Modernizing and Reforming U.S. Maritime Law: The Impact of the Rotterdam Rules in the United States

Article excerpt

I. Introduction

After seven years of work by the U.N. Commission on International Trade Law (UNCITRAL)1 and its Working Group III on Transport Law, which followed almost four years of preparatory work by the Comité Maritime International (CMI),2 the United Nations last December adopted its "Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea"3 (referred to here as "the Convention" or "the Rotterdam Rules"). The Convention, which will supersede the Hague,4 Hague-Visby,5 and Hamburg Rules,6 will be signed at a formal ceremony in Rotterdam on September 23, 20097 and will enter into force when twenty countries have ratified it.8 As this process goes forward, it will be helpful to compare the new Convention with existing law and consider the broader impact that the changes are likely to have. Other participants in this symposium address some of the most important aspects of the Convention and compare those proposals to existing legal regimes.9 In this article, I therefore focus on aspects that others do not address in relevant detail and discuss how those proposed changes would impact the law of the United States in particular.10

If we focus on the big picture, the Convention's proposed changes to U.S. law will not be earth-shattering. The new convention is deliberately evolutionary, not revolutionary. The focus is on updating and modernizing the existing legal regimes that govern the carriage of goods,11 filling in some of the gaps that have been identified in practice over the years,12 and harmonizing the governing law when possible.13 Indeed, several proposals to deal with more revolutionary subjects, or at least subjects in which harmonization would have been difficult, were abandoned precisely so that the Working Group could in fact complete the project and address the core issues.14

In the United States today, the governing legal regime is the 1936 Carriage of Goods by Sea Act (COGSA),15 which is, for the most part, simply the domestic enactment of the 1924 Hague Rules.16 Updating and modernizing are particularly necessary when a law drafted over 85 years ago still regulates an industry that has changed remarkably in the meantime.17 The draftsmen of the early 1920s did not anticipate the container revolution,18 let alone electronic commerce,19 so COGSA is even more outdated than the more modern international regimes that most of the world's commercial powers and most U.S. trading partners have already adopted.20 The benefits of international uniformity in this field are well known and widely accepted,21 but the need to harmonize U.S. law with the rest of the world's is particularly acute. Unique U.S. doctrines have developed over the years with the result that COGSA as applied by the U.S. courts not only differs from the more modern international regimes, but is also out of step even with the international understanding of the Hague Rules.22

Despite the heavy focus on modernization and harmonization, some of the Convention's evolutionary changes include modest reforms in legal doctrine. Perhaps the most visible of these changes is the elimination of the heavily criticized "navigational fault" exception,23 which currently permits a carrier to escape liability for cargo damage caused by the crew's negligence in the navigation or management of the vessel.24 But a number of other provisions in the Convention, some of which are of key importance,25 will also change the law to make it better suited to meet the needs of the industry as it enters the 21st century.

II. SCOPE OF APPLICATION

Although COGSA as a whole is primarily the U.S. enactment of the Hague Rules,26 its scope of application differs from other nations' regimes in several key respects. Some of these differences arise from differing interpretations of a uniform text. Both COGSA and the Hague Rules, for example, are limited in their application "only to contracts of carriage covered by a bill of lading or any similar document of title. …