The Contract of Carriage

Multimodal Transport and Unimodal Regulation

Paula Bäckdén

• Publisher: Informa Law from Routledge
• Year: 2019
• ISBN:
  9780429685859
• Edition: 1
• Topic: Diritto
• Subtopic: Teoria e pratica del diritto

The Contract of Carriage: Multimodal Transport and Unimodal Regulation provides a new perspective on how to approach the question of multimodal transport regulationregarding liability for goods carried. Unlike previous literature, which has approached the issue of applicability from a strict interpretation-of-the-convention angle, this book will analyse the issue from a law of contracts perspective.

If goods are damaged during international transport, the carrier's liability is governed by rules laid down in international conventions, such as the CMR convention, the Hague–Visby Rules and the Montreal Convention. Such rules apply to certain modes of transport, to contracts for unimodal carriage. When goods are carried under a multimodal contract of carriage, which provides for carriage by more than one mode of transport, the question is whether these rules are applicable to transport under multimodal contracts of carriage.

This book investigates the rules of carrier's liability applicable to unimodal transport, and whether these rules are applicable to carriage under multimodal contracts of carriage, with focus on the actual contract of carriage.

This unique text will be of great interest to students, academics, industry professionals, and legal practitioners alike.

Part I

Introduction and method

Chapter 1

Introduction

1.1 The theme

International transport of goods forms the veins of the world’s production structure. Every year, several hundred million TEUs¹ are transported all over the world.² The value of commercial goods transported accounts for one-quarter of the world’s total GDP.³

Today’s transport of goods is multimodal. Goods are carried from the door of the sender to the door of the consignee (“door-to-door”) by a combination of transportation modes. The focus of the transportation customer is that goods are sent to the right place at the right time, without very much attention being paid to the question of by what mode the goods are transported.

However, at the time when states first consolidated their efforts to subject carriers to mandatory liability rules, transport contracts were primarily agreed on a unimodal basis. Even where goods were to be carried by two (or more) different modes, the sender contracted for the separate legs of the transport separately and the goods were received from one carrier and handed over to the next carrier by a local agent. Although the transport as such is multimodal, the contract of carriage is not. From a legal perspective, a transport is only multimodal when the contract of carriage covers more than one mode of transport.⁴ Thus, at the time, the world of transport, which is now quite complex, was easily divided into unimodality. Despite efforts made, there is to this day no international regulation that regulates multimodal transport contracts.⁵

The unimodal conventions in force today may, from an outsider’s perspective, seem quite homogenous. However, besides the obvious dissimilarities such as varying monetary liability limits and the far-reaching liability exemptions available to the maritime carrier, they all approach issues of central importance such as applicability and basis of liability in different ways.⁶ Whilst the liability of the maritime carrier under the Hague–Visby Rules⁷ is fault-based with generous exemptions, the liability of the road and rail carrier under the CMR and the COTIF–CIM regulations⁸ is presumed with detailed exceptions and the air carrier’s liability under the Montreal Convention⁹ is close to strict.¹⁰ And whilst the liability rules regulating air carriage apply to actual air carriage, the maritime liability rules apply to transports carried out under contracts of carriage providing for the issuance of bills of lading and the European land carriage conventions apply to contracts of carriage. This latter approach, which with some modifications has been adopted by the recently drafted Rotterdam Rules,¹¹ applicable to international maritime carriage and additional transports by other modes, has been the cause of legal uncertainly in relation to multimodal transport contracts.¹²

The multimodal contract of carriage has, from a legal perspective, traditionally and without much ado, been regarded as a collection of agreements, one for each separate mode of transport used to fulfil the multimodal transport contract.¹³ However, its nature has come to be challenged in jurisprudence as well as in practice.¹⁴ It has been asserted that the multimodal contract should not be regarded as a collection of agreements, but as a contract sui generis and, as such it cannot be considered that the unimodal conventions applicable to contracts for carriage, e.g. by road apply, to a “unimodal leg” of such a multimodal contract.¹⁵ Therefore, as long as there is no consensus in this respect, the multimodal transport contract faces the legal uncertainty of either being subject to mandatory unimodal regulations or to complete freedom of contract with no fallback rules.¹⁶

These two extremes pose diverse difficulties for the parties to a transport contract. First of all, where the “network system”¹⁷ is applied, and thus each leg of a multimodal transport of goods is deemed to be governed by the unimodal regulation governing that particular mode of transport, there are legal implications relating to overlap between two conventions where two conventions may be applicable at the same time as well as gaps between two regimes where no regime is applicable at all.¹⁸ Secondly, as far as conventions applicable to certain contracts of carriage are concerned, the assertion that such conventions are not applicable to transports carried out under multimodal transport contracts undermines the entire network system and leaves parts of transport carried out under such a contract without regulation. Such complete freedom of contract places the multimodal transport contract in a vacuum that may be hard to justify considering that unimodal transport is subject to mandatory regulations.

Thus, in the absence of a uniform system governing multimodal carriage of goods, application of the network system may seem like a pragmatic solution. However, in a multimodal transport from the warehouse of the sender to the consignee’s place of business a number of undesirable effects of the network system may emerge. On the other hand, should the network system not be applied, the absence of a uniform system entails that the transport is not subject to any international regulation. Although that is a situation that may perfectly solve itself through market regulation, objections may be made.

The issue of multimodal transport contracts and the applicability of unimodal conventions to parts of such contracts have been renewed with a twist due to adoption by the UN General Assembly of the Rotterdam Rules.¹⁹ The convention is applicable to contracts for the international carriage of goods by sea, but also to ancillary carriage by other modes carried out under the same contract. Thus, should the convention enter into force, a large number of multimodal contracts will be subject to mandatory regulation. However, existing unimodal regulations may prevent the full applicability of the Rotterdam Rules.

There is a considerable legal discussion regarding regulation of transports carried out under multimodal contracts of carriage, a discussion that has not led to any unanimous view on the problem, which accordingly entails legal uncertainty.²⁰The discussion is carried out against a setting where several European states have seemingly clear precedents, although there is no uniformity on the international level. Thus, legal uncertainty is enhanced by heterogenous interpretation of the uniform rules.²¹ Accordingly, a carrier offering international transports in Europe must currently adapt its general terms and conditions to a legal setting where the carriage may be subject to mandatory unimodal rules, which however must be supplemented by fallback rules for non-localized damage. The contract of carriage must also be adapted to a scenario where no mandatory rules, uniform or national, apply and the contract of carriage is therefore subject to freedom of contract. It follows that such general terms and conditions will certainly not appear entirely clear to the future transport customer.

In addition to this legal uncertainty, the contract of carriage seems to be in constant evolution. Multimodal transport has given rise to a number of new appearances of the transport contract due to shippers’ increasing unconcern about how goods are carried from the place of loading to their final destination. The carrier is regarded as a service provider whose professional judgment is better suited to determine what modes of transport, routes, and so on will optimize the transport. The spectra of contracts include, on the one hand, explicit multimodal contracts in which the modes of transport are clearly stated and, on the other hand, generic contracts that span contracts where the mode(s) of transport is defined but which gives the carrier an option to change that mode for another,²² to contracts where the mode(s) of transport is left entirely up to the carrier. Hence, a transport contract may or may not state by what mode or modes of transport the goods are to be transported and may in addition give the carrier the right to choose and/or substitute mode(s) of transport.²³

These types of contract entail new challenges in relation to the transport conventions that apply to certain contracts, which can be illustrated by the following examples:

1. (1) Is a contract that explicitly provides for carriage by e.g. sea and road, a contract for carriage by road according to the CMR convention in relation to the road carriage?
2. (2) Is a contract that explicitly provides for e.g. carriage by air, a contract for carriage by rail according to the COTIF–CIM convention if the carrier utilized his contractual right to substitute the mode of transport?
3. (3) Does a generic transport contract, which does not specify the mode of transport to be used, provide for carriage by sea²⁴ if the goods are so carried?

1.1.1 The contractual approach to applicability

As indicated above, the Gordian knot in relation to regulation of multimodal transport is the applicability of the uniform rules that apply to contracts of carriage. It is the fact that some conventions apply to contracts for the carriage of goods by a certain mode of transport (contracts of carriage by [road])²⁵ that may prevent their applicability to multimodal contracts of carriage. Under this “contractual approach”, the applicability of a convention is connected to the actual contract of carriage. Such a contract must be for carriage of goods by the mode in question, be it by road or by sea or by rail. The contractual approach is used in the CMR convention and the COTIF–CIM convention as well as in the Rotterdam Rules, although it was first introduced into maritime transport through the Hamburg Rules.²⁶ It may seem a quite straightforward approach, but it has led to practical problems as regards what is to be considered a contract for the carriage of goods by a certain mode.

Along with this approach to applicability, there are, as regards conventions providing rules on the liability of a carrier of goods for lost and damaged goods, two other approaches to defining the scope of applicability that are generally recognized: the modal approach and the documentary approach.²⁷

The documentary approach was the solution chosen by the drafters of the Hague Rules in the 1920s. At that time, there was a need to distinguish transport of goods, which were not carried out under a charter party, from those that were.²⁸ Since carriage of goods as general cargo was usually carried out under bills of lading, the documentary approach suited the purpose and hence the Hague Rules, as well as its successor the Hague–Visby Rules, applies to carriage of goods under bills of lading.²⁹ The documentary approach thus relates to a particular type of document being used, which triggers the application of certain rules.³⁰

The carriage of goods by air convention, the Montreal Convention, applies to actual carriage of goods by aircraft, i.e. a modal approach.³¹ Clearly, the convention presupposes some form of agreement, but it may be that such an agreement does not have to specify the mode of transport, which facilitates application of the air carriage liability rules to multimodal transports. As will be discussed in Chapter 4 below, the Montreal Convention applies to carriage of goods by air independently of what type of contract of carriage is entered into between the carrier and the contracting consign...