TMW: - A brief introduction of about yourself.

Mr. Mayur C. Contractor : I, Mayur C. Contractor, B.A. LL. M., Vice President of FIATA, Advisor, Working Group Sea, Advisory Body Legal Matters (ABLM), Advisory Body Vocational Training (ABVT) of FIATA, Member, Adhoc Working Group of UNCITRAL Transport Law, Advisor & Past President of Federation of Freight Forwarders Association in India, Chairman, The Indian Institute of Freight Forwarders, Advisor, The Bombay Custom House Agents Association and Trained Trainer of UN-ESCAP for Freight Forwarding & Multimodal Transport.

I am also the Senior Partner of Mayur C. Contractor, Custom House Agent, Freight Forwarder & Multimodal Transport Operator and Chairman of MCC Container Lines Pvt. Ltd., Freight Forwarders and the Director of Transcargo India Pvt. Ltd., Freight Forwarders and Multimodal Transport Operators and having more than 35 years experience in Customs Clearance & Freight Forwarding.


TMW: - Please tell us about FIATA ?

Mr.Mayur Contractor : FIATA, in French “Federation Internationale des Assocociations de Transistaires et Assimiles in English “International Federation of Freight Forwarders Associations”, in German “Internationale Foderation der Spediteurorganisationen”, was founded in Vienna/Austria on May 31, 1926. FIATA is the apex body of International Freight Forwarders, a non-governmental organisation, represents today an industry covering approximately 40,000 forwarding and logistics firms, also known as “Architects of Transport”, employing around 8-10 million people in 150 countries .FIATA has consultative status with Economic and Social Council (ECOSOC) of the United nations (Inter alia ECE, ESCAP, ESCWA), the United Nations Conference on Trade and Development (UNCTAD), and the UN Commission on International Trade Law (UNCITRAL). FIATA includes 21 Association. 95 Countries are members of this Federation.

The FIATA has three Institutes viz. Air Freight Institute, Multimodal Transport Institute and Customs Affairs Institute and various Working Groups & Advisory Bodies viz. Working Group Sea, Working Group Rail, Working Group Road, Advisory Body Vocational Training, Advisory Body Information Technology, Advisory Body for Dangerous Goods and Advisory Body for Safety & Securities, Adhoc Working Group for UNCITRAL Transport Law and Advisory Body Legal Matters. These Institutes, Groups & Bodies deals with the issues/problems faced by the Freight Forwarders Internationally and they are being taken up with the concern authorities.


TMW: - Please inform us about the development of UNCITRAL (United Nations Commissions on International Trade Law) on Transport Law.

Recently, I attended the 18th Session of UNCITRAL Working Group III (Transport Law) held at Viena from 6th – 17th November, 2006 and represented FIATA thereat.

At the outset I must say that I am of the personal view that the Draft Convention is highly complex and difficult for the common shippers, forwarders, carriers, etc. to comprehend, unless the latter are Maritime Lawyers or professors.

I have to advise you that the members of the CMI - Comete Maritime Internationale, felt that there was an urgent need to modernize law of carriage and to take into consideration the latest developments in technology including electronic commerce and to unify the liability of the ocean carrier, since the existing Hague Rules, Hague - Visby Rules and Hamburg Rules have varied liability for the ocean carrier. The period of responsibility of the carrier at the said convention is on port-to-port basis, whereas the draft outline instrument prepared by CMI incorporated the period of responsibility of the carrier on door-to-door basis, i.e. to cover sea leg as well as land leg of transport, thereby encompassing the Multimodal Transport Operators.

The Outline Instrument prepared by CMI was referred to UNCITRAL and the latter, since 1996 is reviewing the current practices and laws in the area of International Carriage of Goods by Sea, with a view to establish uniform rules, where no such rules existed and also to achieve uniformity of law. However, there was also a general consensus amongst the Members of the UNCITRAL Working Group on Transport Law that the multiplicity of the regimes of liability applying to Carriage of Goods by Sea and also to adjust Maritime Transport Law to better meet the needs and realities of International maritime transport practices. There was general consensus among the members of the Working Group that, with the changes brought by the development of multimodalism and the use of e-commerce, the transport law regime was required to be reformed to regulate all transport contracts, whether applying to one or more modes of transport and whether the contract was made electronically or in writing.

The second reading of the draft is under process and at 14th, 15th, 16th and 17th sessions of the Working Group the issues relating to the basis of liability, scope of application, freedom of contract, jurisdiction and arbitration, right of control and transfer of rights, obligations of the shippers, delivery of goods, period of the responsibility of the carrier, delivery to the consignee and transport document and electronic transport records were discussed.

Under the draft Convention, the freedom is given to the parties to volume contracts to derogate from provisions thereof, which is a significant departure from the prevailing regime in transport law conventions.

At the 18th session of the Working Group, the issues discussed were limitation of liability of carrier & shipper, rights of suit and time for suits, jurisdictions, transport documents and electronic transport records, conflicts of Conventions, etc.

The Draft Convention is being named for the time being as Carriage of Goods [wholly or partly] [by sea].

The Convention does not apply to Charter Parties, Contracts for the use of a Ship or any space thereon (ship), other contracts in Non Liner Transportation and Volume Contracts with certain exceptions.

The Draft Convention covers Volume Contract, Performing Party, Maritime Performing Party and Non-Maritime Performing Party.

The Draft Convention covers Basis of Liability of Carrier – for Loss of or damage to the goods, for delay in delivery and consequential loss due to delay in delivery.

Further, the Draft Convention has introduced the right of control of goods by shipper, consignor or controlling party during the period of transportation to modify instructions, to demand delivery and to replace the consignee.

The period of limitation for suite is being considered for 2 years.

The new concept is being introduced for the limitation of shipper’s liability for delay and the amount is being discussed at USD 500,000.00 or such like amount. The freight forwarders will be highly effected since they are contractual carrier vis-à-vis the shipper, whereas shipper vis-à-vis

Further, the limitation of carrier’s liability (contractual or performing carrier) is to be determined – under the Hauges Rules – 500 British Pounds per package., Hague-Visby Rules 666.67 per package or 2SDR per kilo of the gross weight whichever is higher, Hamburg Rules 835 per package or 2.5SDR per kilo of the gross weight or whichever is higher – at the forthcoming meetings of the UNCITRAL Working Group. Many of the countries are in favour of liabilities as spelt out in Hamburg Rules, whereas others are in favour of liabilities as provided in Hauge-Visby Rules.

The FIATA has taken the position that the Jurisdiction should not be regulated by the Draft Convention, however, it was decided at the Meeting to have reservation or an “opt in” clause for the whole of the chapter of Jurisdiction and a partial reservation or partial “opt in” with respect to the “Choice of the court agreement.”

Further, FIATA has taken the position that the Arbitration should not be regulated by the Draft Convention, however, the UNCITRAL Meeting decided to incorporate a partial “opt in” approach.

The Draft Convention covers the network liability of the carrier i.e. when a claim or dispute arises out of loss or damage to goods occur solely during the carriers period of responsibility but;
a) before the time of their loading on to the ship;
b) after their discharge from the ship to the time of their delivery to the consignee;

and, at the time of such loss, damage or delay, provisions of an International Convention or National Law, apply to all or any of the carrier’s activities during that period, specifically provide for carrier’s liability, limitation of liability or time for suit and cannot be departed by private contract, than the provisions of the International Convention or National Law to the extent they are mandatory i.e. carrier’s liability, limitation of liability or time for suit, would apply and prevail over the provisions of the draft Convention.

The Draft Convention provides “Basis of Limitation of Liability of the Carrier” as under;

Draft Article 64(1) – The carriers liability for breaches of its obligation under this Convention is limited to [……] units of account per package or other shipping unit, or […….] units of account per kilogram of the gross weight of the goods lost or damaged, whichever is higher………..

Draft Article 64(2) – It provides that if the carrier cannot establish whether the goods were lost or damaged during the sea carriage or during the carriage preceding or subsequent to the sea carriage, the highest limit of liability in the international and national mandatory provisions that govern the different parts of the transport applies.

Under the draft Convention gives the modified liabilities i.e. uniform and network, PLUS - Draft Article 64(2), this issue will be finalized by the UNCITRAL Working Group at its next meeting.

Further, the provisions have also been made under the Draft Convention about the amendment of limitation amount.

The Country, which ratifies, accepts, approves or accedes to the final Convention then that country has to denounce the Hauge Rules, Hauge Visby Rules or Hamburg Rules, if ratified.

The next Working Group III (Transport Law) – 19th session, will be held from 16th – 27th April, 2007 at New York whereat the deliberations of the pending issues from its second reading will be completed and the third reading will commence thereat and the 20th session will be scheduled from 15th – 25th October, 2007.

TMW: - What are the amendments expected in the Multimodal Transportation of Goods Act, 1993 and Why the Multimodal
Transportation has not taken off in India.

India is the first country, which has full fledged enactment on Multimodal transport, barring a few Latin American countries and ASEAN countries, which have Rules / frame work on Multimodal transport.

The Multimodal transportation of Goods Act, 1993, which has come into force on 16th October, 1992, which is based on the Hague-Visby Rules, UNCTAD-ICC rules and Multimodal Transport Convention, 1980, though it has not come into force.

This Act was amended on 05th December, 2000, and many amendments were carried out.

Further, amendments to the Act are under consideration with the Ministry of Shipping, amongst many a few of them are as under:

1. To increase the ambit of the scope of the Act.

The Act would provide the regulation for the multimodal transportation of goods

(i) from any place in India to a place outside India

(ii) From any place outside India to a place
in India but after the goods having been
landed into India.

(iii) From any place in India to any other place
in India, where one mode of transport by
sea is involved.

2. Exclusion of pick-up and delivery operations

Exclusion of the operations of pick-up and delivery of goods carried out in performance of the unimodal transport contract from or to locations contiguous to a port.

3. Use of an Internationally accepted transport document.

The competent authority may permit the multimodal transport operator to issue an Internationally accepted transport document, in lieu of the prescribed MTD, provided he has complied the prescribed criteria and the said document shall be subject to the liability as provided under the Act.

4. Prohibition of issuance of transport documents for segmented transportation.

Any person is prohibited from issuing transport documents in respect of a segmented transportation, when in effect, such transportation is a multimodal transport.

Provided that such person is permitted to issue the said transport documents, in lieu of the prescribed multimodal transport document, if it is expressly agreed by the shipper or the consignor, as the case may be.

Provided further that such person is permitted to issue the said transport documents, in lieu of the prescribed multimodal transport document, unless he is registered as a multimodal transport operator, under section 4 of the Act.

5. Obligation of the Carrier or his Agents to issue or procure the final delivery Order.

It is the obligation of the Carrier or his Agents to issue or procure the final delivery order for the goods covered under the transport document, after their arrival in India, to the consignee or the endorsee of the said transport document against production thereof and payment of freight and other charges, if any, to enable the consignee or endorsee to take delivery of the goods from the custodian.

6. Penal provisions.

Any person carrying on the business of multimodal transportation without registration and contravening the provisions of the Act or Rules made thereunder, is liable for a prescribed fine and non-payment thereof, shall be punishable with imprisonment.

To your question, why the Multimodal Transport has not taken off in India, I have to state that the Act envisages door-to-door transportation, whereas the MTOs issue MTD only after the out of charge by the Customs, so as to protect themselves from the liability provisions of the Customs Act and it is a high time that the Customs Act provisions should be amended to facilitate the MTOs to issue documents on door-to-door basis.