Sixteen Nations Sign Rotterdam Rules

The Rotterdam Rules now have 16 signatory nations, with more expected in the near future.

Officials with the United Nations Commission on International Trade Law said the total was the largest number of member states to sign a new convention on the first day, according to Don O’Hare, a member of the U.S. delegation to the Uncitral workshop that drafted the new rules for cargo liability on the high seas. Another delegate, attorney Chester D. Hooper, said the atmosphere at the signing ceremony was “very positive.”

By signing what is officially known as the United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea, nations indicate their intent to ratify the treaty. The convention, which took seven years to negotiate and was adopted by the UN General Assembly in December 2008, will come into force one year after it has been ratified by 20 nations. O’Hare said the State Department should present the convention to the Senate in early 2010.

The U.S., Norway, Greece and the Netherlands, all major trading and maritime nations, signed the convention, along with Congo, Denmark, France, Gabon, Ghana, Guinea, Nigeria, Poland, Senegal, Spain, Switzerland, and Togo. Together the signatories account for approximately one-third of world trade.

European shippers and freight forwarders, supported by the European Shippers' Council, have attacked the new rules for being too complicated and favoring ship owners at the expense of the cargo owning interests. Ship-owner groups, however, have broadly welcomed the Rotterdam Rules.

The Rotterdam ceremony was attended by other European and Asian nations, including China, many of whom are expected eventually to sign the convention.

According to Rafael Illescas Ortiz, chairman of the Uncitral working group, approval of the Rotterdam Rules by the African nations is significant. Those nations comprised the majority of support for the Hamburg Rules, an earlier U.N. liability agreement. Adoption of the Rotterdam convention will effectively nullify the Hamburg Rules.

The Rotterdam Rules are intended to modernize and simplify the process a shipper or insurer must go through to recover damages for cargo lost or damaged at sea. The rules recognize intermodal door-to-door transport, and will cover goods in transit by rail or truck on land legs of an ocean voyage.

If they are ratified by the U.S. Senate, the Rotterdam Rules will replace the 1936 Carriage of Goods by Sea Act.