he shipment of goods by sea under Sea Act, commonly known as COGSA is our statute, governing the rights and responsibilities between shippers of cargo and ship owners regarding ocean shipments to and from Pakistan. Our trade is assumed to be 95% by sea. It is the enactment of the international convention regarding bills of lading, commonly known as the "Hague rules."
We, in Pakistan still rely on outdated carriage of goods Act by Sea 1925. A serious effort was made in 2004-05 to amend the outdated/obsolete carriage of goods act by taking all the stakeholders onboard whilst Director General of Ports and Shipping, Karachi, being the regulatory regime played host to all the stakeholders, ie shippers, carriers, chambers, NTTFC and others, to arrive at a consensus.
The consensus was reached bearing in mind the problems faced by trade and commerce and amended draft rules were submitted to the concerned ministry to enable it to move the bill in the parliament to amend the obsolete act. However, the Ministry of Law and Justice instead of vetting the draft bill, dumped it into to the cold storage with no outcome to-date, thus nullifying all the productive man hours put to revise the bill to address the modern day needs.
It is interesting to note that rest of the world amended the "Hague Rules" in 1968 on the premise that the "Hague Rules" are in favour of ship owners, limiting their liability to trade. The rules were replaced by "Visby" amendments, which replaced "per package" with limitation per kilogramme.
The "Hague Visby Rules" have been in force internationally for over years and performed well, both for the maritime law and the countless parties around the world who have chosen courts and arbitral tribunals, invoking Arbitration Act 1996 as per English law, whereas our Arbitration Act is still that of X/1940, thus international entrepreneurs, signing any contract in Pakistan, insist arbitration in London or Switzerland, having no faith in our obsolete Arbitration Act. My personal experience as arbitrator confirms Arbitral proceedings of contract as per the English Arbitration Law of 1996.
Three developments in the maritime world lead to believe that "Hague Visby Rules" have started showing their age. First, the big increase in container traffic required more serious legislative attention then the simple package/unit tinkering effected in 1968 Visby Protocol.
Secondly, the legal framework for carriage of goods by sea has lagged behind the use of electronic means of communication in the issue and transfer of bills of lading, which are negotiable instrument as per negotiable instrument act. The carriage of goods by Sea Act 1992, provided powers for accommodating electronic instruments in the civilised world, but those powers remained unused for lack of comprehension and clarity.
Finally, increased globalisation of markets required that some accommodation be made, even within the liner market, for contracts agreed freely between parties, with some room of departure from Hague Visby Rules, which originated, in the study of the US Harter Act in the late 19th century.
Large commercial concerns now see the carriage of goods on liner terms not simply as incidents to export, but an integral part of serial and large supply chains, which need flexibility in freedom of contract, while we still follow 1925 Carriage of Goods by Sea Act what to talk about amendments or updating.
The UNICTRAL has developed a new regime known as "Rotterdam Rules" and on Wednesday 23rd September 2009, 16 countries have officially ratified the new UN convention Rotterdam Rules and as of today, 23 countries have ratified or signed document of accession, including US.
The IMMTA local office is concerned that whilst we could not amend COGSA, how we are going to take the onslaught or Rotterdam Rules, thus IMMTA is seriously considering to arrange a workshop at Karachi in March to educate all stakeholders on the Rotterdam Rules and hopefully concerned ministries be educated to comprehend the new convention before submitting the document of accession as the rules must be deliberated before approving the convention.
The most serious issue is changing the bills of lading with transport document, thus prudential regulations have to be amended to make the negotiable instrument act/law to accommodate new requirements. The Rotterdam Rules is the United Nation Convention on contracts for the International Carriage of Goods, wholly or partly by sea, and it is highly complex magnum opus of 96 articles.
The IMMTA organised an international conference at Marbella, Spain, from 19th to 23rd September, 2010. Marlaw was also attended by two commercial maritime personnel of repute from Pakistan, who surely are willing to deliberate and educate the local stakeholders.
The Rotterdam Rules were debated in view of multi-modal transportation of goods in the 21st century, needs solution and liability regime, which is yet to be covered by Tokyo Rules or ICC/ UNCTAD rules, thus it is imperative to evolve a binding effect on liability regime of multi-modal transport operator including freight forwarders.
The IMMTA is of the considered opinion that Rotterdam Rules be implemented despite shortcomings to replace the outdated Hague Visby Rules. The International Road Transport Union is, however, urging the government not to ratify the rules as they do not want to bear any liability.
The Rotterdam Rules provides for changes in the Hague Visby/COGSA regime. It will also apply to all carriage of goods wholly or partly, by sea. The convention extends the statutory regime to the entire period the goods are in the custody of the carrier and its maritime performing parties. It is also interesting that charter parties contract, towage agreements and volume contracts are not covered in the Rotterdam Rules.
The IMMTA local office is of the considered opinion of adopting Rotterdam Rules to address the multi-modal transport in Pakistan. Karachi Chamber of Commerce Shipping Committee in the past had expressed its reservation on freight forwarders, thus implementation of Rotterdam Rules will also be netting freight forwarders in liability regime as a MTO.
It is true that the new rules address all deficiencies, in particular containerisation, extending the rules to contract for the carriage of goods wholly or partly by electronic transfer documents which are accommodated as being functionally equivalent to paper transport documents. The liner market is still regulated by rules and charter parties.
The most intriguing question is that are we ready for Rotterdam Rules? The answer is 'no' as neither the ministry concerned, chambers nor the shipping community has been educated on the new UN Convention Rotterdam Rules, which may eventually replace "Hague Visby Rules".
Let us all ponder seriously as it scares me that some layman in the ministry, simply enjoying foreign trips, may endorse the rules, whilst we are not ready, affecting trade, commerce and liability regime. I very humbly give a wake up call to all and sundry and hope the concerned ministry may take the lead. The Shipping Committee of Karachi Chamber of Commerce will be most willing to extend all co-operation to educate the stake holders.
No comments:
Post a Comment