, the abstract formulas. 46
24.should be read literally, permitting the carrier to escape liability when, ins. 46
25.the individual case, he had no possibility to avoid or prevent the occurs. 46
26.rence.38 But, even so, the liability becomes more stringent than under thes. 46
27.formula used in Art. 5.1 of the Hamburg Rules due to insertion of the words. 46
28.Non-maritime transport 47 reasonably in the formula: »took all measures that could reasonably be required to avoid the occurrence and its consequences». Thus, the liability of the rail and road carrier would offer a more limited exemption than would be available to the carrier of goods by sea under the Hamburg Rules, irrespective of the interpretative alternative chosen.s. 47
29.The ambition to mirror the liability of the rail carrier in CMR also ap pears in Arts. 34—36 on successive carriers. Here, however, the provisions become more or less redundant as co-operation between road carriers is not of the same kind as that between railways. Road carriers do not, upon ac cepting goods from a previous carrier, date and sign a receipt in the form required for the application of Arts. 34-36. Instead, there is a fairly consist ent practice that one road carrier assumes liability for the entire carriage us ing other road carriers as subcontractors.39s. 47
30.The 1929 Warsaw and the 1999 Montreal Convention impose stringent liability on the air carrier. Some classic force majeure events have been stip ulated as exemptions,40 so that the carrier is not liable in case of »an act of war or an armed conflict» or »an act of public authority carried out in con nection with the entry, exit or transit of the cargo». Few force majeure events occur during the carriage of goods by air, except for those men tioned. However, terrorist acts would only qualify as exemptions if they amount to »war or armed conflict». Under the Warsaw Convention41, the carrier can avoid liability if he can prove that he and his agents have »taken all necessary measures to avoid the damage or that it was impossible for him or them to take such measures». However, this defense has been removed in the Montreal Convention as to loss of or damage to cargo, as distin guished from liability for delay. The defenses relating to inherent defect, quality or vice of the cargo42 and defective packing of the cargo43 are also available to air carriers but without the rail and road carriers’ benefit of a reversal of the burden of proof as to these special risks.s. 47
31.48 Carrier liability under international conventionss. 48
Multimodal transport
1.5.4.1 Multimodal transport under unimodal regimess. 48
2.The variety of rules, differing according to modes of transport, creates cons. 48
3.siderable difficulty in establishing a particular regime for multimodal transs. 48
4.port. This difficulty was met in COTIF/CIM and CMR by injecting thes. 48
5.rules for different modes as exceptions from the otherwise applicables. 48
6.regime.44 45 In that way, a pattern was set known as the network system.s. 48
7.This signified that, when loss or damage could be attributed solely to cars. 48
8.riage of goods by the other mode of transport, then the rules of mandatorys. 48
9.international conventions regulating that mode would be applied as if as. 48
10.separate contract for carriage by that mode had been made (the concept ofs. 48
11.the hypothetical contract). The principle of the network system has beens. 48
12.maintained in the various projects aiming to resolve the problem of multis. 48
13.modal transport.46s. 48
14.5.4.2 The 1980 UN Convention on International Multimodals. 48
15.Transport of Goodss. 48
16.As mentioned, the 1971TCM draft formed the basis for subsequent effortss. 48
17.leading to the 1980 United Nations Convention on International Multis. 48
18.modal Transport of Goods.47 At that time, it was expected that the Hams. 48
19.burg Rules would replace the Hague and the Hague-Visby Rules, thus sigs. 48
20.nificantly reducing the difference as to basis of liability for the differents. 48
21.Multimodal transport 49 modes of transport. The MT Convention reproduced48 the same exemp tion of liability as appears the Hamburg Rules49 and reserved the network principle to monetary limits only. Where loss or damage occurred that could be localized to a particular stage of the multimodal transport regulat ed by an international convention or mandatory national law and providing a higher monetary limit than the limit under the MT Convention - then that limit would apply.50 Hence, the consignor or the consignee would nev er risk a reduction of the monetary Emits under the MT Convention but would benefit from the higher limit that would have applied if they had contracted for the carriage by the mode to which loss or damage could be localized.51s. 49
22.Although the Hamburg Rules have entered into force, the Hague and Hague-Visby Rules are still predominant in international trade. As a con sequence, States hesitated to ratify the MT Convention, the reason being that the MT Convention does not work as smoothly together with the Hague and Hague-Visby Rules as with the Hamburg Rules. In particular, the MTO would experience a gap between his liability under the MT Con vention and his possibility to get reimbursement from a maritime carrier as subcontractor. The standstill of the MT Convention caused UNCTAD to approach ICC and the freight forwarders’ world organization, FIATA, with a view to reaching a solution. The ICC, having already52 established Rules for Combined Transport Documents, saw fit to co-operate with UNCTAD and FIATA in updating those rules. Meanwhile, FIATA, which had already53 launched its Combined Transport Bill of Lading (FBL) based upon the CMI 1969 Tokyo Rules, agreed to present its views to UNCTAD and ICC as to any revision. In the early 1990s, the FBL had been extensively used to cover individual shipments consolidated in con tainers, so that freight forwarders using FBL thus appeared as well estab lished contracting carriers in the transport market.s. 49
23.50 Carrier liability under international conventionss. 50
24.The working group set up by the ICC was instructed to base the reviseds. 50
25.rules on the Hague-Visby Rules. The result appears in the UNCTAD/ICCs. 50
26.Rules.54 The principle of presumed fault or neglect is set forth,55 while thes. 50
27.particular defences of error in the navigation or management of the vessels. 50
28.as well as of fire available for maritime carriage appear.56 The Hague Rules’s. 50
29.catalogue of defenses has not been reproduced in the UNCTAD/ICCs. 50
30.Rules. However, the effect of the omission, if any, is limited. The networks. 50
31.principle, as in the MT Convention, is only used as to the monetary limits,s. 50
32.since the different bases of liability are of limited importance when the pars. 50
33.ticular defenses have been made available.57 As distinguished from the MTs. 50
34.Convention, the UNCTAD/ICC Rules apply monetary limits for localizeds. 50
35.loss or damage not only to the benefit of the consignor and the consignees. 50
36.but also to the benefit of the MTO by referring not to the higher Emit buts. 50
37.to another limit.58 59s. 50
Monetary limits
1.5.5.1 Assessing the average value ofg oods carrieds. 50
2.As a general principle of the law of carriage of goods, the carrier’s liabilitys. 50
3.is limited to a certain amount. This is nowadays generally expressed in Spes. 50
4.cial Drawing Rights (SDR) as defined by the International Monetary Fund.s. 50
5.SDR was introduced as a unit for the monetary limitation by Protocols tos. 50
6.the respective conventions.60 In this way, the carrier would be able to assesss. 50
7.exposure to the benefit of himself and the insurers of his liability. The mons. 50
8.etary limits should be set so as to reflect the average value of the goods. Thiss. 50
9.differs according to the type of carriage. Clearly, the average value of goodss. 50
10.carried by sea is much less than the average value of goods carried by others. 50
11.modes.s. 50
12.Monetary limits 51 5.5.2 Declarations of value The assumed average value is determined rather arbitrarily but the cargo owner may generally opt to make a declaration of value against payment of additional {ad valorem) freight. Indeed, in some jurisdictions a reminder of this option must be recorded in the carrier’s terms and conditions in order to preserve his rights and immunities. However, the option is seldom used, as the cargo-owner would not get a discount on his cargo insurance premi um following a declaration of value.61 5.5.3 Unit and per kilo limitation Traditionally, the monetary limit for carriage of goods by sea has related tos. 51
13.package or unit of the goods. This remains the principle under the Hague Rules (667.67 SDR),62 while the Hague-Visby Rules add a limitation per kilo of the goods lost or damaged (2 SDR) with the application of the high er of these limits.63 5.5.4 The containerformula As to carriage of goods in containers, does the package or unit limitation apply: • with one amount for the container with the goods stowed in it, or • to each unit in the container? The latter alternative applies according to the container formula of the Hague-Visby Rules,64 provided »the number of packages or units (have been) enumerated in the bill of lading as packed in such article of trans port».65 The Hamburg Rules add that when »the article itself has been lost or damaged» it should be considered as »one separate shipping unit» 66. Ins. 51
14.52 Carrier liability under international conventionss. 52
15.the deliberations on the Hague-Visby Rules, some States expressed prefers. 52
16.ence for a pure per kilo limitation. However, the majority favoured retains. 52
17.ing the per package or unit limitation to protect high value/low weights. 52
18.cargo, such as electronics and similar manufactured goods.s. 52
19.5.5.5 Per kilo limitation for non-maritime carriages. 52
20.As to non-maritime carriage, the package/unit limitation is missing and as. 52
21.sole per kilo limitation applies. This means that the protection of high vals. 52
22.ue/low weight goods is lost. The per kilo limitation for rail and air carriages. 52
23.is the same (17 SDR per kilo) while, surprisingly, under CMR for roads. 52
24.transport the limit is only 8.33 SDR. Surely, one would not expect the avs. 52
25.erage value of goods carried by road to be lower than goods carried by rail?s. 52
26.If so, then the explanation is probably that road carriers were not thoughts. 52
27.to have the same financial capacity to meet claims as rail and air carriers.s. 52
28.Presumably, the bargaining strength of the international organization reps. 52
29.resenting road carriers6 676 succeeded in pressing for a lower limit which, ass. 52
30.any limit, could be defended by considering the cargo-owner’s right tos. 52
31.make a declaration of value against payment of ad valorem freight. Thes. 52
32.limit applicable to road carriage under CMR has also been used for non-s. 52
33.maritime multimodal carriage.68 Clearly, the average value of goods carrieds. 52
34.by air is much higher than goods carried by sea and over land and, theres. 52
35.fore, the limit of 17 SDR per kilo has been retained in the 1999 Montreals. 52
36.Convention.69s. 52
37.5.5.6 Increase ofl imits due to world inflations. 52
38.Considering world inflation, the monetary limits under the various convens. 52
39.tions erode as time goes by. The limits have therefore been increased in thes. 52
40.Hamburg Rules (835 SDR per package or unit and 2.5 SDR per kilo70) ands. 52
41.in the MT Convention (920 SDR per unit and package and 2.75 SDR pers. 52
42.kilo71) compared with the limits of the Hague-Visby Rules (667.67 SDRs. 52
43.Liabilityf or delay 53 per unit or package and 2 SDR per kilo77 21). The Hague-Visby limits have been retained in the UNCTAD/ICC Rules.73 The container formula ap pears in all these conventions as drafted in the Hague-Visby Rules,74 Ham burg Rules,75 and MT Convention76 as well as in the UNCTAD/ICC Rules.77 This signifies that the unit or package limitation is applied to each unit consolidated in the container, pallet, or similar article of transport pro vided the units are enumerated in the transport document.s. 53
Liability for delay78
1.5.6.1 Reluctance of maritime carriers to accept liabilityf or delay While time is of the essence irrespective of mode of transport, carriers of goods by sea have nevertheless traditionally disclaimed liability for delay, the reason being that ships would from time to time be exposed to adverse weather conditions. Indeed, they are required to reduce speed in fog, even though they are nowadays aided by radar and satellite navigation devices (GPS). True, such difficulties could be embraced by referring to what »would be reasonable to require of a diligent carrier».79 However, the tra ditional risk aversion of maritime carriers is difficult to overcome. The Hague Rules80 refer to »loss or damage to or in connection with goods».s. 53
2.54 Carrier liability under international conventionss. 54
3.The words in connection with have been suggested to include delay.81 Hows. 54
4.ever, it is difficult to neglect the context in which delay would have to occur,s. 54
5.namely, only in connection with loss of or damage to goods - but not indes. 54
6.pendently thereof. Hence, the view prevails that the Hague and Hague-s. 54
7.Visby Rules do not generally include liability for all types of delay.s. 54
8.The air carrier’s liability for delay has in practice been rather modest ands. 54
9.has been further modified in the 1999 Montreal Convention.82 83s. 54
10.5-6.2 Declarations of interest in timely deliverys. 54
11.In the deliberations leading to the UNCTAD/ICC Rules, parties repres. 54
12.senting shipowners took a firm stance against including liability for delay.s. 54
13.This resulted in the stipulation that such liability would only arise if »thes. 54
14.Consignor has made a declaration of interest in timely delivery which hass. 54
15.been accepted by the MTO».84 If so, then the definition of delay in delivs. 54
16.ery85 applies. As a result, the MTO becomes liable »when the goods haves. 54
17.not been delivered within the time expressly agreed upon or, in the absences. 54
18.of such agreement, within the time it would be reasonable to require of as. 54
19.diligent MTO, having regard to the circumstances of the case».s. 54
20.5.6.3 Converting prolonged delay to constructive loss of goodss. 54
21.A further problem concerns the question when prolonged delay should bes. 54
22.considered constructive loss of the goods. As it might be desirable to avoids. 54
23.Liability for delay 55 arbitrary decisions in this respect, it is necessary to stipulate a fixed period, although this would fail to distinguish between transport requiring a short er or longer period for performance. CMR86 differentiates between: • expiry of an agreed time limit for delivery, in which case the excess times. 55
24.giving the consignee the option to claim for total loss has been set at 30s. 55
25.days and, • where there is no agreed time, in which case the time is 60 days. The MT Convention87 has determined a longer period of 90 days, since the MTO may undertake trans-ocean transport. Here, it would not be reason able to assume that the goods have been lost, even though delayed for a considerable period of time. The UNCTAD/ICC Rules go even further in protecting the MTO in giving him the possibility to rebut the assumption that the goods have been lost (»in the absence of evidence to the con trary»88). This provision is helpful when the goods have been short-shipped and left behind and have to await the next available transport to maybe a distant destination. 5.6.4 Limits of liabilityfor delay The loss incurred by the consignee as a result of delay is difficult to assess. Further, recovery would be limited to such loss as could be foreseen by the carrier as a possible consequence at the time of concluding the contract (cf. Art. 74 CISG).s. 55
26.To avoid difficulties in assessing compensation, different methods ap pear.s. 55
27.COTIF/CIM use agreements on transit periods.89 If these are exceeded, then compensation is payable90 in an amount: • not exceeding four times the transit charge, but • not more than would have been payable in case of total loss of thes. 55
28.goods.91s. 55
29.56 Carrier liability under international conventionss. 56
30.CMR sets the limit at a sum not exceeding carriage charges,92 with addis. 56
31.tional compensation only payable if a special interest in delivery has beens. 56
32.declared.93s. 56
33.The Hamburg Rules and the MT Convention stipulate two and halfs. 56
34.times the freight for goods delayed but not exceeding the total freight pays. 56
35.able under the contract and, further, not exceeding what would have beens. 56
36.payable for the goods in case of total loss.94s. 56
37.The UNCTAD/ICC Rules95 Emit compensation to the equivalent ofs. 56
38.the freight under the MT contract.s. 56
39.The Hague Rules do not stipulate any particular limit for compensations. 56
40.due to delay - presumably, as they were not intended to cover liability fors. 56
41.delay.s. 56
42.The Warsaw Convention and the Montreal Convention96 stipulate lias. 56
43.bility for delay but there is no particular limit so the general limit of 17 SDRs. 56
44.per kilo would also have to be used in the case of delay.s. 56
Loss of right to limit liability
1.5.7.1 Reasonableness or practicability ?s. 56
2.Some courts tend to set aside monetary limitations, apparently withouts. 56
3.bearing their purpose in mind.97 The objective differs fundamentally froms. 56
4.the carrier’s benefit of exemptions of liability, since the monetary limit is onlys. 56
5.intended to assess the average value of the goods and to facilitate settlements. 56
6.of claims. Further, a higher value is available to the consignor by a declaras. 56
7.tion of value. The absence of a monetary limit would necessitate applyings. 56
8.general principles of law on limitation of recoverable damages, which mays. 56
9.differ in various jurisdictions. A settlement of claims based upon such prins. 56
10.ciples would therefore tend to diminish the effect of the convention to unifys. 56
11.the law.s. 56
12.Loss of right to limit liability 57s. 57
13.It is to be expected that courts, and perhaps arbitrators as well, would prefer to apply the law governing the contract rather than, e.g., the 2004 UNIDROIT Principles of International Commercial Contracts. These98 limit compensation to what the party liable »foresaw or could reasonably have foreseen at the time of conclusion of the contract as being likely to result from its non-performance».99 Arguably, applying this formula may well re introduce the monetary limit if defeated by the blameworthy behaviour of the carrier! However, such a result would be avoided if the corresponding provision of the European Principles of Contract Law were to be applied, since here the words »unless the non-performance was intentional or gross ly negligent»100 have been added. However, in view of the worldwide suc cess of CISG, it seems more appropriate to apply its Art. 74 where the un less addition of the European Principles is missing. Be that as it may, loss of the right to limit liability should not be taken lightly, as the very purpose of monetary limits - in creating certainty and facilitating settlement of claims - might then be defeated.101s. 57
14.58 Carrier liability under international conventionss. 58
15.5.7.2 Imputing misconduct to the carriers. 58
16.The misconduct needed to break the right to limit has been expressed difs. 58
17.ferently in the various conventions. But, even more importantly, the quess. 58
18.tion of whose misconduct should be imputed to the carrier is answered difs. 58
19.ferently. The mere fact that the carrier’s performance includes servants ands. 58
20.agents acting in the course of their employment does not necessarily means. 58
21.that their acts or omissions should be imputed to the carrier when his rights. 58
22.to limit liability is considered. True, when the carrier is a legal entity, whichs. 58
23.is normally the case, it would be necessary to decide which acts or omissionss. 58
24.should be attributed to the legal entity rather than to its servants or agents.s. 58
25.However, the distinction is well known in general contract and corporates. 58
26.law and, moreover, particularly in maritime law as to the shipowner’s des. 58
27.fense of error in the navigation and management of the vessel. Indeed, boths. 58
28.the Hague and Hague-Visby Rules102 refer to »actual fault or privity of thes. 58
29.carrier», signifying that acts or omissions have to be attributed to personss. 58
30.on the managerial level of the legal entity.s. 58
31.CMR clearly includes misconduct by »the agents or servants of the cars. 58
32.rier» as well as »by any other persons of whose services he makes use for thes. 58
33.performance of the contract».103 COTIF/CIM,104 The Hague and Hagues. 58
34.Visby Rules,105 the Hamburg Rules106 and the MT Convention107 have nos. 58
35.Loss ofr ight to limit liability 59 corresponding provision but merely refer to »the railway», »the carrier, and »the multimodal transport operator» respectively. The Hamburg Rules add,108 as does the MT Convention,109 that persons other than the carrier and the MTO lose the right to limit their liability in cases of relevant mis conduct. During deliberations on the Hamburg Rules, the CMI observer suggested inserting the word personal to avoid doubt whether the carrier would retain the right to limit if misconduct could only be attributed to his servants or agents or other persons used for performance (cf. Art. 4 of the 1976 Convention on the Limitation of Liability for maritime claims). After a rather intense debate on the matter, where the majority seemed to favour retaining the carrier’s right to limit when misconduct could not be attrib uted to himself, it was decided not to insert the vroxA personal. Nevertheless, it seemed to be the opinion of the majority that the same result would also follow without the word personal. The structure of the convention supports that opinion, as the provision on liability110 includes »servants or agents», whereas these are missing in the provision on loss of the right to limit.111s. 59
36.The Warsaw convention112 includes »any agent of the carrier acting within the scope of his employment» among those whose misconduct is sufficient to defeat the carrier’s right to limit. The Montreal Convention113 adopts the same principle. 5.7.3 Definition ofb ehaviour required to defeat the right to limit Abstract formulae differ in describing the behaviour needed to defeat the carrier’s right to limit liability. The words »with the intent to cause such damage, or recklessly and with knowledge that such damage would proba bly result» or »wilful misconduct» are used. The Warsaw Convention114 and CMR115 refer to wilful misconduct adding such »default ... as, in ac cordance with the law of the court or tribunal seized of the case, is consid ered equivalent to wilful misconduct». The addition highlights the difficuls. 59
37.60 Carrier liability under international conventionss. 60
38.ty in interpreting what is meant by wilful misconduct, although the words. 60
39.wilful cannot be interpreted to mean something other then intent or dolus.s. 60
40.Semantically, wilful relates to misconduct and, therefore, would only exs. 60
41.clude unintentional misconduct. In other words, wilful misconduct requiress. 60
42.that the person knows that he is misbehaving. Nevertheless, it is also necs. 60
43.essary to decide the relationship between that knowledge and the dams. 60
44.age. 116 With the exception of theft, it is not likely that damage is inflicteds. 60
45.intentionally. However, intent may well arise through disregarding thes. 60
46.likelihood of damage by indifference or, even worse, in order to achieves. 60
47.economic benefit from speedy but careless handling of the cargo. Such ins. 60
48.tent may not be covered by the words with knowledge that such damage woulds. 60
49.probably result, since the word probably invites the conclusion that damages. 60
50.would be more likely than not, in which case the intent approaches doluss. 60
51.indirectus. With the wrcå. possibly, intent would have been reduced to doluss. 60
52.eventualis.s. 60
53.The reference in CMR117 to the law of the forum tends to create confusions. 60
54.in correctly interpreting wilful misconduct. This, at times, has been inters. 60
55.preted rather arbitrarily to mean gross negligence in cases where there is nos. 60
56.wilfiilness at all in the sense referred to in the present analysis. Presumably,s. 60
57.in these cases, one has lost sight of the very purpose of monetary limits.s. 60
58.These, unless in principle unbreakable, have lost their purpose. Wilfiil miss. 60
59.conduct, with respect to passenger claims, has been replaced in the 1999s. 60
60.Montreal Convention by a new formula referring to an act or omission coms. 60
61.mitted intentionally or recklessly with knowledge that damage would probs. 60
62.ably result. The Montreal Protocol 4 to the Warsaw Convention assimilateds. 60
63.wilful misconduct with the latter formula118 but, in any event, wilful miss. 60
64.conduct is no longer referred to in the 1999 Montreal Convention.119s. 60
65.Loss of right to limit liability 61 5.7.4 Within the scope oft heir employment A further reason not to let the misconduct of servants, agents or other persons defeat the carrier’s right to limit liability follows from the difficulty in de ciding whether they have acted within the scope of their employment. A good illustration would be theft. Clearly, they have not been employed to steal but their employment may well give them better opportunities to steal than outsiders. Again, there is no international uniformity as to the extent to which the carrier is liable for theft by servants, agents, or other persons. So, at least in some cases, theft of cargo may not involve carrier liability.s. 61
66.As a practical matter, it appears to be the better solution that the carrier would be Hable to pay with the monetary limit as maximum in every case where the cargo fails to reach the consignee unless able to disprove pre sumed fault or neglect or otherwise benefit from an exception of liability. In many cases, the costs of investigating whether the cargo has been stolen may become disproportionate to the amount to be compensated. All con ventions, except CMR, clearly require that the claimant must prove (»if it is proved») the circumstances required to defeat the carrier’s right to limit li ability and, presumably, Art. 29.1 CMR should be interpreted in the same way.120 In most cases, the burden of proof and the costs of investigation would discourage the claimant from trying to defeat the carrier’s right to limit. This invites the question whether he should be induced to try, by a regulation imposing unlimited liability on the carrier in case of theft.s. 61
The mixture of mandatory
6
and non-mandatory law
Scope of mandatory carrier regimes
1.6.1.1 Period of responsibilitys. 62
2.Traditionally, maritime carriers were keen to limit their responsibilitys. 62
3.strictly to the period from the moment the goods were hooked on to thes. 62
4.ship’s tackle until they were unhooked from the ship’s tackle at destinations. 62
5.{the tackle-to-tackleprinciple}.1 In charterparty trade, the responsibility mays. 62
6.be further restricted by leaving the entire loading and unloading obligations. 62
7.to the charterer {Free In and Out, F.I.O.). Modern cargo handling techs. 62
8.niques and containerisation make such a limitation of the maritime carrier’ss. 62
9.period of responsibility inappropriate. Parcel cargo is either received by thes. 62
10.carrier for stuffing into containers or assembling on pallets or similar artis. 62
11.cles of transport or received by the carrier stowed in or on such articles ofs. 62
12.transport. Except where the article of transport contains homogeneous cars. 62
13.go, the container with cargo stowed in it is usually received from freights. 62
14.forwarders who have undertaken to consolidate the parcels for a number ofs. 62
15.shippers {LCL, for Less thanf ull Container Loads'). The shippers would thens. 62
16.get the freight forwarder’s bill of lading as receipt and evidence of the cons. 62
17.tract made with the freight forwarder (often the FBL), while the carriers. 62
18.would tender his bill of lading as a receipt and evidence of the contract bes. 62
19.tween him and the freight forwarder. In these cases, the freight forwarders. 62
20.becomes the contracting carrier, with the maritime carrier as the subcons. 62
21.tracted performing carrier. Containers are lifted on board cellular shipss. 62
22.with cranes usually operated by port authorities or independent terminals. 62
23.operators in the container ports. As it would not be practical in such casess. 62
24.to refer to the ship’s tackle, the natural period of responsibility would bes. 62
25.from the moment the carrier takes the goods in charge - usually at his cargos. 62
26.terminal before the arrival of the ship - until delivery at destination, agains. 62
27.usually from a cargo terminal.s. 62
28.Scope of mandatory carrier regimes 63s. 63
29.The appropriate period of responsibility appears in the Hamburg Rules (»in charge of the goods at the port of loading, during the carriage and at the port of discharge»2) and in the MT Convention, here without reference to any particular place for receipt or delivery of the goods.3 Non-maritime carriers have not felt any need to restrict the period of responsibility to be tween the loading or unloading of the vehicle of transportation, instead re ferring to the period during which the goods are in charge of the carrier.4 The Warsaw Convention limits in charge to the airport or, in the unfortu nate event of »landing outside an aerodrome, in any place whatsoever»;5 while the Montreal Convention6 excludes »any carriage by land, by sea or by inland waterway performed outside an airport». 6.1.2 Type of loss covered All conventions limit their scope in only specifically regulating liability for loss of or damage to the goods and, except the Hague and Hague-Visby Rules7 also for delay in delivery. The reason is that liability concerns incidents hap pening during the period of responsibility and not unrelated non-perform ance of the carrier’s contractual obligations. Hence, a breach of contract by the carrier in failing to receive the goods for transport falls outside the man datory regime, as it only covers delay in delivery and not also delay in receipt for shipment. Liability in the latter case would be determined by the appli cable law on breach of contractual obligations under the contract of car riage. Such liability would not be controlled by mandatory law and would often be reduced by contract clauses relieving the carrier from liability for indirect and consequential loss.s. 63
30.In practice, sellers as beneficiaries under letters of credit are more inter ested in getting compensation in cases of the carrier’s failure or delay in re ceiving the goods for carriage than in receiving compensation for delay in delivery. However, they get no assistance from mandatory carrier regimess. 63
31.64 The mixture of mandatory and non-mandatory laws. 64
32.to ensure compensation for loss due to inability to present the requireds. 64
33.transport document to the bank for payment under the letter of credit.s. 64
34.They may, in case of delay in shipment, sometimes get assistance by thes. 64
35.carrier back-dating the transport document. This, however, would constis. 64
36.tute a fraud on the buyer.s. 64
37.The Hamburg Rules and the MT Convention8 address the problem bys. 64
38.invalidating fraudulent letters of indemnity purporting to protect the carriers. 64
39.by the shipper’s promise to reimburse him if the buyer recovers damages fors. 64
40.having received a clean document, when it ought to have been claused bys. 64
41.mentioning any discrepancies between the stated and observed condition ofs. 64
42.the goods, but the more serious case of back-dating the transport documents. 64
43.is not addressed. The Hamburg Rules and the MT Convention9 also stips. 64
44.ulate liability to pay compensation for false information with intent to des. 64
45.fraud a third party. Possibly, at least in more serious cases, the carrier’s diss. 64
46.claimers of liability for indirect or consequential loss could also be defeateds. 64
47.by applying general principles of law, using the same notions that appear ins. 64
48.the UNIDROIT Principles of International Commercial Contracts,10 stips. 64
49.ulating that exemption clauses »may not be invoked if it would be grosslys. 64
50.unfair to do so, having regard to the purpose of the contract». Moreover,s. 64
51.the overriding duty to »act in accordance with good faith and fair dealing»11s. 64
52.may prevent a carrier from escaping liability in the event of serious non-pers. 64
53.formance of obligations falling outside the scope of the mandatory regime.s. 64
54.6.1.3 Misdeliverys. 64
55.Carrier liability for loss other than loss of or damage to the goods or delays. 64
56.in delivery is without limit. In particular, such liability will arise if the cars. 64
57.rier fails to honour his obligation to deliver goods only in return for at leasts. 64
58.one original of the bill of lading. This obligation follows directly from thes. 64
59.presentation clause usually appearing in the lower right-hand corner of thes. 64
60.front page of the bill of lading. But even without a presentation clause its. 64
61.may follow from the very nature of the bill of lading as a vehicle for transfers. 64
62.of right to subsequent holders that goods may only be delivered in returns. 64
63.for at least one original. In this context, the practice of issuing bills of ladings. 64
64.in several originals should be mentioned.s. 64
65.Scope of mandatory carrier regimes 65s. 65
66.The main reason for this practice - or rather malpractice - stems from the considerable difficulty arising for the shipowner if the ship arrives but no one turns up with an original bill of lading. If this happens, then the ship owner cannot deliver the goods but will have to store them for whom it may concern. Further, if the original bill of lading is lost, then this necessitates applying for a court order entitling the person last in possession of the bill of lading before its loss to possession of the goods as if he had been the rightful holder of the original bill of lading {mortification procedures).s. 65
67.The problem with several originals is that they are not necessarily all in the hands of one person. As a result, the risk of fraud appears, since the holder of several originals may choose to sell the goods represented by the bills of lading to several parties. In that case, the party first appearing with an original would get the goods while the others would lose their rights under the bill of lading. There is also a practice that one original is kept by the master of the ship, who might then tender the original to a party having presented satisfactory proof that he is entitled to receive the goods as consignee. In that case, the master could hand over the original to that party and then get it back in return for the goods. Here, however, the bill of lading has ceased to function properly as originally intended. When no original bill of lading is available at destination, the goods are nevertheless delivered to the person believed to be entitled to them. But then the goods are delivered against a bill of lading guarantee, normally issued by a bank. If the rightfill holder of the original appears to claim the goods, then the party that misdelivered the goods would become liable, though with the possibility to obtain re-imbursement under the bill ofl ading guarantee.12 Needless to say, such a system is inappropriate as it constitutes a serious departure from the function of the bill of lading as a document of title. Delivery of goods without presentation of bills of lading would not be covered by the terms of the shipowner’s or dinary (protection & indemnity) insurance. But, exceptionally, cover could nevertheless be made available at the discretion of the insurer.13s. 65
68.66 The mixture of mandatory and non-mandatory laws. 66
69.Where the ultimate consignee is known from the outset and no transfers. 66
70.is contemplated while the goods are in transit, no paper document is res. 66
71.quired for delivery of the goods. However, in US law the straight bill of lads. 66
72.ings used in such cases.14 Nevertheless, straight bills of lading usually cons. 66
73.tain a presentation clause of the same kind as in negotiable bills of ladings. 66
74.stipulating that the bill of lading must be presented and surrendered in exs. 66
75.change for the goods. As mentioned, applicability of the Hague ands. 66
76.Hague-Visby Rules depends upon issue of a bill of lading as a document ofs. 66
77.title, signifying that rights to the goods evidenced by the bill of lading mays. 66
78.be transferred while the goods are in transit. Without this transferabilitys. 66
79.function, a seller of goods CFR or CIF Incoterms 2000 would be unable tos. 66
80.fulfil the obligation to tender the required document. Qualifying thes. 66
81.straight bill of lading in this respect was discussed in the English case of Thes. 66
82.Rafaela.15 Here, the court held that the straight bill of lading did qualify fors. 66
83.such purpose, adding {obiter) that surrender of the straight bill of lading wass. 66
84.required as a condition for delivery of the goods even in the absence of as. 66
85.presentation clause. It was considered sufficient that the bill of lading coulds. 66
86.be transferred once - namely from the shipper to the consignee - and thats. 66
87.further transferability was not required to qualify the straight bill of ladings. 66
88.as a document of title.s. 66
89.Other documents of transport differ from bills of lading, since rights tos. 66
90.goods under waybills cannot be transferred from one party to the other. Ins. 66
91.stead, delivery of goods at destination is to be made to a named consignee.s. 66
92.The shipper, in the capacity of carrier’s contracting party, would be entitleds. 66
93.to give instructions as to delivery of the goods until they have reached theirs. 66
94.destination and thus change the name of the original consignee.s. 66
95.To ensure the right of a named consignee to the goods at destination,s. 66
96.waybills used for carriage of goods by rail, road, and air under the applicables. 66
97.international conventions are issued in several originals, one for the ships. 66
98.per, one for the carrier, and one for the named consignee. As long as thes. 66
99.shipper keeps his original, he is in a position to give further instructions tos. 66
100.the carrier as to delivery. But this right ceases when the goods have reacheds. 66
101.their destination, in which case they will be delivered to the named cons. 66
102.signee without any requirement that his original of the waybill should bes. 66
103.presented in exchange for the goods. If the shipper surrenders his originals. 66
104.to the consignee, then he loses the right to give further instructions to thes. 66
Scope of mandatory carrier regimes 67
1.carrier and the right of the consignee to the goods will be ensured. This es toppel function of the shipper’s original of the waybill would make it a doc ument »controlling the disposition of the goods» in the sense of Art. 58 CISG.s. 67
2.As manufactured goods are normally not sold in transit, bills of lading are not required for this purpose. Hence, bills of lading are often replaced with sea waybills, particularly by container shipping lines. As yet, sea way bills are not recognized in any international convention relating to carriage of goods by sea. However, sea waybills have been recognized in national legislation, such as the English Carriage of Goods by Sea Act 1992. Al though they cannot be regarded as documents of title, the consignee protec tion intended by the Hague and Hague-Visby Rules has been accorded to parties entitled to delivery under sea waybills. However, no legislation pro tects the named consignee against the risk of the shipper misdirecting goods to somebody else by changing instructions to the carrier. Such pro tection would therefore have to be arranged by contractual stipulations be tween the parties concerned. With that in mind, the CMI presented its Uniform Rules for Sea Waybills in 1990. Under these rules, the shipper may agree that his original instructions to the carrier as to delivery of the goods are irrevocable so that he may not direct delivery to somebody else than the named consignee (No Disp-clause}. Only in such cases would the sea waybill qualify as a document »controlling the disposition of the goods» in the sense of Art. 58 CISG.16s. 67
3.As we have seen, under the waybill system delivery should be made to a person identifying himself as entitled to delivery. Absent any specific stip ulation as to carrier liability in case the goods are delivered to the wrong person, it is reasonable to assume that the carrier may only avoid liability if he can prove that he has exercised due diligence in identifying the party en titled to delivery.s. 67
4.To some extent, electronic data interchange (EDI) replaces paper docu ments. As far as waybills are concerned, no major difficulties would arise, because information to the carrier could easily be transmitted electronically. In this way, the carrier would know to whom the goods should be delivereds. 67
5.68 The mixture of mandatory and non-mandatory laws. 68
6.at destination and also whether the instructions given electronically are irs. 68
7.revocable or not.s. 68
8.It is different with bills of lading, as long as no legislation is in force givs. 68
9.ing statutory support to a document of title replaced by EDI. Yet, Incotermss. 68
10.even in their 1990 version indicated the possibility to get the required sups. 68
11.port by contractual stipulations. Here, the A8 clauses of i.a. the CFR ands. 68
12.CIF terms stipulate: »Where the seller and the buyer have agreed to coms. 68
13.municate electronically, the document referred to in the preceding paras. 68
14.graphs may be replaced by an equivalent electronic data interchange (EDI)s. 68
15.message». This invites the question as to the meaning of the word equivas. 68
16.lent.s. 68
17.In the event, the CMI launched its Rules for Electronic Bills of Lads. 68
18.ing17 simultaneously with the adoption of Incoterms 1990. Under theses. 68
19.rules, the right of control of the goods is attached to a Private Key, whichs. 68
20.is unique to each successive Holder. The Private Key means any technicallys. 68
21.appropriate form, such as a combination of numbers and/or letters, whichs. 68
22.the parties may agree for securing the authenticity and integrity of a Transs. 68
23.mission. The holder of the Private Key is the only party who may, as againsts. 68
24.the carrier, claim delivery of the goods, nominate the consignee, or substis. 68
25.tute a nominated consignee for any other party, and transfer the right ofs. 68
26.control and transfer to any other party. Further, he is entitled to instruct thes. 68
27.carrier as to the goods as if he were the holder of a paper bill of lading. Ins. 68
28.addition, it is stipulated that the contract of carriage is subject to any inters. 68
29.national convention or national law that would have been compulsorily aps. 68
30.plicable if a paper bill of lading had been issued. Transfer of the right ofs. 68
31.control occurs by the current holder notifying the carrier of its intention tos. 68
32.transfer its right of control to a proposed new holder. And, upon acceptings. 68
33.the transfer, the carrier should cancel the current Private Key and issue as. 68
34.new one to the new holder. As the system has no statutory support but restss. 68
35.solely upon voluntary adoption of the rules by the parties, it would, as fores. 68
36.seen in Incoterms 1990, not operate in the absence of an electronic agrees. 68
37.ment.18s. 68
Scope of mandatory carrier regimes 69
1.6.1.4 Mixed carrier and agency function As mentioned, the Hague and Hague-Visby Rules restrict the carrier’s pe riod of responsibility to the time while the goods are on the ship {the tackleto-tackle principle} and carriers have traditionally been reluctant to extend the period of responsibility to include storage and carriage before loading and after discharge. Nevertheless, while carriers have largely arranged such activities, in the absence of any mandatory legal regime, they have used their freedom of contract to reduce their liability by declaring that they are only acting as agents as to any arrangements prior to loading or after dis charge.s. 69
2.Where the carrier procures on-carriage of the goods to or from ports or places inland, the carriage maybe covered by the carrier’s through bill ofl ad ing but with a disclaimer of carrier liability when carriage has not been per formed by the carrier’s own ships. Hence, there may well be continuous documentary cover of the kind required under a documentary credit - but not continuous liability. Through carriage is addressed in the Hamburg Rules19 recognizing this practice but, in order to protect shippers and con signees, it is required that the part to be performed by another person than the carrier should be specified and that the performing party should be named {the actual carrier}. If these requirements are not met, then both car riers would be responsible jointly and severally20. Further, it is required that the actual carrier could be held responsible under the Hamburg Rules in the same way as the main carrier.s. 69
3.As regulation under the Hamburg Rules does not conform to contem porary practice, the UNCITRAL/CMI draft takes a more cautious ap proach. It recognizes that the parties may expressly agree in the contract of carriage that in respect of a specified part or parts of the transport of the goods, the carrier, acting as agent, will arrange carriage by another carrier or carriers. In that event, carrier liability is reduced to the exercise of due diligence in selecting and contracting with such other carrier(s), i.e., a lia bility for culpa in eligendo.s. 69
4.It would thus appear that a through bill of lading in contemporary prac tice differs from a multimodal transport document in so far as it only pro vides documentary cover for carriage performed by parties other than the is suer of the document. By contrast, the multimodal transport documents. 69
5.70 The mixture of mandatory and non-mandatory laws. 70
6.provides not only documentary cover but also liability cover for the wholes. 70
7.transit.s. 70
8.6.1.5 Shippers liabilitys. 70
9.A common principle of transport law exists that the shipper guarantees thats. 70
10.his information regarding the cargo is correct. If it is not, he would becomes. 70
11.liable if the carrier suffers any damage or injury as a result of incorrect ins. 70
12.formation. This includes compensation for damage to the carrier’s propertys. 70
13.or for fines incurred for passing on any incorrect information to the authors. 70
14.ities. In particular, the shipper’s liability may be serious if he has failed tos. 70
15.observe regulations regarding dangerous goods. The carrier also inserts ins. 70
16.formation regarding the goods in the transport document. Further, by iss. 70
17.suing the document the carrier may incur liability to consignees that res. 70
18.ceived the document relying on the information in it. In maritime carriage,s. 70
19.the carrier usually disclaims liability for information by expressions such ass. 70
20.»said to be» or »according to the declaration of the shipper» but may nevs. 70
21.ertheless become liable for non-disclosure when any discrepancies ought tos. 70
22.have been noted.s. 70
23.As to damage or injury caused by the goods,21 the rules differ regardings. 70
24.shipper’s liability. In maritime carriage, the charterer and the shipper ares. 70
25.taken to have guaranteed that the cargo is fit to carry without any risk ofs. 70
26.property damage or personal injury. In some cases, the nature of the goodss. 70
27.may also require particular instructions. Moreover if, in the absence of suchs. 70
28.instructions, the goods cause injury or damage, then the charterer or ships. 70
29.per will become Hable. However, the Hague and Hague-Visby Rules22s. 70
30.state that the shipper is not responsible for loss or damage sustained by thes. 70
31.carrier or the ship arising or resulting from any cause without the act, faults. 70
32.or neglect of the shipper, his agents or his servants. Only as to dangerouss. 70
33.cargo shipped without the carrier’s knowledge and consent is the shipper’ss. 70
34.liability strict and the carrier may at any time before discharge land thes. 70
35.goods at any place and make them innocuous without compensating thes. 70
36.shipper or the consignee.23s. 70
Scope of mandatory carrier regimes 71
1.The Hamburg Rules and the MT Convention make the same distinc tion between dangerous cargo and other cargo.24 In charterparty trade, the charterer or the shipper may become liable when the ship is directed or pro ceeds to unsafe ports or berths or, under time charterparties, also when the ship is used outside the agreed trading limits or for some purpose other than agreed. The customary clause in charterparties - »as near thereto as she may safely get and lie always afloat» - has not been interpreted literally in the Anglo-American jurisdictions as a limitation of the right to direct the ship but also as an implied or express warranty that the ship does not suffer any damage in reaching, remaining at, or leaving the port or berth.25s. 71
2.In non-maritime transport, express regulation of the shipper’s liability concerns incorrect or inadequate information about the goods. In addition, CMR26 and COTIF/CIM27 impose strict liability on the consignor in case of absence of, or defects in, the packing of the goods unless this was appar ent or known to the carrier upon receipt. The CMR28 has particular rules on dangerous cargo similar to the Hague, Hague-Visby, and Hamburg Rules, and the MT Convention. COTIF/CIM29 regulates the carrier’s right to unload and destroy dangerous goods at any time. The UNCITRAL/CMI draft30 defines the shipper’s liability corresponding to the principle of presumed fault or neglect (»unless the shipper proves that such loss or damage was caused by events or through circumstances that a dili gent shipper could not avoid or the consequences of which a diligent ship per was unable to prevent»). In all cases when the charterer, shipper, or con signor is liable, liability is unlimited. 6.1.6 Payment and adjustment off reight In charterparty trade, freight is negotiated and agreed, usually by indepen dent shipbrokers engaged by the parties. In voyage charterparties, prepaid freight is »earned upon shipment and non-returnable, vessel or cargo lost or not lost», according to consistent practice, while freight payable at dess. 71
3.72 The mixture of mandatory and non-mandatory laws. 72
4.tination is usually earned upon delivery. In some jurisdictions, freight mays. 72
5.be payable quantum meruit and pro rata for the part of the voyage performeds. 72
6.{pro rata itinerisff when further carriage is hindered or prevented. In times. 72
7.charterparties, payment of hire may become suspended according to regus. 72
8.lation in off-hire clauses33 21 when the working of the vessel becomes hindereds. 72
9.or prevented.s. 72
10.In the liner trade, carriers publish their tariffs, which are made availables. 72
11.upon request and incorporated in bills of lading according to the rate at thes. 72
12.date of shipment. It is customary that the freight, prepaid or not, is consids. 72
13.ered earned upon shipment and non-returnable in any event. Further, thes. 72
14.freight may also be subject to adjustments if the currency in which thes. 72
15.freight has been charged becomes devalued. The relevant currency adjusts. 72
16.ment factor {CAP) is usually available in the carrier’s tariffs. If not, then thes. 72
17.bill of lading would usually explain how the adjustment should be made. Ifs. 72
18.the consignor fails to deliver the cargo for carriage as agreed, then he mays. 72
19.become liable to pay dead freight. The amount payable may vary betweens. 72
20.full freight or a portion of it, depending upon the carrier’s opportunity tos. 72
21.obtain substitute cargo.s. 72
22.Matters relating to freight are usually not subject to mandatory regulas. 72
23.tion. However, protecting consignees necessitates ensuring that they do nots. 72
24.have to pay for hidden charges resulting from agreement between carriers. 72
25.and consignor. The Hamburg Rules33 provide that, if the bill of lading doess. 72
26.not set forth payable freight or demurrage, then this constitutes prima facies. 72
27.evidence that no freight or demurrage is payable by the consignee. And, ifs. 72
28.the bill of lading has been transferred to a party in good faith, proof to thes. 72
29.contrary is not admitted.s. 72
30.6.1.7 Deviation, hindrances, and non-performances. 72
31.As mentioned, freedom of contract has - at least traditionally - been cons. 72
32.trolled by requiring a clear and complete contractual stipulation for any res. 72
33.duction of liability as it would have been in the absence of the contractuals. 72
34.stipulation concerned. Far-reaching exemption and limitation of liabilitys. 72
35.Scope of mandatory carrier regimes 73 clauses would require the utmost specificity in order to be upheld as intend ed by the drafters. Deviations from the agreed transport would be particu larly serious for the carrier, as in English law it has been held as a general requirement for the validity of clauses reducing carrier liability that the voy age would be performed strictly as agreed. Otherwise, as a matter of inter pretation of exculpatory clauses, their effect would be limited to the agreed voyage, so that any deviation would make them ineffective.s. 73
36.This would explain the customary clauses in charterparties and bills of lading, where the scope of voyage is defined or where the carrier retains more or less complete freedom as to methods and routes of transportation. Thus, the Gencon charterparty (1994 version) deviation clause stipulates that the vessel has liberty to call at any port or ports in any order, for any purpose, to sail without pilots, to tow and/or assist vessels in all situations, and also to deviate for the purpose of saving life and/or property. And cus tomary multimodal transport bills of lading indicate under the heading »Methods and Routes of Transportation» :s. 73
37.»The carrier is entitled to perform the transport and all services related thereto ins. 73
38.any reasonable manner and by any reasonable means, methods and routes» and, further:s. 73
39.»In accordance herewith, for instance, in the event of carriage by sea, vessels mays. 73
40.sail with or without pilots, undergo repairs, adjust equipment, dry dock and tows. 73
41.vessels in all situations». The corresponding stipulation in the FIATA Multimodal Transport Bill of Lading, in its 1992 version, reads as follows:s. 73
42.»Without notice to the Merchant the Freight Forwarder has the liberty to carrys. 73
43.the goods on or under deck and to choose or substitute the means, route and pros. 73
44.cedure to be followed in the handling, stowage, storage and transportation of thes. 73
45.goods». With definitions of the scope of voyage or the methods and routes of trans portation as above, the intention is to avoid an adverse interpretation of the exculpatory clauses only to apply if the voyage is performed strictly as agreed. Nevertheless, according to the literal wording of clauses, the carrier remains free to perform the contract as he thinks fit. As a result, it is nec essary to decide whether such clauses should be upheld without any restrics. 73
46.74 The mixture of mandatory and non-mandatory laws. 74
47.tions, or whether they should only give the carrier a reasonable possibilitys. 74
48.to exercise his liberty when this is due to circumstances that he did not fores. 74
49.see or ought to have foreseen at the time of concluding the contract. As wes. 74
50.have seen, reference to reasonableness sometimes appears from the wordings. 74
51.of the clause itself.34s. 74
52.The carrier’s liability in case of deviation from the agreed method ands. 74
53.route of transportation is addressed in the Hague and Hague-Visby Ruless. 74
54.and the Hamburg Rules as to carriage of goods by sea. However, theses. 74
55.stipulations only relate to the carrier’s non-liability in cases of any deviations. 74
56.in saving or attempting to save life or property at sea. The Hague ands. 74
57.Hague-Visby Rules35 also include »any reasonable deviation» in addition tos. 74
58.deviation for the purpose of saving life or property. Such deviation is nots. 74
59.regarded as an infringement or breach of the convention or the contract ofs. 74
60.carriage. The Hamburg Rules36 restrict carrier non-liability to cases wheres. 74
61.loss, damage, or delay in delivery resulted from measures to save life or froms. 74
62.reasonable measures to save property at sea. Hence, measures to save life res. 74
63.sult in unconditional non-liability, while saving property is qualified by thes. 74
64.word reasonable. It is also added that liability may arise in general average.s. 74
65.Presumably, the intention is that the stipulations of the Hague and thes. 74
66.Hague-Visby Rules and the Hamburg Rules should be interpreted e contras. 74
67.rio so that any deviation not covered by the stipulations will be considereds. 74
68.unlawful, resulting in liability. However, the carrier would, at least to somes. 74
69.extent, be assisted by the above liberty clauses, by which he reserves somes. 74
70.freedom to perform the carriage as he thinks fit. As suggested, the libertys. 74
71.accorded to the carrier under such clauses should be subject to the test ofs. 74
72.reasonableness.s. 74
73.If it is considered that the carrier should be Hable for unlawful deviation,s. 74
74.then this necessitates deciding the nature and extent of his hability. Ass. 74
75.mentioned, under EngHsh law an unlawful deviation may be considereds. 74
76.such a departure from the contract of carriage that the contractual basis fors. 74
77.the exculpatory clauses of the contract disappears so that the carrier bes. 74
78.Scope of mandatory carrier regimes 75 comes strictly liable without the benefit of any limitation of liability.37 But even so, the causation between deviation and the loss inflicted on the ship per or consignee would have to be resolved as well as restricting compensa tion to such loss as could or ought to have been foreseen at the time of the conclusion of the contract as a possible consequence of the deviation (cf. the formula of Art. 74 CISG or similar principles relating to remoteness of damage). Under the circumstances, a deviation may under the Hamburg Rules38 result in the carrier’s loss of the right to limit responsibility. There is no reason to assume that the test should be different in case of deviation than in other cases of acts or omissions of the carrier. This is clarified in the UNCITRAL/CMI draft,39 stipulating that unlawful deviation only has ef fect consistently with the provisions of the draft.s. 75
79.As to method of transportation, carriage of goods on deck constitutes a particular problem. First, such carriage may expose the cargo to excessive risks of loss or damage. Second, cargo which by the contract of carriage is stated as being carried on deck, and is so carried, would not fall under the definition of goods in the Hague Rules40 and would thus be exempted from the mandatory rules. It is customary, particularly when the goods are stowed in containers, that carriers reserve the right to optional stowage so that the goods may be carried on or under deck without notice. This stip ulation is required because of the structure of container vessels. These are usually cellular vessels also offering safe carriage of the containers well above whatever is considered to be equivalent to the weather deck of a tra ditional vessel. Further, it is difficult to know at the time of concluding the contract of carriage exactly where the container with the goods will be placed on board the vessel. Put differently, in modern carriage of goods by container vessels the former sharp dividing line between deck cargo ands. 75
80.76 The mixture of mandatory and non-mandatory laws. 76
81.cargo in the holds of the vessel has more or less disappeared. This is reflects. 76
82.ed in the UNCITRAL/CMI draft, which specifically refers to cases wheres. 76
83.goods in containers are to be carried in vessels specially fitted to carrys. 76
84.them.41 To protect the consignee, any agreement between the shipper ands. 76
85.the carrier as to carriage of goods on deck should appear from the bill ofs. 76
86.lading not only by a general liberty clause on optional stowage but also as as. 76
87.statement on the front page of the bill of lading.42s. 76
88.Most contracts and standard forms contain clauses covering cases whens. 76
89.performance is hindered or excessively onerous due to circumstances thats. 76
90.need not have been taken into account at the time of concluding the cons. 76
91.tract. These clauses usually appear under the heading »Relief» or »Forces. 76
92.majeure». Charterparties would usually specifically address the best-knowns. 76
93.circumstances affecting or preventing performance. These include, e.g.,s. 76
94.strikes, war and warlike operations, and ice.43 Bills of lading would usuallys. 76
95.assemble these and other contingencies in a single clause.44 45 Clauses cons. 76
96.taining more abstract formulae appear in documents used for multimodals. 76
97.transport with the heading Hindrances etc. Affecting Performance.46 Uns. 76
98.der such clauses, the carrier retains the right not to perform the contract ass. 76
99.agreed but to deliver the goods at a substitute safe and convenient port, als. 76
100.ternatively to treat performance of the contract as terminated. The shippers. 76
101.may then have to pay the full freight as well as compensation for any extras. 76
102.cost resulting from the circumstances referred to in the clause.47s. 76
103.6.1.8 General Averages. 76
104.As mentioned, the rules relating to general average have been preserveds. 76
105.through the centuries and now appear as the 1994 York-Antwerp Rules.s. 76
106.Charterparties and bills of lading invariably refer to these rules.48 As tos. 76
107.Scope of mandatory carrier regimes 11 general average which is to be adjusted in accordance with the law and practice of the United States, a particular clause is required, the new Jason clause, which may be incorporated explicitly,49 or by reference.50 51 It is a firm principle of general average that the settlement is not affected by faults of one of the parties to the adventure but that the settlement does not prej udice any remedies or defenses that may be available in an action separate from the settlement.52s. 11
108.The Hague and Hague-Visby Rules contain no stipulations relating to general average. However, the Hamburg Rules53 deviate from the princi ples of the 1994 York-Antwerp Rules as to independent settlement of the general average by referring to the provisions of the convention relating to liability of the carrier. This may entitle the consignee not only to reclaim any contribution already paid but also to refuse contribution in general av erage. Similarly, the UNCITRAL/CMI draft54 stipulates that liability of the carrier may influence settlement as well as liability to reimburse any contribution made.s. 11
109.Notably, general average is strongly related to the carrier’s defenses of errors in the navigation and management of the vessel, as many incidences of general average result from such errors. In fact, a general average settle ment would be a waste of time and money if the ultimate responsibility rested upon the carrier in any event. The MT Convention55 contains a stip ulation to the same effect as Art. 24.2 of the Hamburg Rules. However, in multimodal transport operations subcontracting may usually be required. If the MTO does not perform the maritime carriage himself, he may have to pay contribution in general average to the subcontracted maritime carrier, in which case he would usually retain the right to reimbursement from his contracting party for any compensation paid. In such cases, the stipulations. 11
110.78 The mixture of mandatory and non-mandatory laws. 78
111.on general average would appear as a duty to indemnify the multimodals. 78
112.transport operator for claims incurred by him as a result of a general avers. 78
113.age.56s. 78
114.6.1.9 Added Servicess. 78
115.Added service in maritime carriage usually concerns additional handlings. 78
116.and storage of the goods after the period of responsibility under the applis. 78
117.cable convention (i.e. beyond the tackle-to-tackle period). Consequently,s. 78
118.maritime carriers may use their freedom of contract to reduce their liabilitys. 78
119.for loss of or damage to the goods. However, a total disclaimer of liabilitys. 78
120.may be defeated as unreasonable. In fact, handling and storage of the goodss. 78
121.prior to loading and subsequent to discharge constitute - either expressly ors. 78
122.impliedly - separate contracts to the extent that they are not within thes. 78
123.scope of the contract of carriage as such. In most countries, there is no legs. 78
124.islation in force imposing mandatory liability on the provider of services.s. 78
125.An extension of the carrier’s period of responsibility to cover the stages bes. 78
126.fore loading and after discharge, as appears from the Hamburg Rules57 ands. 78
127.suggested in the UNCITRAL/CMI draft,58 is beneficial not only to thes. 78
128.shipper and consignee but also to the carrier, who otherwise may risk losings. 78
129.his right to limit liability. Consequently, in bills of lading used in containers. 78
130.traffic or for multimodal transport, the period of responsibility is often exs. 78
131.tended to cover the whole period from the time the carrier has taken thes. 78
132.goods into his charge until the time of delivery.59s. 78
133.With carriage of goods by road, it often happens that the carrier is ins. 78
134.structed only to deliver the goods when the consignee has paid the invoices. 78
135.for the goods under the contract of sale. Under CMR,60 the carrier’s failures. 78
136.to execute such instructions will result in liability to cover any pecuniary losss. 78
137.suffered by the shipper up to the amount that he requested the carrier tos. 78
138.collect. As no departure from the rules of the convention is permitted,61 thes. 78
139.carrier cannot escape the above liability on account of his failure to observes. 78
140.the cash on delivery (COD)instructions. CMR62 does not impose a duty ons. 78
141.Scope of non-mandatoryf reightf orwarder regimes 79 the carrier immediately to reimburse the amount he has failed to collect, as the shipper must first prove that he has suffered pecuniary loss. This would normally mean that the shipper has been unable to collect the amount di rectly from the consignee due to his insolvency. Although adequate protec tion of the interests of the consignee may well require that the carrier im mediately reimburse him, against assignment to the carrier of his right to collect the amount from the consignee, it follows from the wording of CMR63 that the consignee must prove actual loss because of the carrier’s breach of contract.64s. 79
142.Although services in addition to carriage of the goods are usually pro vided by freight forwarders and not by the performing carriers, it is to be expected that logistics services will be offered in cases where the performing carriers are engaged in transporting goods from door-to-door. The matter will be further discussed in 6.7 below.s. 79
Scope of non-mandatory freight forwarder
regimes
1.6.2.1 Thefreightforwarder as service provider At least one common denominator of the freight forwarder is universally recognized: he could be described as a service provider. The difficulty starts when the need arises to distinguish between different types of services. One such service would be assisting the customer with export and import of goods.65 The freight forwarder would offer his services to fulfil whatever obligations are imposed on the exporter to declare and clear the goods for export as he could assist the importer in clearing goods for import and pay ing duty and other official charges. In some countries, the latter function might require a license to act as a customs broker. Traditionally, clearing the goods for import might require taking the goods in charge from the trans portation vehicle for transport through Customs or into Customs ware houses. As a result, the freight forwarder would also be engaged in physical handling of the goods.s. 79
2.80 The mixture of mandatory and non-mandatory laws. 80
3.Additional services might involve loading the goods on transportations. 80
4.vehicles or discharging them from arriving transportation vehicles. If thes. 80
5.goods are intended to be carried further inland, then the freight forwarders. 80
6.might undertake to arrange for their reloading on the on-carrying vehicle.s. 80
7.Or, where goods are to be stored pending delivery to the consignee, thens. 80
8.the freight forwarder might arrange for storage or store the goods in hiss. 80
9.own storage facility. The services now described are performed domesticals. 80
10.ly and the liability of the freight forwarder for such services will usually falls. 80
11.within the category of obligations to exercise due diligence or best efforts,s. 80
12.with liability for failure to do so. In French law, most of these servicess. 80
13.would be performed by transitaires (cf. commissionaires expéditeurs in Bels. 80
14.gium) as distinguished from the functions of a commissionaire de transport.s. 80
15.In recent years, services offered by freight forwarders have been consids. 80
16.erably extended. As an illustration, Art. 2 of the Nordic Freight Forwarders. 80
17.Conditions (NSAB 2000) provides:s. 80
18.The freight forwarder contract may include the performance of:s. 80
19.• Carriage of goodss. 80
20.• Storage of goodss. 80
21.• Other services in connection with the transport or storage of goods, such ass. 80
22.1) clearance of the goods,s. 80
23.2) cooperation in the performance of the customer s obligations under public law,s. 80
24.3) handling and marking of goods,s. 80
25.4) signing of insurance,s. 80
26.5) assistance with documents for export and import,s. 80
27.6) collection of ‘cash on delivery’ charges and other assistance concerning thes. 80
28.payment for the goods,s. 80
29.7) advice in matters of transport and distribution.s. 80
30.The freight forwarder may carry out these services either on his own account or ass. 80
31.intermediary.s. 80
32.A. The freight forwarder has a liability as carrier under §§ 15-23:s. 80
33.a) when he performs the carriage of goods with his own means of transports. 80
34.(performing carrier), ors. 80
35.b) when he has expressly or impliedly accepted liability as carrier (contractings. 80
36.carrier).s. 80
37.The freight forwarder shall be considered as contracting carrier:s. 80
38.1) when he has issued a transport document in his own name,s. 80
39.Scope of non-mandatoryf reightforwarder regimes 81s. 81
40.2) when in connection with marketing or in his offer he formulated his undertaks. 81
41.ing in such a way, e.g. quoting his own price for the transport, that it can bes. 81
42.reasonably assumed that he has undertaken a liability as carrier,s. 81
43.3) when he undertakes carriage of goods by road.s. 81
44.B. Under §§ 24-26 the freight forwarder has a liability as intermediary, withouts. 81
45.Eability as carrier, with regard to carriage of goods not covered by A.s. 81
46.C. The freight forwarder’s liability includes liability for those he has engaged tos. 81
47.perform the contract (agents and independent contractors):s. 81
48.a) when he has a liability as carrier in accordance with A.,s. 81
49.b) when the services have been performed by himself with the help of his owns. 81
50.equipment or employees, ors. 81
51.c) when he has accepted responsibility for the services on his own account.s. 81
52.These conditions apply equally to the persons of whose services the freight fors. 81
53.warder makes use for the performance of the contract as to the freight fors. 81
54.warder himself, irrespective of the grounds for the customer’s claims againsts. 81
55.the freight forwarder and such other persons. The aggregate liability of thes. 81
56.freight forwarder and such other persons is Emited to what applies to thes. 81
57.freight forwarder’s liability under these conditions.s. 81
58.When the freight forwarder has undertaken to perform the contract on hiss. 81
59.own account, in addition to what has been expressly agreed, general practices. 81
60.and generally accepted terms are applicable in so far as they do not deviate froms. 81
61.these conditions.s. 81
62.In other cases than those mentioned under a)-c) the freight forwarder iss. 81
63.responsible as intermediary without liability for other parties than his owns. 81
64.employees.s. 81
65.D. With regard to warehousing, the conditions of § 27 apply.»66 As we shall see in 6.7. below, freight forwarders prefer the title of logistics service providers, owing to the expansion of their services to perform com plete distribution according to the principles of logistics. As the term »logistics» is used to describe any rational system for management and dis tribution of goods, the outsourcing of such functions to freight forwarders would appear under the name of third party logistics (3 PL).s. 81
66.82 The mixture of mandatory and non-mandatory laws. 82
67.6.2.2 Agency and disclaimer ofs tatus as carrier67 68s. 82
68.Traditionally, freight forwarders offer their services in connection with ins. 82
69.ternational transport by contracting with carriers as agents for the customs. 82
70.er. Or, as described in the case of Jones v. European & General Express Co,s. 82
71.Ltd.,6* forwarding agents are:s. 82
72.willing to forward goods for you ... to the uttermost ends of the earth. They dos. 82
73.not undertake to carry you, and they are not undertaking to do it either themselvess. 82
74.or by their agent. They are simply undertaking to get somebody to do the work,s. 82
75.and as long as they exercise reasonable care in choosing the person to do the works. 82
76.they have performed their contract.s. 82
77.Freight forwarders could also be retained by carriers in soliciting cargo fors. 82
78.their benefit and as their agents. In ports served by liner shipping compas. 82
79.nies, freight forwarders are often appointed as liner agents. Consequently,s. 82
80.they would have a dual function representing both parties in the contractuals. 82
81.relationship that they have arranged as agents, between carrier and shipper.s. 82
82.This should not be confused with the freight forwarders’ activity in connecs. 82
83.tion with air transport, where they act as IATA agents serving the IATAs. 82
84.airlines generally and not solely one particular airline.s. 82
85.The activity of freight forwarders in connection with rail and road transs. 82
86.port is different. Here, freight forwarders would usually have their own ars. 82
87.rangements with the railways, reserving space on railway wagons to be useds. 82
88.for consolidating individual shipments from a number of shippers destineds. 82
89.for a number of consignees. In these cases, the freight forwarder would offers. 82
90.the customers carriage of the goods according to his own tariffs and issues. 82
91.his own document to each customer, with himself retaining the consignments. 82
92.note for the whole wagon. International carriage of goods by road woulds. 82
93.usually be performed either by the freight forwarder with his own vehicles,s. 82
94.alternatively arranging longer periods with owners of such vehicles, reservings. 82
95.the needed capacity for the freight forwarder. In these cases, the freight fors. 82
96.warder would not qualify as an agent as he has his own interest in the freights. 82
97.charged by him. As an agent, he would have had to give an account for thes. 82
98.freight actually paid to railways or road hauliers and agree with the customers. 82
99.on an appropriate commission. Nevertheless, as we shall see, freight fors. 82
100.warders, at least traditionally, prefer to disclaim status as carrier in these cases.s. 82
Scope of non-mandatoryf reightforwarder regimes 83
1.German law has considerably influenced law and practice in the Scan dinavian countries and to some extent also in Italy. The freight forwarder is defined as a person who in his own name undertakes to arrange a contract of carriage for the account of his customer. Or, as was expressed in the Ger man Handelsgesetzbuch^ prior to the 1998 amendments:s. 83
2.Spediteur ist, wer es gewerbsmässig übernimmt, Güterversendungen durchs. 83
3.Frachtführer oder durch Verfrachter von Seeschiffen für Rechnung eines anderess. 83
4.(des Versenders) in eigenem Namen zu besorgen. This principle is reflected as the main principle in the 1998 amendments76 09, while the freight forwarding contract71 implies that the freight forwarder is obliged to arrange for dispatch of the goods.72 7 A3 similar definition as in ear lier German law appears in the Italian Codice Civile13 describing the Italian spedizionere74 Concluding the contract with the carrier in his own name would make him a contracting party with the carrier, according to the prin ciples relating to commission agents. He may not escape his liability to the carrier under the contract made with him by later disclosing the name of his customer - unlike the case in English law, under the principles of the undisclosed principal. Nevertheless, his customer remains the interested party in the contract of carriage, so that the freight forwarder would have to account to him for whatever follows from the contract of carriage. Hence, the freight forwarder would have a right to reimbursement for freight and other payments arising under the contract of carriage, in addition to the remuneration agreed in the contract of commission with his customer.s. 83
5.French law differs from the German, Italian, and Belgian law as to the status of the commissionaire de transport. The Code de Commerce definition of commission agent75 is the same as in the other jurisdictions. However, although the commissionaire de transport falls within the category of inter mediaries, he has a particular liability that in effect equals the liability of a carrier. According to the Code de Commerce,76 he warrants the arrival of thes. 83
6.84 The mixture of mandatory and non-mandatory laws. 84
7.goods at the agreed destination with the exception off orce majeure. Furs. 84
8.ther,77 he warrants that the goods will not suffer any loss or damage in trans. 84
9.sit, again with force majeure the only exception. In addition, he is respons. 84
10.sible for acts or omissions by persons engaged for the performance of thes. 84
11.contract. Art. 99 is regarded as a rule imposing upon the commissionaire des. 84
12.transport a del credere liability for subcontractors {une règle légale ducroire).s. 84
13.However, the liability incumbent upon the commissionaire de transport acs. 84
14.cording to the Code de Commerce may be avoided by contrary stipulations ins. 84
15.his contract. So far, the liability of the commissionaire de transport differss. 84
16.from the liability imposed upon carriers, who often fall within mandatorys. 84
17.regimes. Following the principles of del credere liability, when the commiss. 84
18.sionaire de transport incurs liability for acts or omissions by persons engageds. 84
19.for the performance of the contract, he will be subject to the same liabilitys. 84
20.as would be imposed on the persons engaged {le système caméléon). Thus,s. 84
21.the commissionaire de transport will have to respond to his customer buts. 84
22.would have a full right of recourse against the persons engaged provided, ofs. 84
23.course, that he succeeds in proving that loss or damage could be attributeds. 84
24.to them. The liability of the commissionaire de transport rests upon a pures. 84
25.network liability system, as not only liability at law for the persons engageds. 84
26.but also their contractual regulation would apply.78s. 84
27.Belgian and Italian law is different in so far that the particular liabilitys. 84
28.of the French commissionaire de transport has not been adopted. Instead, thes. 84
29.Belgian commissionaire de transport is regarded as a carrier as distinguisheds. 84
30.from the commissionaire-expéditeur, whose duty is limited to dispatchings. 84
31.the goods, while the commissionaire de transport has undertaken the duty tos. 84
32.procure the transport from point to point. It does not matter whether hes. 84
33.performs his duty by his own means of transport or by means belonging tos. 84
34.persons engaged.79 80 Italian law is basically to the same effect in distins. 84
35.guishing between a spedizioniere and a spedizioniere-vettore. According tos. 84
36.the Italian Codice Civile,81 the spedizioniere is defined as a person who uns. 84
37.Scope of non-mandatoryf reightforwarder regimes 85 dertakes the duty to conclude a contract in his own name for the account of his customer and to perform accessory operations, while the spedizionierevettore undertakes to procure transport from point to point which, under the Codice Civile?1 imposes liability upon him as carrier.8 832s. 85
38.In Spanish law, the comisionista de transporte traditionally84 had the same characteristics as the French commissionaire de transport. Nevertheless, ac cording to the present Côdigo de Comercio,85 if the undertaking is not limit ed only to arranging contracts of carriage but amounts to procuring the car riage {la realization del transporte), it is suggested that the Spanish comision ista becomes equivalent to the Italian spedizionere-vettore. The particular regulation of road carriers86 is restricted to performing road carriers but this does not affect interpretation of the notion of comisionista. Although, in principle, the liability of the comisionista is non-mandatory, he may be caught by mandatory carrier regimes to safeguard the interests of his cus tomer.87s. 85
39.Although the distinctions mentioned in French, Belgian, Italian, and Spanish law seem to clarify the position of the freight forwarder, depending upon the duties undertaken, it is not easy to make the distinction in prac tice. Basically, however, what matters would be the duty to procure trans port {faire transporter) from point to point {de bout en bout) and it is irrele vant whether transport procurement is implemented by the freight for warder’s own means of transport or by using transport subcontracted from somebody else. In determining whether the freight forwarder has limited his duty to conclude the contract or contracts needed to take the goods from point to point or whether he has undertaken a duty to procure the transport, the fact that he has charged his own price88 for the whole transit without a duty to give account for what he has paid to his subcontractors would be come decisive as would, of course, any express undertaking evidenced by the document issued. Normally, analysis of the document would suggests. 85
40.86 The mixture of mandatory and non-mandatory laws. 86
41.whether it represents a transport document or merely a receipt for thes. 86
42.goods.s. 86
43.When German, Belgian, Italian, and Spanish freight forwarders ares. 86
44.considered pure intermediaries without carrier or equivalent liability, theys. 86
45.may limit such liability in their general conditions. However, this appearss. 86
46.not to be possible if they fall under a mandatory carrier liability regime.s. 86
47.This is now clarified with the 1998 amendments to the Germans. 86
48.Handelsgesetzbuch.89 90 Hence, the most important distinction between thes. 86
49.French commissionaire de transport and commission agents under Belgian,s. 86
50.German, Italian, and Spanish law seems to be as follows:s. 86
51.• The French commissionaire de transport may avoid carrier liability bys. 86
52.contractual stipulations.s. 86
53.• This does not seem to be generally possible for the Belgian commissions. 86
54.aire de transport, the Italian spedizionere-vettore, or the Spanish comision-s. 86
55.ista del transporte.s. 86
56.• In any event, is not possible for the German Spediteur in the situationss. 86
57.specified in HGB.91 92s. 86
58.The Scandinavian countries have no statutory law regulating liability ofs. 86
59.freight forwarders. Instead, the Nordic Association of Freight Forwarderss. 86
60.has since 1919 agreed on General Conditions applicable in Denmark, Fins. 86
61.land, Norway, and Sweden - and now also in Estonia and Latvia. As ofs. 86
62.1959, the General Conditions were drafted in co-operation with organizas. 86
63.tions representing customers. As they could be regarded as an agreed docus. 86
64.ment, they would, in practice, fulfil the same function as statutory law,s. 86
65.although they would normally require incorporation into individual cons. 86
66.tracts in the same way as other standard form contracts. Until the 1974 ver-s. 86
67.Scope of non-mandatoryf reightforwarder regimes 87 sion of the Nordic Conditions (NSAB\ the freight forwarder disclaimed liability as carrier unless he had physically performed the carriage. How ever, as from the 1974 version the Nordic Conditions recognize the freight forwarder’s liability as carrier, in particular where he has quoted his own price for transport without a duty to account for charges paid to subcon tractors. Thus, the Nordic Conditions - now NSAB 2000 - contain a sep arate regulation for liability of the freight forwarder as an intermediary and a separate carrier liability, which is akin to the liability imposed upon the carrier by road under the CMR supplemented by a network liability where a particular mode of transport has been agreed or where loss of or damage to the goods could be localized to a particular mode of transport. Thus, the carrier liability of the freight forwarder under NSAB would, in practice, be more or less equivalent to the liability of a French commissionaire de trans port according to the provisions of the French Code de Commerce. 6.2.3 Adoption of liability as contracting carrier As we have seen, freight forwarders may themselves clarify the legal posi tion either by avoiding the status of carrier whenever this is possible under the applicable law, alternatively adopting liability as contracting carriers. Provisions on carrier liability may be found in general conditions used in Canada, France, Hong Kong, Indonesia, Kenya, the Netherlands, Poland, Singapore, South Africa, Sri Lanka, Switzerland, the United Kingdom and Vietnam and in the countries where NSAB 2000 are used.93 Hence, most freight forwarders undoubtedly prefer to clarify the position, rather than to leave it uncertain and subject to the vagaries of courts of law.s. 87
68.Voluntary adoption of carrier liability has been enhanced by the compe tition between contracting and performing carriers. In particular, the ad vent of containerisation in the 1960s forced freight forwarders to properly evidence their contracts of carriage when receiving goods from their cus tomers for containerisation. It would not be a commercially viable option to receive goods from individual shippers, to stuff the goods into containers in the country of shipment, and to arrange break bulk of the containers at destination, while at the same time insisting that the contract of carriage as such was arranged by the freight forwarder for the sole purpose of achieving a contractual relationship between their customer and the performing car riers).s. 87
The mixture of mandatory and non-mandatory law
1.This would explain the creation in 1971 of the FI ATA Combineds. 88
2.Transport Bill of Lading (FBL), as it was then called. This was met withs. 88
3.some scepticism by traditionalists who preferred a disclaimer of carrier lias. 88
4.bility. However, commercial realities made the use of FBL a global success.s. 88
5.As FBL is used in relation to each individual shipper, while in the contracs. 88
6.tual relationship between the freight forwarder and the performing cons. 88
7.tainer lines bills of lading covering the whole container would be used,s. 88
8.FBLs by far outnumber liner bills of lading in international trade. Thes. 88
9.FBL, as an international document of transport, is used independently ofs. 88
10.the freight forwarder’s general conditions but the carrier liability unders. 88
11.FBL is often used to reflect carrier liability under general conditions ass. 88
12.well.94 Freight forwarders wishing to tender a document to customers evis. 88
13.dencing receipt and an obligation to deliver the goods at destination to thes. 88
14.consignee, but without incurring liability as carrier, could do so by thes. 88
15.FIATA Certificate of Transport (FCT) where carrier liability is expresslys. 88
16.denounced.s. 88
The 1967 UNIDROIT Draft Convention on
Contract of Agency for Forwarding Agents
relating to International Carriage of Goods
1.The law of freight forwarding is not subject to any international convens. 88
2.tion, because the efforts of UNIDROIT to achieve such a convention haves. 88
3.not materialized. The work of achieving an international convention starts. 88
4.ed in the mid-1950s and progressed simultaneously with work to elaborates. 88
5.a convention on contracts for combined international carriage of goods. Ins. 88
6.1963, the Governing Council of UNIDROIT approved the Draft Convens. 88
7.tion on the Contract of Agency for Forwarding Agents as well as the Drafts. 88
8.Convention on the Contract for the Combined International Carriage ofs. 88
9.Goods. The aim of both these proposed international instruments was tos. 88
10.promote international trade. Although general conditions sponsored by thes. 88
11.forwarding agents’ organizations would have established a certain uniforms. 88
12.ity, the conditions were considered a poor substitute for uniform legislas. 88
13.tion. First, as they were issued by private organizations, their validity mights. 88
14.The 1967 UNIDROIT Draft Convention on Contract of Agency... 89 be contested. Second, the general conditions varied from one country to another.s. 89
15.It was not an easy task to bridge the different concepts in statutory law relating to freight forwarders. In particular, the French notion of commis sionaire de transport created difficulties. With that in mind, one approach to avoiding any difficulty involved replacing reference to commissionaire de transport by the words contrat de commission en matière de transport interna tional de marchandises.s. 89
16.Regulating the freight forwarder’s liability for incidental services carried out by himself included:s. 89
17.all operations incumbent upon him before the first stage of carriage, between twos. 89
18.stages of carriage or after the last stage, and, in particular, the taking over of thes. 89
19.goods at the designated place; their custody, storage, transhipment and moving;s. 89
20.that the documents necessary for their export or import are obtained; that the cuss. 89
21.toms and other formalities are complied with; that the duties, dues and others. 89
22.expenses incumbent upon the principal are paid in advance or that security is furs. 89
23.nished therefor; that the condition of the goods and of its packing is checked; thats. 89
24.the carrier is furnished with data necessary for the making out of the carriage docs. 89
25.uments; and that assistance is made available for loading and unloading.95 In carrying out these functions, the forwarding agent would be liable for acts and omissions of his agents, servants and representatives when they acted within the scope of their employment.96 But the freight forwarder would not be liable for the due performance of contracts that he has con cluded to ensure the carrying out of the international carriage.97 His liabil ity in this respect was reduced to a liability for proper choice of subcontrac tors and for the instructions given to them (liability for culpa in eligendo vel instruendo). The principle that the forwarding agent avoided liability for due performance of contracts that he had concluded would follow naturally from his function only to act as agent. A monetary limitation of the for warding agent’s liability was contemplated but the amount was left open for later decision. Interestingly, loss of the right to limit liability did not follow the CMR concept of ‘wilful misconduct that had been accepted only a few years earlier. Indeed, by the mid-1960s the meaning and scope of the con cept of wilful misconduct had already been the subject of notable controversys. 89
26.90 The mixture of mandatory and non-mandatory laws. 90
27.both in doctrine and case law. Instead, conduct defeating the right to limits. 90
28.liability was expressed as »either a deliberate disregard of the prejudicials. 90
29.consequences that might result from such conduct, or inexcusable lack ofs. 90
30.awareness of such consequences».98s. 90
31.The particular French concept of a del credere liability for the commissions. 90
32.aire de transport was taken care of in a particular chapter on »Forwardings. 90
33.Agency Contract with Special Liability».99 Here,100 it is noted that the pars. 90
34.ties may agree that the forwarding agent is responsible, from the time hes. 90
35.takes over the goods until he delivers them to the consignee, for the dues. 90
36.performance of all contracts made to ensure the carrying out of internations. 90
37.al carriage. In case of non-performance of such contracts, the forwardings. 90
38.agent would be responsible according to the rules governing the contracts. 90
39.concluded with the respective subcontractor, i.e. the network liability syss. 90
40.tem, which would naturally follow from the del credere principle. Thiss. 90
41.would not reduce the liability of the forwarding agent for failure to observes. 90
42.the duties incumbent upon him as an intermediary. Additionally, the fors. 90
43.warding agent would not benefit from any special clauses in his contracts. 90
44.with the subcontractor and which would not regularly be used in such cons. 90
45.tracts.101 In so far as »special liability» would follow from an express cons. 90
46.tract, it would not be difficult to accept the system of del credere liability fors. 90
47.subcontractors. However, in other cases one would have to resolve much-s. 90
48.debated issues. As to situations where the forwarding agent has agreed ons. 90
49.a flat rate for the contract of carriage, he would have to accept liability ins. 90
50.the same way as would follow from an express agreement.102 Further, ins. 90
51.case of grouping the goods under one single carriage document it should bes. 90
52.presumed that the forwarding agent has accepted liability.103s. 90
53.The draft convention also contains104 provisions relating to a internas. 90
54.tional forwarding note (Fr. titre de commission de transport international).s. 90
55.That document might be issued upon request. It would contain the infors. 90
56.mation usually to be found in bills of lading, so that the forwarding agents. 90
57.would have more or less the same duty as a carrier. That is, to check thes. 90
58.accuracy of the statements in the international forwarding note as to the de-s. 90
59.The 1967 UNIDROIT Draft Convention on Contract of Agency... 91 scription of the goods and their apparent condition including their packag ing, and, if found incorrect, enter appropriate reservations. If no reserva tions were made, it should be presumed that the goods were in good order and condition when taken over unless the contrary is proved. However, it will not be possible for the forwarding agent to disprove the contents of the document against a consignee who has acquired the international forward ing note in good faith. In the same way as under CMR,105 any stipulation directly or indirectly derogating from the provisions of the convention would be null and void.106s. 91
60.As we have seen, the special liability of the forwarding agent is not exact ly the same as liability of the carrier. However, in practice the result would be more or less the same as if the forwarding agent had accepted liability as contracting carrier. This, under ordinary principles of law, would include vicarious liability for any persons used in the performance of the contract of carriage. That invites the question whether it would serve any purpose to introduce a middle category between the ordinary liability of the forwarding agent and the ordinary liability of a carrier.107 However, of course the special liability may be explained as acceptance of the particular liability of the French commissionaire de transport, which under the draft convention would be recognized in some circumscribed situations.s. 91
61.When the draft convention was approaching the stage of a diplomatic conference, FIATA had already started to consider the possibility of a par ticular combined transport bill of lading to be used by freight forwarders in consolidating cargo for container transport. Such a document, it was be lieved, would be much more appropriate than the international forwarding note contemplated by the draft convention. Additionally, it was considered premature to deal with any special liability for the freight forwarder until his position under the contemplated draft for the combined international carriage of goods had been ascertained. Although, as we have seen, such an international convention is now available for ratification in the form of the 1980 UN Convention on International Multimodal Transport of Goods, it has not yet entered into force and would have to await further development in this field. So, in spite of the shortcomings of rules available for voluntary adoption, such as the 1991 UNCTAD/ICC Rules for Multimodal Trans-s. 91
62.92 The mixture of mandatory and non-mandatory laws. 92
63.port Documents, there is as yet no other alternative to achieve internationals. 92
64.uniformity.s. 92
Regulation of freight forwarder contracts in
general conditions
1.General conditions for the service of freight forwarders undoubtedly cons. 92
2.tribute to consistency and transparency. But this does not extend beyonds. 92
3.the countries or regions in which such general conditions are used. Thus,s. 92
4.international trade would have to suffer from the different approaches ands. 92
5.levels of liability following from general conditions. Countries and regions,s. 92
6.where organizations representing customers have participated in the delibs. 92
7.erations with freight forwarders in the drafting of general conditions, haves. 92
8.succeeded in achieving a better balance between the interests of the partiess. 92
9.concerned. Nevertheless, any comparative analysis of general conditionss. 92
10.used would demonstrate a considerable and harmfill variety.s. 92
11.In countries where freight-forwarding services have been regulated bys. 92
12.statutory law, the conditions follow that law or at least use the law as a points. 92
13.of departure. Where, as in Germany, the law relating to the freight fors. 92
14.warder as contracting carrier is mandatory, to that extent no option is avails. 92
15.able for him to regulate his liability differently in his general conditions.108s. 92
16.Instead, the mandatory liability may be absorbed by a more or less sophiss. 92
17.ticated insurance system.109 The Austrian General Conditions also replaces. 92
18.liability with insurance but in a different way, since no mandatory law existss. 92
19.as in Germany. Among the countries where liability closely follows status. 92
20.tory law we find, i.a., Germany, France, Spain, Portugal, Slovakia, and Uzs. 92
21.bekistan. However, overall limits of liability differ. For example, Frenchs. 92
22.conditions (50.000 EUR) contrast with Spain, which has no overall Emits. 92
23.as to loss of or damage to goods but a limit to an amount not exceeding thes. 92
24.remuneration for the service as to delay in delivery or any indirect loss ors. 92
25.damage. In some countries, such as the Czech Republic and Poland, limis. 92
26.tations of liability are allowed only if following from national law or inter-s. 92
27.Regulation off reightforwarder contracts in general conditions 93 national conventions. Again, in Russia reference is made to the monetary limits of international conventions.s. 93
28.At the other end of the scale we find countries still accepting almost a total freedom of contract which is used by some associations in their dis claimers of liability (e.g., in Australia, Greece, India, New Zealand, and Singapore). The traditional disclaimer of liability as carrier appears in Bel gium, Bulgaria, the Czech Republic, Egypt, Poland, the Netherlands, and Italy. The distinction between the freight forwarder as agent and principal is particularly apparent in the common law jurisdictions, where the lead of the British conditions (BIFA) have been followed in Bulgaria, Hong Kong, Ireland, Kenya, South Africa, U.A.E. (NCFF), and Vietnam.s. 93
29.In some countries, distinctions are made between the different fiinctions of the freight forwarder, with carrier liability sometimes accepted by refer ence to FBL, e.g., the Scandinavian and Baltic States using NSAB 2000, France, Switzerland, Greece, Canada (CIFF A), Russia, Korea, Indonesia, and Ukraine. In the United States, the notions of indirect carrier and non vessel operating common carrier (NVOCC) have been launched in the regula tory statutory provisions110. However, the private law aspects of the freight forwarder’s liability have so far attracted less attention, except in efforts to extend maritime liability to cover multimodal transport by amendments to the Carriage of Goods by Sea Act. These are presently under re-consider ation by UNCITRAL in co-operation with CMI. To what extent such amendments will affect the freight forwarder’s liability remains to be seen.s. 93
30.This short survey of the freight forwarder’s liability on the world map demonstrates a chaotic picture. Regrettably, the 1996 FIATA Model Rules have so far only had a marginal impact. This may lead to a general decline of the traditional method of the freight forwarding industry to determine liability by self-regulation in general conditions.s. 93
31.94 The mixture of mandatory and non-mandatory lauos. 94
The 1996 FIATA Model Rules for Freight
Forwarding Services
1.In 1981, FIATA submitted to its member organizations a »FIATA Models. 94
2.for Standard National Freight Forwarding Trading Conditions». Thats. 94
3.Model contained only a few articles that did not deal with liability fully ands. 94
4.also left the monetary limits of liability open. The Model contained somes. 94
5.articles as to the freight forwarder’s right of hen, time limits for claims (6s. 94
6.months), and jurisdiction. As far as known, no freight forwarding organis. 94
7.zation has to any significant extent used that Model.s. 94
8.The different approaches to legal classification of freight forwarders ares. 94
9.disturbing, in at least two important areas. First, the notion of the freights. 94
10.forwarder as commission agent is unknown in the common law systems.s. 94
11.Instead, one would have to resolve from case to case whether or not thes. 94
12.freight forwarder has acted as agent or as a principal. Second, in French laws. 94
13.a freight forwarder who undertakes to procure carriage from point to points. 94
14.(de bout en bout) is111 1 1 r11e23sponsible for the acts or omissions of third parties ass. 94
15.a »commissionaire de transport» (a kind of del credere liability). This cons. 94
16.cept is unknown to both the common law systems and the civil law systemss. 94
17.other than French law. However, the French concept has similarities in as. 94
18.number of other jurisdictions but with some important differences. In ads. 94
19.dition, a distinction exists under French law between the freight forwarders. 94
20.as commissionaire de transport and as transitaire, since the latter is a persons. 94
21.who will only undertake matters ancillary to the actual transport (opérationss. 94
22.juridiques). Under Belgian law, the concept of commissionaire de transport iss. 94
23.also known but del credere liability has not been used since the Belgian coms. 94
24.missionaire de transport is under liability as carrier. The situation is the sames. 94
25.according to the Italian Codice Civilestipulating that the spedizionere-s. 94
26.vettore is subject to liability as carrier (vettore) as is presumably the comi-s. 94
27.sionista del transporte according to the Spanish Cödigo de comercio.n?>s. 94
28.In order at least to modify the differences in the law of freight forwards. 94
29.ing, in 1995 FIATA submitted to a Working Group the task of performings. 94
30.a survey of the existing general conditions used by freight forwarders in thes. 94
31.member countries of FIATA and, on the basis of that survey, elaboratings. 94
32.Model Rules for Freight Forwarding Services. In June 1996, the Workings. 94
33.The 1996 FIATA Model Rules for Freight Forwarding Services 95 Group presented a final draft, which later in October was accepted by the Board of Officers of FIATA in connection with the Caracas World Con ference.s. 95
34.The Model Rules distinguish between the freight forwarder as principal and agent. When liable as principal for carriage and other services, his lia bility follows the same rules that would have applied if the customer had entered into a separate contract for such service or carriage and with the ap plication of the mandatory and other rules and conditions relating there to.114 In other words, the network system technique has been used. This also means - provided, of course, that the loss or damage could be localized - that the freight forwarder would enjoy a back-to-back position, since he could seek indemnity from those he might have engaged for the service or carriage upon the same conditions as apply in the relationship with his own customer. Whenever the freight forwarder performed the service or car riage by his own facilities or means of transport it would, of course, be pos sible for him to make the contract subject to his own specific conditions for the service of carriage insofar as such conditions did not depart from any compulsorily applicable regime.s. 95
35.As to freight forwarding services, the FIATA Model Rules stipulate that the freight forwarder would have an obligation to exercise due dili gence and take reasonable measures in performing the services.115 The monetary limit has been set at 2 SDR per kilo as to loss of or damage to the goods,116 1b1u7t for other types of loss the liability limit for each incident has been left open for a decision by the respective national freight forwarding associations. There are particular exceptions from liability for valuables as well as for delay and consequential loss other than direct loss.™ The time bar for actions against the freight forwarder is nine months from handing over the goods.118 Where liability concerns something other than loss of or damage to the goods - such as liability for errors or omissions - notice of the claim must be given within 14 days from the day when the customer knew or ought to have known the circumstances giving rise to the claim. Failing such notice the claim is barred unless it can be shown that it was impossible to comply with this time limit.119s. 95
The mixture of mandatory and non-mandatory law
1.The Model Rules also secure the freight forwarders’ right to exercise as. 96
2.general lien on the goods in his possession in order to satisfy his claims,s. 96
3.both as to such goods and also for claims arising from earlier contracts withs. 96
4.the customer.120 Additional stipulations provide for the customer to holds. 96
5.the freight forwarder harmless for unexpected costs arising in the perfors. 96
6.mance of the services according to the customer’s instructions or when, ows. 96
7.ing to incorrect or incomplete instructions, extra costs result for the freights. 96
8.forwarder.121 In particular, the customer is responsible for economic losss. 96
9.incurred by the freight forwarder as a result of dangerous characteristics ofs. 96
10.the goods unknown to the freight forwarder.122s. 96
11.If the freight forwarder refers to the Model Rules, then this would cons. 96
12.stitute an agreement with the customer that his liability could not be res. 96
13.duced by the simultaneous application of additional rules stipulating a lows. 96
14.er liability.123 However, the Model Rules would, of course, not prevent thes. 96
15.freight forwarder from doing the opposite and giving the customer addis. 96
16.tional protection.s. 96
17.Since the application of the Model Rules is voluntary, it remains to bes. 96
18.seen to what extent they will be used in national freight forwarding condis. 96
19.tions or otherwise.s. 96
20.In NS AB 2000 the preamble signals that in every respect they offer thes. 96
21.customer at least the protection that would follow from applying the FLA-s. 96
22.TA Model Rules.124s. 96
Warehousing by freight forwarders and the
OTT convention
1.6.6.1 Freedom of contract prevailss. 96
2.The liability of stevedores and terminal operators is subject to national law,s. 96
3.which usually accepts considerable scope for freedom of contract. Conse-s. 96
4.Warehousing byf reight forwarders and the 1991 OTT convention 97 quendy, stevedores and terminal operators have used their freedom of con tract to limit their liability accordingly by various methods. These include, for example, stipulating liability only for »wilful misconduct on the mana gerial level of the company» and with a very low monetary limit. In addi tion, liability may be excluded altogether to the extent the customer has or should have covered himself by cargo insurance. 6.6.2 Lack of effective protection and the need to insure the goods Regrettably, the purpose of mandatory law as to international transport is not sufficiently clear. We have seen that the Hague and Hague-Visby Rules primarily aim to protect the consignee\yy mandatory rules. The reason is that under CFR and CIF contracts the consignee is exposed to the risk of sub standard contract terms. That is, he exerts no influence at the time of con cluding the contract of carriage that is made for his benefit by the CFR and CIF seller. Additionally, rules should exist to protect his rights under the documents, entitling him to: • claim the goods from the carrier at destination, and to • sue the carrier in case of loss of or damage to the goods. It cannot be said, however, that the aim of the mandatoiy regimes under the Hague and Hague-Visby rules generally aim to protect the weaker party in the contractual relationship.s. 97
5.A further purpose of mandatory law would be to reach uniformity. However, here global international consensus is of course required - but not easily achieved. The willingness of States to commit themselves to an international regime depends upon the benefits that could be derived from it. In essence, it is believed that contracting parties are capable of agreeing in an appropriate way, at least in situations where they have an opportunity to ascertain their legal position under the contract as drafted. Owing to the great variety of contracts needed to take goods from one point to another in transnational trading, the aim of achieving full and consistent cover with appropriate liability for the persons engaged is a hopeless task. Protection by mandatory rules would necessarily be haphazard unless one and the same enterprise undertakes through liability - from point to point.s. 97
6.Even so, no international regime as yet exists providing protection by mandatory law for such an undertaking. Moreover, as we shall see, it may only be possible ever to achieve international consensus on such a type ofs. 97
7.98 The mixture of mandatory and non-mandatory laws. 98
8.through liability if some flexibility is offered. The shortcomings of thes. 98
9.present rules and the difficulty of achieving full protection from point tos. 98
10.point by mandatory law explain the continuing focus on the traditionals. 98
11.mandatory liability of carriers. This goes hand in hand with abstainings. 98
12.from similar protection for the customer during the particularly dangerouss. 98
13.stages before or after the carriage. Hence, few customers would dare to abs. 98
14.stain from an appropriate insurance covering the whole transport includings. 98
15.the stages before and after the actual carriage. This becomes all the mores. 98
16.important as carriers that have undertaken to receive the goods from and tos. 98
17.deliver them to inland points would only seldom voluntarily accept liabilitys. 98
18.for stages of the transport during which they have not themselves pers. 98
19.formed the transport. Even if mandatory law covered the period of respons. 98
20.sibility from the carrier’s taking the goods in charge until delivery, success. 98
21.sive carriers may be involved. As a result, the goods might then be exposeds. 98
22.to loss or damage during the critical transhipment stages.s. 98
23.Carriers undertaking liability during the pre-shipment and after the diss. 98
24.charge stages may look for reimbursement of compensation that they hads. 98
25.to pay to their customers. However, they would then often find that the lis. 98
26.ability of stevedores and warehousemen in different countries is simplys. 98
27.non-existent or substandard. They would, of course, benefit from any ins. 98
28.ternational regime protecting their rights of recourse. Nevertheless, it is tos. 98
29.be expected that the interest of States to assist them is rather weak. Thiss. 98
30.may stem from the general view that carriers have a sufficiently strong bars. 98
31.gaining position with their customers and subcontractors to look after theirs. 98
32.own interests.s. 98
33.6.6.3 The 1991 OTT Conventions. 98
34.Efforts to create a uniform regime comprising the stages before and afters. 98
35.carriage were initiated by UNIDROIT. Later, under the auspices of UNs. 98
36.CITRAL, this led to the 1991 International Convention on Liability ofs. 98
37.Operators of Transport Terminals in International Trade (the OTT Cons. 98
38.vention) .125 The mandatory scope of that convention in connection withs. 98
39.Warehousing byf reightf orwarders and the 1991 OTT convention 99 carriage relates to operators who handle or receive goods »involved in inter national carriage».126 The liability rules and the monetary limitation corre spond to the rules of the 1980 Multimodal Transport Convention. How ever, particular difficulties arise in deciding the very basis for applying the OTT Convention, namely that the goods should be involved in interna tional carriage.s. 99
40.The independent terminal operator as such is not involved with interna tional carriage. Moreover, the fact that the goods are involved in such car riage may - as far as he is concerned - be considered a rather weak connect ing factor to international carriage. In some cases it might even be difficult to ascertain whether or not goods delivered to a terminal operator are in tended for carriage internationally. Further, if the goods remain in the ter minal after entering it, difficulty may arise in establishing whether they ar rived there after international carriage.s. 99
41.Further difficulties arise in determining the applicable monetary limit, since according to the OTT Convention regard should be had to the in tended transport. If a subsequent non-maritime transport is contemplated, then the monetary limit of 8.33 SDR per kilo would apply. But how will it be possible for both parties to the contracts of storage and handling of the goods in terminals to know which goods - or which part of the goods - are intended to be carried abroad with a particular mode of transport? Addi tionally, since a distinction is made between goods involved in international carriage and other goods, then administrative difficulties would result for the terminal operator unless he chose to apply the OTT Convention - also outside the scope of its mandatory application - for all goods handled in the terminal.s. 99
42.The OTT Convention has so far had little success (one State has rati fied, whereas five ratifications and accessions are necessary to bring the Convention into force). Perhaps, the fate of the OTT Convention evidenc es what has been suggested, namely that efforts to achieve a workable and appropriate protection to the benefit of owners of goods in transit will fail to reach sufficient international consensus. Instead, it might be necessary to focus on the more modest objective of providing an appropriate legal in frastructure with non-mandatory rules, thus leaving to the contracting par ties the possibility either to opt in or opt out.s. 99
43.100 The mixture of mandatory and non-mandatory laws. 100
Distribution and value-added logistics services
1.As we have seen, the services offered by freight forwarders are fairly coms. 100
2.prehensive. But, traditionally, they are all more or less closely connected tos. 100
3.the transport as such. They relate to services in preparing for the transports. 100
4.by receiving the goods, storing and clearing them for export as well as pres. 100
5.paring the appropriate documentation and procuring the contract of cars. 100
6.riage. Further, after-transport services comprise clearing the goods for ims. 100
7.port, helping with paper-work, receiving the goods from the carrier, carrys. 100
8.ing out CAD or COD instructions, and storing the goods pending deliverys. 100
9.to the party entitled to receive them. Additionally, the pick-up and deliverys. 100
10.service may include collecting the goods from the carrier or the customers. 100
11.for delivery at inland destination points or to carriers for on-carriage.s. 100
12.In recent years, services offered by freight forwarders have been consids. 100
13.erably expanded and may comprise everything necessary from the moments. 100
14.the goods are produced or manufactured until they reach the ultimate res. 100
15.ceiver and sometimes even following such receipt through assistance res. 100
16.quired for adaptation and use of the goods. Hence, expanded value addeds. 100
17.services may include receiving orders and also implementing orders by:s. 100
18.• collecting the goods from storage facilities,s. 100
19.• packing and marking the goods,s. 100
20.• assembling parts to conform with the order,s. 100
21.• supervising goods in storage by inventories, ands. 100
22.• receiving any goods returned as non-conforming with orders.s. 100
23.In such context, customers may require sophisticated distribution services,s. 100
24.in turn requiring a profound knowledge of the products and the relevants. 100
25.market.s. 100
26.Added services are not limited to the physical movement of goods froms. 100
27.point to point but would include information by EDI and the transfer ofs. 100
28.money under various arrangements not limited to cash on delivery or cashs. 100
29.against documents but extended to payment under factoring and leasing ars. 100
30.rangements. In many cases, the ability of service providers to satisfy the res. 100
31.quirements of customers at low cost would entail considerable saving ofs. 100
32.costs which otherwise would have been incurred. Hence, it would be ecos. 100
33.nomically sound to engage other parties, such as freight forwarders, by outs. 100
34.sourcing functions previously maintained by the entities concerned. How-s. 100
35.Distribution and value-added logistics services 101 ever, this would require efficiency and reliability of parties contracting to undertake such important functions for their customers.s. 101
36.The holistic approach required to achieve optimal economic efficiency deserves an appropriate term. This has been provided by the term logistics inherited from strategy used in warfare. Clearly, it would be imprudent to send armies into enemy country without first ensuring an appropriate and timely supply of ammunition, stores, and provisions for the fighting forces. The logistic approach may of course be used internally by an enterprise or in co-operation with a particular customer. However, if a third party, such as a freight forwarder, is engaged, then the terminology needs qualifying by the term third party logistics (3 PL).s. 101
37.The term 4PL is also used primarily to indicate that the service is more comprehensive and sophisticated than offered by other 3PLS particularly as to the management ofinformation flows by EDI.127s. 101
38.The term logistics service provider as compared with the notion of freight forwarder does not signify any difference in principle, except that a logistics service provider is expected to offer more comprehensive, sophisticated services. The French General Terms of Sale of the Fe'dération des Entrepris es de Transport et Logistique (2001) refer to operations performed by trans port or logistics operators but do not significantly depart from traditional regulation in general conditions on freight forwarding services.128s. 101
39.Undoubtedly, rights and obligations as well as liability in case of non performance may be taken care of by general conditions. However, a new approach is required compared with existing general conditions regulating freight forwarding services.129 The traditional focus on obligations relating to transport as such - including ancillary services - is inadequate. Instead, a purely contractual approach is needed. In essence, contracts with 3PLS or 4PLS are contracts for non-tangible services and should be performed ac cordingly. In order to be competitive, 3PLS and 4PLS would have to acs. 101
40.102 The mixture of mandatory and non-mandatory laws. 102
41.cept fairly extensive liability. Disclaimers, or reduction of liability referrings. 102
42.to an estimated average value of the goods may become unacceptable tos. 102
43.customers. Instead, one would have to rely on a general monetary limitations. 102
44.of liability based on an assessment of loss that could be reasonably foresees. 102
45.able at the time of the conclusion of the contract (cf. Art. 74 CISG).s. 102
Subcontractors and piercing the privity
1.7s. 3
of contract barrier
Use of subcontractors
1.7.1.1 Through transport As we have seen, the mere fact that a document covers a period from taking goods in charge until delivery does not necessarily imply continuous liabil ity for the issuer of the document. In particular, the maritime carrier cus tomarily limits liability to the segment of carriage that he physically per forms. At the same time, he acts as agent - in the same way as a forwarding agent - when concluding additional contracts needed to bring the cargo to the delivery point mentioned in the transport document. Under such a con tractual arrangement, the party entitled to delivery will have two or more contracting parties, each responsible for their part of the total transport. This situation may also arise in non-maritime carriage, although here the non-maritime carrier would usually remain responsible for the whole trans port from the moment of taking the goods in charge until their delivery.s. 3
2.However, particularly in carriage of goods by road, transport may be ar ranged in stages, where each participating carrier becomes responsible only for the part that he performs. In carriage of goods by rail and road, partic ular rules apply to such cases imposing a collective responsibility on the car riers. Thus, according to COTIF/CIM,1 the railway that accepts goods for carriage with a consignment note will be responsible for the carriage during the entire route up to delivery. Moreover,2 each succeeding railway by tak ing over the goods with the original consignment note will participate in performing the contract in accordance with the terms of that document. Actions for loss of or damage to the cargo may be raised against the for warding railway, the railway of destination, or the railway on which the cause of action arose.3 This system has been copied in the CMR provisionss. 3
3.104 Subcontractors andp iercing the privity of contract barriers. 104
4.relating to carriage performed by successive carriers.4 However, liabilitys. 104
5.arising by reason of a successive carrier’s acceptance of the goods and thes. 104
6.consignment note does not correspond to contemporary practice. Rather, ins. 104
7.international carriage of goods by road, one carrier usually remains respons. 104
8.sible for the whole transit, using other carriers as subcontractors.5s. 104
9.As mentioned, air carriers are liable under the applicable conventionss. 104
10.solely for air carriage as such, finishing with delivery from the airport. Cons. 104
11.signees will not always receive goods from the air carrier at the airport buts. 104
12.the airline may offer a pick-up and delivery service. However, whatevers. 104
13.they do in that context would not be covered by the conventions. Neverthes. 104
14.less, by contract air carriers often assume liability equivalent to liability uns. 104
15.der the applicable convention, so as to avoid difficulty in attributing incis. 104
16.dents involving the goods to the air carriage segment as distinguished froms. 104
17.those before and after it. Often, freight forwarders assemble goods for airs. 104
18.carriage and issue their own documents in the same way as in maritime cars. 104
19.riage, where they use FBL. However, in these cases, freight forwarders cuss. 104
20.tomarily use their own air waybills (house air waybills) using the airline ways. 104
21.bill as the master air waybill. The latter might comprise a number of indis. 104
22.vidual consignments assembled in the particular container used for air cars. 104
23.riage (the igloo). Again, determining whether the freight forwarder hass. 104
24.assumed liability as carrier would involve analysing the house air waybill iss. 104
25.sued.s. 104
26.7.1.2 Multimodaltransports. 104
27.Multimodal transport operations require distinguishing between a pers. 104
28.forming MTO and a MTO merely contracting for carriage and using subs. 104
29.contractors to perform the carriage. However, in practice it may well haps. 104
30.Liability ofs ubcontractors and the carrier's vicarious liability 105 pen that a MTO that performs the major part of the transit - e.g. a con tainer Une extending the transport inland to a hub to and from which the cargo is tendered and delivered - leaves additional transport to other car riers. Conversely, a MTO primarily acting as contracting carrier and using a subcontracted carrier for the main part may well physically perform addi tional carriage. Also, any services additional to the transport as such may either be performed by the MTO himself or by engaging other parties. In dependent terminal operators are often used as subcontractors, particularly as to storage in stages between two parts of the carriage or storage pending deliveiy to the consignee. 7.1.3 Logistics service providers As we have seen, the service offered by logistics service providers extends to include activities falling under different types of contracts. Several of these would not so much concern physical handling of the goods as intangible services required to achieve optimal flow of money and information, as well as goods. The range of subcontractors needed in performing such contracts necessarily expands when compared to requirements to perform simple transport of goods.s. 105
Liability of subcontractors and the carrier’s
vicarious liability
1.7.2.1 Different approaches6 While it is a fairly universal principle that, absent agreement to the contra ry, a contracting party remains liable even though all or part of his perform ance is entrusted to subcontractors, nevertheless the liability of subcontrac tors to parties under contract with the main contractor is much-debated. In the absence of a contractual relationship with the claimant, the subcon tractor would be exposed to the risk of actions on a non-contractual basis. This, in most jurisdictions, would be possible based on a general duty of care to the world at large not to inflict physical loss of or damage to the goods {the tort ofn egligence}. However, as to actions unrelated to such a dutys. 105
2.106 Subcontractors and piercing the privity of contract barriers. 106
3.of care it would usually be impossible or at least difficult to obtain compens. 106
4.sation for pure pecuniary loss, e.g. following from inadequate information.s. 106
5.Another option would be to exclude the possibility of concurrent actions. 106
6.against both the main contractor and his subcontractor under the theorys. 106
7.that the parties have impliedly agreed to bar a concurrent action against thes. 106
8.main contractor’s servants and agents. However, such protection of servs. 106
9.ants and agents would normally not be available under the applicable law.7 8s. 106
10.As an alternative to non-contractual actions against subcontractorss. 106
11.based upon the tort of negligence, contract terms might be used in spite ofs. 106
12.the fact that there is no contract between the claimant and the subcontracs. 106
13.tor. If so, it remains to be determined what contract terms should be used.s. 106
14.One option would be to incorporate the terms that would have applied if as. 106
15.contractual relationship had been established between the claimant and thes. 106
16.subcontractor under the theory of an implied contract to that effect. Alters. 106
17.natively, the terms of the main contract could be incorporated based on thes. 106
18.theory of implied authority of the main contractor to agree with his subs. 106
19.contractors on the same terms as in his own contract on behalf of his cons. 106
20.tracting party. This alternative may expose the subcontractor to worse cons. 106
21.tract terms than those of his own contract with the main contractor. But ins. 106
22.that case he could protect himself by a right of recourse against the mains. 106
23.contractor. This would arise if the subcontractor has to pay more to thes. 106
24.claimant than would have been the case if the main contractor had sued fors. 106
25.reimbursement of what the main contractor might have had to pay to thes. 106
26.claimant {a circular indemnity clause). Conversely, the subcontractor coulds. 106
27.benefit from the better terms of the contract concluded between the mains. 106
28.carrier and the customer.s. 106
29.Normally, one would expect each contracting party to agree in his bests. 106
30.interests and guard against any additional risks following from actions froms. 106
31.persons under contract with his own contracting party. Clearly, however, its. 106
32.would be asking for too much to require employees, and perhaps also somes. 106
33.other less sophisticated parties, to do so. Perhaps, the clearest example of as. 106
34.misfortune of a person exposed to an action in tort appears in the famouss. 106
35.case of Adler v. Dickson {The Himalaya)* where the master and boatswains. 106
36.were sued by a passenger who wished to avoid the defenses available to thes. 106
37.shipowner. As a result, legislative action was required to obtain protections. 106
38.for, in particular, servants and agents and to support contractual clausess. 106
39.Liability of subcontractors and the carrier's vicarious liability 107 {Himalaya clauses) extending the benefits of the main contract not only to servants and agents but also to anyone engaged for the performance of that contract. 7.2.2 Solutions under international conventions In maritime carriage, the problem of non-contractual claims was first ad dressed in the Hague-Visby Rules.9 Here, the possibility for the claimant to get an upside by a tort action was defeated first by Art. 4 bis 1 to the ef fect that it did not matter whether the action was founded in contract or in tort. In both cases, the defenses and limits of liability provided for in the Hague-Visby Rules would apply in any action against the carrier in respect of loss or damage to the goods covered by the contract of carriage. Addi tionally, if such action had been brought against a servant or agent of the carrier, such servant or agent would be entitled to avail himself of the same defenses and limits of liability which the carrier was entitled to invoke un der the convention. Further, the aggregate of what could be recovered from the carrier and servants and agents should not exceed the limit provided for in the convention. Nevertheless, the Hague-Visby Rules strictly limited the protection to servants and agents and added within brackets the following words »such servant or agent not being an independent contractor». At the time of the CMI Stockholm Conference 1963 preparing this addition to the Hague Rules, it was the majority view that protection should be ex panded to cover independent contractors. However, at the time of the dip lomatic conference views had changed presumably under the assumption that parties other than servants and agents were capable of protecting them selves by appropriate clauses.10 The Hamburg Rules11 are based on the same principles as the Hague-Visby Rules12 but the MT Convention13 ex tends protection to »any other person of whose services he makes use for the performance of the multimodal contract».s. 107
40.108 Subcontractors and piercing the privity of contract barriers. 108
41.7.2.3 Identifying the carriers. 108
42.In maritime carriage, several carriers are often involved and it might theres. 108
43.fore be difficult to decide which of these carriers is responsible to shipperss. 108
44.and consignees. Bills of lading often contain identity of carrier clausess. 108
45.whereby liability is channelled to the owner of the ship. Hence, althoughs. 108
46.the contract of carriage may seem to have been entered into between a partys. 108
47.other than the shipowner and the consignor, the clause aims to identify thes. 108
48.performing carrier as the contracting carrier. The validity of such clauses iss. 108
49.much-debated but channelling liability to the shipowner, rather than, e.g.,s. 108
50.a time charterer, is also supported by the practice of issuing bills of ladings. 108
51.for the master, who would not have authority to conclude contracts on behalfs. 108
52.of anyone else than his employer, the shipowner. In practice, however, billss. 108
53.of lading are issued by liner agents and it might be argued that they act ups. 108
54.on the authority of the liner shipping company rather than the shipowner,s. 108
55.even if they put their signature under the pre-printed text for the master.^s. 108
56.If channelling liability to the shipowner under the applicable law weres. 108
57.unsuccessful, he would be exposed to actions from the cargo owners on as. 108
58.non-contractual basis. This may deprive him of any exemption or limitas. 108
59.tion of liability available under the applicable international convention.s. 108
60.Normally, he would not ultimately be prejudiced by this, as most charter-s. 108
61.party forms would give him a right of recourse for any liability followings. 108
62.from the orders given by the time charterer (under the employment clauses. 108
63.of time charterparties). Instead, the detriment would hit the contractings. 108
64.carrier by his duty to indemnify the shipowner, so that the end result woulds. 108
65.be loss of his rights under the applicable international convention. True,s. 108
66.cargo claimants could be discouraged from performing such a by-pass ops. 108
67.eration by a circular indemnity clause in bills of lading to the effect that anys. 108
68.amount paid in excess of the liability under the international conventions. 108
69.must be reimbursed to the contracting carrier. However, such measures ares. 108
70.seldom used - presumably due to reliance on identity ofc arrier clauses.s. 108
71.Liability ofs ubcontractors and the carrier's vicarious liability 109 7.2.4 Joint liability of contracting and performing carriers The Hamburg Rules15 first define the carrier as »any person by whom or in whose name a contract of carriage of goods by sea has been concluded with the shipper». In addition,16 the non-contracting carrier is referred to as the actual carrier. This carrier is defined as »any person to whom the performance of the carriage of the goods, or a part of the carriage, has been entrusted by the carrier, and includes any other person to whom such performance has been entrusted». This wide definition of actual carrier would not only include the performing carrier but also non-performing carriers if they had been entrusted by the carrier to perform. So, if such a non-performing carrier subcontracted performance to another carrier, he would still remain responsible in his capacity of actual carrier.17 The UNCITRAL/CMI draft restricts the definition to pe forming parties which refers to »a person other than the carrier that physically performs any of his responsibilities under the contract of carriage» and further provided that he acts »at the carrier’s request and under the carrier’s supervision or control». The Hamburg Rules18 make all the provisions of the convention applicable to the responsibility of the actual carrier but limited to »the car riage performed by him». And, further, the liability of the contracting car rier and the actual carrier is joint and several.19 2 I0t is not quite clear what is meant by the words for the carriage pe formed by him.2Q According to a lit eral interpretation, this would seem to mean that a party entrusted with performance but choosing to delegate it to somebody else might escape li ability. However, this would mean that the broad definition of actual car rier21 has not been followed up in the implementation provision.22 Pre sumably, such a literal interpretation23 ought to be avoided under the thes. 109
72.110 Subcontractors and piercing the privity of contract barriers. 110
73.ory that the undertaking to perform would be enough to qualify the carriers. 110
74.as the performing carrier.24 25s. 110
75.In non-maritime carriage, the same dichotomy of contracting and pers. 110
76.forming carriers appears in a particular convention added to the Warsaws. 110
77.Convention, the 1961 Guadalajara Convention. Here,26 basically the sames. 110
78.distinction between contracting carrier and actual carrier as in the Hams. 110
79.burg Rules appears. It follows from the Warsaw Convention27 that success. 110
80.sive carriers will also become liable. All these carriers are subject to the ruless. 110
81.of the Warsaw Convention but - as to successive and actual carriers - onlys. 110
82.for the part of the transport performed. As to successive carriers, an exceps. 110
83.tion to this principle is made when the first carrier has assumed liability fors. 110
84.the whole journey.28 In rail and road transport, the principle of collectives. 110
85.responsibility of carriers is recognized under the theory that each successives. 110
86.carrier becomes responsible together with the other carriers upon receivings. 110
87.the goods and accepting the consignment note.29 COTIF/CIM and CMRs. 110
88.stipulate that non-contractual claims against the carrier or someone fors. 110
89.whom the carrier is responsible would be subject to the provisions of thes. 110
90.respective conventions which exclude or limit liability.30 As mentioned,s. 110
91.subcontracting in carriage of goods by road often occurs when one carriers. 110
92.assumes liability for the whole carriage from point to point while engagings. 110
93.others wholly or partly to perform the carriage. In particular, when freights. 110
94.forwarders undertake liability as carriers they would do so by issuing as. 110
95.CMR waybill for the whole transit although they might have engaged oths. 110
96.er road carriers wholly or partly to perform the carriage.s. 110
Clauses for protecting subcontractors
1.7.3.1 Himalaya clausess. 110
2.Particularly in English law, the doctrine of privity of contract has made its. 110
3.difficult to secure recognition of clauses aiming to protect servants, agents,s. 110
Clausesfor protecting subcontractors 111
1.and subcontractors. In the absence of a contractual link between a party to the contract of carriage and the persons engaged in performing the contract without being contracting parties themselves, the doctrine of privity of con tract would in theory make it impossible to extend any rights or obligations under the contract of carriage to somebody else.31 3 T2his is different under civil law as no difficulty exists in making a stipulation in a contract to the benefit of somebody else. Nevertheless, a particular drafting of the clause may make it acceptable even under English law, provided the stipulation has been made by a contracting party acting as agent or trustee as to the stipulation intended to provide protection for other than the contracting parties themselves. By this method, the required contractual link is created and the outsiders become beneficiaries of the contractual stipulation in tended to protect them. Although, in the 1992 English Carriage of Goods by Sea Act, there is now statutory support to the benefit of the carrier’s servants and agents, the particular drafting of Himalaya clauses traditional ly required under English and US law is still retained. It should also be mentioned that this particular drafting will still be required if the protection is also intended to comprise independent contractors not covered by statu tory support, such as independent contractors when the Hague-Visby Rules apply.s. 111
2.Even if Himalaya clauses as such are recognized, it remains to decide how far they go in order to protect subcontractors. An illustration is the American case of Kirby v. Norfolk Southern Railway Company}2 Here, Kir by had made a contract with a freight forwarder (ICC) in Australia for car riage of goods to a US port for oncarriage by the railway. Thus, a contrac tual relationship was established between Kirby and ICC. ICC, in its turn, had subcontracted a shipping line (Hamburg Sud) for carriage of the goods from Sydney Australia to Savannah Georgia, from where the goods were to be carried by rail onto the destination, Huntsville Alabama. The damage occurred while the train was on route from Savannah to Huntsville, with extensive damage to the goods (machinery). This well exceeded any Emit of liability under the stipulations of the document issued by ICC (thes. 111
3.112 Subcontractors and piercing the privity of contract barriers. 112
4.FIATA Multimodal Transport Bill of Lading, FBL) and also under the bills. 112
5.of lading issued by the shipping line. As the freight forwarder according tos. 112
6.FBL undertakes liability as carrier, the shipping line acted as its subcons. 112
7.tractor, as reflected in its bill of lading, which thus governed the relations. 112
8.ship between the freight forwarder and the shipping Une. Both the FBLs. 112
9.and the bill of lading issued by the shipping line contained Himalaya clauss. 112
10.es. The shipping line’s bill of lading extended protection to »all agents,s. 112
11.servants, employees, representatives, all participating (including inland)s. 112
12.carriers and all stevedores, terminal operators, warehousemen, crane opers. 112
13.ators, watchmen, carpenters, ship cleaners, surveyors and all independents. 112
14.contractors whatsoever». The FBL, in customary less specific language, exs. 112
15.tended protection to »any servant, agent or other person (including any ins. 112
16.dependent contractor) whose services have been used in order to performs. 112
17.the contract». The question to decide was whether, under any of theses. 112
18.Himalaya clauses, protection could be extended to the railway as independs. 112
19.ent subcontractor. The US Supreme Court held that the freight forwarders. 112
20.had implied authority to make the Himalaya protection of the shippings. 112
21.line’s bill of lading available to the railway, although it was not his subcons. 112
22.tractor but a sub-subcontractor engaged by the subcontracted shipping lines. 112
23.as its subcontractor.s. 112
24.7.3.2 Circular indemnity clausess. 112
25.It is to be expected that logistics service providers would often find thems. 112
26.selves in the same situation as the freight forwarder in the case of Kirby v.s. 112
27.Norfolk Southern Railway Company. In such cases, one might well take thes. 112
28.view that it would be too complicated to extend Himalaya protection to thes. 112
29.world at large and that protection ought to be limited to persons engageds. 112
30.in performing their own contract - and not be extended to protect personss. 112
31.under somebody else’s contract as well. On the other hand, the claimants. 112
32.undoubtedly gets an unexpected upside from the mere fact that the oncar-s. 112
33.rier happens to be under contract with somebody else than the claimant’ss. 112
34.own contracting party. Indeed, if Himalaya clauses were defeated becauses. 112
35.of lack of specificity or failure to meet the requirements needed to pierces. 112
36.the privity of contract barrier, one might well experience counter-measuress. 112
37.by way of circular indemnity clauses. These could protect everyone in thes. 112
38.contractual chain by imposing a duty on the cargo claimant to reimburses. 112
39.whatever has been received from non-contractual claims against somebodys. 112
Clausesfor protecting subcontractors 113
1.involved in the performance of the contract irrespective of his position as contracting party, servant or agent, independent contractor, or sub-subcon tractor.33 Presumably, the decision by the US Supreme Court in the Kirby case may be explained by a general desire to let the terms of the subcontract prevail even in the absence of a direct contractual link between the claimant and the subcontractor and sub-subcontractor. 7.3.3 Who is the claimant under the contract of carriage? It would be wrong solely to focus on the contract of carriage, ignoring its interrelation with other contracts involved in international trade transactions and, particularly, the contract of sale. Whenever the terms of the contract of sale require the buyer to conclude a contract of carriage - such as under a FOB contract - the link between the buyer and the carrier is immediately established, which would seem to solve all problems. It will be for the buyer to agree with the carrier on appropriate terms. Nevertheless, even under FOB terms, sellers often undertake the practical arrangements by booking the car go for transport with the shipping line {FOB additional services) for the ben efit of the buyer. In addition, the seller even without being a party to the contract of carriage would have to hand over the goods for carriage and would in that capacity require a receipt from the carrier. In some cases, the receipt may not be identical with the transport document - the bill of lading - but may take the form of mate’s receipt. According to customary practice, bills of lading are often tendered to the seller even when the contract of carriage is between the carrier and the buyer. We may then get a situation where the buyer - although a contracting party in the contract of carriage - has no right to receive the goods from the carrier in the absence of the bill of lading, which has to be presented and surrendered to the carrier in exchange for the goods at destination. Additionally, the buyer would wish to rely on the information contained in the bill of lading, which is made out in his absence and with a description of the goods under the control of the seller and the carrier.s. 113
2.Under CFR and CIF contracts the position of the absent buyer is even more aggravated, since now he is not a party to the contract of carriage, whichs. 113
3.114 Subcontractors and piercing the privity of contract barriers. 114
4.is concluded by the seller. The buyer only becomes a beneficiary to the cons. 114
5.tract of carriage through the medium of the bill of lading representing thes. 114
6.goods. The bill of lading will be issued to the seller upon his demand ands. 114
7.subsequently transferred to the buyer by the seller’s endorsement.s. 114
8.In non-maritime transport, the situation is basically the same but sims. 114
9.pler as sale of goods in transit is seldom contemplated. Consequently, thes. 114
10.transport document need not have the transferability function of a bill ofs. 114
11.lading. It is enough that the buyer is named as consignee and that he mays. 114
12.receive the goods from the carrier in that capacity.s. 114
13.The buyer might wish to take delivery at the seller’s premises under thes. 114
14.trade term EX Works (EXW) and, if so, the whole transit would be withins. 114
15.his immediate control under the contract or contracts of carriage made fors. 114
16.the purpose of bringing the goods to the ultimate destination. The situas. 114
17.tion is basically the same when the seller’s obligation is limited to handings. 114
18.over the goods for transport to the carrier but, again, as appears from FCAs. 114
19.Incoterms 2000 clause A3 a »the seller may contract for carriage on usuals. 114
20.terms at the buyer’s risk and expense». Where under the terms CPT ands. 114
21.CIP - corresponding to CFR and CIF - the goods are not handed over ons. 114
22.board the ship but to the carrier usually at inland points, the seller woulds. 114
23.make the contract upon usual terms as a contracting party in the contracts. 114
24.of carriage but with the buyer as beneficiary. Only with contracts of sales. 114
25.made upon delivered terms (destination contracts: DAF, DES, DEQ^s. 114
26.DDU and DDP Incoterms 2000), the seller would be not only contractings. 114
27.party but also beneficiary under the contract of carriage. Nevertheless, buys. 114
28.ers may require documents necessary for oncarriage of the goods or for res. 114
29.ceiving them from the carrier at destination.34s. 114
30.It follows from what has been said that the claimant under the contracts. 114
31.of carriage is not necessarily the party who has suffered the harm but thes. 114
32.party who because of the contracting either remains or becomes the cons. 114
33.tracting party in the contract of carriage or, subsequent to assignment, bes. 114
34.comes the party entitled to claim the goods from the carrier and to exercises. 114
35.any rights against the carrier in the event the goods are not correctly delivs. 114
36.ered.35s. 114
Linking contract of sale and contract
8
of carriage
The bill of lading
1.The bill of lading holds a unique position in international trade law. It is usually described as having at least three important functions, namely: • To evidence that the goods, as described in the bill of lading, have beens. 115
2.handed over for carriage or, in other words, that the seller has fulfilleds. 115
3.his obligation under F- and C-terms (the receipt function). • To evidence the terms of the contract of carriage either by printed cons. 115
4.ditions in the bill of lading itself or by reference to the carrier’s generals. 115
5.conditions on concluding the contract (the evidence of contract termss. 115
6.function). • To give the holder of the document the right of control and transfer, sos. 115
7.that the holder of the bill of lading is the only one entitled to give ins. 115
8.structions to the carrier while the goods are in transit and to receive thes. 115
9.goods at destination (the document of title - or transferability- function). The last of the three functions in particular distinguishes the bill of lading from other documents of transport - such as waybills for carriage of goods over land or by air - which simply name the person entitled to receive the goods at destination (cf. the same method for straight bills of lading used in the United States).s. 115
10.The specific need for a bill of lading in carriage of goods by sea is ex plained by the fact that it is only during such carriage that the goods are sometimes sold in transit. This in turn necessitates a document that both entitles the original buyer to receive the goods and also enables him to transfer his right to subsequent buyers. Without a document of title, such as the bill of lading, this would not have been possible. In a sense, when goods are sold in transit, such sale usually takes the form of an assignment of the first buyer’s rights under contracts of carriage and insurance as thes. 115
Linking contract ofsale and contract ofc arriage
1.case may be. This also explains the rather strange phenomenon that the risks. 116
2.of loss of or damage to the goods may pass to the buyer at the very moments. 116
3.when they are handed over to the carrier. Of course, in the case of sale ofs. 116
4.goods in transit this will occur before the contract of sale is made. In ess. 116
5.sence, it is not then a sale of the goods themselves but rather of documentss. 116
6.representing the goods.1 2s. 116
7.In practice, several original bills of lading are usually issued. This pracs. 116
8.tice, or rather malpractice, is necessarily risky, since the right of control ands. 116
9.transfer may be vested in different persons at the same time. This risk iss. 116
10.modified to the benefit of the issuer by the customary wording in the lowers. 116
11.right hand corner of the front page of the bill of lading reading:s. 116
12.»One original Bill of Lading must be surrendered duly endorsed in exchange fors. 116
13.the goods or delivery order.s. 116
14.IN WITNESS whereof the Master of the said Vessel has signed the number ofs. 116
15.original Bills of Lading stated below, all of this tenor and date, one of each beings. 116
16.accomplished the other to stand void».s. 116
17.The cited text means that the issuer need not bother if there are originalss. 116
18.of the bills of lading held by other parties once he has rightfully delivereds. 116
19.the cargo to a person presenting one original. The system of several origis. 116
20.nals is explained by the fact that the unpaid seller would hesitate to surrens. 116
21.der the right of control to the buyer. For this purpose, however, it woulds. 116
22.have been sufficient with two originals. It is more difficult to explain whys. 116
23.more than two originals are usually issued in practice. It has been suggesteds. 116
24.that this stems from older trading patterns, whereby originals could be sents. 116
25.to trading houses in different ports whereupon the vessel could proceed tos. 116
26.one of these as soon as it had been ascertained that there was a buyer for thes. 116
27.goods in the port. With several originals of the bill of lading one coulds. 116
28.ensure that one be available for the buyer before, or at the same time as, thes. 116
29.ship arrived, Nowadays, however, such a system seems wholly anachroniss. 116
30.tic.3s. 116
The bill ofl ading 117
1.Banks are usually aware of the risks connected with issuing several orig inal bills of lading. They would invariably insist on being given a full set, which is also required under UCP 500 setting forth the rules relating to documentary credits43 . So, in banking practice the system of several origi nals has in a sense defeated itself. The position of the unwary buyer is less fortunate, as he may tend to forget that, unless otherwise agreed, he has no obligation whatsoever to pay the price until either the goods or documents controlling their disposition are at his disposal (cf. CISG Art. 58.1). Clear ly, one original bill of lading, when several have been issued, would not be enough for the buyer to control disposition of the goods, since he would risk having as many competitors as there are originals in circulation.s. 117
2.The buyer should take care not to place too much reliance on the evi dence fonction of the bill of lading when it states that the goods have been received (receivedfor shipment}^ of lading) or shipped (shipped on board\y& of lading) in apparent good order and condition. Bills of lading also stipulate that everything mentioned therein has been furnished by the merchant and that the condition, weight, measure, marks, numbers, quality, contents and val ue of the goods are unknown to the issuer of the bill of lading. True, ac cording to particular provisions and principles in most jurisdictions, the carrier would owe a duty to the holder of the bill of lading to check the con dition of the goods and insert reservations in the bill of lading if something appears to be wrong. However, it should be carefolly noted that reference in the bill of lading is made to apparent good order and condition, which is something quite different from the actual condition. Particularly in con tainer trade, practical possibilities for the issuer of the bill of lading to check the goods would be non-existent, unless he himself has been charged with the task of stowing them in the container. Therefore, the normal evidence function of the bill of lading as to the goods has more or less disappeared in container trade.s. 117
3.A further difficulty arises because of the arrangement of maritime trans portation services. Usually, the bill of lading clauses aim to channel liability to the owner of the carrying ship. The shipowner may or may not be iden tical with the person with whom the contract of carriage has been made. The contracting carrier may have engaged the vessel under a time- or voy age charterparty. As a result, it is often difficult to see whether an action arising from loss of or damage to the goods should be directed towards thes. 117
4.118 Linking contract ofsale and contract of carriages. 118
5.contracting carrier, the charterer, or the owner of the ship. The practice ofs. 118
6.issuing bills of lading^ôr the master or as agent without disclosing the prins. 118
7.cipal of the agent, whose signature in some cases may be illegible, is nots. 118
8.very helpful.5s. 118
9.Bills of lading are not only used in commodity trade - where they ares. 118
10.needed to enable the first buyer to assign his rights under the bill of ladings. 118
11.to a subsequent buyer while the goods are in transit - but also in liner trade,s. 118
12.where there is no intention at all to perform such sales. Particularly in liners. 118
13.trade, problems often occur when the vessel arrives before the original bills. 118
14.of lading needed to claim the goods. Liner vessels nowadays often travels. 118
15.faster than mail {snailmail as compared with e-mail). Moreover, quite aparts. 118
16.from this the transmission of bills of lading may become delayed when theys. 118
17.are processed by ship’s agents, forwarders, and banks. This has given rise tos. 118
18.yet another malpractice, namely to issue bill of lading guarantees to protects. 118
19.the carrier from claims when he intentionally departs from his obligation tos. 118
20.deliver the cargo only in return for an original bill of lading. Here again, as. 118
21.distinction could be made between fraudulent and rather innocent situas. 118
22.tions. In most cases, the carrier would know that the non-availability of thes. 118
23.bill of lading is simply due to the sad fact that the trading partners haves. 118
24.been fettered by old traditions and simply used the wrong document. Its. 118
25.may be more or less evident that the carrier should in fact not expect anyones. 118
26.else as entitled to receive the goods than the party named under notify ads. 118
27.dress in a copy of the bill of lading. But in order to avoid any risk whatsoevers. 118
28.a bill of lading guarantee could still be useful.s. 118
29.Nevertheless, issuers of such bill of lading guarantees should be aware ofs. 118
30.the risk that the carrier has committed a serious breach of his main obligas. 118
31.tion and that he would be exposed to unlimited liability. This, at worst,s. 118
32.could extend to include compensation for even remote and unforeseeables. 118
33.losses, such as factory standstills when important components do not arrives. 118
34.in time.6 In some jurisdictions, limitation of liability to pay for such unfores. 118
35.seeable losses is unavailable when they have been caused intentionally or bys. 118
36.gross negligence.7 Whenever the carrier has any reason to suspect suchs. 118
37.risks, he should take care to get a bill of lading guarantee without any mons. 118
38.Seawaybills 119 etary limit. Whether the banks would be prepared to issue such unlimited bill of lading guarantees is another matter. Normally, they have every rea son not to do so, or for that matter to issue any bill of lading guarantee at all, as this would only support a practice that has ceased to function prop erly. At any rate, if in a particular trade goods are in fact often delivered to persons claiming to be consignees but unable to present an original bill of lading, then the whole system has collapsed. The consequences are serious since - in the event of the seller’s bankruptcy - it could be disputed that possessing an original bill of lading is sufficient for the right of control and transfer of the goods needed for property rights to pass from seller to buyer or to give the buyer a secured right to the goods with priority over the sell er’s other creditors.s. 119
39.One would have thought that the presentation clause usually inserted in straight bills of lading would be unnecessary when the ultimate consignee is known and consequently named in the document. Nevertheless, straight bills of lading customarily contain presentation clauses. Indeed, in the En glish case of The Rafaela* it is suggested in an obiter dictum that, even in the absence of a presentation clause, every bill of lading would require surren der of the paper document in exchange for the goods. The English 1992 Carriage of Goods by Sea Act contains no specific regulation of the straight bill of lading which, therefore, presumably would simply be regarded as a sea waybill (see infra). Nevertheless, it may be of some benefit to have the options to use either: • an ordinary negotiable bill of lading, where the bill of lading could bes. 119
40.transferred repeatedly while the goods are in transit, • a straight bill of lading, which could only be transferred once from thes. 119
41.original shipper to the named consignee, or • sea waybills, where no paper document is required in order to claim thes. 119
42.goods at destination and where it would be sufficient that the nameds. 119
43.consignee identifies himself as such.s. 119
Sea waybills
1.As we have seen, the bill of lading system entails a number of difficult problems. In addition, the management of the system is quite costly. In the 1970s, shipping lines therefore made efforts to rationalise the docu mentary procedures by switching from bills of lading to sea waybills.s. 119
2.120 Linking contract of sale and contract ofc arriages. 120
3.These are distinctly different from bills of lading by not offering the holds. 120
4.er of the document any entitlement to transfer the rights under the docus. 120
5.ment to somebody else. Instead, the goods are delivered to the persons. 120
6.named as consignee in the sea waybill. In other words, the goods are ins. 120
7.tended to travel directly from the shipper to an identified consignee in thes. 120
8.same way as would be the case under the straight bill of lading known fors. 120
9.many years in the United States. These modern documents for carriage ofs. 120
10.goods by sea bear many names, such as sea waybill, data freight receipt ands. 120
11.liner waybill,9 but they are all based on the above principle for delivery ofs. 120
12.goods at destination.s. 120
13.In international conventions relating to carriage of goods over land ands. 120
14.by air, a particular system has been designed to protect the consignee -s. 120
15.usually identical with the buyer - against the sender’s disposal of thes. 120
16.goods in transit by re-destining them to somebody else than the nameds. 120
17.consignee. This is achieved through duplicating the document so that thes. 120
18.unpaid sender could retain his original (the duplicate waybill for carriages. 120
19.of goods by road and rail and the sender’s original for carriage of goods bys. 120
20.air) until paid. However, when the original intended for the sender hass. 120
21.been surrendered to somebody else, the sender would lose his right to gives. 120
22.instructions to the carrier to re-destine the goods. Thus, the sender’s origs. 120
23.inal of the waybill would be a document controlling the disposition of thes. 120
24.goods in the sense of CISG Art. 58.1.10 Accordingly, the buyer whens. 120
25.holding such an original takes no risk that the goods will be delivered tos. 120
26.somebody else, unless the carrier fails to fulfil his delivery obligation unders. 120
27.the contract of carriage, in which case he would be liable to fully compens. 120
28.sate the buyer.s. 120
29.The traditional system used by maritime carriers differs from the practices. 120
30.now described for non-maritime carriage. Thus, a sea waybill cannot be res. 120
31.garded as a document controlling disposition of the goods in the sense ofs. 120
32.CISG Art. 58.1, and the buyer is not obliged to pay for the goods in returns. 120
33.for such a document. In order to create a sea waybill with an estoppel funcs. 120
34.tion, the CMI, in 1990, presented the Uniform Rules for Sea Waybills.11s. 120
35.Sea waybills 121 These rules do not deal with the contract of carriage as such. It is merely stated that the contract shall be subject to any international convention or national law which, if the contract had been covered by a bill of lading or similar document of title, would have been compulsorily applicable thereto. The purpose of this particular rule would be to solve the problem arising from the limited scope of application of the Hague Rules requiring for its application that a bill of lading or a similar document of title be issued.s. 121
36.The key provision of the Rules relates to the Right of Control. First, it is stipulated that the Right of Control remains with the shipper unless he has exercised his option, not later than the receipt of the goods by the car rier, to transfer the Right of Control to the consignee. Thus, the shipper would, unless the option is exercised, have the right to change the name of the consignee at any time up to when the consignee claims delivery of the goods after their arrival at destination. If, however, the shipper exercises his option to transfer the Right of Control to the consignee, then this must be noted on the sea waybill and, if so, the right of the shipper to give the carrier new instructions for delivery would be transferred to the consignee.s. 121
37.The system signifies that the shipper could from the outset give the car rier irrevocable instructions to deliver the goods to the named consignee and to nobody else. If this particular stipulation of the CMI Uniform Rules for Sea Waybills is followed, the sea waybill would fulfil the requirements un der CISG Art. 58.1, since the buyer would have a secured right to call upon the carrier to deliver the goods to him at destination. At the time when the CMI Uniform Rules were elaborated, a particular problem arose, since un der English law, owing to the doctrine of privity, it is in principle impossi ble for two parties to confer rights on somebody not being a party to the contract. For this reason, the Rules contain a provision relating to Agency to the effect that the shipper on entering into the contract of carriage would do so not only on his own behalf but also as agent for and on behalf of the consignee. This is now, at least under English law, unnecessary in view of the particular provisions relating to sea waybills in the 1992 English Car riage of Goods by Sea Act.12 So far, only a few shipping lines have adopted the system according to the CMI Rules. However, unless they trust their sellers, buyers should avoid paying for goods before having checked that the sea waybill contains irrevocable instructions to the carrier .s. 121
38.A sea waybill system designed according to the CMI Uniform Rules would make bills of lading unnecessary, except where the buyer intends tos. 121
39.122 Linking contract ofsale and contract of carriages. 122
40.sell the goods in transit. In order to facilitate a switch from the bill of ladings. 122
41.system to the seawaybill system, Incoterms 200013 stipulate that unless oths. 122
42.erwise agreed the transport document should enable the buyer to sell thes. 122
43.goods in transit by the transfer of the document to a subsequent buyer.s. 122
44.Here, reference is made to the negotiable bill of lading. By the words unlesss. 122
45.otherwise agreed the parties are reminded of the possibility to use a sea ways. 122
46.bill when the buyer has no intention to sell the goods in transit. But if as. 122
47.buyer enters into such an agreement with the seller, he should insist on as. 122
48.sea waybill with irrevocable instructions to deliver the goods to him unless hes. 122
49.considers the seller wholly trustworthy.14s. 122
Electronic bills of lading
1.As mentioned, the 1990 revision of Incoterms was mainly triggered by thes. 122
2.computer revolution. International trading already to some extent usess. 122
3.electronic data interchange (EDI). Indeed, a model law for such trading15s. 122
4.has been submitted to governments for their consideration as a basis for nas. 122
5.tional legislation. Incoterms 1990 as to all trade terms, except EXW wheres. 122
6.no proof of delivery is required, contain the following text in A8:s. 122
7.»Where the seller and the buyer have agreed to communicate electronically, thes. 122
8.document referred to in the preceding paragraph may be replaced by an equivalents. 122
9.electronic data interchange (EDI) message».s. 122
10.A general problem connected with electronic messages concerns their evis. 122
11.dentiary effect. First, one would have to ensure that the message is sent bys. 122
12.somebody authorised to do so (the problem of authentication). Second, thes. 122
13.system must ensure that an unauthorised person cannot change the mess. 122
14.sage by gaining access to the computer. Third, it is necessary, before somes. 122
15.body other than the receiver relies on it, that the EDI message retains itss. 122
16.original content. Thus, it is important that parties agreeing to communis. 122
17.cate electronically check whether proper security measures are built into thes. 122
18.computer system.s. 122
19.Electronic bills of lading 123s. 123
20.While non-negotiable transport documents, such as waybills for carriage of goods over land and air and sea waybills, could be transformed into EDI messages without much difficulty, problems arise in transforming a nego tiable document such as the bill of lading embodying a legal symbol of transferability. True, the problem of transferring rights from the shipper as the first holder of the right of control and transfer to an identified buyer is equivalent to the same problem arising under sea waybills, where the tech nique of irrevocable instructions from the sender to the carrier to deliver the goods to the buyer could be used. But particular difficulties arise, as subse quent transferees are unknown at the time of issue of instructions.s. 123
21.At the same time as the CMI adopted its 1990 Uniform Rules for Sea Waybills, it also adopted Rules for Electronic Bills of Lading.16 Under these Rules, holding a Private Key is considered to equal holding a paper bill of lading. It is defined as any technically appropriate form, such as a combination of numbers and/or letters, which the parties may agree for se curing the authenticity and integrity of a Transmission. The Private Key is unique to each successive holder and is not transferable by him to some body else. Instead, according to the CMI Rules the transfer of the holder’s Right of Control and Transfer through possessing the Private Key is per formed in five successive steps, namely: • the current Holder notifies the carrier of its intention to transfer itss. 123
22.Right of Control and Transfer to a proposed new holder; • the carrier confirms the notification message; • the carrier’s transmission to the proposed new Holder of information -s. 123
23.except the Private Key - as to the goods is electronically recorded; • the proposed new Holder notifies acceptance of the Right of Controls. 123
24.and Transfer; • the current Private Key is cancelled and new Private Key issued to thes. 123
25.new Holder. Since it is impossible to know in advance whether subsequent transferees are willing and able to communicate electronically, the Rules provide for the option to receive a paper document. Thus, it is possible to opt out of the system prior to delivery of the goods at destination by demanding a papers. 123
26.124 Linking contract ofsale and contract of carriages. 124
27.bill of lading from the carrier, that is, a printout of what has been electrons. 124
28.ically recorded. However, the paper bill of lading replacing the electronics. 124
29.one must contain a statement that it has been issued upon terminating thes. 124
30.procedures for EDI under the CMI Rules. Moreover, opting out means thats. 124
31.the Private Key must be cancelled, although any rights, obligations, or lias. 124
32.bilities already accrued before issue of the paper bill of lading are preserved.s. 124
33.The 1996 UNCITRAL Model Law on Electronic Commerce containss. 124
34.a particular stipulation as to transport documents, reading as follows:s. 124
35.»Article 17. Transport documentss. 124
36.(1) Subject to paragraph (3), where the law requires that any action referred to ins. 124
37.article 16 be carried out in writing or by using a paper document, that requirements. 124
38.is met if the action is carried out by using one or more data messages.s. 124
39.(2) Paragraph (1) applies whether the requirement therein is in the form of ans. 124
40.obligation or whether the law simply provides consequences for failing either tos. 124
41.carry out the action in writing or to use a paper document.s. 124
42.(3) If a right is to be granted to, or an obligation is to be acquired by, one persons. 124
43.and no other person, and if the law requires that, in order to effect this, the rights. 124
44.or obligation must be conveyed to that person by the transfer, or use of, a papers. 124
45.document, that requirement is met if the right or obligation is conveyed by usings. 124
46.one or more data messages, provided that a reliable method is used to render suchs. 124
47.data message or messages unique.s. 124
48.(4) For the purposes of paragraph (3), the standard of reliability required shalls. 124
49.be assessed in the light of the purpose for which the right or obligation was cons. 124
50.veyed and in the light of all the circumstances, including any relevant agreement.s. 124
51.(5) Where one or more data messages are used to effect any action in subparas. 124
52.graphs (f) and (g) of article 16, no paper document used to effect any such actions. 124
53.is valid unless the use of data messages has been terminated and replaced by thes. 124
54.use of paper documents. A paper document issued in these circumstances shalls. 124
55.contain a statement of such termination. The replacement of data messages bys. 124
56.paper documents shall not affect the rights or obligations of the parties involved.s. 124
57.(6) If a rule of law is compulsorily applicable to a contract of carriage of goodss. 124
58.which is in, or is evidenced by, a paper document, that rule shall not be inapplicas. 124
59.ble to such a contract of carriage of goods which is evidenced by one or more datas. 124
60.messages by reason of the fact that the contract is evidenced by such data messages. 124
61.or messages instead of by a paper document.»s. 124
62.Stipulations as to electronic communication are not contained in any inters. 124
63.national convention relating to carriage of goods as yet. However, thes. 124
64.UNCITRAL/CMI Draft contains extensive provisions not only relating tos. 124
65.electronic communications but also to the possibility of a controlling partys. 124
66.to give instructions to the carrier while the goods are in transit and to transs. 124
67.Freight forwarder documents 125 fer control to another party, as well as to the modalities upon delivery of the goods to the consignee. In principle, it is suggested that anything which is to be in or on a transport document may be recorded or communicated by using electronic communication provided the issue and subsequent use of an electronic record occurs with the express or implied consent of the car rier and the shipper. The use of a negotiable electronic record is suggested to be subject to rules of procedure agreed between the carrier and the ship per or the holder of the rights. Moreover, these rules of procedure should provide for the modalities as to the transfer of the negotiable electronic record to a further holder and how it should be proven that somebody is the holder of the negotiable electronic record.s. 125
Freight forwarder documents
1.The freight forwarders’ world organization, FI ATA, has launched a number of documents, all of which play a role for the purpose of linking the contract of carriage or freight forwarding with the contract of sale. The most important document used by freight forwarders worldwide today is the FBL. In view of the importance of ocean bills of lading, FIATA con sidered it appropriate to create an equivalent document in cases where freight forwarders assumed liability as contracting carriers - primarily for carriage of goods by sea. Traditionally, it has been disputed whether it is open for everyone to issue a bill of lading with the characteristics of the ocean bill of lading capable of transferring rights successively from one par ty to the other (i.e., with the document’s transferability function). Could this, one might ask, be done by contract or is statutory support required?17s. 125
2.126 Linking contract ofsale and contract of carriages. 126
3.Statutory support exists in some countries. Indeed, it has done so ins. 126
4.England ever since 1855 with the Bill of Lading Act, now replaced by thes. 126
5.stipulations of the 1992 Carriage of Goods by Sea Act. Moreover, in thes. 126
6.United States statutory support is given by the Pomerene Act of 191618.s. 126
7.But it must not be forgotten that the ocean bill of lading was recognized ass. 126
8.a document of title long before it received statutory support. Further, in anys. 126
9.event the promise of the issuer of the bill of lading only to surrender thes. 126
10.goods upon presentation and in exchange for the paper bill of lading musts. 126
11.be recognized as a promise to anyone - either directly under the contracts. 126
12.with the carrier or subsequently upon assignment of the rights under thes. 126
13.bill of lading from one party to the other. Thus, for all practical purposes,s. 126
14.the rights of the holder of the document would be ensured on the basis ofs. 126
15.the promise contained in the bill of lading. Yet, there is some hesitation ins. 126
16.countries strictly adhering to the doctrine of privity of contract, as thes. 126
17.promise made to the first holder of the bill of lading may not necessarily bes. 126
18.recognized as a promise effective for the benefit of subsequent holders.s. 126
19.However, such an orthodox implementation of the doctrine of privitys. 126
20.would run against the interests of international trade. It therefore deservess. 126
21.to be defeated in the same way as it has been defeated in connection withs. 126
22.documentary credits where, indeed, an opening bank is permitted to extends. 126
23.a promise to honour its undertaking under the contract with the instructings. 126
24.party to the benefit of the beneficiary.s. 126
25.In any case, with a reservation for the transfer of property issue, theres. 126
26.can be no doubt that the FBL contains the same three characteristics as thes. 126
27.ocean bill of lading, namely:s. 126
28.• to function as a receipt of the goods;s. 126
29.• to evidence the terms of the contract of carriage, ands. 126
30.• to enable subsequent transfer of the bill of lading by handing it over dulys. 126
31.endorsed to a new holder.s. 126
32.As mentioned, freight forwarders traditionally sought to avoid status ass. 126
33.common carriers. Nevertheless, a commercial need existed for a documents. 126
34.which like a bill of lading would require presentation and surrender ins. 126
35.exchange for the goods. Hence, the freight forwarder’s certificate of transs. 126
36.port (FCT) was made available for use. That document stipulates that thes. 126
37.goods will be delivered »against surrender of this document properlys. 126
38.Stoppage ofg oods in transit 127 endorsed». However, it also states that »the undersigned do not act as car riers but as forwarders».19 Additionally, the terms of the FCT follow the general conditions applicable to freight forwarding services in the respec tive countries where it is used. The freight forwarder would certainly be held to his promise as to the modalities of delivery and the FCT would also presumably have the same transferability fùnction as an ocean bill of lading, although the freight forwarder does not accept carrier liability. The ques tion whether the FCT has the same transferability function as the bill of lading is now more or less redundant after the advent of FBL, which should be used whenever such a transferability fùnction is intended.s. 127
39.The other documents, the freight forwarder’s certificate of receipt (FCR) and the FIATA Waybill (FWB), are similar to waybills used for air and land transport. As with sea waybills, it is necessary to agree on the modalitites of delivery by a contractual stipulation, as there is no statutory sup port for the estoppel function of the sender’s original of the waybill. In stead, under FWB,20 the consignor may use the option to transfer the right of control to the consignee by a notation in the box of the front page of the FWB. If this is not done, then the consignor, in his capacity as contracting party with the freight forwarder, would retain the right to change his in structions and re-direct the goods to a person other than the buyer. In the same way as the FBL, FWB evidences that the freight forwarder has ac cepted liability as carrier. If he does not wish to do so, then he would either use his own house document where carrier liability is denounced, alternative ly the FIATA documents FCT or FCR. The FCR provides that instruc tions authorizing disposal by a third party can only be cancelled or altered if the original certificate of receipt is surrendered.s. 127
Stoppage of goods in transit
1.Art. 71 CISG provides that a party may suspend the performance of his ob ligations if, after concluding the contract, it becomes apparent that the oth er party will not perform a substantial part of his obligations. As to the sell er’s right to do so, the rule represents what is known as the seller’s right of stoppage in transitu. His practical possibilities to exercise this right neces sarily becomes impaired after he has dispatched the goods. CISG21 stipu-s. 127
2.128 Linking contract ofsale and contract ofc arriages. 128
3.lates that the seller may prevent the handing over of the goods to the buyers. 128
4.even after dispatch of the goods and even though the buyer holds the docs. 128
5.ument that entitles him to obtain the goods.s. 128
6.However, there is also an important reminder that what has been stateds. 128
7.»relates only to the rights in the goods as between the buyer and the seller».s. 128
8.As long as the seller under the respective document is entitled to give ins. 128
9.structions to the carrier, he would have ample opportunity to do so whens. 128
10.ever he is entitled to stop the goods in transit as stipulated in CISG.22 Buts. 128
11.what is his position if he has lost that right either by:s. 128
12.• irrevocable instructions under the sea waybill to deliver the goods to thes. 128
13.buyer/consignee, ors. 128
14.• surrendering his original of the waybill to the buyer/consignee, ors. 128
15.• transferring the bill of lading duly endorsed to the buyer/consignee?s. 128
16.Such situations involve incompatibility. That is, under the contract of cars. 128
17.riage and the transport document the carrier is undoubtedly under a dutys. 128
18.to deliver the goods to the buyer/consignee and to nobody else, while thes. 128
19.seller is estopped from giving any further instructions to the carrier. Buts. 128
20.under the contract of sale the situation is different whenever the seller hass. 128
21.a right to stop the goods in transit in the relationship between himself ands. 128
22.the buyer. Surely, it would be unfair to expose the carrier to any riskss. 128
23.involved if he were to depart from his obligation under the contract of cars. 128
24.riage.23s. 128
25.In principle, there is no reason to resolve the matter differently from thes. 128
26.situation where the buyer wishes to estop a bank to which he has given irs. 128
27.revocable instructions to pay for the goods in return for stipulated docus. 128
28.ments. If the documents are conforming, then, under the doctrine of sepas. 128
29.rability, the bank would have to pay even though under the contract of sales. 128
30.the buyer would have the right to avoid the contract and his obligation tos. 128
31.pay for the goods. The same principle should apply when the seller seeks tos. 128
32.stop delivery of the goods but has lost the practical possibility to do so bys. 128
33.instructions to the carrier. Thus, the carrier would have to honour his obs. 128
Seller’s obligations under Incoterms 2000 Clauses A3 and A8 129
1.ligations under the contract of carriage and deliver the goods to the buyer/ consignee. In these situations, the only remedy available to the party wish ing to stop performance would be to ask a court of law for an injunction re straining the carrier - or the bank, as the case may be - from fulfilling its obligation pending resolution of the rights and obligations under the con tract of sale.s. 129
Seller’s obligations under Incoterms 2000
Clauses A3 and A8
1.8.6.1 Structure of Incoterms 2000 Clauses A3 and A8 of Incoterms 2000 determine the seller’s obligations as to contracts of carriage and insurance (A3) and his obligation to tender documents (A8).s. 129
2.The term Ex Works (EXW) represents the minimum obligation of the seller, who consequently has no obligation at all as to contracts of carriage and insurance and documents. It is simply for the buyer to take delivery as soon as the goods have been placed at his disposal at the named place of delivery (clauses B4 and A4). It is then for the buyer to decide the destina tion to which the goods should be carried and conclude contracts of car riage and insurance as appropriate.s. 129
3.The other terms are divided in three categories, with each category in dicated by the first letter of the three digits describing the trade term: • Terms starting with the letter (F) signify shipment contracts where it iss. 129
4.for the buyer to contract for carriage (clause B3). • Terms starting with the letter (C) also signify shipment contracts buts. 129
5.where the seller must procure a contract for the carriage of the goods tos. 129
6.the named port of destination (clause A3). • Terms starting with the letter (D) signify destination contracts, wheres. 129
7.the seller has to contract for carriage in order to fulfil his obligation tos. 129
8.deliver the goods at destination.s. 129
9.130 L inking contract ofsale and contract ofc arriages. 130
10.Although this division of trade terms is clear in principle, commercial pracs. 130
11.tice will also often involve the seller in concluding the contract of carriages. 130
12.under trade terms FCA and FOB.24 The trade term FC A is used particus. 130
13.larly for the sale of manufactured goods. Here, it is commercial practice fors. 130
14.the seller to arrange for the contract of carriage at the buyer’s risk ands. 130
15.expense and thereupon deliver the goods to the carrier at the named places. 130
16.on the date or within the period agreed for delivery.25 In accordance withs. 130
17.the main principle of the F-terms, the buyer retains the right to concludes. 130
18.the contract of carriage and may inform the seller accordingly. Further, thes. 130
19.seller may decline to make the contract and, if he does, he must properlys. 130
20.notify the buyer.s. 130
21.8.6.2 Contracts of carriage and insurances. 130
22.The term FOB is used irrespective of the nature of the goods but would uns. 130
23.doubtedly be more appropriate for sale of commodities. In such cases, thes. 130
24.buyer would normally contract for carriage by nominating an appropriates. 130
25.ship. Indeed, his failure to do so and ensure that the ship arrives on times. 130
26.will result in a premature transfer of the risks.26 When the ship has beens. 130
27.nominated, it is for the seller to deliver the goods on the date or within thes. 130
28.agreed period of time at the named port of shipment and in the manners. 130
29.customary at the port on board the vessel nominated by the buyer.27 Thes. 130
30.term FAS follows the same principles as apply to FOB but now it is not fors. 130
31.the seller to place the goods on board but to place them alongside the noms. 130
32.inated vessel at the loading place named by the buyer at the named port ofs. 130
33.shipment on the date or within the agreed period and in the manner cus-s. 130
34.Seller's obligations under Incoterms 2000 Clauses A3 and A8 131 ternary at the port.28 2 3 T90he term FAS would normally require the buyer to charter a ship, since liner shipping companies would receive the goods not alongside the ship but usually in cargo terminals for subsequent loading on board the ship. Although it has not been indicated in FOB A3 Incoterms 2000, the seller may conclude the contract of carriage at the buyer’s risk and expense, in the same way as under the trade term FCA when it is commer cial practice to do so. This would then constitute a variation of FOB Inco terms 2000 usually referred to as FOB additional services.23 Such a variation of FOB is particularly appropriate for sale of manufactured goods.s. 131
35.Although the C-terms all indicate the port or place of destination, they are nevertheless shipment contracts signifying that the seller fillfils his ob ligations to the buyer at the port or place of shipment. In essence, contracts under C-terms are the same as contracts under F-terms but with the addi tional obligation on the seller to conclude a contract of carriage and also, under trade terms CIF and CIP, a contract of insurance. Hence, the point for division of risk between the seller and the buyer (the FOB-point) is ex actly the same under trade terms FOB, CFR, and CIF. It is important not to be misled by the fact that the destination is mentioned after the C-terms: this does not mean that the seller’s obligations are extended until the goods actually arrive at destination. Instead, the buyer would be the beneficiary of contracts made by the seller. Since the seller would have to pay the costs for concluding contracts of carriage and insurance, then the contract could in a commercial sense be similar to a contract concluded on the basis of FOB plus contracts of carriage and insurance.However, the important difference would be that under CIF the seller would assume the risk of an increase of the costs added to the FOB price from conclusion of contract of sale until conclusion of the required additional contracts and delivery of the goods on board the ship.31s. 131
36.The difference between CFR and CIF on the one hand, and CPT and CIP on the other, is in principle the same as the difference between FOBs. 131
37.132 Linking contract ofsale and contract ofc arriages. 132
38.and FC A. The FOB-point is the relevant point for division of risk of losss. 132
39.of or damage to the goods under FOB, CFR, and CIF. However, under FC A,s. 132
40.CPT, and CIP it is for the seller to deliver the goods to the carrier, or, ifs. 132
41.there are subsequent carriers, to the first carrier for transport to the agreeds. 132
42.point at the named place on the date or within the agreed period.32 As mens. 132
43.tioned, under FCA the carrier maybe nominated by the buyer or, accordings. 132
44.to commercial practice, chosen by the seller. It is then for the seller to delivers. 132
45.the goods to the carrier nominated by the buyer or chosen by the seller ats. 132
46.the named place on the date or within the period agreed for delivery.33s. 132
47.The choice of FCA, CPT, or CIP instead of FOB, CFR, and CIF wills. 132
48.depend upon the nature of the goods. The International Chamber of Coms. 132
49.merce, in its Model International Sale Contract34, recommends the choices. 132
50.of FCA, CPT and CIP for contracts of sale of manufactured goods intends. 132
51.ed for resale. Needless to say, the seller’s obligation in connection with cons. 132
52.cluding the contract of carriage is of paramount importance because, afters. 132
53.the seller delivers the goods to the ship or the carrier, the buyer will have tos. 132
54.assume the risk until the goods have reached their destination. If somethings. 132
55.goes wrong, his only remedy lies against the carrier under the terms of thes. 132
56.contract of carriage concluded by the seller and, under trade terms CIF ors. 132
57.CIP, with a further remedy of claiming compensation under the terms ofs. 132
58.insurance.s. 132
59.Under C-terms, it is for the seller to contract on usual terms at his owns. 132
60.expense for the carriage of the goods to the named port or place of destinas. 132
61.tion by the usual route. Under CFR and CIF it is added that the contracts. 132
62.should be for carriage of goods in a seagoing vessel (or inland waterway vess. 132
63.sel, as the case may be) of the type normally used for the transport of goodss. 132
64.of the contract description. In CPT and CIP the contract should concerns. 132
65.carriage of the goods in a customary manner. Thus, CPT and CIP could bes. 132
66.used irrespective of the contract of carriage chosen, while contracts of sales. 132
67.on CFR or CIF-terms would invariably oblige the seller to conclude a cons. 132
68.tract of carriage by sea or inland waterways. The choice of FCA, CPT ands. 132
69.CIP is particularly appropriate when the goods are to be carried in contains. 132
70.ers, since in such cases risk transfer when the goods pass the ship’s rail ats. 132
71.the named port of shipment35 is inappropriate. This is because the carriers. 132
72.Sellers’ obligations under Incoterms 2000 Clauses A3 and A8 133 in container traffic would either receive the container on a vehicle arriving at its container terminal or container yard or, alternatively, receive the goods for stowage into containers at the carrier’s container freight station.s. 133
73.As to the seller’s choice of carriage, reference is made to usual terms and usual route. In this respect, it should be noted that Art. 32.2 CISG puts more stringent obligations on the seller as »he must make such contracts as are necessary for carriage to the place fixed by the means of transportation appropriate36 in the circumstances and according to usual terms for such transportation».37 The reason why the seller’s obligation under the C-terms of Incoterms 2000 has been modified is explained by the fact that carriers of goods by sea do not warrant that the vessel is appropriate in the circum stances, as their duty is generally reduced to exercising due diligence in pro viding a seaworthy ship. If the buyer wants a particular ship or carrier in or der to ensure an appropriate transportation, then he has to agree this with the seller accordingly. A contract subject to CISG would allow the parties to depart from the stipulations of CISG.38 Thus, a reference to Incoterms 2000 would supersede Art. 32.2.s. 133
74.Although it would be inappropriate to fix a point for transfer of the risk of loss of or damage to the goods to the passing of the ship’s rail where the goods are to be carried in containers, it should be observed that the choice of FCA means that the buyer would have to absorb costs in the stage be tween the seller’s handing over of the goods to the carrier until shipment on board. These costs, often referred to as THC {Terminal Handling Charges'), would have to be considered on concluding the contract of sale so that the price is determined accordingly. In cases where it is difficult to know to what extent THC will be debited, the buyer may wish to require the seller to pay THC.39 8.6.3 Documents Clause A8 determines the seller’s obligation as to documents. The seller’s obligation to procure documents is an important addition to the obligation to deliver goods conforming to the terms of the contract of sale. Thus, thes. 133
75.134 Linking contract ofsale and contract ofc arriages. 134
76.seller may be in serious breach of obligation to the buyer under the contracts. 134
77.of sale even in cases where conforming goods have been delivered in times. 134
78.for shipment. Therefore, the importance of the seller’s obligations unders. 134
79.the A8-clauses of Incoterms 2000 cannot be over-emphasized.40s. 134
80.As mentioned, it is - at least in principle - the buyer’s obligation to cons. 134
81.tract for carriage under the F-terms. Thus, one would expect that the buyers. 134
82.should obtain the transport document evidencing the contract of carriages. 134
83.directly from the carrier. However, as we have seen, commercial practices. 134
84.often involves the seller in concluding the contract of carriage. In addition,s. 134
85.even if the buyer has concluded the contract of carriage, the transport docs. 134
86.ument may be handed over by the carrier to the shipper acknowledging thats. 134
87.the carrier has received the goods in apparent good order and condition ass. 134
88.described in the document. This will explain why clause A of both FCAs. 134
89.and FOB states that the seller must provide the buyer at the seller’s expenses. 134
90.with the usual proof of delivery of the goods in accordance with A4, whichs. 134
91.determines how delivery to the carrier is made. Nevertheless, the seconds. 134
92.paragraph of the A8-clauses indicates that proof of delivery may be thes. 134
93.transport document itself. And, if a separate proof of delivery has been obs. 134
94.tained from the carrier (such as a mate’s receipt) then »the seller musts. 134
95.render the buyer at the latter’s request, risk and expense, every assistance ins. 134
96.obtaining a transport document for the contract of carriage».s. 134
97.In the C-terms it is a different story. Here, as the seller would have tos. 134
98.conclude the contract of carriage, he would obtain the transport document,s. 134
99.which has to be tendered to the buyer. Under CFR- and CIF-terms thes. 134
100.document would traditionally be the negotiable bill of lading, the reason bes. 134
101.Sellers obligations under Incoterms 2000 Clauses A3 and A8 135 ing that these trade terms are often used for the sale of commodities where it is contemplated that the goods may be sold in transit. If this occurs, then the bill of lading with its transferability function would be used in order to transfer entitlement to the goods, which is implemented by transferring the paper document to subsequent buyers. However, if it is known from the outset that there will be no sale of goods in transit, then other documents may be sufficient. This is indicated in the A8-clauses by the words unless otherwise agreed, dispensing with the need for a negotiable bill of lading and the characteristics of that document to »enable the buyer to sell the goods in transit by the transfer of the document to a subsequent buyer».s. 135
102.If the ultimate consignee is known from the outset, then documents such as a non-negotiable sea waybill or an inland waterway document may be sufficient. In all cases, the transport document must cover the contract goods, be dated within the period agreed for shipment, and enable the buy er to claim the goods from the carrier at the port or place of destination. This is specifically set out in the A8-clause of CFR and CIF, while the cor responding provisions of the A8-clause of CPT and CIP have been ex pressed differently by including further variants of transport documents and without specifically mentioning that they must also cover the contract goods and be dated within the period agreed for shipment. Additional transport documents mentioned include »air waybill, a railway consign ment note, a road consignment note, or a multimodal transport document».s. 135