It must be noted that, at common law, a common carrier also has a lien for freight.80 There is some dispute as to whether a private carrier has this right.81 Whether a forwarder is a common carrier or not will depend on the circumstances. If the forwarder offers to carry the goods for reward to all and does not reserve the right to refuse, he will be deemed a common carrier.82

It is customary for carriers to pay freight forwarders commissions and other allowances. Since the legality of receiving of such allowances is questionable, the Conditions allow the freight forwarder to retain brokerages, commissions, allowances and other remunerations customarily paid (cl 9).

Right of sale is also imparted under the Conditions in a number of situations – that is:

(1) where the cargo has perished or is in danger of perishing and likely to cause damage to third parties or contravene regulations (cl 8(B)); and (2) where goods are not collected or the person supposed to take delivery is not traceable (cl 10(B)(i)).

The Conditions also contain a number of indemnity clauses to protect the forwarder, ranging from liability, costs, expenses, and so on, arising as a result of following the customer’s instructions (cl 20(A)), general average costs (cl 20(D)) to claims, ‘costs and demands whatsoever and by whomsoever made or preferred in excess of the liability of the company under the terms of these Conditions regardless of whether such claims, costs and demands arise from or in connection with the negligence or breach of duty of the company, its servants, sub-contractors or agents’ (cl 20(C)).

Responsibility and liability of the consignor

The consignor is responsible for providing accurate and adequate descriptions of the goods and must pack the goods adequately, as well as mark and label them properly. Where loss, damage or delay has occurred as a result of the consignor’s fault, the forwarder will not be liable and the consignor will be required to indemnify the forwarder (cl 20).83

Time limit, jurisdiction and applicable law

Where the Conditions apply, the cargo owner must institute proceedings within nine months of the event giving rise to a cause of action.84 The cargo owner is also required to make his claim in writing to the forwarder within 14 days of the date on which the cargo owner became aware of the event giving rise to the claim, unless he can show that it was not possible for him to do so within the time limit.85 Under the Conditions, English courts will have exclusive jurisdiction and the applicable law

will be that of England (cl 28).

Fiata negotiable multimodal bill of lading

As stated earlier (p 377), the parties may agree to issue a FIATA Bill.86 In this event, the terms of the FIATA Bill replace the Conditions.

A legal issue likely to arise is whether a negotiable multimodal bill of lading is recognised as such – that is, as a document of title – in English law. Common law recognises only a shipped

80Skinner v Upshaw (1702) 2 Ld Raym 752.

81See Electric Supply Stores v Gaywood (1909) LT 855; United States Steel Products v Great Western Railway [1916] AC 189.

82Belfast Ropework Co v Bushell [1918] 1 KB 210. See also Tyly v Morrice (1699) Carth 485.

83See Table 13.3 for further on MTO liability.

84Clause 27(B).

85Clause 27(A).

86Reproduced in the Appendices. Note that BIMCO has also devised negotiable multimodal bill called MULTIDOC 95, which is also modelled on the UNCTAD/ICC Rules. See Appendix 6.

bill of lading as a document of title.87 However, a document of title may be created by mercantile custom at common law.88 It would, therefore, be possible for a multimodal bill of lading to be recognised as a document of title through customary use in the trade.89 A likely problem that might be encountered in imparting negotiable quality to a multimodal transport document is that cargo, in most cases, would only be received for shipment at the time of issue. In other words, it would be no more than a received for shipment bill of lading, which is not recognised as a document of title at common law. It would, of course, be feasible for a received for shipment document to be converted to a shipped document through appropriate notation. It must be noted that a bill of lading is only transferable, not negotiable, in the legal sense of the term in English law. In other words, on transfer, the transferee does not get a better title than the transferor.90

The FIATA Bill, modelled on the UNCTAD/ICC Rules, is subsequently outlined in brief.

Applicability of FIATA Bill terms

The provisions of the FIATA Bill apply when parties agree to contract on these terms. The terms assume that the freight forwarder (defined as multimodal transport operator who issues the bill, is named on the face of the document and assumes liability for the multimodal transport contract as a carrier) is the principal. They govern carriage of all types of cargo, including live animals. They apply equally where one mode of transport is used to carry the cargo.

Responsibilities, liabilities and rights of the freight forwarder

The freight forwarder is responsible for the cargo from the moment he takes them in his charge to the time of delivery. He does, however, have the right to choose the method of transportation, the route and the procedure of handling and storage of the goods. The basis of his liability is one of presumed fault – that is, he is liable for loss of or damage to or delay in delivery while the goods are in his charge unless the freight forwarder91 ‘proves that no fault or neglect of his own, his servants or agents or any other person referred to in cl 2.2 has caused or contributed to such loss, damage or delay’.

However, where there is carriage by sea or inland waters, the forwarder is allowed two more defences:

•act, neglect, or default of the master, mariner, pilot or the servants of the carrier in the navigation or in the management of the ship; and

•fire, unless caused by the actual fault or privity of the carrier, however, always provided that whenever loss or damage has resulted from unseaworthiness of the ship, the freight forwarder can prove that due diligence has been exercised to make the ship seaworthy at the commencement of the voyage.

87A received for shipment bill of lading is not recognised as a document of title at common law. Where a non-negotiable bill of lading is used, the consignee needs to produce the bill of lading to obtain delivery from the carrier. This is not the case with a waybill. See Chapters 6 and 8.

88Kum v Wah Tat Bank [1971] 1 Lloyd’s Rep 439.

89However, the English courts draw a distinction between custom and practice. See Sucre Export SA v Northern Shipping Ltd (The Sormovskiy 3068) [1994] 2 Lloyd’s Rep 266 and Chapter 6. The recognition of the Multimodal Transport Document in the Uniform Customs and Practice for Documentary Credits 600 (UCP 600) may (arguably) be used to establish custom.

90See Tettenborn, ‘Transferable and negotiable documents of title – a redefinition?’ [1991] 4 LMCLQ 538.

91The FIATA Bill throughout uses the phrase ‘freight forwarder’.

The two-tier liability scheme imparts importance to localisation of damage. This is enhanced by the maximum amounts that the freight forwarder is liable for – 2 SDRs per kg of gross weight or 666.67 units per package where there is a water (sea, inland waters) trajectory according to the contract and 8.33 SDRs per kg of gross weight in its absence.

The terms also provide that they apply only to the extent they are not contrary to the mandatory provisions of national law or international conventions that may be applicable to the contract. This is likely to cover situations where a unimodal carrier takes on the mantle of a multimodal transport operator to avoid mandatory provisions.

The protection given to the freight forwarder is extended to his servants, agents and other persons (including any independent contractor) whose services he may have used in performing the contract. The defences and limits of liability are available regardless of whether the action is founded in contract or in tort. Clauses purporting to extend immunities to parties (including subcontractors) whose services the forwarder may use are effective in English law.92

The terms of the FIATA Bill are available regardless of whether the action is brought in contract or in tort against the freight forwarder.

The FIATA Bill also lists a number of rights in favour of the freight forwarder: right to freight and charges, lien on goods and cargo and general average.

Consignor’s responsibilities

The consignor is responsible for the accurate description, marks, quantity, weight, and so on, of the goods and the consignor remains liable to the freight forwarder for any loss or damage he may have suffered, even though the document is transferred to the consignee. Consignor is defined as the person who enters into the contract with the freight forwarder, and consignee as the person entitled to receive the goods from the freight forwarder.

Time limit

An action would be time barred if it is not brought within nine months after the delivery of the goods or the date when the goods should have been delivered or the date when the goods could be treated as lost.93

Both the FIATA Bill and UNCTAD/ICC Rules94 work within the parameters of a network framework in that there are different provisions in respect of extent of liability – that is, whether or not the carriage involves a sea or inland waterways segment. This issue of kind of mode also affects the maximum amount of the carrier’s liability. (Of course, it is always open to the parties to agree expressly to a higher limit.) All this is subject to the proviso that mandatory laws, be they domestic or international, do not enter into the picture.

Provision for combined transport in unimodal conventions

Some of the unimodal conventions that have been implemented by the UK have special provisions for combined transport. The 1955 Hague Protocol amending the Convention for the Unification of Certain Rules Relating to the International Carriage by Air 1929 provides, in Art 31, that, where part of the combined carriage is performed by air, the Convention is to apply to air

92New Zealand Shipping v AM Satterthwaite and Co Ltd (The Eurymedon) [1975] AC 154. See also Chapter 8.

93See Table 13.3.

94See Table 13.4 for a comparative framework of carrier liability under the UNCTAD/ICC Rules and the United Nations Multimodal Convention 1980.

carriage that comes within the ambit of Art 1. Similarly, CIM also makes provision for combined transport and Art 38 of the CIM Rules provides some special defences where sea and rail transport are combined.

The CMR also addresses the issue of combined transport. Its provisions are innovative. According to Art 2, where goods are carried on a vehicle that is loaded on to another mode of transport such as a ship or an aircraft (i.e., ro-ro traffic), the convention applies to the entire voyage. Where goods are unloaded from the vehicle for any reason (e.g., for loading on to the other mode of transport, for purposes of convenience), the application of the CMR to the entire voyage is broken. In some circumstances, however, the road carrier may find himself within a different liability scheme as a result of the proviso to Art 2, which states:

Provided that to the extent that it is proved any loss, damage or delay in delivery of the goods which occurs during the carriage by the other means of transport was not caused by an act or omission of the carrier by road, but by some event which could only have occurred in the course of and by reason of the carriage by that other means of transport, the liability of the carrier by road shall be determined not by this convention but in the manner in which the liability of the carrier by the other means of transport would have been determined if a contract for the carriage of the goods alone had been made by the sender with the carrier by the other means of transport in accordance with the conditions prescribed by law for the carriage of goods by that means of transport.

This proviso, as seen in Chapter 12, raises many questions, and its consideration by the English courts in Thermo Engineers v Ferrymasters95 highlights some of the difficulties. In contrast to the CIM, under the CMR, different liability limits apply where the location of the loss or damage is ascertained.

The United Nations Convention on International Multimodal Transport 1980 – its future

The formulation of standard terms, such as the BIFA Standard Trading Conditions and the FIATA Bill, for use by freight forwarders has brought about some harmonisation and certainty in the area of multimodal transport. Standard terms, however, apply only when incorporated in the carriage contract. The ideal solution for cargo interests would be a mandatory regime. Modelled on the Hamburg Rules96 (United Nations Convention on the Carriage of Goods by Sea 1978), the United Nations Multimodal Convention 1980 (hereinafter ‘Multimodal Convention’), were it to come into force, would create a regime of minimum liability that cannot be derogated from, unless of benefit to cargo interests. It was hoped that the convention would come into force once the Hamburg Rules came into force. Those hopes have receded with the passage of time. And the recent report from UNCTAD reinforces the view that we may have to visit the harmonisation of multimodal transport afresh. It is unlikely that the UK will ratify the Hamburg Rules or the Multimodal Convention in the near future. It might be persuaded to do so if countries with shipping interests or European Union (EU) member states97 were to ratify it.

95[1981] 1 Lloyd’s Rep 200.

96Selvig, ‘The influence of the Hamburg Rules on the work for a convention on international multimodal transport’, in Speakers’ Papers for the Bill of Lading Conference, 1978, LLP.

97See Chapter 2, Introduction on the implementation of the Vienna Convention 1980 in the UK.

It is not as if the UK is unaware of the need to harmonise the law in respect of international multimodal transport. For instance, Diana Tribe in 1994 (then Law Commissioner) is cited as voicing her dissatisfaction with the multimodal transport regime thus:

The multimodal industry is investing heavily in improving its services. It is a very sophisticated industry but the same cannot be said of its legal infrastructure. There is a large number of transport conventions which are potentially applicable to any contract . . . enormous sums, which would be better applied commercially, are spent in legal disputes . . . The best way forward would be the abolition of all individual conventions and introduce one which would govern all transport contracts, by whatever means of transport and whether unimodal or multimodal. This may see legal expenditure in the short term while precedents are established for the construction of such a convention, but in the long term it would obviate many of the current problems and save costs [cited in fn 6 UNCTAD Doc UNCTAD/SDTE/TLB2, 25 June 2001].

It must be said that the views expressed are idealistic, and it is unforseeable that the various interests are likely to agree to even drafting a text for a single convention to replace the existing transport conventions. Although the observation that the long-term (economic) benefits should be the motivating feature in the drafting of a convention is correct, sadly, humanity tends to think in terms of short-term benefits. Until there is a change in human perceptions and attitudes, and perhaps a shift in calculation of economic benefits, the drafting of a single convention remains a dream. However, occasionally dreams do invade reality.

The Multimodal Convention is designed to introduce a uniform liability scheme. The liability of the multimodal transport operator is, therefore, not dependant on establishing during which mode of transport the loss or damage occurred. It adopts a simple scheme: the multimodal transport operator is responsible for loss, damage or delay in delivery while the goods are in his control – that is, from the time he takes them in his charge to the time of delivery (Art 14). The basis of the multimodal transport operator’s liability is one of presumed fault or neglect. To escape liability, the burden is on him to show that he, his servants, agents, or any other person of whose services he makes use for the performance of the multimodal transport contract (Art 15) took all measures that could reasonably be required to avoid the occurrence and its consequences (Art 16).

This simplicity in respect of liability does not mean that the Multimodal Convention is the perfect solution to a complex situation. It has its fair share of problems, some of which are highlighted here.98 It adopts a complex network scheme for compensation by drawing a distinction between multimodal transport involving a sea trajectory and multimodal transport not involving a sea trajectory. So, where there is sea carriage, liability amount is limited to 920 SDRs per package or other shipping unit or 2.75 SDRs per kilogram of gross weight of goods lost or damaged (Art 18(1)). In the absence of a sea limb, liability is set at the maximum of 8.33 SDRs per kilogram of gross weight of goods lost or damaged (Art 18(3)). However, where loss or damage occurs on a mode of transport where application of a mandatory national law or international convention would provide a higher limit of liability than that set in Art 18 of the Multimodal Convention, the multimodal transport operator’s liability amount will be calculated by reference to the international convention (Art 19)99 or mandatory national law. The ‘limited “network” system of compensation’100 means

98For an interesting, thorough and extensive account of the legal problems faced in multimodal transport, see De Wit, Multimodal Transport, 1995, LLP. See also Diamond, ‘Liability of the carrier in multimodal transport’, in Schmithoff and Goode (eds),

International Carriage of Goods: Some Legal Problems and Possible Solutions, 1988, Centre for Commercial Law Studies.

99See Table 13.1.

100Glass and Cashmore, Introduction to the Law of Carriage, 1989, Sweet & Maxwell, p 265.