Dispute settlement understanding notes, Lecture notes of International Economic Law

Download Dispute settlement understanding notes and more Lecture notes International Economic Law in PDF only on Docsity! INSURANCE IN MULTI-MOTAL TRANSPORT • In International Trade the movement of cargo is frequently done through more than one carrier and more than one mode of transport. Normally, the consignor used to engage individual transporters for carriage of their goods depending upon the mode of conveyances involved for a particular transit. • The consignor also enters into separate contracts with each carrier. The Carriers also limit their liability according to the Contract of Carriage. • • However, under Multimodal transport, the consignment handing over to a person arranges multi modal transport operation and makes all internal/intermediate arrangements necessary for the movement of the goods and delivery to the final destination as per Contract of Carriage. • • International multimodal transport is involved for carriage of goods from one country to another by more than one mode of transport on the basis of a single contract. Multimodal transport • Multimodal transport (also known as combined transport) is the transportation of goods under a single contract, but performed with at least two different means of Transport; the carrier is liable (in a legal sense) for the entire carriage, even though it is performed by several different modes of transport (by rail, sea and road, for example). The carrier does not have to possess all the means of transport, and in practice usually does not; the carriage is often performed by sub-carriers (referred to in legal language as "actual carriers"). The carrier responsible for the entire carriage is referred to as a multimodal transport operator, or MTO. • This form of Transport is supposed to be governed by the UN Convention “Multi- Modal Convention”, but it is yet to enter into force. Article 1.1. of the UN Multimodal Convention defines multimodal transport as follows: "'International multimodal transport' means the carriage of goods by at least two different modes of transport on the basis of a multimodal transport contract from a place in one country at which the goods are taken in charge by the multimodal transport operator to a place designated for delivery situated in a different country" Vessel Operating Multimodal Transport Operators (VO-MTOs) • Vessel Operating Multimodal Transport Operators (VO-MTOs) • Normally the liability of the Ship-owners for carriage of goods is attached when the cargo is safely placed on board the vessel. However, due to introduction of containerization in International trade, many shipowners start providing their services to include carriage during land transit and even carriage by Air. • • Such combination of modes of transport recognizes the vessel operating companies as MTOs. The ship-owners do not own or operate to carry the goods by road, rail or air but arranges transportation of goods by subcontracting with unimodal carriers. They also sub contract inland stevedoring and warehousing services. • Non-vessel Operating Multimodal Transport Operators (NVO-MTOs) • Non-vessel Operating Multimodal Transport Operators (NVO-MTOs) • Other than Ocean carriers, some transport operators may also arrange through transport or door-to-door delivery service of cargo by using more than one mode of transport. Instead of subcontracting the inland or air segments of the transport, they may subcontract to the Ocean carrier but they will not own or operate the vessels for ocean voyage. Therefore, they are regarded as "non-vessel operating MTOs" or " non-vessel operating common carriers"( NVOCCs). Is multimodal transport service accepted by all shippers? Many shippers do not like to select a single carrier or by conference carriers in order to avail themselves different quality of service and prices depending on their requirements. According to some shippers, a conference carrier does outstanding job in terms of service, documentation, communication, safety and security but it was expensive. But when they utilize the services of non conference carrier and NVO-MTOs , they do not get the service for inland transportation for which they have to have make a separate arrangement. The most striking point in this is that percentagewise, a selection of NVO-MTO is higher where shippers arrange inland transportation and the rest of the transport is arranged by NVO-MTO. The Table bellow shows the reasons for preferring single factor door to door rates and preferring to arrange for inland transportation only. Notice of loss /damage to the goods • Notice of loss /damage to the goods: • Notice shall be given by the consignees in writing to the MTO immediately if the losses are apparent. However, if the loss/ damage is not apparent; such notice shall be given within six days from the date of delivery. • • Limitation on Legal Action: • The MTO shall not be liable under any of the provisions of the act unless legal action against him is brought within 9 months of : • The date of delivery of the goods; or • The date when the goods should have been delivered; or • The date on and from which the consignee has the right to treat the goods as lost. The characteristics of multimodal transportation. The characteristics of multimodal transportation are: (1)the multimodal transport operator and receiver of cargo are in two different countries, (2) the cargo transport in the in ternational multimodal transport is done via at least two different transport methods, or that the trans port is covered by at least two different transporta tion branches, (3) the entire international multimodal transport process is covered by one contract signed between the multimodal transport operator and the sender of the cargo, (4) the entire transport process has only one shipping manifest, (5) the entire process is executed and coordinated by a single operator – the multimodal transport operator (MTO). This is usually an international carrier company. 3.2 Notion and kinds of hull transport insurances The hull transport insurance may be divided into several groups based on the primary branch of transportation: naval, road, railroad and air insurance. Usually insurance companies only count air and naval insurances as “hull” insurances. Road and railroad insurances are normally covered under property insurances. Domestic laws only cover the basic insurance contracts; the details and technicalities are left to the insurance companies, so they can accommodate various needs of individual transport branches. Multimodal Transport Operator & Multimodal Transport Contract • 1) What is a Multimodal Transport Operator ? • A Multimodal Transport Operators (MTO), is "Any person who concludes a multimodal transport contract and assumes responsibility for the performance thereof as a carrier.“ • 2) What is a Multimodal Transport Contract? • A MTO transport contract is “a single contract for the carriage of goods by at least two different modes of transport." • In other words, a MTO is any one who undertakes to arrange for a transport of goods using more than one mode of transport and who issues one transport document for the entire cargo journey. Often this refers to door to door transport. C) Multi-transport Operators (MTO) and their liability. Unimodal transport is governed by respective international conventions: for ocean - the Hague / Hague Visby / Hamburg Rules, for air - the Warsaw Convention, for road - The CMR, for rail - The CIM Conventions, etc. These transport conventions may apply to individual segments of multimodal transport of goods. Damage to the goods can either be localized (it is possible to determine on which mode of transport the damage occurred) or concealed (it is impossible to determine where the damage occurred). Based on the definition of MTO, an MTO assumes responsibility (is liable) for the performance as a carrier for more than one mode of transport. As such the MTO is bearing the liability for the entire transport according to the contract with the merchant. The advantages to the merchants are obvious: The merchant is much better protected. In case of segmented transport (non multimodal transport) the merchant must often claim against sub-carriers whom he does not know, rather than against the carrier with whom he has made the transport contract. In many events, it is not possible to pinpoint where the damage took place, since loss or damage are normally not discovered before the goods arrive at their destination. At that stage, there will be practical difficulties to localise loss or damage to a responsible party. This is particularly true with respect to cargo handling in the intermediary stages between pre-carriage, main carriage and on-carriage. Hence, it might be impossible for the merchant to obtain compensation for the damage or loss occurred. With a multimodal transport document , the MTO takes over the full responsibility. The merchant no longer needs to seek redress from the individual actual carrier. He simply claims against the MTO who in turn must claim against the liable sub-contracting carrier. Also, prior to arranging the transport, neither the owner, nor his insurer can know in advance how the risk of any loss or damage to them will be allocated. Without engaging a multimodal transport operator, the merchant has to deal directly with various actual carriers. These actual carriers adopt different conventions and liability systems which may be extremely confusing to the merchants. By using an MTO, the merchant is in many cases much better protected and can claim against the carrier with whom he has made the transport contract . The MTO is responsible independently of the rules which apply to the actual carrier. In most cases, this does not only greatly reduce the administrative cost of shippers in handling cargo claim, but is also protecting him much better. The fact that the MTO is fully liable to the shipper, but on the other hand might find it impossible to recover from a subcontractor because the mode of transport where the damage took place cannot be identified, represents a great risk to the MTO. In order to cover this liability, it is essential that the MTO arranges adequate 'liability insurance' cover for its operation. One important criterion of being a member of the Singapore Registry of Accredited Multimodal Transport Operators is that the applicant must be insured for carriers liability insurance for at least US$500,000 per any one claim. C) Multi-transport Operators (MTO) and their liability. The advantages to the merchants in MTO operators. The advantages to the merchants in MTO operator are obvious: The merchant is much better protected. =In case of segmented transport (non multimodal transport) the merchant must often claim against sub-carriers whom he does not know, rather than against the carrier with whom he has made the transport contract. =In many events, it is not possible to pinpoint where the damage took place, since loss or damage are normally not discovered before the goods arrive at their destination. At that stage, there will be practical difficulties to localise loss or damage to a responsible party. This is particularly true with respect to cargo handling in the intermediary stages between pre-carriage, main carriage and on-carriage. Hence, it might be impossible for the merchant to obtain compensation for the damage or loss occurred. =With a multimodal transport document, the MTO takes over the full responsibility. The merchant no longer needs to seek redress from the individual actual carrier. He simply claims against the MTO who in turn must claim against the liable sub-contracting carrier. Also, prior to arranging the transport, neither the owner, nor his insurer can know in advance how the risk of any loss or damage to them will be allocated. Without engaging a multimodal transport operator, the merchant has to deal directly with various actual carriers. These actual carriers adopt different conventions and liability systems which may be extremely confusing to the merchants. E) THE NON-VESSEL OPERATING MTO Companies acting as non-vessel operating MTO are often freight forwarders who either sub- contract the ocean voyage or even sub-contract the whole transport. As already mentioned, the NV-MTO takes full responsibility and might even be liable to a higher extent compared with any subcontractors involved, including the shipping line. By avoiding investment in various types of transport means, an NV-MTO can at any time choose the type of transport or combination of different modes of transport which is cost-effective and efficient and thus meets the needs of the customer. That means an NV-MTO can truly concentrate on the needs of his customer and is not favouring his own investments and commitments. For the shipper, the involvement of the NV-MTO has no disadvantages in comparison with the VO-MTO. On contrary, in many cases, the shipper will even have advantages by involving the NV- MTO. By acting as NV-MTO, the freight forwarder can truly fulfill his task of being 'The Architect of Transport‘. G) ADVANTAGES OF USING ACCREDITED NV-MTO IN INTERNATIONAL TRANSPORT • G) ADVANTAGES OF USING ACCREDITED NV-MTO IN INTERNATIONAL TRANSPORT • By engaging an NV-MTO which is a member of the Namibian Accredited Multimodal Transport Operators, the merchant in Namibia has the following advantages: • • G.1) Responsibility • The registered NV-MTO acts as a principal for the entire transport. He is required to have a minimum paid up capital which is updated from time to time in the government Gazette. • • G.2) Liability • The registered NV-MTO is liable for the entire transport. The shipper is dealing with only one contracting party, and does not need to seek redress from individual actual carriers. The liability of the NV-MTO is in many cases higher compared to the individual actual carrier involved. • The registry ensures that registered members have a valid liability insurance which covers the stipulated liability, thus making sure the merchant can be compensated in cases of legitimate claim or claims. G.3) FIATA Multimodal Transport Bill of Lading • G.3) FIATA Multimodal Transport Bill of Lading • The registered NV-MTO must be able to issue the FIATA Multimodal Transport Bill of Lading. • The FIATA Multimodal Transport Bill of Lading is based on internationally accepted ICC / UNCTAD rules and regulations for multimodal transport. • FIATA promotes a high reputation of FIATA Multimodal Transport Bill of Lading. The issuance of the FIATA Multimodal Transport Bill of Lading is restricted to members of national associations. Not even foreign corresponding agent of an authorized forwarder can issue this document. For forwarders who are issuing the FIATA Multimodal Transport Bill of Lading, it is a public demonstration of responsibility which gives confidence in their services.