This article is written by Aanika Aery, currently pursuing B.B.A. LLB from Symbiosis Law School, Noida. This is an exhaustive article which deals with conventions, components and modes of International Commercial Law.

Introduction

The globalization of foreign economies, international economic integration, elimination of trade barriers, and increased competition has significantly increased business dependence on transport. The order to transport goods from one location to another, a carriage contract must be entered into. The association or organizations performing the trade of transport are called carriers.

Whether by land or water or via an air transport network goods can be carried through transportation means. The movement of cargo through two or more modes of transport is called multimodal transport. The need to move goods from one location to another can not be overemphasized in any country’s commercial life. Goods must also be shipped from country to country. A carriage contract shall be concluded for these purposes. The individuals, organizations, or associations carrying goods are referred to as carriers. Goods may be transported by land, sea, or air, including inland waterways. The legislation on the movement of goods is, therefore, included in the following provisions:

1. For the transport of goods by land:(i) The Carriers Act, 1865. (ii) The Railways Act, 1989.
2. In the event of goods being transported by sea:(i) The (Indian) Bills of Lading Act, 1856. (ii) The Carriage of Goods by Sea Act, 1925. (iii) The Merchant Shipping Act, 1958. (iv) The Marine Insurance Act, 1963.
3. For the transport by air of goods: The Carriage by Air Act, 1972.

Components of carriage of goods

1. Delay and misdelivery: Carriers shall be responsible for delay in delivery of the goods to the consignee under all legal systems. The duration of transport may be determined by the laws, international treaties, administrative regulations, or even contractual arrangements, with regard to the correct transport means and deciding the implications of the delay. According to the contract law, “breach of contract occurs if the goods are not delivered within the agreed time.”Under common law, the carrier would typically be responsible for damages if the delay is triggered by a deviation. A divergence occurs when the carrier departs or passes his destination from the path he has explicit or implicitly decided to follow. In the absence of special legislation or contractual arrangements, carriers are not bound by any specific route in civil jurisdictions. A deviation from the usual route is not a mistake on the part of the carrier; the carrier would only be responsible if the deviation creates a delay because it is a loss.
2. Diversion and reconsignment; stoppage in transit: The terms diversion and reconsignment apply to a change of destination or billing before or after the initial destination of a shipment. For the business world, reconsignment is of great significance because products can be transported from a distant source to the most suitable location, and then moved to a certain target destination. Carriers will typically bill for the exercise of the right of diversion or reconsignment. In general, the number of distractions is reduced to ensure that transport means are not being used as storage areas.The goods owner may alter the instructions of the carrier on the place of destination or on the person allowed to take delivery in all the legal systems. The carrier is obliged to satisfy this order, provided he is assured that, at the time of order, the person designating a new delivery venue, or a new receiver is the owner of the goods. In civil-law courts the person holding the transport title is normally entitled to change the destination of the goods, be it a lading bill or another document. Technically, a stoppage in transit is an unpaid seller’s right to change its destination before it is delivered to the destination user. Under the rule, even though the seller hasn’t kept possession of the product in a deal with the buyer, the seller has the right. The British Goods Selling Law of 1893 codifying the common law notes, as symbolic, that the unpaid seller shall resume possession of the goods as long as they are in transit and may retain them until the price is paid or tendered. In the scope of civil law, there are similar clauses.
3. Dangerous Goods: Those goods that may be damaging to persons, means of transport or other goods by nature are dangerous. In all legal regimes, hazardous goods have been transported and special rules have been created.In countries of civil law, the types of products deemed to be hazardous are defined by legislation or administrative rules, which either prohibit shipments by public carriers or specify the terms on which they may be transported. In common law jurisdictions, unless the shipper has stated the dangerous nature of the goods at the time of delivery and has approved them with the knowledge of their existence, it shall be borne by the carrier for any harm caused by hazardous goods shipped for shipment.
4. Carriage by two or more carriers: Goods also enter their destination after two or more carriers have crossed hands. The latter may be the case when the shipper has entered into a contract with many carriers when the shipper authorizes a carrier to serve as their agent for other carriers or when the carrier delivers the products to another carrier without authority.Where the carrier transfers the goods to another carrier without permission, he is responsible for the second carrier’s miss commandments and for any loss or damages sustained by the owner during the period when they were in the second carrier’s hands.In other terms, by executing the contract through an agent’s services, the carrier can not assume responsibility. In addition, the delivery of the goods to a carrier by a tacit or explicit condition that the carriage is carried out by the carrier’s vehicles that constitute a contravention of the contract. In marine transport, this condition is implied.
5. Carrier’s lien: The legislation is all about ensuring that the freight is paid to a carrier that has taken the goods to its destination. The carrier may have a common-law lien or legislative lien to this effect in common-law jurisdictions. Within the courts of civil law, the carrier typically has a special right. A commercial carrier in commercial-law jurisdictions has a common-law lien in which the goods may be kept before the product has been paid to him. The carrier is not entitled to sell or use the goods, however, parties should agree to the carrier’s active lien — that is, the carrier is entitled to sell the goods.Therefore the shipowner is specifically entitled in the United States to seize and sell goods that are shipped by him in situations where the freight is not paid. Parties that accept that the carrier is not responsible at all, or has a general lien on the goods transported, in other words, a lien that involves debts that do not relate to the pending freight. The carrier has the privileges and responsibilities of a dancer since exercising the lien. This can also be liable for the loss or harm incurred by its negligence and may recover the costs fairly required to maintain the product.Carriers under civil law typically have the luxury of paying freight and incidental costs for the goods transported by them. This privilege is open only to qualified carriers in France and in structures following the French model, who carry goods by carriage contract. The right of civil law varies from a common law condition in which the carrier is empowered to sell the goods for the satisfaction of its claims. The profit encompasses the entire shipment as determined by shipping documents and shall be obsolete when the goods are shipped to the recipient.
6. Carrier’s role as warehouseman and bailee: The special obligations imposed on the carrier in all the legal systems apply only for the length of the carry, that is until the carrier takes all appropriate measures to deliver them to the consignee, from the moment the goods are delivered to the carrier for shipment. It means that for the whole time the goods will be in its possession, the carrier is not under his responsibility as a carrier. In fact, before carriage starts or after it ends in compliance with the terms and conditions of a special contract which may qualify as a bailment in common law courts and in civil-law nations, the goods that are delivered for safekeeping to a carrier.In the event, the delivery may not be taken into account, where the delivery carrier may assume an unintended or depositary role, goods may already be in the hands of the transport carrier, as the consignor has refused delivery unjustifiedly, in which case the carrier can take up the function of the accidental bailee, or repository.
7. Carrier’s role as warehouseman and bailee: The special obligations imposed on the carrier in all the legal systems apply only for the length of the carry, that is until the carrier takes all appropriate measures to deliver them to the consignee, from the moment the goods are delivered to the carrier for shipment. It means that for the whole time the goods will be in its possession, the carrier is not under his responsibility as a carrier. In fact, before carriage starts or after it ends in compliance with the terms and conditions of a special contract which may qualify as a bailment in common law courts and in civil-law nations, the goods that are delivered for safekeeping to a carrier.The goods could also be owned by the carrier since unwarranted delivery was rejected by the consignor, and the carrier may, in this case, be kept in the role of an unwanted bailiff or depositary. In civil law, where the parties agree that, before the commencement or after the end of the transport, the carrier shall be in possession of the goods as a warehouse, they shall enter into a reward deposits agreement which is distinct from a carriage agreement.
8. The measure of damages: Owing to the application of the general principles of contract law, damages to breach and failure to execute a carriage contract are typically decided. In the event of a breach of the carriage contract, extraordinary clauses are rare; they are found in international treaties in general.
9. Bills of lading: Various shipments are provided by the carrier to the expeditor when the items are shipped for transport under bills of packing. Unless its right is removed by the transport contract, the shipper is entitled to order the issuance of bill of carriage. The lading bill shall be, first of all, a declaration by a carrier that the goods for shipment have been paid. Additionally, the lading bill is either a carriage contract or proof of a carriage contract. Third, if it is negotiable, as normal with regard to transport by sea, the lading bill controls ownership of the goods and is one of the important documents in funding the movement of goods and services in the world.
10. Freight or forwarding agents: Shipowners also employ cargo or shipping agents’ services, including those who are recompensed for transporting and distributing the goods at their destinations. The services of these persons are typically used where successive carriers or use of the successful means of transport are involved in the transportation of the goods.
11. Mixed-carrier transportation: The word “mixed carriage” refers to circumstances of transport by two or more modes of transport, such as road, sea and air, in which goods are transported to their final destination. At least two choices are available. There may be no specific legal relation between successive carriers, for example, if the shipper has independently contracted each carrier or the shipper has contracted a forwarding agent. In these situations, each carrier has its own access to the shipper or forwarders’ agent and is subject to its own regulations.

International Conventions under UNCTAD

Any of these issues are discussed in the Multimodal Accountability Convention of UNCTAD 1980 even if not yet in effect. The Convention on the international contract of transportation of goods has been adopted by UNCITRAL in whole or in part by the sea. This is designed to replace the 1924 Hague Rules of Procedure, the 1968 Hague Visby Rules, and the 1978 Hamburg Rules. Upon 20 ratifications, this Convention will come into force.

The 1980 UNCTAD Multimodal Convention heralded a hope that the New Convention could eliminate the gaps between the respective rules. This optimism has not been expressed so far, because the Convention has not yet been enforced. Meanwhile, in general terms such as the Lading FIATA bill and the UNCT AD / ICC Rules, a temporary solution is given in this situation in international multimodal transport. Since the States are not bound by an international agreement to follow the solution set out in the UNCT AD / ICC rules, the national courts are not obliged to adhere to such rules that form general conditions.

Carriage of goods by sea

The law regulating maritime trade in the Western world was essentially standardized before the advent of modern nation-states. Yet in the eighteenth and nineteenth centuries, legislation and court judgments in pursuit of national interests that had been formulated in detail slowly removed the ancient and universal rule of the sea from many countries and created serious conflicts in the rule. Throughout the era in which technological development and the spread of the Industrial Revolution led to the expansion of maritime trade globally, the flow of goods was thus hindered from country to country.

It became more and more evident from the last decades of the 19th century that these law disputes could be resolved by international conventions. The law of commercial shipping was, of course, one of the first branches of private right to draw attention to future foreign legislation. The uniform movement resulted in the signing by the Convention in 1924 of some codes of law relating to Lading’s bills. This was intended merely that all laws on loading bills and on damage to hull cargo other than live animals should be consolidated.

Any landing bills covered by the convention shall be subject to certain standard provisions which describe the risk assumed by the carrier and which, unless agreed otherwise, shall be absolute and shall not be altered by contrary agreement and shall enjoy immunities for the carrier. Generally, clauses that relieve the carrier of responsibility for negligence with regard to load, handling, storage, storage, transport and disposal of the goods, are considered void or that minimize its obligation to supply seamanship. However, the carrier shall be stripped of the responsibility for errors in navigation or the handling of the ship and the full guarantee of navigability.

The majority of maritime countries have ratified the Convention or acceded to it, and other states have adopted national legislation, including those negotiated at Brussels, such as Greece and Indonesia. Some countries adhering to the Convention have implemented the principles of the Convention in their commercial codes, including Germany, Belgium, Turkey and the Netherlands. Furthermore, the Convention itself has been granted legal force and, in addition, it has adopted domestic legislation based upon the Convention, including France, Italy, Egypt, and Switzerland. In most parts of the Western world, concrete requirements for container loading in maritime transport have essentially become universal.

Carriage of goods by air

Another regulatory approach to problems posed by the transport of goods is explained by the 1929 Warsaw Convention modified by the 1955 Hague Protocol. It represents a significant step towards the universal unification of air carriage laws. The Convention shall refer to the international carriage for payment of passengers, baggage, and supplies as well as free carriage by an airline. It applies if aircraft belong to private individuals or public bodies; however, the application of the Convention may be excluded by reasonable reservations in relation to aircraft which belong to a State directly.

The Convention specifies that where the departures and destinations are in separate contracting specified or the same contracting state, an international carriage is made available because the stoppage has been decided in another state, even though this state is not a convention member. The convention shall extend to any aircraft, airfield, or another plant at which time the carriers are responsible for the products. It is not true when goods are transported by a carrier of land, sea or inland water. Many countries are members of the Convention, including the United States and the United Kingdom. 

Transportation of documents and their electronic equivalents

In addition, a broad range of transport papers, such as bills and shipping orders, which are now very much in use, do not comply with “a lading bill,”.When international trade volume rises, existing paper systems are too sluggish and expensive and unable to cope with the growing amount of foreign trade transactions. Although the supply chain processes are now focused on sophisticated logistics and ICTs, the traders still have an estimated 5-10% of the total value of world trade in conventional paper forms for traded core information. In a fast containerized environment, the arrival of products before the relevant paperwork is not uncommon.

The change from paper-trade paper documents to simpler and structured paper-trade documents and then e-documents will be incremental, with the process of incorporating electronic documents, including customs records, permits and certificates, carefully designed and based on the phased approach. At the beginning of the phase, a transition duration must be set.

Throughout regional laws and regulations, import and export processes are codified. The lead agency will be in charge of implementing such changes well in advance, to allow traders to become aware of the new regulations regarding import/exportation procedures. The lead agency should be responsible for promoting these changes in advance. To incorporate it into its own business processes, a fair time should be required. It is necessary to highlight the advantages of these trade facilitation initiatives and to provide opportunities by reducing the fees for submission of electronic documents, reducing clearance times, publication times etc.

Conclusion

For certain countries, foreign trade in goods can be regulated by agreements other than those of Berne, the Brussels Convention of 1923 or the 1929 Warsaw Convention. The Eastern European countries developed a uniform movement system, comparable to that of the Berne Convention, during the Cold War.

The 1956 Geneva Convention on the Transport of Goods by Road also contains other agreements on the subject. The convention was adopted in 1961, with France, Austria, Italy, The Netherlands, and Yugoslavia in its initial membership. It refers to the international transportation of goods by road, except for certain items such as postal service. Carriage is international if two countries are involved, one of which is a convention member. The Geneva Convention is initially defined by mixed-carrier transport. It is true for the entire journey, even though the road vehicle was transported by other means of transport without being removed unless proof has been provided that harm occurred in a section of the journey other than road transport.

Despite the briefness of the Sea Carriage Act, 1992, both national and international trade legislation have seen significant changes. As noted, it addresses many of the problems associated with the old law and the transport law for the 21st century should at least be taken into consideration with respect to the prospect of implementing an electronic lading bill. However, some of the issues remain unresolved and some of the words can be deemed potentially unequal.

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