Last week, the Union of African Shippers Council (UASC) met in Abuja to discuss ratification of the Rotterdam Rules. BABALOLA YUSUF, in this piece examines what it portends for developed and developing nations.
The Nigerian Shippers Council (NSC) recently hosted all African Shippers Council under the aegis of Union of African Shippers Council (UASC) to discuss the validation and prompt ratification of the “United Nation’s Convention On Contracts For The International Carriage Of Goods Wholly Or Partly By Sea” also known as Rotterdam Rules.
The colloquium discussed the balancing of interests of parties to the carriage contract (Carriers and shippers) as well as incongruity with modern trade practices such as containerization, electronic commerce and door-to-door delivery of cargoes.
According to the Executive Secretary of the Nigerian Shippers’ Council, Barr. Hassan Bello, the Rotterdam Rules was a balance of interest between the Hague and Hamburg rules that solely protect the carrier at the detriment of the shippers.
Bello posited that freedom of contract was being used and abused by Ship-owners to oppress the Shippers by unilaterally diminishing their liabilities for cargo loss or damage through inserting indiscriminate exemption clauses in bills of lading and contract of carriage.
“The resultant unwholesome practices by ship-owners could not be checked by the shippers because they are the weaker side of the bargaining process and are therefore subjected to one-sided standard form of contract which were drawn up by ship-owners and incorporated into various bills of lading,” Bello said.
He however, explained that the Rotterdam rules is a more comprehensive, perfect, balance, modern and enduring carriage of goods regime to the Hague and Hamburg rules.
The Hague Rules
The Hague rules are the first truly international mandatory carriage regime. The Hague rules represent 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 cargo damage.
The Hague rules still reign supreme despite its visibly various shortcomings in the area of balancing of interest of parties to the carriage contract (Carriers and Shippers) as well as its incongruity with modern trade practices.
The Hague rules offers no protection to cargo owners in terms of balancing the interest of ship-owners and cargo owners rather, the rules water down the protection offered the cargo owners under the common law in respect of the liability of common carriers.
However, developing countries and major shipping nations called for a more balanced liability regime for international carriage of goods by sea and in an attempt to address the lack of balance of interest between carriers and shippers as well as seeming indifference to technological development and modern trade practices. In the process, the Hamburg rules were introduced and adopted at a diplomatic conference on 31st March 1978 and came into force on 1st November, 1992.
The Hamburg Rules
The Hamburg Rules were prepared by the United Nation’s Commission on International Trade Law (UNCITRAL) at the instance of developing countries and endorsed by the United Nation’s conference on trade and Development (UNCTAD) and other intergovernmental organisation.
The Hamburg Rules were 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 an even playing ground for both carriers and shippers.
But the Hamburg rules are favoured by developing nations who are largely cargo owners and shunned by developing nations who represents carrier interest.
What Africa countries will benefit from ratifying Rotterdam rules.
According to some stakeholders, Africa countries stand to benefit a lot from ratifying the Rotterdam rules.
The Chairman, Union of African Shippers Council, Dr Kofi Mbiah, African countries stand to gain what modern world has brought to being by way of containerization.
“We stand to gain by way of scope of applications on the Rotterdam rule which is wider and encompasses door to door concept. Africa stands to gain from time limitations that has moved from one year to two years and in consonant with Hamburg rules. African stands to gain from clear provision from delay since that when your cargo is delayed and you have an agreement with the shipping lines then you can make your claim. Africa stands to gain increase limit liability that is a point that is important because there will always be cargo damage
“Africa stands to gain because of jurisdiction just like Hamburg rules allow Africa to hear cases in their countries and consequently to build a very important resources for case law which is very important for future cases that will come”, Mbiah noted.
Dr Mbiah noted “Truly, it has taken quite some time but that is exactly how international convention goes because people have interest and they must ensure that their interest are satisfied and information flow must be adequate because people must understand the convention and the process”, adding that to ratify a convention is not the enough but to domesticate it.
“Things one go through before ratifying conventions are enormous for many of our countries adopting the convention is not enough but also have to domesticate it but there are many processes to go through and so many countries want to be sure that they just don’t want to ratify the convention and put it down and that when they ratify by the time the ratification finishes in parliament they also have domestic law to go with it so that is why it is delaying.