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2nd Global Shipping Summit 23-24 November 2007, Shenzhen, China, Multimodal Transport : International Regulation of Liability D r. Mahin Faghfouri Multimodal Transport: International regulation of liability I. Commercial significance of multimodal transport

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2nd Global Shipping Summit23-24 November 2007, Shenzhen, China, Multimodal Transport: International Regulation of Liability

Dr. Mahin Faghfouri


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Multimodal Transport: International regulation of liability

I. Commercial significance of multimodal transport

II. Attempts to develop a uniform legal regime at international level

III. Current international liability framework and problems

IV. On-going developments: UNCITRAL Draft Convention on the Carriage of Goods[Wholly or Partly] [By Sea]


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1. Commercial significance of multimodal transport

1. What is multimodal transport?

  • No single authoritative definition

    • carriage by two or more modes of transport

    • door-to-door transport

    • one contract with one party assuming responsibility

    throughout

    • one document

  • terms also used: intermodal transport, combined transport

    2. Growth in world containerized trade


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Growth in World Containerised Trade

Source:Clarkson Research Services, Shipping Review Database, Spring 2007, Page 101.


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Containerised Trade: Forecast

Source: Drewry Shipping Consultant


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II. Attempts at establishing a uniform legal regime at international level

1.1980 UN Convention on Multimodal Transport

Not in force

2. 1992 UNCTAD/ICC Rules for Multimodal Transport Documents

- need to be incorporated into contract

- give precedence to mandatory law


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III. Current liability framework: international level

  • No MT Convention in force

  • National/regional/subregional laws and regulations on multimodal transport

  • Localized loss: unimodal conventions on carriage by sea, road, rail, air (if applicable)

  • Standard term contracts

    (e.g. FIATA FBL 92, BIMCO MULTIDOC 95)


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Problems international level

Liability varies depending on:

- stage of transport where loss or damage occur - applicable regime

- causes of loss or damage

Diversity of approach on key issues: e.g. liability basis, delay, limitation and time-bar


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Summary international level

• Multimodal transport is growing exponentially

• Current legal framework

• is fragmented and liability cannot be assessed in advance

• is too complex and may not be cost effective

• The proliferation of regional, subregional and national solutions further adds to complexity


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IV. On-going developments:UNCITRAL Draft Convention on the Carriage of Goods [Wholly or Partly] [By Sea]

• application tosea transport and multimodal transport [MT] including a sea leg

• based on maritime concepts and existing maritime liability regimes,

- but with significant changes in structure, substance and approach

• it is extremely lengthy and complex (100 articles) only 3 arts. relate to MT: art. 1(1), 26 and [62(2)]

(It is expected that a new convention will be adopted in 2008)


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Suitability of the Draft Convention to govern modern multimodal transport?

Central questions:

  • one party responsible throughout?

  • do the same liability rules apply throughout?


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1. One party responsible throughout? multimodal transport?

Period of responsibility: receipt to delivery(art.11)But:

- time and location of receipt/delivery may be contractually determined

Also:

Carrier issuing transport document may not be responsible:

- for parts of the carriage (art.12)

- for functions such as loading, stowage and discharge (art. 14(2))


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1. One party responsible throughout? multimodal transport?

Thus, carrier mayonly be responsible:

- During the period of responsibility as contractually defined

- for parts of the multimodal transport, and

- for some of a carrier’s functions

Cargo interests may need to sue another carrier

Particular problems for MT shipper/consignee


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2. Do the same liability rules apply throughout? multimodal transport?

Liability system:“modified network system”

If loss is localized:

-Draft Convention gives precedence to certainmandatory provisions of any international convention applicable to the segment of transport where loss or damage occurred

Also:

- A a Contracting State may apply its mandatory national law by means of declaration


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Thus, applicable rules vary multimodal transport?

If loss is localized

• provisions on liability, limitation of liability, time for suit of any applicable international unimodal convention or national law apply

• Plus remainder of Draft Convention


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And multimodal transport?

For non-localized loss or

where no convention or national law applicable

• Maritime liability regime of Draft Convention applies

• Irrespective of how short the sea leg and how long the land leg may be


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Conclusions? multimodal transport?

Improvement of status quo?

Thank you

[email protected]


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For further information see: multimodal transport?

UNCTAD Documents: (www.unctad.org/ttl/legal)

- Commentary on Draft Instrument on Transport Law (UNCTAD/SDTE/TLB/4)

- Multimodal Transport: The Feasibility of An International Legal Instrument (UNCTAD/SDTE/TLB/2003/1)

- Implementation of Multimodal Transport Rules (UNCTAD/SDTE/TLB/2 and Add.1)

UNCITRAL Documents: (www.uncitral.org - Working Group III)

- Preparation of a Draft Instrument on Carriage of Goods by Sea

A/CN.9/WG.III/WP.21, 32, 36, 39, 56 & 81(2007 draft)

- IMMTA submission: A/CN.9/WG.III/WP.97

See also: Mahin Faghfouri, International Regulation of Liability for Multimodal Transport, WMU Journal of Maritime Affairs, April 2006.


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