The Rotterdam Rules

The Rotterdam Rules aim to provide legal security, predictability and flexibility. These goals can be appreciated in the delimitation of objective forums that operate through alternative relationships and that can be superseded by a choice of a forum included in Article 66 that meets the formal, substantive and material requirements set out in the Rules. These agreements will be classified as concurrent or exclusive choice of forum agreements. The first yields in favour of the latter when an exclusive choice-of-court agreement is contained in a volume contract that complies with the requirements set out in Articles 67 and 72.^[1] A volume contract is defined as ‘carriage of a specified quantity of goods in a series of shipments during an agreed period of time' (Article 1(2)).

The Rotterdam Rules amount to a double agreement because they regulate direct and indirect jurisdiction, based on Article 73, which defines the scope of application of the Brussels I Regulation (recast). The Rotterdam Rules also provide for consolidation and removal of actions, together with objective forums related to party autonomy.

Jurisdiction under the Rotterdam Rules

The parties’ freedom of choice has been slightly expanded in relation to volume contracts, subject to restrictions, but not otherwise compared with the Hamburg Rules. The parties have limited bargaining power over choice of jurisdiction or arbitration agreements under certain conditions, depending on whether the carrier and the shipper or the carrier and a third party rely on it. Under the Rotterdam Rules, states can apply chapter 14 (jurisdiction). If a state has declared to be bound by chapter 14 (by application to the European Commission, which puts it to the Council of the EU), the claimant may institute proceedings in accordance with Articles 66 (actions against the carrier) and 68 (actions against the maritime performing party), or by reference to the lex fori. Under Article 74, the jurisdiction provisions ‘shall bind only Contracting States that declare in accordance with article 91 that they will be bound by them’.

The Rotterdam Rules distinguish between contracts in which the parties need to be man-datorily protected and volume contracts as defined in Article 1(2).

Article 66 (actions against the carrier) states:

Unless the contract of carriage contains an exclusive choice of court agreement that complies with article 67 or 72, the plaintiff has the right to institute judicial proceedings under this Convention against the carrier:

• (a) In a competent court within the jurisdiction of which is situated one of the following places:
• (i) The domicile of the carrier;
• (ii) The place of receipt agreed in the contract of carriage;
• (iii) The place of delivery agreed in the contract of carriage; or
• (iv) The port where the goods are initially loaded on a ship or the port where the goods are finally discharged from a ship; or
• (b) In a competent court or courts designated by an agreement between the shipper and the carrier for the purpose of deciding claims against the carrier that may arise under this Convention.

Contractual parties are tackled in Article 67(1):

The jurisdiction of a court chosen in accordance with article 66, subparagraph (b) is exclusive for disputes between the parties to the contract only if the parties so agree and the agreement conferring jurisdiction:

(c) Is contained in a volume contract that clearly states the names and addresses of the parties and either (i) is individually negotiated or (ii) contains a prominent statement that there is an exclusive choice of court agreement and specifies the sections of the volume contract containing that agreement.

A person who is not a party to the volume contract can also be bound by an exclusive jurisdiction clause if it satisfies the requirements set out in Article 67(2)(a).^[2] Parties to the B/L may include consignees, transferees, assignees and insurers exercising their subrogated rights against the carrier, excluding third parties (terminal operators, warehousemen and stevedores, governed by Article 68). Third-party protection is incorporated into the Rotterdam Rules through various provisions. The general provisions in Article 79 state:

• 1. Unless otherwise provided in this Convention, any term in a contract is void to the extent that it:
  • (a) Directly or indirectly excludes or limits the obligations of the carrier or a maritime performing party under this Convention;
  • (b) Directly or indirectly excludes or limits the liability of the carrier or a maritime performing party for breach of an obligation under this Convention; or
  • (c) Assigns a benefit of insurance of the goods in favour of the carrier or a person referred to in Article 18.
• 2.
• (a) Directly or indirectly excludes, limits or increases the obligations under this Convention of the shipper, consignee, controlling party, holder or documentary shipper; or
• (b) Directly or indirectly excludes, limits or increases the liability of the shipper, consignee, controlling party, holder or documentary shipper for breach of any of its obligations under this Convention.

Article 80 provides that certain volume contracts may provide for greater or lesser rights, obligations and liabilities than those imposed by the Rules. Article 80(2) provides that such a derogation is only binding if:

• (a) The volume contract contains a prominent statement that it derogates from this Convention;
• (b) The volume contract is (i) individually negotiated or (ii) prominently specifies the sections of the volume contract containing the derogations;
• (c) The shipper is given an opportunity and notice of the opportunity to conclude a contract of carriage on terms and conditions that comply with this Convention without any derogation under this article; and

(d) The derogation is neither (i) incorporated by reference from another document nor (ii) included in a contract of adhesion that is not subject to negotiation.

According to Berlingieri, it is clear that under Article 80(2)(d)(i), the derogation cannot be incorporated by reference from another document, but this statement does not affect choice of court agreements ‘unless we have such exclusive agreement the plaintiff can sue the carrier in a competent court or courts designated by an agreement between the shipper and the carrier for the purpose of deciding claims against the carrier that may arise under this Convention’ under Article 67( 1 )(a).^[3] That exclusive jurisdiction agreement also must, according to Article 67(l)(b), ‘clearly designate the courts of one Contracting State or one or more specific courts of one Contracting State’.

Briefly, the agreement must be contained in the volume contract and cannot be incorporated by reference to another document, as set out in Article 67(1 )(a) and pursuant to Article 80(2)(d)(i). Baatz indirectly reaches the same conclusion as Berlingieri because Article 67(1 )(a) requires a prominent statement that cements the jurisdiction and the court in the agreement. The reasoning is less clear concerning Article 80( 1 )(d)(ii), if the contract is an adhesion contract that includes an arbitration clause.

Berlingieri explains the four conditions for exclusive jurisdiction agreements to bind third parties according to Article 67(2) of the Rules, including:

• (a) The chosen court must be in one of the places specified in Article 66(a): '(i) The domicile of the carrier; (ii) The place of receipt agreed in the contract of carriage; (iii) The place of delivery agreed in the contract of carriage; or (iv) The port where the goods are initially loaded on a ship or the port where the goods are finally discharged from a ship’.
• (b) That agreement is contained in the transport document (in the volume contract) or electronic transport record’ (being available to third parties).

A negotiable transport document or record, or a non-negotiable transport document that requires surrender, does not pose any problem. Berlingieri remarks that once an ordinary non-negotiable transport document or non-negotiable transport record is transferred to the consignee, that party may not be aware of any incorporated clauses, and there is doubt that they would bind the consignee.

(c) ‘That person is given timely and adequate notice of the court where the action shall be brought and that the jurisdiction of that court is exclusive.

Berlingieri suggests timely and adequate notice before the third party brings proceedings against the carrier, with the intention of making it aware of where it is suing the latter in a different court by specifically quoting the text of such jurisdiction agreement. In volume contracts, the interested parties are the ones that give such notice. However, a negotiable transport document or electronic record raises difficulties for identifying the relevant third party, probably the consignee, since it might be transferred several times.

(d) ‘The law of the court seised recognises that that person may be bound by the exclusive choice of court agreement. ’ Any reference to the substantial law of a Contracting State shall be avoided, referring only to its procedural law, enabling the application of the 2005 Hague Convention on Choice of Court Agreements concerning third parties if it does not collide with internal procedural rules. However, as already stated its scope of application excludes the carriage of goods by sea and the limitation of liability for maritime claims. It could be applicable to contracts of insurance (or reinsurance) and arguably to time charter parties and bareboat or demise charter parties but not voyage charter parties.

The law of the court seised should recognise that the third party may be bound by the exclusive choice of court agreement. Any reference to the substantive law of a contracting state shall be avoided, referring only to its procedural law and enabling the application of the Hague Choice of Court Convention concerning third parties, if it does not collide with internal procedural rules. However, as previously stated, its scope of application excludes carriage of goods by sea and the limitation of liability for maritime claims. It could be applicable to contracts of insurance (or reinsurance), time charterparties and demise charterparties, but not voyage charterparties.

• [1] Juan José Álvarez Rubio, ‘Entre La Haya, Hamburgo y Rotterdam: La compleja opción legislativa interna ante las cuestiones de jurisdicción y arbitraje en el Derecho Marítimo’ (2017) 17 Spanish Yearbook of Private International Law 596, 620. 2 Article 71 prendes that unless there is a binding exclusive jurisdiction agreement, if an action is brought against ‘both the earner and the maritime performing party arising out of a single occurrence the action may be instituted only in a designated court’. If the carrier or mantune performing party seeks a declaration of nonliability or any other action depriving a party of a forum selection light under the Rules, they must withdraw that action on request once an appropnate court is selected. 3 Baatz, ‘Should Thud Parties Be Bound by Arbitration Clauses in Bills of Lading?’ (n 101). 4 William Tetley, ‘Transports de cargaison par mer, les Regies de Rotterdam, leur adoption par les États-Ums, le Canada, l’Union Européenne et les pays transporteurs du monde?’ (Responsibility Fraternity, and Sustainability in Law: A Symposium in Honour of Charles D Gonthier, Montreal, 20-21 May 2011).
• [2] That the court is designated under Article 66(a), the agreement is contained m the appropriate documents, appropriate notice of the exclusive jurisdiction is given and the choice is recognised by the court seised. 2 ibid.
• [3] Francesco Berlingieri, International Maritime Conventions (Volume 1): The Carriage of Goods and Passengers by Sea (Informa 2014) 237-239. 2 Yvonne Baatz, ‘Jurisdiction and Arbitration’ in D Rhidian Thomas (ed), The Carriage of Goods by Sea under the Rotterdam Rules (Informa 2010) 319, 326-327. 3 Berlingieri, International Maritime Conventions (Vol. 1) (n 116) 237-239. 4 ibid.