Evolution of the Rotterdam rules, By Hassan Bello

Long before the emergence of International Carriage Conventions, the sea and the oceans of the world have been of divergent purposes to several city states and civilization.
  The Greeks, Chinese, Romans, Vikings, medieval Lords and the Great Hannibal of Carthage all at one time or the other explored the sea in the cause of war and expansion of frontiers. Later arose the Spanish armada with the then Queen Isabella of Spain holding sway with her avalanche of great naval fleet. The British, German and the Japanese all exploited the sea in their quest for territorial expansion and extended their power beyond their immediate environment through their various naval fleets.
With time, these maritime powers instead of waging war deployed their mastery of the sea to trade and commerce. This calls to mind the statement by the foremost Naval Strategist, Alfred T. Mahan ‘whoever controls the waves, controls the world’ and this holds true to this day.
By late 19th century, freedom of contract was being used and abused by ship-owners to oppress shippers by unilaterally diminishing their liabilities for cargo loss or damage through inserting indiscriminate exemption clauses in bills of lading and contracts of carriage. The resultant unwholesome practices by ship owners could not be checked by the shippers because they were at the weaker side of the bargaining process, and are therefore subjected to one-sided standard form contracts which were drawn up by the ship-owners and incorporated into their various bills of lading.
Harter Act.
The earliest legislative response to the unwholesome abuse of freedom of contract came from the United States of America which introduced the Harter Act in 18931.
The Act established the first mandatory regime which governed trade with the United States of America prior to the advent of international conventions on matter of mandatory liability regimes in international carriage of goods by sea.
Under the Harter Act, carriers are not relived of liability for negligence in proper stowage or proper delivery of goods2. Carriers are also prohibited from inserting any clause in a bill of lading which will lessen or avoid totally, their obligations to deliver goods properly3. Stipulations lessening or weakening that obligation are held to be void4.
The Hague Rules and Hague-Visby Rules
After the Harter Act came the first truly International mandatory carriage regime, The Hague Rules which was signed in Brussels, the Netherlands in 1924 and known as the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading (The Hague Rules). This represents the first attempt by the international shipping community to deal with the problem of ship owners regularly excluding themselves from all liabilities for loss or damage to cargo. They were referred to as ‘Hague Rules’ because the work on them commenced at a meeting of the International Law Association at The Hague in Netherlands in 1921.
The Hague Rules drew largely from the Harter Act and has straddled the realm of international carriage of goods by sea for more than ninety (90) years and is still reigning supreme, despite its various short comings in the areas of balancing of interests of parties to the carriage contract (carriers and shippers), as well as its incongruity with modern trade practices such as containerization, electronic commerce and door-to – door delivery of cargo.
The 19685 protocol slightly modified the Hague Rules which introduced slight changes to The Hague Rules leaving it substantially unaltered.
The Rules together with its Visby protocol offers no protection to cargo owners in terms of balancing the interest of ship owners and cargo owners. Instead the rules water down the protection offered the cargo
owners under the common law in respect of the liability of common carriers.
In an attempt to address this lack of balance of interest between carriers and shippers, as well as seeming indifference to technological development and modern trade practices, pressure were mounted by developing countries and major shipping nations for a more balanced liability regime for international carriage of goods by Sea.
Hamburg Rules
The Hamburg Rules6 was prepared by the United Nations Commission on International Trade Law (UNCITRAL) at the instance of developing countries and endorsed by the United Nations Conference on Trade and Development (UNCTAD) and other intergovernmental organizations. It was finalized and adopted by a diplomatic conference on 31st March, 1978 and came into force on 1st November, 1992.
The Hamburg Rules was prepared to establish a relatively uniform legal regime with a fair balance of risks between carriers and shippers, under a port-to-port contract of carriage of goods by Sea. One of the major objectives of the convention was to create a level playing ground for both carrier and shippers.
It is worthy to note that the Hamburg Rules is favoured by developing nations who are largely cargo owners and shunned by developing nations who represent carrier interests, and who prefer The Hague Rules or the Visby Protocol with its side protection of their interest. The three (3) carriage regimes presently continue to operate side by side, affecting negatively the objective of uniformity in the law of carriage.
To further complicate the situation, some countries opted for piecemeal incorporation of aspects of the three (30 conventions into their various national laws. China and the Nordic countries are good examples of this patch work approach.
Commenting on this situation, at the CMI conference in Beijing China in 2012, Dr. Kofi Mbiah7 stated, “Thus the stage was set for the application of multiplicity of rules for the international carriage of goods by sea. While
some countries have denounced the Hague Rules and become parties to Hamburg Rules, there are others who are party to the Hague-Visby Rules and yet others who are party to only the Hague Rules (e.g. Ghana).
There are some who have not denounced the Hague Rules, but have ratified the Hamburg Rules (e.g. Nigeria). There are still some other Countries who have incorporated bits and pieces of the various laws into their national law. Currently, there is a hotchpotch of international rules for carriage of goods by sea, which has created a great deal of muddled confusion and uncertainties.
The Rotterdam Rules8
The above scenario set the stage for a new search for another international instrument that not only cure the muddled up confusion and uncertainties in the law of carriage of goods by sea, but will also cater for technological advancement and developments in modern trade practices, which were not considered by any of the existing previous instruments.
Affirming this objective, the UN General Assembly Resolution adopting the Rotterdam Rules states inter alia;-
“The General Assembly,… Concerned that the current legal regime governing the international carriage of goods by sea lacks uniformity and fails to adequately take into account modern transport practices, including containerization, door-to–door transport contracts and the use of electronic transport document… Adopts the United Nations Convention on contracts for the International Carriage of Goods Wholly or Partly by Sea, contained in the annex to the present resolution9.
The Rotterdam Rules originated from an initiative of the CMI and the UNCITRAL Working Group III (Transport Law).
As far back as around 1990, these bodies realized that the plurality of international carriage of goods regimes with the attendant polarized adoption of same, was affecting international trade negatively, the bodies also realized the urgent need to incorporate electronic commerce in international trade transactions.
After encountering some problems relating to electronic commerce with the existing instruments, UNCITRAL requested CMI to conduct a study and bring up a proposal that would provide an international response to the problems, and shortcomings of existing international carriage regimes.
In December 2001, CMI submitted a draft instrument to UNCITRAL which was a product of collaborative work between the CMI and UNCITRAL working Group 111 (Transport Law).
The draft submitted by CMI to UNCITAL had already gone through in-depth discussion and consultations between the industries and National Association Members of CMI. The draft instrument therefore contained various necessary compromises to make it acceptable to the different groups.
The UNCITRAL Working Group 111 and the CMI were supported all through the work on the convention by a number of excellent expert delegations from all the regions of the world, including African delegations, which participated actively in the negotiations of the conventions and this resulted in what we have today and refer to as the Rotterdam Rules which could be said to be as near perfect as possible.
The African Group held a colloquium in Nigeria and in Benin Republic where the Group fashioned out a common position that was canvassed by the Group during the negotiation of the Convention.
The United Nations General Assembly, at its sixty-third session, on 11th December, 2008, via resolution 63/122, adopted the United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea. A signing ceremony was scheduled to take place at Rotterdam, the Netherlands on 23rd September 2009. It was also agreed that the convention should be called “Rotterdam Rules”. Nigeria and many other African Countries joined in signing the convention on 23rd September, 2009.
It was agreed that the Rules will come into force one year after their ratification by 20 nations. So far, only three (3) countries have ratified the convention, namely Congo, Spain and Togo. There are twenty five (25)
signatories to the convention a number of whom are still considering the ratification. The table below shows the current status of the convention:10
Armenia Cameroon Congo Democratic Republic of the Congo Denmark France Gabon Ghana Greece Guinea
Guinea-Bissau Luxembourg Madagascar Mali 29/09/2009 29/09/2009 23/09/2009 23/09/2010 23/09/2009 23/09/2009 23/09/2009 23/09/2009 23/09/2009 23/09/2009 24/09/2013 31/08/2010 25/09/2009 26/10/2009 23/09/2009 22/10/2009 28/01/2014 19/01/2011 17/07/2012
Netherlands Niger Nigeria Norway Poland Senegal Spain Sweden Switzerland Togo United States of America 23/09/2009 23/09/2009 23/09/2009 23/09/2009 23/09/2009 20/07/2011 23/09/2009 23/09/2009 23/09/2009
One significant thing about the Rotterdam Rules is that the original signatories to the convention are a mixture of developed and developing countries, strong ship- owning and traditional cargo interest nations, or what one may call traditional carrier and shipper nations. That was indeed a good prospect for the convention. It is, in a way, a testimony to the balanced nature of the convention. However, the poor ratification profile of the convention is beginning to erode the hope of operating a more unified, more balanced and modern carriage regime.
The 25 signatories to the Rotterdam Rules represent well over 25% of world trade, volume. This is quite significant when compared with the 5% world trade volume represented by the over 30 contracting members, to the Hamburg Rules.
One important event worth mentioning which followed the adoption of the Rotterdam Rules was the organization of a colloquium under the auspices of UNCITRAL and CMI on 21st September, 2009 held in Netherlands. The Colloquium was to provide a forum for in-depth analysis of the Convention.
Some Unique Features of the Rotterdam Rules.
The Rotterdam Rules make provisions for the regulation of certain matters in connection with the international carriage of goods, which were not considered or regulated by the previous carriage conventions. These form what I would like to refer to as the unique features of the Rotterdam Rules. Notable among these are the following:
a) Carriage beyond the sea leg or multi-modalism.
b) Maritime Performing Party.
c) Delivery of goods (including door-to-door delivery)
d) Electronic alternative to transport document.
e) Right of the Controlling Party.
f) Transfer of rights.
Time and scope of this presentation would not permit the discussion of these features of the Convention. Suffice it to say that the inclusion of these issues in the Convention followed painstaking deliberations, based on experiences gained from the previous carriage regimes. The Rotterdam Rules was expected to be a more comprehensive, more perfect, more balanced, more modern and more enduring carriage of goods regime. The drafters therefore took the pain to cover as much issues as possible which were left unregulated under the previous conventions, without losing sight of the need for acceptable compromises. For example, the concept of the Maritime Performing Party incorporates the principles upon which the Himalaya clause in bills of lading is based. The maritime performing parties include contractors who perform services ashore, but within the port areas. This would include terminal operators and freight forwarders. The maritime performing parties are subject to the obligations and liabilities imposed on the carrier and are also entitled to the same defenses and limits of liability available to the carrier under the Rules.
1. CMI/UNCITRAL Draft Instrument on Transport Law (December 10, 2001, and January 8, 2002) Report of the Secretary-General.
2. CMI 2012 Beijing. 14-19 October, 2012, Beijing China. Proceedings.
3. Francesco Berlingieri: A COMPARATIVE ANALYSIS OF THE HAGUE-VISBY RULES, THE HAMBURG RULES AND THE ROTTERDAM RULES. Paper delivered at the General Assembly of the AMD, Marrakesh 5-6 November, 2009.
4. Proshanto K. Mukherjee & Abhinayan Basu Bal: A LEGAL AND ECONOMIC ANALYSIS OF THE VOLUME CONTRACT CONCEPT UNDER THE ROTTERDAM RULES. Journal of Maritime Law and Commerce. Vol. 40, No. 4. October,2009.
5. Olena Ptashenchuk: THE HAGUE-VISBY RULES AND THE ROTTERDAM RULES IN THE LIGHT OF THE MODERN MARITIME INDUSTRY DEVELOPMENTS. Available at http://www.umba.org.ua/en/newsroom/articles/article4.htm. Accessed on 26/08/2016.
6. Rotterdam Rules From Eikipedia, the free encyclopedia. Available at https://en.wikipedia.org/wiki/Rotterdam_Rules Accessed on 26/08/2016.
 *Bello, Executive Secretary/CEO Nigerian Shippers Council delivered this speech on Tuesday in Abuja at an event put together by the  Federal Ministry of Transportation in collaboration with the Union of African Shippers’ Council (UASC)