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Prof Tetley's comments on Senate COGSA '99 (sixth U.S Senate Staff Working Draft Bill of September 24, 1999)

US COGSA and Other Developments

Lecture by:

William Tetley, Q.C.
McGill Law Faculty

Counsel to:
Langlois Kronström Desjardins

Email: william [dot] tetley [at] mcgill [dot] ca (William Tetley)
Website: www.mcgill.ca/maritimelaw/

Lecture at:

Nottingham University

Prof. Stephen D. Girvin

February 22, 2001

US COGSA and Other Developments

INDEX

I. INTRODUCTION

II. HISTORY OF THE U.S. DRAFT "CARRIAGE OF GOODS BY SEA ACT OF 1999" (SENATE COGSA'99)

III. USEFUL IMPROVEMENTS OF SENATE COGSA

IV. WELL-INTENTIONED BUT COMPLICATED PROVISIONS

V. OPPOSITION TO THE HAMBURG RULES

VI. OPPOSITION TO HAGUE/VISBY

VII. THE CANADIAN EXPERIMENT

VIII. CONCLUSION re SENATE COGSA'99

IX. SUMMARY

Appendix "A"

Sect. 46 of the proposed Canadian Marine Liability Bill, Bill S-17, adopted by the Senate of Canada, May 17, 2000, and in second reading by the Canadian House of Commons, October 10, 2000, but which died on the Order Paper with the calling of the Canadian federal general election of November 27, 2000

Appendix "B"

Definition of "service contract" in sect. 3(21) of the U.S. Shipping Act of 1984 (46 U.S.C. App. 1702(21))

Appendix "C"

National and International Bodies Opposed to the Proposed U.S. COGSA'99

Appendix "D"

Letter of March 23, 2000 re Proposed COGSA'99 from BIMCO, CENSA, ICS, the International Group of P& I Clubs and Intertanko to the National Industrial Transportation League (NIT), with copy to U.S. Senator Kay Hutchison

Appendix "E"

Five Fallacies of the U.S. MLA Position on Senate COGSA '99


I. INTRODUCTION

It is difficult and delicate for one state to comment on the legislation of another state, and it is particularly so for Canada, a relatively smaller nation, to criticize a proposed domestic law of its giant neighbour to the south.

Yet Canada and the United States of America are friends, have enjoyed a centuries-long unguarded border and are each other's major trading partners. In fact our economies are very, very closely linked. We have as well been been allies in major wars and our social and foreign policies are in most respects very similar. Certainly, as friends, we can discuss matters that are of common interest.

What particularly causes Canadians and others (see Appendix "A' for a partial list of opponents) to criticize the proposed U.S. Senate COGSA (hereafter "Senate COGSA '99") is that, in good part, it is not a domestic law, but rather a statute which legislates on carriage of goods and contracts far outside American borders.

In fact Senate COGSA 1999 is in many respects a Canadian law:

1) It applies both inwards and outwards (sect. 3(a)) and thus to contracts of carriage written in Canada.

2) It is multimodal (sects. 2(a)(5)(A)(i) and 3(a)) and applies to shipments under a single bill of lading issued by a "contracting carrier" (e.g. from Toronto by rail to Halifax and then by sea to Charleston S.C., and finally inland by truck to Atlanta, Ga.). It also applies to transport backwards in the above example.

It applies to a shipment by truck from Seattle by rail to Vancouver and then by sea to Yokohama and by truck to Tokyo under a single bill of lading of a "contracting carrier".

3) It applies the U.S. Bills of Lading Act (the Pomerene Act 1916/1994) to such shipments, both inbound to and outbound from, the U.S. (sect. 16(b)

4) It has very nationalistic provisions on jurisdiction and arbitration (sect. 7 (i)).

II. HISTORY OF THE U.S. DRAFT "CARRIAGE OF GOODS BY SEA ACT OF 1999" (SENATE COGSA'99)

1) U.S. Maritime Law Association (U.S. MLA) "CoCoG/COGSA 1996", prepared by the MLA Committee on the Carriage of Goods (CoCoG).

2) Approved at the AGM of the U.S. MLA in New York on May 3, 1996 by a vote of 278 to 33.(1)

3) Presented by the U.S. MLA to the U.S. Senate's Sub-Committee on Surface Transportation and Merchant Marine Infrastructure, Safety and Security, a sub-committee of the Senate Committee on Commerce, Science and Transportation, at a hearing of the Sub-Committee held April 21, 1998.

4) This original Senate COGSA was subsequently amended several times by the U.S. MLA, working in consultation with the staff of the U.S. Senate.

5) "Senate COGSA 1999" referred to in this document is the sixth re-write by the Senate staff of the draft Carriage of Goods by Sea Bill, dated September 24, 1999, which reflects most of the corrections and amendments suggested by the U.S. MLA's Steering Committee.

III. USEFUL IMPROVEMENTS OF SENATE COGSA

Senate COGSA'99 contains the following useful improvements over U.S. COGSA 1936:

1) It abolishes "error in navigation or management" as a defence, as in the Hamburg Rules. (There is, however, a peculiar burden of proof rule at sect. 9(d)(2) if the claimant wishes to prove negligence "in the navigation or in management of the ship.")

2) It adopts the package and kilo limitations (of Visby) (Senate COGSA'99 sect. 9(h)(1)).

3) It covers carriage before loading and after discharge by the contracting carrier and the performing carrier, (a partial adoption of the provisions of art. 4 of the Hamburg Rules) (Senate COGSA'99 sects. 2(a)(8), 5(a), (b) and (c)(1)).

4) It covers some multimodal carriage for the "contracting carrier" (Senate COGSA'99 sect. 2(a)(5)(A)(i)).

5) It covers deck cargo (as in the Hamburg Rules) and does not exclude goods carried on deck from the definition of "goods" (Senate COGSA'99 sect. 2(a)(6)); but the Draft does not contain any specific rules on deck carriage similar to those of the Hamburg Rules art. 9).

6) It covers all contracts of carriage, including bills of lading or "similar documents" (waybills) and electronic documents, (as partially in the Hamburg Rules arts. 1(6) and 2(1)) (Senate COGSA'99 sect.2(a)(5)(A)(i) and (ii) and 2(a)(5)(C)); (see also sect. 2(b) re electronic communication of notices, claims and other communications.)

7) Its provisions on prescription (time for suit) apply not only to suits, but to arbitration and to actions in indemnity, (as in the Hamburg Rules art. 20(1) and (5).) (Senate COGSA'99 sect. 13(a) (suits), 13(b) (arbitration) and 13(c) (actions for contribution or indemnity)).

8) The provisions on jurisdiction and arbitration (Senate COGSA'99 sect. 7(i)) will prevent any repetition of the unfortunate Sky Reefer decision, but will unfortunately create new difficulties and breach a fundamental principle of American and international conflict of laws.

IV. WELL-INTENTIONED BUT COMPLICATED PROVISIONS

Certain well-intentioned but complicated (and what seem at times to be confusing provisions) are included in Senate COGSA'99, which was a compromise of a number of interest groups:

1) There are complicating definitions of three types of "carrier" (sect. 2(a)(1)), being: "contracting carrier" (sect. 2(a)(2)), "performing carrier" (sect. 2(a)(3)) and "ocean carrier" (sect. 2(a)(4)). The Hamburg Rules and the Nordic Code, by comparison, have two ("carrier" - Ham.: art. 2(1); Nordic: Chap. 13 sect. 1 - and "actual carrier" - Hamburg.: art. 2(2); Nordic: "subcarrier" Chap. 13 sect. 1)). Unlike the Hamburg Rules and Nordic Rules, carriers under Senate COGSA'99 are not expressly declared jointly and severally responsible. (Compare sect. 5(b) and (c) with Ham. art. 10(6) and Nordic Chap. 13 sect. 37.)

2) The "performing carrier" who benefits under the proposed Act refers to any party "that performs, undertakes to perform, or procures to be performed any of a contracting carrier's responsibilities under a contract of carriage", but only to the extent that the party in question "…acts, either directly or indirectly, at the request of, or under the supervision or control of, a contracting carrier (Senate COGSA'99 sect. 2(a)(3)(A)(i) & (ii)). The "performing carrier' need not be a party to, or identified in, the contract of carriage (Senate COGSA'99 sect. 2(a)(3)(A) in fine). But "performing carrier" does not include any person (other than the contracting carrier) who is retained by the shipper or consignee or that is an employee, servant, agent, contractor, or sub-contractor of a person so retained (Senate COGSA'99 sect. 2(a)(3)(B)).(2)

These complicated provisions, exceptions and exceptions to exceptions exclude from the definition of "performing carrier" various categories of persons who had been expressly included in the ambit of the term in previous drafts of Senate COGSA'99, notably "consolidators, packers, warehousers", etc., unless, of course, they "act, directly or indirectly, at the request of, or under the supervision or control of, a contracting carrier". The current draft (sixth rewrite) also appears to exclude freight forwarders, as well as their servants, agents and contractors, from the scope of "performing carrier", where the freight forwarders are hired by shippers or consignees and are not acting as carriers. They will, of course, be considered as "performing carriers" if they act as "contracting carriers", but freight forwarders ordinarily try to insinuate in their standard-form contracts that they are merely "agents" and not "principals".

Recently, FIATA (the International Federation of Freight Forwarders' Associations) made a deal with the U.S. MLA. Freight forwarders were excluded from the scope of Senate COGSA'99 when acting as agents, apparently in return for their support for the whole Bill. If true, this would be shameful on FIATA's part. They properly argued for the exclusion of agents, but should not give their support to this Bill. In any event, they are likely to be "hoist by their own petard", because in 75% of their contracts, modern freight forwarders effectively act as carriers, not agents.

3) There are useful provisions for "shipper's weight, load, and count" for non-containerized goods (Senate COGSA'99 sect. 7(e)(1)) and for "shipper's load, stow and count" for containerized goods (Senate COGSA'99 sect. 7(f)(1)), which provisions, however, are not identical to the "shipper's weight, load and count" provision in the U.S. Bills of Lading Act 1994, 49 U.S. Code sect. 80101 et seq. at sect. 80113(b) & (c), (hereafter the "Pomerene Act 1916/1994"). The Pomerene Act 1916/1994 has been, and is, the diadem in the crown of American maritime law, putting the U.S. ahead of all national bills of lading acts. May one not ask, why these complicated provisions were added to Senate COGSA'99? If the Pomerene Act 1916/1994 was now deficient, should it not have been amended and all U.S. bills of lading legislation kept consistent and in one place? Thus bills of lading legislation has been mixed with carriage of goods legislation, whilst leaving the primary bills of lading legislation intact. (The United Kingdom, on the other hand, repealed and replaced its bills of lading Act in 1992.)

4) There are similarly useful provisions as to the sealing of containers (Senate COGSA'99 sect. 7(f)(2) & (3) and 7(g)(2) & (3)), which would seem, however, to have been better placed in the Pomerene Act 1916/1994.

5) The Pomerene Act 1916/1994 (a great achievement of American maritime law) only applies outwards (49 U.S.C. sect. 80102). Now the Pomerene Act 1916/1994 provisions in the proposed Senate COGSA'99 would apply inwards and outwards. See Senate COGSA'99 sect. 16(b).

6) The Harter Act , being 46 U.S. Code Appx. 190-196 (another great achievement of American maritime law), has been amended in some cases, but not in others. The Harter Act, since its enactment in 1893, has covered domestic water carriage of goods between U.S. ports, including carriage wholly or partially by sea (although the parties have frequently chosen to subject such carriage to U.S COGSA 1936 by contract). U.S. COGSA 1936, on the other hand, has applied by its own force only to sea carriage "in foreign trade" (46 U.S.C. Appx. sect. 1300 and 1312). Senate COGSA'99, on the other hand, would apply to any "contract of carriage covering transportation to or from the United States" (Senate COGSA sect. 3(a)). The words "in foreign trade" have been eliminated. Moreover, "contract of carriage" is defined to mean a contract for the carriage of goods "either by sea or partially by sea....."(Senate COGSA'99 sect. 2(a)(5)(A)(i)). The proposed new law would therefore govern domestic carriage of goods by water between U.S. ports, provided that at least some of that carriage was done by sea. As a result, the Harter Act would become largely irrelevant to American domestic water carriage.

The Harter Act would no longer govern the pre-loading and post-discharge periods, these periods falling into the responsibility of the contracting carrier and/or the performing carrier under Senate COGSA'99 sects. 2(a)(8), 5(b) and (c)(1)), as indicated above.

The Harter Act would appear to remain applicable, however, to purely inland water carriage in the U.S., because the term "contract of carriage" excludes "contracts for transportation in domestic trade exclusively on the Great Lakes, rivers, or other inland waters, or the intracoastal waterways" (Senate COGSA'99 sect. 2(a)(5)(B)(i)). The Harter Act would also continue to govern contracts for the carriage of live animals, because, as under COGSA 1936, they continue to be excluded from the definition of "goods" under Senate COGSA'99 sect. 2(a)(6).

Would it not have been clearer to have fully revised the Harter Act or to have fully replaced it with the new Act, so that it covered ocean and inland water traffic, as in Canada?

The proposed Act also excludes from "contracts of carriage", not only charterparties, but also "contracts of affreightment, and similar agreements that are functionally equivalent" (Senate COGSA'99 sect. 2(a)(5)(B)(i)) and "towage agreements" (Senate COGSA'99 sect. 2(a)(5)(B)(ii)). This is proper but very poor drafting, as compared with the Hague/Visby or Hamburg Rules.

7) There is partial multimodal carriage (Senate COGSA'99 sect. 2(a)(5)(A)(i)), which seems to result in a very special, incomplete regime, with very particular exclusions. (e.g. an "interstate or foreign motor carrier, or a rail carrier, that is not a contracting carrier to the extent that the claim relates only to motor carrier services or rail carrier services, respectively." (Senate COGSA'99 sect. 3(b)). The exclusion appears optional, however, because it does not prohibit "… any extension of rights to a motor or rail carrier by a contract of carriage nor does it adversely affect, or void, any rights so extended." (COGSA'99 sect. 3(b) in fine). In consequence, motor carriers and rail carriers (American and foreign) may be governed by COGSA'99 if the bill of lading so provides. One wonders as well whether motor and rail carriers made a deal (as did FIATA for freight forwarders) in exchange for their support of the whole Bill. If so, they made a bad bargain, as they will now, in many cases, find themselves subjected by contract to this most unacceptable Bill.

Would it not have been better to have adopted the terms of the Multimodal Convention 1980, or at least a less complicated, but more complete, American regime?

8) Fire as a defence becomes even more complicated under U.S. law. (See Senate COGSA'99 sects. 4(1) & 9(c)(2)). Should not the occasion of a new statute have been used to eliminate the U.S. Fire Statute (sects. 4281-4289 of the Revised Statutes of the United States), as was done in the U.K. in 1971, in respect of carriage of goods by sea? (Incidentally, the U.S. Fire Statute applies only to owners and demise charterers, while Senate COGSA'99 applies to operators and time and voyage charterers as well. (Senate COGSA'99 sect. 2(a)(4) defining "ocean carrier"). The fire provisions would thus seem to cause more distinctions in American law and further departures from international law.)

9) New, complicated rules on burden of proof, different from Hague/Visby art. 4(5)(e) and Hamburg art. 8(1), have been created for: (a) various carriers amongst themselves and towards consignees and shippers in respect of fire and negligent navigation or management of the ship (Senate COGSA'99 sects. 9(c)(2) and 9(d)(2)); and (b) deviation and fundamental breach (Senate COGSA'99 sect. 9(g) and 9(h)(3)(D)(ii)).

10) The abolition of the equitable Vallescura Rule of the U.S. Supreme Court(3) (Senate COGSA'99 sect 9(e)) and the substitution of proportional fault, which, although justified in the case of collision of ships, where both parties are present, seems questionable at sea, where the cargo owner is not present, but still must make proof of the carrier's fault (Senate COGSA'99 sect. 9(e)(1)(A)). The sixth rewrite of Senate COGSA'99 has also slightly reworded sect. 9(e)(1)(A) so as to specify that in cases where the loss or damage is partly caused by the carrier's default and partly by an excepted peril, it is the "party seeking to recover for the loss or damage" (i.e. the cargo claimant) who bears the onus of proving the extent of the loss or damage attributable to the carrier's breach of its obligations, fault or neglect. In addition, sect. 9(e)(2), requiring the carrier and ship to bear 50% of the liability where there is insufficient evidence of the extent to which the loss or damage is attributable under sect. 9(e)(1), uses the unfortunate term "trier of fact". This confusing and improper term is not used in international conventions and is employed in only a few American criminal and evidentiary statutes. Should it ever be inserted in private law legislation on civil matters such as a carriage of goods by sea act? This is another example of the extraordinarily bad drafting in the Bill.

11) Senate COGSA'99 sect. 9(c)(2) on fire relieves the ocean carrier, the ship furnished by him and the contracting carrier from liability for loss or damage caused by fire on board, unless the fire was caused by their "actual fault or privity". The burden of proving such fault or privity would continue to fall on the cargo claimant, as it does at present, resulting in a virtually impossible task for the claimant.

12) The provisions of Senate COGSA'99 on "service contracts" are disturbing. Under the Bill, sect. 2(a)(10), "service contracts", as defined in the U.S. Shipping Act of 1984, as amended by the Ocean Shipping Reform Act of 1998 (OSRA), would permit carriers and shippers to opt out of certain key features of Senate COGSA'99. In particular, by sect. 7(j), provisions of service contracts affecting the rights and liabilities of parties to such contracts would be exempt from sect. 7(h). The latter is the rule prohibiting clauses in contracts of carriage relieving or reducing the carrier's liability otherwise than as permitted by COGSA (similar to the old sect. 3(8) of U.S. COGSA 1936 and to art. 3(8) of the Hague and Hague/Visby Rules). Parties to "service contracts" would also be exempt under sect. 7(j) from the "foreign forum provision" on jurisdiction and arbitration, thus enabling them to agree to suit or arbitration anywhere in the world, without either party having the right to insist on U.S. suit or arbitration in accordance with the general regime of sect. 7(i). In addition, parties to "service contracts", under sect. 9(h)(C)(3), would be permitted to contract for either higher or lower limits of liability than the Hague/Visby package/kilo limitations provided for by sect. 9(h)(1).

Service contracts therefore permit special rights and privileges to be enjoyed by a select group of shippers and carriers, most likely large shippers and their favoured carriers. It is unclear whether non-American parties would be permitted to conclude "service contracts". In any case, permitting any privileged group of shippers and carriers (American or not) to derogate contractually from such key elements of the general COGSA regime as the foreign forum provision and the Hague/Visby limitations, weakens the general regime as a whole. Combined with the provisions of sect. 11 (similar to the old sect. 6 of COGSA and art 6 of Hague and Hague/Visby) which permit shippers and carriers to conclude "special agreements" for the carriage of "particular goods" other than ordinary commercial shipments under non-negotiable documents (e.g. waybills), the service contract rules of Senate COGSA'99 threaten to create a whole second-tier cargo liability regime, which would further complicate carriage of goods by sea law and unduly and unfairly favour particular parties and particular contracts at the expense of shippers and contracts of carriage generally.

13) The burden of proof of negligent navigation or negligent management of the ship is placed on the party alleging such negligence (i.e. the cargo claimant) (Senate COGSA'99 sect. 9(d)(2)). In many cases, this would be an onerous, if not impossible, burden to discharge, because the cargo claimant usually lacks ready access to the facts needed to make such proof. The benefit derived from the abolition of the carrier's defence of error in navigation or management of the ship is thus lessened in practice.(4)

14) The unfortunate Sky Reefer decision of the U.S. Supreme Court, reported at 515 U.S. 528, 115 S.Ct. 2322, 1995 AMC 1817 (1995), is properly countered (Senate COGSA'99 sect. 7(i)(2)). The result, however, is that a party (plaintiff or defendant) may override a foreign jurisdiction or arbitration clause, in any one of five cases: 1) if the carriage is (or was intended to be) to or from a U.S. port; 2) if the goods are (or were intended to be) received by a carrier or delivered to an authorized receiver in the U.S.; 3) if the defendant's principal place of business or habitual residence is in the U.S.; 4) if the contract of carriage was made in the U.S.; or 5) if the contract of carriage or other agreement specifies a U.S. forum for litigation or arbitration (Senate COGSA'99 sect. 7(i)(2)(A), (B), (C), (D) & (E)).

In consequence, the right of the claimant to disregard a foreign forum clause in the contract of carriage and to opt instead for suit or arbitration in the U.S. has been extended. A cargo claimant could now commence proceedings in the U.S., not only in respect of shipments loaded, discharged, received or delivered there (as under previous drafts), but also in respect of shipments between non-American ports, (e.g. where transshipment occurs in a U.S. port) as long as the defendant had its principal place of business or habitual residence in the U.S., or the contract of carriage was concluded there or contained some provision calling for suit or arbitration there (Senate COGSA'99 sect. 7(i)(2)(C), (D) & (E)) .

Nor would the claimant seeking U.S. litigation or arbitration be obliged to seek leave of a court by a "timely motion" (as previous drafts required a claimant to do to if he wished U.S., rather than foreign, arbitration). Now, the right to American suit or arbitration would be automatic, at the mere option of either party to the contract. Thus declaratory actions by the carrier could establish jurisdiction, and presumably could be combined with anti-suit injunctions to prohibit proceedings elsewhere.

The right of defendants to take "pre-emptive" strikes by forcing cargo claims into U.S. fora, even contrary to bill of lading clauses calling for suit or arbitration elsewhere, could be used oppressively against cargo interests who are "weaker bargaining parties". This could well occur where the bill with its non-American jurisdiction or arbitration clause was issued by someone other than the "ocean carrier" (e.g. a freight forwarder acting as a "contracting carrier").

Moreover, sect. 7(b) of Senate COGSA'99 requires contracts of carriage issued for shipments from U.S. ports to contain a "statement" (i.e. a Paramount Clause) subjecting the contracts to the new Act. In consequence, foreign courts and arbitration panels would be obliged to give effect to sect. 7(i)(2) and decline jurisdiction over claims relating to such shipments, in favour of U.S. courts or U.S. arbitration, even if the contracts called for suit or arbitration elsewhere.

These provisions violate the normal rules of comity and of private international law (PIL) in respect of national laws. It is noteworthy as well, that unlike the Hamburg Rules, at arts. 21 & 22, there is no choice of five jurisdictions in Senate COGSA'99, where there is a foreign jurisdiction or arbitration clause, but the sole jurisdiction permitted expressly by the Bill is the United States. The new Senate COGSA'99 provisions on arbitration and jurisdiction are exacerbated and are even more nationalistic, because Senate COGSA'99 applies inwards and outwards (sect. 3(a)) i.e., the above provisions apply not only to contracts of carriage entered into the United States, but contracts of carriage entered into outside the United States for goods carried to or delivered in the United States by sea or through traffic.

In addition, the most recent draft (of September 24, 1999) would apply the U.S. jurisdiction/arbitration provisions even to contracts for the carriage of goods between other countries (e.g. if they are transshipped in the U.S.) where the carrier was U.S.-based or the contract was made in the U.S. or specified a U.S. court or arbitral tribunal.

15) The complicated drafting and exceptions within exceptions, within exceptions (brought about by trade-offs and deals with various parties for the last four years) has resulted in a text which will be a nightmare to interpret by the courts, let alone the ordinary businessman. In fact, at the U.S. MLA's Carriage of Goods Sub-committee meeting held in New York City on Thursday, May 6, 1999, Vincent DeOrchis, Chairman of the Sub-committee, interrupted my criticisms of the proposed Senate COGSA, in order to take five minutes to blame its complicated drafting, wording and numbering on the Senate legislative committee.

16) Of major importance, the different wording of the proposed Senate COGSA'99 will make most American jurisprudence under COGSA 1936 up to the present time redundant.

17) American carriage of goods by sea jurisprudence will no longer be relevant in the rest of the world. Similarly, America will no longer look outward to the jurisprudence of the rest of the world.

18) The different numbering of even the few provisions which are untouched or are similar to COGSA 1936 will be a nightmare to merchants, practitioners and judges in deciding cases under the new proposed Senate COGSA'99, let alone to foreigners, to whom this law will apply in so many cases.

19) No position paper has been published since the U.S. MLA Summary of May 3, 1996,(5) despite complete changes in drafting, content, style and substance of the proposed COGSA since that time.

V. OPPOSITION TO THE HAMBURG RULES

The U.S. MLA's Committee on the Carriage of Goods apparently opposes the Hamburg Rules because:(6)

1) "A small number of developing nations, which represent about only 2% of the United States' trade by sea, have adopted the Hamburg Rules."

2) "The greatest disadvantage of Hamburg is its vague definition of liability. Adoption of that definition would discard all the case law that has interpreted COGSA in the United States since 1936."

Is it not possible, however, that Senate COGSA'99, with its original rules on burden of proof, on modified through carriage, on three new carriers, its new rules on jurisdiction and arbitration, its multitudinous changes in drafting, its new numbering, etc., etc., will, more than Hamburg, "discard all the case law that has interpreted COGSA in the United States since 1936"?

One is reinforced in this conclusion by a number of recent empirical studies in legal journals, analysing the legal effects of the Hamburg Rules on U.S. carriage of goods by sea law.(7)

If Hamburg is not an alternative, because only 2% of U.S. trade by sea is with Hamburg countries, the vast majority of the U.S. trading partners have adopted Hague/Visby.

VI. OPPOSITION TO HAGUE/VISBY

The U.S. MLA's Committee on the Carriage of Goods has nevertheless opposed promoting the adoption of the Hague/Visby Rules, I gather, because the members fear that cargo interests and others might convince Congress to adopt the Hamburg Rules if the U.S. MLA proposed Hague/Visby.

May I suggest that either Hague/Visby or Hamburg is preferable to going it alone with Senate COGSA'99. It is noteworthy that an estimated 63.9% of U.S. trade is with Hague/Visby countries.(8) May I suggest that it would be better if the U.S. MLA enthusiastically proposed Hague/Visby, with slight modifications, if desired.

VII. THE CANADIAN EXPERIMENT

A Canadian amendment was proposed, which would have solved the SKY REEFER problem, but unfortunately the Bill concerned died on the Order Paper with the calling of the Canadian federal general election of November 27, 2000. New sect. 46 of Canada's proposed Marine Liability Bill(9) would have permitted a claimant to opt for suit or arbitration in Canada in any of the five situations contemplated by arts. 21 and 22 of the Hamburg Rules, in cases where those Rules did not apply. By necessary implication, therefore, where the Hamburg Rules did apply, the claimant would have been entitled to institute litigation or arbitration in any of the five jurisdictions permitted under arts. 21 and 22 of those Rules. The proposed provision also made it clear that the option to sue or arbitrate in Canada where the Hamburg Rules did not apply would be available only if the contract of carriage "...provides for the adjudication or arbitration of claims arising under the contract in a place other than Canada".

This right, which would have been available to only the "claimant" (in most cases, the cargo claimant or its underwriter) was far superior to the proposed sect. 7(i) of Senate COGSA'99, which permits:

1) any party to the contract (i.e. the plaintiff or the defendant) to insist on suit or arbitration in the U.S.,

2) even when the Hamburg Rules apply.

3) The U.S. proposal also allows a defendant carrier to commence a declaratory action in the U.S. (perhaps combined with an injunction to restrain proceedings elsewhere) and thus to keep U.S. jurisdiction, and

4) repeats the broad exception (loophole) for "service contracts" (special agreements between carriers and large shippers) (sect. 7(j)).

5) The peculiar drafting of sect. 7(i) and the use of the word "notwithstanding", rather than "if", can lead one to believe that sect. 7(i) applies even to cases where there is no foreign jurisdiction or arbitration clause.

The Canadian proposal thus would have found a solution to recent, unfortunate Canadian decisions on arbitration and jurisdiction (similar to SKY REEFER). (It has always been my personal view, however, that the proposed Canadian Marine Liability Bill would have been even better, if it had adopted the exact Hamburg Rules formula for jurisdiction and arbitration.)

VIII. CONCLUSION re SENATE COGSA'99

1) There are some useful and admirable changes in Senate COGSA'99.

2) Unfortunately, a whole new untested regime of carriage of goods seems to have been created in respect of: a) the new allocation of responsibilities of the three types of carrier; b) various new burdens of proof; c) the mixing of the bills of lading act (the U.S. Pomerene Act, 1916/1994) with the present carriage of goods act (U.S. COGSA 1936); d) the partial multimodal carriage; e) the new, complicated application of the Harter Act; f) the new provisions on fire; and g) the multiple changes in drafting.

3) The burden of proof rules in respect of fire and negligent navigation and management of the ship, and damage during the contract, will prove difficult to discharge for cargo claimants, who do not have the facts available to them.

4) The provisions on jurisdiction and arbitration create a regime which applies to shipments to the U.S., or under foreign carriage contracts, with no choice but U.S. jurisdiction or U.S. arbitration permitted. They also would apply to many shipments between other countries.

5) Domestically, Senate COGSA'99 would seem to be a very different carriage of goods regime from the present U.S. COGSA, which will confuse shippers, consignees, carriers, banks and merchants generally throughout the world.

6) Internationally, Senate COGSA'99 contains some useful Hague/Visby and Hamburg Rules provisions, but the other particular provisions, apparently adopted in the negotiations with various interests,(10) would seem to put the proposed statute far out of the mainstream of international law on carriage of goods by sea. May one not therefore question whether Senate COGSA'99 fulfills its original purpose which was: "The proposal to amend COGSA is intended to bring the United States into unity with the rest of the maritime nations." (See MLA Doc No. 724 of May 3, 1996 at page 3, being the first sentence of the "COGSA Proposal Summary", i.e. CoCoG/COGSA 1996.)

7) May one also question why a new, very particular U.S. COGSA was deemed necessary, outside the existing international conventions? Even accepting such a proposition, would it not have at least been advisable to abolish the "inward" application of U.S. COGSA 1936 and its application to contracts of carriage entered into outside the United States? This latter provision has already put the United States outside the normal rules of private international law for the past 64 years.(i.e. since U.S. COGSA 1936).

8) The wording, terminology, numbering and drafting are all quite different from the U.S. COGSA 1936, the Hague/Visby Rules, the Hamburg Rules, and any international convention. It will be a nightmare to Americans and all shippers, consignees, shipowners, carriers, merchants and the whole world shipping community. Most of American jurisprudence will become redundant.

9) The advantages of Senate COGSA'99 can also be found for the most part in the Hague/Visby Rules and almost completely in the Hamburg Rules. Would it not have been better, had one or other of those Conventions been promoted for adoption by the U.S. Congress, rather than Senate COGSA'99?

10) Or would it not have been better to have gone the route of Australia or the Nordic countries and to have adopted changes to COGSA, which were compatible with Hague/Visby and Hamburg, thus placing the United States in a position to accept new international legislation in the future, while leaving it with a regime that is not out of step internationally?

11) It is also noteworthy that if the United States proceeds to adopt this new domestic and international carriage of goods by sea legislation, it will be obliged not only to repeal U.S. COGSA 1936, but also to denounce the Hague Rules, which convention was approved by a 2/3 vote of the U.S. Senate, by its resolutions of April 1, 1935 and May 6, 1937, signed by President Roosevelt and ratified by the U.S. on June 29, 1937.

IX. SUMMARY

Canada is the biggest purchaser of U.S. goods and vice versa. We are each other's biggest trading partners! And Senate COGSA'99, which applies not only from the United States but to the United States, will apply to all claims concerning Canadian shipments to the U.S., tried or arbitrated in the U.S., despite the fact that the bills of lading were issued in Canada and the contracts made in Canada! Senate COGSA'99 is thus a Canadian matter, too.(11)

It is time for all of us Canadians and Americans to oppose Senate COGSA'99 before it is too late.

We would do well to bear in mind the words of the late President John F. Kennedy, speaking in Ottawa on May 17, 1961, when he said of America and Canada:

"Geography has made us neighbors. History has made us friends. Economics has made us partners, and necessity has made us allies. Those who nature hath so joined together, let no man put asunder."

 

William Tetley, Q.C.
Faculty of Law
McGill University
3644 Peel Street
Montréal, Québec
Canada H3A 1W9

bus.: (514) 398-6619
fax: (514) 398-4659
res: (514) 733-8049

Counsel to Langlois Kronström Desjardins
Email: william [dot] tetley [at] mcgill [dot] ca (William Tetley)
website:www.mcgill.ca/maritimelaw/

 

Appendix "A"

Sect. 46 of the proposed Canadian Marine Liability Bill, Bill S-17, adopted by the Senate of Canada, May 17, 2000, and in second reading by the Canadian House of Commons on October 10, 2000, but which died on the Order Paper with the calling of the Canadian federal general election of November 27, 2000

Institution of Proceedings in Canada

Claims not subject to Hamburg Rules

46. (1) If a contract for the carriage of goods by water to which the Hamburg Rules do not apply provides for the adjudication or arbitration of claims arising under the contract in a place other than Canada, a claimant may institute judicial or arbitral proceedings in a court or arbitral tribunal in Canada that would be competent to determine the claim if the contract had referred the claim to Canada, where

(a) the actual port of loading or discharge, or the intended port of loading or discharge under the contract, is in Canada;

(b) the person against whom the claim is made resides or has a place of business, branch or agency in Canada; or

(c) the contract was made in Canada.

Agreement to designate

(2) Notwithstanding subsection (1), the parties to a contract referred to in that subsection may, after a claim arises under the contract, designate by agreement the place where the claimant may institute judicial or arbitral proceedings.

Procédure intentée au Canada

Créances non assujetties aux règles de Hambourg

46. (1) Lorsqu'un contrat de transport de marchandises par eau, non assujetti aux règles de Hambourg, prévoit le renvoi de toute créance découlant du contrat à une cour de justice ou à l'arbitrage en un lieu situé à l'étranger, le réclamant peut, à son choix, intenter une procédure judiciaire ou arbitrale au Canada devant un tribunal qui serait compétent dans le cas où le contrat aurait prévu le renvoi de la créance au Canada, si l'une ou l'autre des conditions suivantes existe:

a) le port de chargement ou de déchargement prévu au contrat ou effectif est situé au Canada;

b) l'autre partie a au Canada sa résidence, un établissement, une succursale ou une agence;

c) le contrat a été conclu au Canada.

Accord

(2) Malgré le paragraphe (1), les parties à un contrat visé à ce paragraphe peuvent d'un commun accord désigner, postérieurement à la créance née du contrat, le lieu où le réclamant peut intenter une procédure judiciaire ou arbitrale.


Appendix "B"

Definition of "service contract" in sect. 3(21) of the U.S. Shipping Act of 1984 (46 U.S.C. App. 1702(21))

"(21) 'service contract' means a contract between a shipper and an ocean common carrier or conference in which the shipper makes a commitment to provide a certain minimum quantity of cargo over a fixed time period, and the ocean common carrier or conference commits to a certain rate or rate schedule as well as a defined service level - such as, assured space, transit time, port rotation, or similar service features; the contract may also specify provisions in the event of nonperformance on the part of either party."

Definition of "service contract" in redesignated sect. 3(19) of the U.S. Shipping Act of 1984 , as amended by sect. 102 of the U.S. Ocean Shipping Reform Act of 1998 (OSRA), adopted by Public Law No. 105-258, 112 Stat. 1902, on October 14, 1998, and in force as of May 1, 1999

"(19) 'service contract' means a written contract, other than a bill of lading or a receipt, between one or more shippers and an individual ocean common carrier or an agreement between or among ocean common carriers in which the shipper or shippers makes a commitment to provide a certain volume or portion of cargo over a fixed time period, and the ocean common carrier or the agreement commits to a certain rate or rate schedule and a defined service level, such as assured space, transit time, port rotation, or similar service features. The contract may also specify provisions in the event of nonperformance on the part of any party."


Appendix "C"

National and International Bodies Opposed to the Proposed U.S. COGSA'99

European Commission

U.K. Government, Department for Transport

British M.L.A. (to the U.K. Government)

Canadian M.L.A. (to the Canadian Government)

Canadian Government

Canadian International Freight Forwarders' Association (CIFFA)

Shipping Federation of Canada

BIMCO (Baltic and International Maritime Council)

CENSA (Council of European and Japanese National Shipowners' Associations)

ICS (International Chamber of Shipping)

International Group of P&I Clubs

Intertanko (International Association of Independent Tanker Owners)


Appendix "D"

Letter of March 23, 2000 re Proposed COGSA'99 from BIMCO, CENSA, ICS, the International Group of P& I Clubs and Intertanko to the National Industrial Transportation League (NIT), with copy to U.S. Senator Kay Hutchison

(N.B. This document is copied from the website of BIMCO (Baltic and International Maritime Council))

Industry Action on US COGSA

23 March 2000

A proposal to revise the US Carriage of Goods by Sea Act (COGSA) is expected to be introduced into the US Senate shortly. The proposed revision, which the Maritime Law Association (MLA) of the United States has worked on for a number of years, is strongly opposed by BIMCO and other international shipowners' organisations.

Proponents of the US COGSA argue that the revision is necessary to bring the United States in line with other jurisdictions as regards the interpretation of the Hague and Hague-Visby Rules. However, BIMCO fears that unilateral action on the part of the United States will seriously undermine international efforts to harmonise international liability regimes governing carriage of goods by sea.

In order to heighten the pressure against the proposed revision of the US COGSA, CENSA, BIMCO, ICS, the International Group of P&I Clubs and Intertanko have sent a joint letter to the National Industrial Transportation (NIT) League, a major proponent of the US COGSA. The same letter has been sent to Senator Hutchison, Chairperson of the US Senate Committee on Commerce, Science and Transportation.

The text of the letter reads as follows:

"The NIT League have suggested that the undersigned organizations, and other opponents of the MLA proposal to revise COGSA, should try to resolve their differences with respect to that proposal. We believe, however, it is not possible to resolve those fundamental differences in the context of the MLA proposal; instead we invite the NIT League and other proponents of the proposal to join us in a different course of action to modernize cargo liability laws.

COGSA may need revision and updating. But we firmly believe that a truly international industry like shipping requires international solutions in order to continue to serve the needs of an increasingly globalized economy, to the benefit of all users of shipping services and ultimately the consumers. Our associations, which represent the overwhelming majority of the international shipping community, and which also include US carriers engaged in international trade, are convinced that unilateral enactment by the US of the sweeping changes in the MLA COGSA proposal would work to the detriment of the international ocean carrier, shipper and intermodal transport communities, as it would undermine the predominant approach among US trading partners to cargo liability laws, and thus make it much more difficult, if not impossible, to reach an international agreement to update those laws.

Proponents of the MLA proposal argue that unilateral action by the US is warranted because there no longer exists a common international law of cargo liability. While the current situation is not ideal, the majority of the world's leading trading nations are applying cargo liability schemes which are based on the so-called Hague or Hague-Visby rules. According to MLA's own calculations, approximately 80% of the US foreign waterborne trade (measured by value) takes place with nations adhering to these rules. Any unilateral decision by the US to implement cargo liability rules such as those proposed by the MLA would, therefore, put the US further outside the mainstream of its most important and largest trading partners including Canada, Mexico, Japan, the EU and Australia. Consequently, the changes proposed by the MLA would be irreconcilable with, and in some cases contradictory to, the dominant international liability provisions. The resulting lack of comity, legal conflicts and possible counter-measures by other countries would create new barriers to trade - an outcome whose primary victims would be shippers and companies engaged in international commerce, including many NIT League members.

Particularly worrisome are the extraterritorial implications of the MLA proposal as it would regulate not only cargo shipments from the US, but also shipments coming into the US which are regulated by foreign jurisdictions' cargo liability statutes. In addition, unlike existing international maritime cargo liability instruments, the MLA's proposed COGSA reform would regulate all phases of an intermodal movement with a sealeg. Such a proposal should only be carefully considered at an international level.

For these and other reasons, we remain committed to continue to engage constructively in international efforts to devise a new cargo liability regime. We encourage all US carrier, shipper and intermodal transport interests to join with their counterparts in the international community to make this happen in a meaningful manner and in a realistic time frame.

In that regard, the international community is quickening the pace of international consideration of cargo liability laws. The OECD's Maritime Transportation Committee, of which the US is a member, recently launched a major effort to identify common elements in the various liability schemes in force around the world, including the US, to provide a workable basis for a new international liability regime. An OECD workshop will be held in September with a view to having final recommendations approved by the end of the year.

The OECD work parallels - and would produce synergies with - an initiative by the Comité Maritime International (CMI), in co-operation with other international organizations to develop a wide-ranging international convention on transportation issues. Such a convention may encompass a number of issues not governed by existing regimes such as the bankability of documents used in international trade, electronic data interchange, delivery of cargo without bills of lading, multimodality, etc. At the same time the Convention may establish a revised liability regime clearly defining the rights and obligations of carriers, shippers and intermediaries to be uniformly applied by those countries signing the Convention. The work program for the CMI initiative includes a workshop in July in New York - with another to be held in September - designed to develop a comprehensive progress report, with a draft Convention, for the CMI Conference in February 2001.

We would be happy to meet with the NIT League and other proponents of the MLA proposal to consider how to promote these international efforts to produce a comprehensive and workable new law of cargo liability.

We believe our approach is the only realistic way to resolve these important matters in a manner which would respect international comity and provide legal certainty and transparency, and therefore further the continued growth of international commerce.

signed:

CENSA (Representing European & Asian Shipowners)
ICS (International Chamber of Shipping)
INTERNATIONAL GROUP OF P&I Clubs
BIMCO (The Baltic & International Maritime Council)
INTERTANKO (International Association of Independent Tanker Owners)"


Appendix "E"

Five Fallacies of the U.S. MLA Position on Senate COGSA '99

There are five major fallacies in the position taken by those in the U.S. MLA who are promoting Senate COGSA '99.

1) The first fallacy is that U.S. COGSA 1936 was considerably different from the Hague Rules 1924 because of American judicial decisions. In fact, U.S. COGSA 1936 was and is essentially the Hague Rules. Among the purported "differences", the "Vallescura Rule"(12) is a normal rule of burden of proof, whereby a party with facts at its disposal (i.e. the carrier) has, in the final analysis, to make proof of such facts.(13) The "fair opportunity rule",(14) as well as the presumption that a geographic deviation is prima facie "unreasonable" where it is made in order to load or unload cargo or passengers,(15) are merely nuances, which are followed by courtsin the rest of the world, so rich is American maritime case law.(16) Such mere nuances exist in many national interpretations of the Hague Rules 1924 and Hague/Visby Rules 1968/1979, without creating any fundamental divergence between the carriage by sea law of the countries in question. Recently, for example, peril of the seas in Australia was deemed to be in the English tradition, whereby even an expected or "expectable" storm could constitute an exculpatory peril under art. 4(2)(c) of those Rules, as opposed to the United States-Canadian tradition, which preclude such a storm from being considered an exception to liability.(17) Any international law will have national nuances. The U.S. COGSA 1936 was not different. Its rich jurisprudence pulled the world together.(18)

2) The second fallacy is that Senate COGSA '99, in applying inwards as well as outwards, is similar to U.S. COGSA 1936, which also applied inwards and outwards. The answer, of course, is that the old U.S. Act applied the Hague Rules 1924 inwards and outwards. The proposed new Act, on the other hand, is very different in content, form and numbering, and is very local in terminology, but will nevertheless apply inwards and outwards internationally. It will also apply to a wider array of defendants than U.S. COGSA 1936 (the three types of "carrier" and, in particular, the various "performing carriers"). And Senate COGSA '99 will impose the U.S. Pomerene Act 1916/1994 on inbound bills of lading, whereas that statute now applies only to outbound bills. Finally, Senate COGSA '99 applies inland, whether in the U.S. or in a foreign country.

3) The third fallacy is that the U.S. MLA has acted as a group of jurists in developing Senate COGSA '99. In fact, what would seem to be a small coterie of U.S. MLA proponents of the new Act have acted, not as jurists, but rather as politicians and negotiators. They negotiated the incredibly bad text of May 3, 1996 and then acquiesced and cooperated in the even worse draft of the Senate legislation committee. This should not have been done.

4) The fourth fallacy is that the jurisdiction provisions of Senate COGSA '99, which preclude carriers from relying upon foreign jurisdiction clauses in bills of lading covering inbound and outbound U.S. shipments, do not really impose U.S. jurisdiction on non-U.S. parties who have contracted for suit elsewhere, because cargo claimants must still establish that the U.S. court has jurisdiction in personam, as well as subject-matter jurisdiction, over the foreign defendant. Criticism from non-American commentators(19) with respect to the extraterritorial aspect of Senate COGSA '99 in relation to jurisdiction and arbitration in particular, has been dismissed as based on a failure to understand the U.S. requirement for personal, as well as subject-matter, jurisdiction.(20) Do the critics, however, deserve such rebuffs?

American courts are notorious for taking personal jurisdiction, either "general"(21) or "specific",(22) over foreign defendants, and one should not forget Rule 4(k)(2) of the Federal Rules of Civil Procedure (virtually a general federal "long-arm statute") empowering U.S. federal courts to exercise jurisdiction over claims arising under federal law, based on the defendant's "national contacts" with the U.S. as a whole, where its contacts with any particular U.S. state are insufficient to found the personal jurisdiction of any state court of general jurisdiction.(23)Nor should one forget that where state courts do have sufficient contacts with a defendant to assume personal jurisdiction, the dispute, at the claimant's option, may also be tried in those courts, under the "saving to suitors" clause of 28 U.S.C. 1333(1).(24) Thus, many defendants qualifying as "carriers", and particularly the various "performing carriers", could well be subjected to the personal jurisdiction of both American federal and state courts under Senate COGSA '99.

It must also be remembered that under sect. 7(i)(2) of Senate COGSA '99, "a party to the contract or agreement" may opt to sue or arbitrate in the United States if one or more of the conditions listed in sub-paras. (A) to (E) of that provision are met, and this "[n]otwithstanding a provision in a contract of carriage or other agreement to which this subsection applies that specifies a foreign forum for litigation or arbitration of a dispute to which this Act applies". This would appear to permit a declaratory action in an American court to establish the right of either the cargo claimant or the carrier(s) to opt for suit or arbitration in the U.S. if proceedings were instituted elsewhere pursuant to a foreign jurisdiction or a foreign arbitration clause (or perhaps even without such a clause), as well as anti-suit injunctions to prohibit such foreign proceedings. Despite the removal from the current draft of the Bill of the power of American courts to order U.S. arbitration contrary to contractual provisions calling for suit or arbitration abroad (a provision which figured in previous drafts of Senate COGSA '99(25)), the amended sect. 7(i) would continue to result in imposing the jurisdiction of American arbitrators on parties who would not formerly have been subject to such jurisdiction, even where they have stipulated for litigation or arbitration elsewhere, and even if that other place is much more closely connected to the parties and their transaction than the United States.

Moreover, the implementation of sect. 7(i) in respect of foreign arbitration clauses in bills of lading covering shipments to and from the United States would almost certainly leave parties to such contracts in a "catch 22 situation", inasmuch as foreign courts, applying their own conflict of law rules, would probably refuse to recognize and enforce a U.S. arbitral award rendered by a U.S. arbitral tribunal under Senate COGSA '99, sect. 7(i), if the bill of lading called for jurisdiction outside the U.S., on the ground that the U.S. tribunal lacked jurisdiction over the dispute. Conversely, American courts might well refuse to recognize and enforce a foreign arbitral award rendered in accordance with the same bill of lading clause, on the ground that the clause violated sect. 7(i).(26) By proposing to depart from established international practice, the U.S. MLA is creating situations which will only result in international complications, anti-suit injunctions, multiple proceedings with the attendant risk of contradictory rulings and conflicts of law, particularly in respect of recognition.

and 5) The fifth fallacy is that foreigners do not understand U.S. law and U.S. law-making.(27) Actually, we do. U.S. maritime law is intensely national and rarely does it embrace international conventions. Witness the Collision Convention 1910,(28) the Limitation Conventions 1924,(29) 1957(30) and 1976,(31) the Maritime Liens and Mortgages Conventions 1926,(32) 1967(33) and 1993,(34) the Immunity of State-owned Ships Convention 1926,(35) the Arrest of Ships Convention 1952,(36) the Civil Jurisdiction(37) and Penal Jurisdiction(38)Conventions 1952, the Visby Protocols 1968(39)and 1979,(40) the CLC Convention 1969,(41) the Fund Convention1971,(42) the Athens Passenger Convention 1974(43) -- to none of which the United States is a party! Instead of supporting this tradition, the U.S. MLA should be opposing it. They should act as jurists, not politicians.

 


NOTES

1. See U.S. MLA Document No. 724, dated May 3, 1996.

2. See also, in general, the dissenting report of M.J. Ryan re the provisions on "performing carrier"of CoCoG/COGSA 1996 in U.S. MLA Document No. 724 of May 3, 1996 at pp. 92-94.

3. Schnell & Co. v. S.S. Vallescura 293 U.S. 296, 1934 AMC 1573 (1934).

4. See, however, Samuel R. Mandelbaum, "Creating Uniform Worldwide Liability Standards for Sea Carriage of Goods Under the Hague, COGSA, Visby and Hamburg Conventions" (1996) 23 Transp. L.J. 471 at pp. 500-501, who argues for a "qualified nautical fault defense", but one which would impose the burden of proof on the shipowner, rather than the cargo claimant.

5. U.S. MLA Document No. 724, dated May 3, 1996.

6. See "Cogsa Proposal Summary -i.e. CoCoG/COGSA 1996- of U.S. MLA Document No. 724 of May 3, 1996 at p. 3.

7. R. Glenn Bauer (a longtime Admiralty practitioner of New York) -"Conflicting Liability Regimes: Hague-Visby v. Hamburg Rules - A Case by Case Analysis", (1993) 24 Journal of Maritime Law and Commerce (JMLC) 53-74; Professor Robert Force, (Director of the Tulane Maritime Law Center, Tulane Law School) - "A Comparison of the Hague, Hague/Visby, and Hamburg Rules; Much Ado About (?)", (1996) 70 Tulane Law Review 2051- 2089; Michael F. Sturley, (Professor of Law, University of Texas at Austin) -"Changing Liability Rules and Marine Insurance: Conflicting Empirical Arguments about Hague, Visby and Hamburg in a Vacuum of Empirical Evidence" (1993) 24 JMLC 119. See also Sturley's article on CoCoG/COGSA 1996, "Proposed Amendments to the Carriage of Goods by Sea Act" (1996) 18 Houston J. Int'l. L. 609; Christophe Koffi Nubukpo, "La Convention des Nations Unies sur le transport de marchandises par mer dix ans après" DMF 1989, 538-558; Stephen R. Katz, "New Momentum towards Entry into Force of the Hamburg Rules"[1989] ETL 297-303; Douglas A. Werth, "Hamburg Rules Revisited - A Look at U.S. Options" (1991) 22 JMLC 59; Joseph P. Sweeney, "UNCITRAL and The Hamburg Rules--The Risk Allocation Problem in Maritime Transport of Goods" (1991) 22 JMLC 511; "Hamburg Rules Text" [1992] ETL 563; Article by Article Commentary (by UNCITRAL) [1992] ETL 585; John O. Honnold, "Ocean Carriers and Cargo; Clarity and Fairness - Hague or Hamburg?" (1993) 24 JMLC 75; Charles W. H. Goldie, "Effect of the Hamburg Rules on Shipowners' Liability Insurance" (1993) 24 JMLC 111; Hannu Honka, "New Carriage of Goods by Sea", Institute of Maritime and Commercial Law, Abo, 1997 at pp. 4-13; Samuel R. Mandelbaum, "Creating Uniform Worldwide Liability Standards for Sea Carriage of Goods Under the Hague, COGSA, Visby and Hamburg Conventions" (1996) 23 Transp. L.J. 471.

8. See Samuel R. Mandelbaum, supra note 4 at p. 491, citing "Cargo Liability and the Carriage of Goods by Sea Act (COGSA): Oversight Hearing before the Subcommittee on Merchant Marine of the House Committee on Merchant Marine and Fisheries" 102d Congress, 2d Sess. 21 at pp.42-44 (1992).

9. Bill S-17, adopted by the Senate of Canada on May 17, 2000, and in second reading by the Canadian House of Commons on October 10, 2000, but which unfortunately died on the Order Paper with the calling of the Canadian federal general election of November 27, 2000. . This proposed legislation, by its Part 5, would have repealed and replaced Canada's present Carriage of Goods by Water Act, S.C. 1993, c. 21. Like the 1993 statute, however, Bill S-17 would have maintained Canada's adherence to the Hague/Visby Rules 1968/1979, pending a decision on their replacement by the Hamburg Rules, to be taken by Parliament, based on a report to be prepared by the Minister of Transport of Canada before January 1, 2005 and every five years afterwards. See Bill S-17, sects. 41, 43, 44 and Schedules 3 and 4.

10. See discussion, supra, re FIATA's deal to have freight forwarders excluded from the definition of "performing carrier" where they act purely as agents, and possibly in return for the support of those bodies for the whole Bill.

11. The urgent need for an up-to-date American carriage of goods by sea law is highlighted by the fact that, with the liberalization of world trade under GATT and NAFTA, international shipping to and from United States ports is expected to grow dramatically in the foreseeable future, with a projected increase in the value of U.S. exports and imports from U.S. $454 billion in 1990 to U.S. $1.6 trillion in 2010, accompanied by an increase in volume of cargo at U.S. ports from 875 million metric tons to an estimated 1.5 billion metric tons in the same period. See Samuel R. Mandelbaum, supra note 4 at pp. 497-498, citing, inter alia, the "Hearing before the Subcommittee on Water Resources and Environment of the House Committee on Transportation and Infrastructure" 105th Congress, 2d Session (1995) (statement of the American Association of Port Authorities by Erik Stromberg, President).

12. Supra, note 3. Actually a Harter Act, not a Hague Rules, decision.

13. As Justice Stone observed: "... All the facts and circumstances upon which he [the carrier] may rely to relieve him of that duty [to care for and safely deliver the cargo] are peculiarly within his knowledge and usually unknown to the shipper. In consequence, the law casts upon him the burden of the loss which he cannot explain or, explaining, bring within the exceptional case in which he is relieved from liability." The Vallescura, 293 U.S. 296 at p. 304 (1934).

14. The "fair opportunity rule", first laid down by the Second Circuit in 1953 in The Edmund Fanning (Petition of Isbrandtsen Co.) 201 F.2d 281 at p. 285, 1953 AMC 86 at p. 91 (2 Cir. 1953), requires the carrier to give the shipper a "fair opportunity" to declare a higher value for the goods shipped under the relevant bill of lading, in order to break the U.S. $500. package limitation otherwise applicable under U.S. COGSA 1936, sect. 4(5), 46 U.S. Code app. 1304(5). See generally W. Tetley, Marine Cargo Claims, 3d, Les Éditions Yvon Blais, Inc., Montreal, 1988 at pp. 886-889 (hereinafter "MCC 3 Ed.").

15. U.S. COGSA 1936, sect. 4(4) in fine, 46 U.S. Code app. sect. 1304(4) in fine.

16. See MCC 3 Ed, where about 40% of the decisions cited are American.

17. Great China Metal Industries Co. Ltd. v. Malaysian International Shipping Corporation Berhad (The Bunga Seroja) (1998) 158 A.L.R 1, 1999 AMC 429, [1999] 1 Lloyd's Rep. 512 (Austl. High Ct.).

18. See further MCC 3 Ed., which discusses the decisions of four nations - Canada, the U.K., France and the U.S. The American decisions are by fare the most important and lead the world.

19. See, for example, Asariotis and Tsimplis, "The proposed U.S. Carriage of Goods by Sea Act" [1999] LMCLQ 126 and republished in [1999] LMCLQ 25th Anniversary Issue 11.

20. See Sturley, "Proposed amendments to the US Carriage of Goods by Sea Act: a response to English criticisms" [1999] LMCLQ 519 (distributed in advance by the U.S. MLA). See also Asariotis and Tsimplis, "Proposed amendments to the US Carriage of Goods by Sea Act: a reply to Professor Sturley's response" [1999] LMCLQ 530.

21. "General" personal jurisdiction has been held to exist where the non-resident defendant's contacts with the forum state are "continuous and systematic", even if those contacts are not directly related to the cause of action. See Helicopteros Nacionales de Colombia, S.A. v. Hall 466 U.S. 408 at p. 414, note 9 (1984); Wilson v. Belin 20 F.3d 644 at p. 647 (5 Cir. 1994), cert. denied 513 U.S. 930 (1994); Interglobal Shipping Co. v. Catholic Relief Services 1998 AMC 1079 at p. 1082 (S.D. Tex. 1997).

22. "Specific" personal jurisdiction exists where the non-resident defendant's contacts with the forum state arise out of, or are directly related to, the cause of action. See cases cited supra, note 21.

23. Rule 4(k)(2) of the Federal Rules of Civil Procedure, adopted in 1993, permits the taking of jurisdiction over defendants who are not subject to the jurisdiction of the courts of general jurisdiction of any U.S. state, provided that the plaintiff's cause of action arises under federal law (which includes federal admiralty law), and provided that the defendant's total contacts with the United States as a whole are sufficient to confer personal jurisdiction on the court without offending the constitutional requirements of due process. See, for example, World Tanker Carrier Corp. v. M/V Ya Mawlaya 99 F.3d 717, 1997 AMC 305 (5 Cir. 1996); Western Equities, Ltd. v. Hanseatic Ltd. 956 F. Supp. 1232, 1997 AMC 2703 (D. V.I. 1997); Aerogroup International, Inc. v. Marlboro Footworks, Ltd. 956 F. Supp. 427 (S.D. N.Y. 1996). Rule 4(k)(2) permits personal jurisdiction to be taken over foreign defendant shipowners or ship managers, based on such factors as the number of calls the vessels concerned have made to U.S. ports over a given period of years. See, for example, Mutualidad Seguros Del Instituto Nacional de Industria v. M.V. Luber 1999 AMC 824 (S.D. N.Y. 1998); West Africa Trading & Shipping Co. v. London Int'l Group 968 F. Supp. 996, 1998 AMC 2111 (D. N.J. 1997).

24. 28 U.S.C. 1333(1) provides: "The [federal] district courts shall have original jurisdiction, exclusive of the courts of the States, of: (1) Any civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled." Under this provision, which dates back to the Judiciary Act of 1789, plaintiffs may elect to sue in a state court on an admiralty matter, and thus obtain a civil jury trial, unless the matter has been exclusively reserved to the federal courts. Cargo claims in personam may be asserted in state courts, under the "saving to suitors clause", as well as in federal courts. Nor does Senate COGSA '99 affect this option of the claimant. See the Report of the U.S. MLA's Committee on the Carriage of Goods on the original proposed revision to U.S. COGSA 1936, Document No. 724, May 3, 1996, at p. 24: "The proposed bill has no impact on the availability of a non-admiralty forum under the 'saving to suitors clause' of 28 U.S.C.§1333(1). Thus cargo claimants will have the same rights they now have to bring cases in state courts on the "law" side of federal court under 28 U.S.C. §1331 (federal question), §1332 (diversity), or §1337 (commerce regulations); the bill neither limits nor expands the COGSA plaintiff's forum choices outside of admiralty. But it does require all courts to apply the proposed Act in covered cases."

25. See, for example, sect. 7(i)(3) of the June 19, 1998 and April 16, 1999 drafts of Senate COGSA, which provided: "(3) COURT-ORDERED DOMESTIC ARBITRATION.-- Except as provided in paragraph (4), if a contract of carriage or other agreement to which this subsection applies specifies a foreign forum for arbitration of a dispute to which this Act applies, then a court, on the timely motion of either party, shall order that arbitration shall proceed in the United States." Paragraph (4) provided that parties may nevertheless agree to litigation or arbitration in a foreign forum after the claim arises.

26. See Asariotis and Tsimplis, supra, note 19 at pp. 138-139.

27.Supra, note 20.

28. International Convention for the Unification of Certain Rules of Law With Respect to Collision Between Vessels, adopted at Brussels, September 23, 1910, and in force March 1, 1913.

29. International Convention for the Unification of Certain Rules Relating to the Limitation of the Liability of Owners of Sea-Going Vessels, adopted at Brussels, August 25, 1924 and in force June 2, 1931.

30.International Convention Relating to the Limitation of the Liability of Owners of Sea-Going Ships, adopted at Brussels, October 10, 1957 and in force May 31, 1968.

31. International Convention on Limitation of Liability for Maritime Claims, adopted at London, November 19, 1976, and in force December 1, 1986.

32.International Convention for the Unification of Certain Rules Relating to Maritime Liens and Mortgages, adopted at Brussels, April 10, 1926 and in force June 2, 1931.

33.International Convention for the Unification of Certain Rules Relating to Maritime Liens and Mortgages, adopted at Brussels, May 27, 1967 but not in force.

34. International Convention on Maritime Liens and Mortgages, 1993, adopted at Geneva, May 6, 1993.

35. International Convention for the Unification of Certain Rules Relating to the Immunity of State-Owned Vessels, adopted at Brussels, April 10, 1926 and its Protocol, adopted at Brussels, May 24, 1934, both in force January 8, 1937.

36. International Convention Relating to the Arrest of Sea-Going Ships, adopted at Brussels, May 10, 1952, and in force February 24, 1956.

37. International Convention on Certain Rules Concerning Civil Jurisdiction in Matters of Collision, adopted at Brussels, May 10, 1952 and in force September 14, 1955.

38. International Convention for the Unification of Certain Rules Relating to Penal Jurisdiction in Matters of Collisions or Other Incidents of Navigation, adopted at Brussels, May 10, 1952 and in force November 20, 1955.

39. Protocol to Amend the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading, adopted at Brussels, February 23, 1968 and in force June 23, 1977.

40. Protocol Amending the International Convention for the Unification of Certain Rules of Law Relating to Bills of lading, adopted at Brussels, December 21, 1979 and in force February 14, 1984.

41. International Convention on Civil Liability for Oil Pollution Damage (CLC Convention), adopted at Brussels, November 29, 1969, and in force June 19, 1975.

42.International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, adopted at Brussels, December 18, 1971, and in force October 16, 1978.

43. Athens Convention Relating to the Carriage of Passengers and Their Luggage By Sea, adopted at Athens, December 13, 1974 and in force April 28, 1987.