Freedom of Contract under the Rotterdam Rules

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1 Francesco Berlingieri * 1. PREAMBLE Although the Hague Rules 1921 and the ensuing International Convention for the Unification of Certain Rules of Law relating to Bills of Lading 1924 (Brussels Convention 1924) were drafted in reaction to the excessive freedom of contract existing at the time, they nevertheless both expressly allowed freedom of contract in specific situations. They did so using two different techniques. The first technique consisted in excluding from the scope of application certain types of contract, the charter parties; in both the Hague Rules 1921 and the Brussels Convention 1924 the reason why their application was excluded was the same: there was no need to protect any of the contracting parties because their negotiating power was practically equal. This concept was expressed very clearly at the October 1922 London Conference of the Comité Maritime International (CMI) by a Danish shipowner, A.P. Möller:1 Tramp shipping he said is done on a basis of free contract. The bill of lading is not the primary document; the primary document is the charter party, and the charter party is gone through by both parties and signed by both parties. It is generally signed by the merchants and signed over by a representative of the shipowner, at any rate he acts for the owner and the owner must abide by what he does. Therefore the cargo interests are as regards tramp shipping in a much better position to protect their interests, and as there are so many trades in the world it is natural that there will be different charter parties, and it is possible for both parties, and convenient for both parties to be able to do so, to put such special conditions into any given charter party that any given special trade may demand. Therefore I do not really see any need, and as far as my knowledge goes, I never heard of any call, for reform of the present condition of things as regards tramp shipping. * OBE, past Professor of Maritime Law at the University of Genoa (Italy), President ad honorem of the Comité Maritime International. The text of the Rotterdam Rules is reproduced on p. 324 of this Review (issue /2). 1 The Travaux Préparatoires of the Hague Rules and of the Hague-Visby Rules, ed. F. Berlingieri, Antwerp (1997), 95. Rev. dr. unif

2 Francesco Berlingieri The second technique consisted in allowing the parties to derogate from the Rules in relation to certain types of shipment, provided no bill of lading was issued. Pursuant to Article 6 of the Convention, in fact the carrier is at liberty in regard to particular goods to enter into any agreement on any terms as to its responsibility and liability for the goods and as to its rights and immunities, in so far as the stipulation is not contrary to public policy and provided no bill of lading is issued and that the terms agreed are embodied in a receipt, and provided further that the shipment concerned is not an ordinary commercial shipment made in the ordinary course of trade and that the character and condition of the property to be carried or the circumstances, terms and conditions under which the carriage is to be performed are such as reasonably to justify a special agreement. Article 7 in turn provides that a similar freedom of contract exists before loading or after discharge. But in this case, while its use in the Hague Rules 1921, that were meant to become rules for voluntary adoption, was appropriate, its incorporation in the Convention is difficult to understand, since it is meant to apply to situations that are outside the scope of application of the Convention, in as much as its operation is conditional on no bill of lading being issued in respect of the goods concerned. 2. THE TRAVAUX PRÉPARATOIRES OF THE ROTTERDAM RULES The issue of establishing the borderline between, on the one hand, contracts of carriage subject to a possible new instrument intended to replace the instruments presently in force and, on the other hand, contracts in respect of which freedom of contract should be permitted was amongst the matters considered by the CMI during the preparation of the preliminary draft to be submitted to UNCITRAL. Although the initial approach was still based on the type of document, it was thought that a mere reference to charter parties was insufficient, since that category of contract had widened and its character had become difficult to identify. It was thus decided to describe the relevant type(s) of document or contract in terms that would allow a measure of flexibility by adding in square brackets, after charter parties, a reference to contracts of affreightment, volume contracts, or similar agreements. It is noteworthy that contracts of affreightment and, in particular, volume contracts may be performed by ships employed in the liner trade and that this is normally the case for volume contracts. That difference was clear in the minds of the CMI Working Group that had prepared the initial draft and the suggestion was made to regulate contracts of affreightment and volume 832 Unif. L. Rev. 2009

3 contracts used in the liner trade separately from charter parties and other contracts with similar characteristics used in the non-liner trade, and it was consequently suggested that in respect of the former contracts the new instrument ought preferably to apply, even though as a default rule.2 The problem was considered by the UNCITRAL Working Group on Transport Law during its 12 th session. There was broad agreement on the adoption of either or both of two alternatives, but various solutions were suggested, including the following: (a) to keep in the article on the scope of application the provision pursuant to which charter parties are not covered by the new instrument and to move elsewhere the provision relating to contracts in respect of which the provisions of the instrument should apply, but not mandatorily;3 (b) to delete the traditional provision pursuant to which charter parties are excluded from the scope of the instrument and to regulate only the conditions under which freedom of contract should be permitted, focusing on the establishment of the conditions under which a contract might be deemed to be freely negotiated. In connection with the first alternative, reference was made by the Delegation of the United States of America to the Ocean Liner Service Agreements OLSAs that are the subject of specific regulation in the Shipping Act of 1984, as amended by the Ocean Shipping Reform Act of The following comments are made on the original Article of the draft instrument (Document A/CN.9/WG.III/WP.21): One suggestion is to extend charter party treatment to modern equivalents of the charter party, such as slot charters and space charters, but to recognize a different sort of freedom of contract for negotiated contracts between sophisticated parties that less closely resemble traditional charter parties, such as contracts of affreightment and volume contracts. The suggestion has been made that contracts of affreightment and volume contracts should be subject to the draft instrument as a default rule, but that the parties to these contracts should have the freedom to derogate from the terms of the draft instrument. Such derogations, however, would only be binding on the immediate parties to the contract. Transport documents issued under these contracts would still need to comply with the terms of this draft instrument when they are passed to a third party who is not bound by the original parties agreement. 3 In this connection reference was made by the U.S. Delegation to its proposal (in document A/CN.9/WG.III/WP.34) to permit the parties to the contracts known in the United States as Ocean Liner Service Agreements to derogate from the provisions of the instrument. 4 The definition now contained in section 3, paragraph 19 of the Shipping Act is the following: (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 non-performance on the part of any party. Rev. dr. unif

4 Francesco Berlingieri The United States proposal was further considered during the 14 th session of the Working Group, when it was suggested that OLSAs could be defined broadly as volume contracts for the future carriage in the liner trade of a certain quantity of goods over a certain period of time in a series of shipments.5 When the concern was expressed that the introduction of a special regime in respect of volume contracts could create market competition-related problems, it was suggested that both carriers and shippers could gain commercial advantage by derogating from the standard liability regime and, further, that most cargo claims were made by third parties who would be unaffected by any such derogation. At the end of the debate, broad support was expressed for the inclusion of a special rule in respect of volume contracts.6 Consideration of the problem of freedom of contract in respect of volume contracts continued during the 15 th session of the Working Group, during which four issues 7 were considered. The first was whether OLSAs should be treated as a type of volume contract; the second, under which conditions it should be possible to derogate from the provisions of the instrument; the third, whether certain provisions of the instrument should in any case remain mandatory; the fourth, whether a derogation could extend to third parties and, if so, under which conditions.8 After the first issue had generally received the support of the Working Group, in respect of the second it was suggested that the following conditions should be met for a derogation to be valid: the contract should be [mutually negotiated and] agreed to in writing or electronically; the contract should obligate the carrier to perform a specified transportation service; a provision in the volume contract that provides for greater or lesser duties, rights, obligations, and liabilities should be set forth in the contract and may not be incorporated by reference from another document; and the contract should not be [a carrier s public schedule of prices and services,] a bill of lading, transport document, electronic record, or 5 Document A/CN.9/572, paragraph Document A/CN.9/572, paragraph A fifth issue was also considered, in relation to the definition of contract of carriage, but it does not appear that it materially affected the problem of freedom of contract. 8 Document A/CN.9/576, paragraphs Unif. L. Rev. 2009

5 cargo receipt or similar document but the contract may incorporate such documents by reference as elements of the contract. Although there was support for a derogation, the conditions suggested were considered by several delegates to be insufficient. In respect of the third issue it was generally agreed that no derogation should be permissible in respect of any provision connected with seaworthiness,9 while in respect of the fourth issue it was decided that a provision should be included to the effect that third parties may expressly agree to be bound by derogations. The draft of the provisions on freedom of contract that resulted from the debate were added, as Article 88(2) and (3), to the provisions on the man character of the rules on the obligations of the carrier and of the performing parties and on the limits of their liability as well as of the corresponding rules applicable to the shipper. The structure that emerged was, therefore, the following: certain contracts charter parties that had been excluded from the scope of application of both the Hague-Visby Rules 10 and the Hamburg Rules, were also excluded from the scope of application of the draft instrument; an exception to the general mandatory character of the rules governing the obligations and the limits of the obligations of the carrier was made in respect of volume contracts; a general exception was made for live animals; a further general exception was made for shipments that are not ordinary commercial shipments. During the 17 th session of the Working Group,11 the provisions setting out the conditions required for the operation of freedom of contract in respect of volume contracts, as drafted in a proposal by Finland,12 met with strong support, even though concern was expressed as to whether they provided sufficient protection for the parties. The first three paragraphs of the provision (at that time Article 95), were worded as follows: 9 Document A/CN.9/576, paragraphs The Hague Rules 1924 as amended by the Brussels Protocol Held in New York from 3 to 14 April Document A/CN.9/WG.III/WP.61. Rev. dr. unif

6 Francesco Berlingieri Article 95. Special rules for volume contracts 1. Notwithstanding Article 94, a volume contract to which this Convention applies may provide for greater or lesser rights, obligations, and liabilities than those set forth in the Convention provided that the volume contract contains a prominent statement that it derogates from this Convention, and (a) is individually negotiated, or (b) prominently specifies the sections of the volume contract containing the derogations. 2. A derogation under paragraph 1 must be set forth in the volume contract and may not be incorporated by reference from another document. 3. A carrier s public schedule of prices and services, transport document, electronic transport record, or similar document is not a volume contract under paragraph 1, but a volume contract may incorporate such documents by reference as terms of the contract. The provisions on the protection of third parties were set out in paragraph (4) in the following terms: 5. (a) Paragraph 1 applies between the carrier and the shipper. (b) Paragraph 1 applies between the carrier and any other party that has expressly consented to be bound by the terms of the volume contract that derogate from this Convention. The express consent must demonstrate that the consenting party received information that prominently states that the volume contract derogates from this Convention and the consent shall not be set forth in a carrier s public schedule of prices and services, transport document, or electronic transport record. (c) The burden is on the party claiming the benefit of derogation to prove that the conditions for derogation have been fulfilled. In respect of these provisions it was pointed out that the wording adopted could give rise to difficulties in interpretation and that it should be more clearly stated that an obligation is placed on the original party (i.e. the shipper) to inform the third party (i.e. the holder of the negotiable transport document or the consignee) regarding the derogations and that it is not sufficient for the requirement of express consent that it be set forth in a carrier s public schedule of prices and services, transport document or electronic record. Attempts were made during the 19 th session of the Working Group to amend draft Article 95 (in the meantime renumbered 85) in order, first, to restrict the definition of volume contracts by providing for a minimum period and a minimum quantity of shipments, or at least by requiring them to be significant; secondly, to require that the two conditions mentioned in paragraph (1)(a) and 836 Unif. L. Rev. 2009

7 (b) be cumulative rather than alternative; thirdly, to extend the list of matters in respect of which derogations are not permitted so as to cover also the provisions on the basis and the limits of the carrier s liability and on the basis of the shipper s liability. However, none of these proposals met with sufficient support, even though some support had been voiced for a revision of the definition of volume contract so as to narrow down its scope of application and protect small shippers.13 A further attempt to ensure better protection for small shippers and to obtain wider support for the provision on freedom of contract was made at the 21 st (and last) session of the Working Group 14 and this time was successful. While the two requirements set out in paragraph (1) (consisting in (1) the prominent statement that the contract derogates from the instrument and in (2) that the contract is either individually negotiated or prominently specifies the sections of the contract containing the derogations) were left unaltered, paragraph (2), which merely provided that the derogation must be set forth in the contract and may not be incorporated by reference from another document, was replaced by a new text which, after incorporating under (a) and (b) the requirements previously set out in paragraph (1), added two further requirements, viz., that: (c) The shipper is given an opportunity and notice of the opportunity to conclude a contract of carriage on terms and conditions that comply with this Convention without any derogation under this article; and (d) The derogation is neither (i) incorporated by reference from another document nor (ii) included in a contract of adhesion that is not subject to negotiation. 3. AN ANALYSIS OF THE PROVISIONS CONTAINED IN THE ROTTERDAM RULES 3.1 Contracts excluded from the scope of application of the Rules The effect of Articles 6 and 7 is to exclude from the scope of application of the Rotterdam Rules the original parties to a contract of carriage mentioned in Article 6. But that does not necessarily mean that they enjoy freedom of contract, because such freedom may not exist under the applicable law. Freedom of contract probably existed in most maritime countries at the time when the Hague Rules were adopted, but may not exist now. 13 Document A/CN.9/645, paragraph Held in New York from14 to 25 January Rev. dr. unif

8 Francesco Berlingieri In any event, the categories of contract excluded by Article 6 differ from those excluded by Article 1(b) of the Hague-Visby Rules and by Article 2(3) of the Hamburg Rules. In fact, while under both sets of Rules a documentary approach is adopted in order to identify such contracts, under the Rotterdam Rules a combination between the contract approach and the type of trade and the documentary approaches is adopted. First, reference is made to contracts of carriage. Secondly, reference is made to the type of trade: in fact, the Rotterdam Rules basically apply to contracts in liner transportation whereas they do not apply to contracts in non-liner transportation. Thirdly, the exceptions to the general rule are based on the type of contract: the Rotterdam Rules in fact do not apply in liner transportation to charter parties and other contracts for the use of a ship or any space thereon, whereas they do apply in non-liner transportation when the only document issued is a transport document or an electronic transport record. The exclusion of the contracts of carriage mentioned in Article 6 from the scope of application of the Rotterdam Rules operates only in the relationship between the carrier and the original party to the contract. It does not, on the other hand, operate in the relationship between the carrier and any third party. Reference is made in Article 7 to the consignee, controlling party or holder, because these are the parties that may exercise rights under the contract of carriage. Therefore any provision in the contract of carriage agreed between the carrier and the other original party to the contract that derogates from the Rotterdam Rules and that is valid and binding under the applicable law is not enforceable against a party that is not the original party, since such provision falls under Article 79. It is questionable, however, whether Article 80(5) would apply by analogy in that case. If, in fact, the consignee receives information in the form required by Article 80(5)(a) and gives its express consent to be bound by a derogation from the Rotterdam Rules that was valid in respect of the original parties to the contract pursuant to the applicable law (since in that case the Rotterdam Rules are not applicable), there does not seem to be any reason why such consent should not be binding on that party. 3.2 The general rule on the mandatory character of the Rotterdam Rules The approach adopted in the Rotterdam Rules differs from that adopted in Article 3(8) of the Hague-Visby Rules and in Article 23 of the Hamburg Rules. First, because it provides for the mandatory character of the provisions applicable to both the carrier and its counterpart that may be the shipper, consignee, controlling party, holder or documentary shipper; secondly, 838 Unif. L. Rev. 2009

9 because, since there are exceptions to the general rule, it states that this rule applies unless otherwise provided; thirdly, because it refers specifically to both the obligations and the liability of the parties. The provisions applicable to the carrier differ from those applicable to its counterparts in that for the carrier, the mandatory character of the rules operates only in respect of a possible exclusion or limitation of its obligations and liability, whereas for its counterparts it operates in both directions in that it applies also in respect of a possible increase of their obligations and liability. Furthermore, in respect of the carrier, it covers also the assignment of the benefit of insurance of the goods in favour of the carrier or of any person for whom the carrier is liable pursuant to Article The exceptions to the general rule on the mandatory character of the Rotterdam Rules The exception to the general rule in respect of volume contracts The need for protection of the shipper is justified in view of the fact that the definition of volume contract is very wide: there is in fact no reference to the quantity of goods but only to a number of shipments, it being necessary that the goods be carried in a series of shipments. Even if it is not certain that the word series may apply when the shipments are only two, this is probably the case. In any event, since no minimum quantity is required, each shipment may consist also of a very small quantity of goods: for example one container. It appears, therefore, that a volume contract may be used also for the carriage of a very small quantity of goods or a very small number of containers, in which event the negotiating power of the shipper would normally be minimal, even though it is difficult to conceive why a shipper of a small number of container might have an interest to enter into a volume contract. There seems little doubt that the conditions originally required for a derogation to be valid were not such as to ensure protection for the shipper. In fact, even if a prominent statement should draw the attention of the shipper to the fact that the contract contains a derogation, while the requirement of individual negotiation would entail the shipper s involvement in the drafting of the contract, the alternative requirement that the contract prominently specifies the sections of the volume contract containing the derogations would add very little, if anything, to the prominent statement that the contract derogates from the Convention. Rev. dr. unif

10 Francesco Berlingieri It is thought instead that the additional requirements do afford a reasonable protection. The first of these requirements consists in the freedom of choice to be granted to the shipper between a contract that contains a derogation and a contract that does not: for example, a contract at a given freight rate and another at a reduced rate with a reduction of the limit of liability. The shipper would thus be placed in a position to make a decision. The second condition is twofold. The derogation may not be incorporated by reference to another document. It must, therefore, be contained in the volume contract that, pursuant to Article 3, must be signed by the shipper. Then, the contract may not be a contract of adhesion, which is not subject to negotiation. In this connection, it appears that in order for a contract not to fall within the category of contracts of adhesion it is not sufficient for certain clauses, such as the freight rate, to be subject to negotiation, while others are not. If a contract form is submitted to the shipper with some blank spaces, relating to quantities, number and period of shipments and freights rates, but all other terms are in print, the contract would fall within the category of contracts of adhesion. An important issue in connection with the provision under consideration is the allocation of the burden of proof. In view of the fact that the provisions on freedom of contract in respect of volume contracts are an exception to the general rule of the mandatory character of the Convention, the burden of proving that the conditions required by Article 80 are present is certainly on the carrier. This is particularly important in respect of the question of whether the contract is or is not a contract of adhesion. The terms prominent and prominently used in respect of the character of the statement that the contract derogates from the Convention, of the specification of the sections of the volume contract containing the derogations and of the information that the third party must receive in respect of the derogation indicate that the information referred to must be written in such a manner as to immediately draw the attention of the shipper and the third person concerned. To that effect the information, if contained in a lengthy document, should, for example, be shown on the first page or on the signature page and, whatever the length of the document, be written in a typeface significantly larger than and different (e.g. bold) from that used for the rest of the document. Similarly to what is provided in respect of contracts excluded from the scope of application of the Rotterdam Rules by Article 6, Article 80 grants specific protection to third parties. 840 Unif. L. Rev. 2009

11 The conditions required by Article 80(5) for the derogation agreed between the carrier and the shipper to apply in respect of any person other than the shipper are, in fact, two in number: (a) the receipt by such person of information that prominently states that the volume contract derogates from the Rotterdam Rules and (b) the express consent of such person to be bound by the derogation. This provision is of extreme importance, since in the great majority of cases it is the consignee that brings a claim against the carrier in respect of loss, damage or delay, because the goods normally travel at the risk of the buyer. (a) Prominent information Paragraph (5)(a) does not indicate in which document (the information must be in writing pursuant to Article 3) the prominent information should be contained. However, since the express consent required should obviously refer to such information, it appears logical that it should be incorporated in the same document. On that assumption, and in view of the statement in paragraph (5)(b) that the consent may not solely be set forth in a carrier s public schedule or prices and services, in a transport document or electronic transport record, the consequence seems to be that the prominent information likewise may not be (solely) contained in any of these documents. The similarity of the language used in paragraph (5)(a) to that used in paragraph (2)(a) suggests that the obvious way to supply such information is to provide the person against whom the derogation is invoked with a copy of the volume contract containing the prominent statement referred to in paragraph (2)(a). In any event, the document containing the information should comply with the same requirements applicable to the prominent statement mentioned in paragraph (2)(a) and, therefore, identify the volume contract under which the shipment in question is made and the provisions of the Rotterdam Rules that are derogated from, and indicate in what the derogation consists. (b) Express consent In order for the consent to be express, it must identify the derogation. The question that arises in this respect is whether it would suffice for that purpose, for example if the document containing the information is a copy of the volume contract, that reference be made to the clauses of the contract containing the derogations, or whether the provisions of the Rotterdam Rules that are derogated from should be identified and the nature of the derogation Rev. dr. unif

12 Francesco Berlingieri specified. For example, would a signature on a printed statement at the bottom of the document to the effect that the clauses containing derogations, identified by number, are expressly accepted, suffice? It is suggested that it would not, and this view is supported by the provision in paragraph (5)(b) that the consent may not solely be set forth in the transport document which is handed over by the consignee in order to obtain delivery of the goods The exception to the general rule in respect of live animals and shipments that are not ordinary commercial shipments The two exceptions regulated by Article 81 differ significantly from the exception relating to volume contracts because (a) they relate only to obligations and liability and not to rights; (b) they relate only to the obligations and liability of the carrier (or of a performing party); (c) they relate only to the exclusion or limitation of its liability; (d) there is no requirement as to the form of the agreement, no reference to Article 81 being made in Article 3; (e) there is no requirement similar to those provided in favour of the shipper by Article 80(2) nor is there any requirement for the application of the exclusion or limitation of liability between the carrier (or a performing party) and persons other than the shipper. As regards the form of the agreement, since Article 81 provides that the contract of carriage may exclude or limit the obligations or the liability, the form of the exclusion is obviously that of the contract: if the contract is in writing, so must be the exclusion or limitation. The fact that the provisions of Article 81 are stated to be without prejudice to Article 80 merely indicates that the provisions of Article 80 on volume contracts apply if a contract covered by Article 81 is a volume contract. But if this is not the case, the Rotterdam Rules do not afford any special protection to the shipper or to persons other than the shipper The exception in respect of live animals By excluding live animals from the definition of goods, the Hague-Visby Rules exclude live animals from their scope of application. The Hamburg Rules instead apply also to the carriage of live animals, but adopt a different regime of liability and a special allocation of the burden of proof. Article 5(5) in fact provides that the carrier is not liable for loss, damage or delay in delivery resulting from any special risk inherent in the carriage of live animals. The burden of proof is made less stringent by the creation of a presumption that the loss, damage or delay was caused by any such special risk if the carrier proves that he has complied with any special instructions given to him 842 Unif. L. Rev. 2009

13 by the shipper respecting the animals and that, in the circumstances of the case, the loss, damage or delay could be attributed to such special risk. Initially, the draft instrument merely provided for the carrier s right to exclude or limit its liability in respect of the carriage of live animals, but then various views were expressed, such as the exclusion of the carriage of live animals from the scope of application of the instrument or the limitation of the freedom of contract by providing for the liability of the carrier in case of intentional fault or serious misconduct in the treatment of the animals.15 The latter of such alternatives ultimately prevailed and, therefore the same criteria that regulate the loss of the right to limit the liability of the carrier apply also in respect of the validity of any contractual exclusion or limitation of liability in respect of the loss of or damage to live animals or the delay in their delivery The exception in respect of shipments that are not ordinary commercial shipments Article 81(b) reproduces the proviso of Article 6 of the Hague-Visby Rules,16 except that its application is excluded when a negotiable transport document or a negotiable electronic record is issued, rather than a bill of lading. The difference however consists in the fact that while the Hague-Visby Rules do not apply when a bill of lading is not issued, so that the operation of their Article 6 is difficult to conceive, the Rotterdam Rules apply to all contracts of carriage, whether or not a negotiable document or electronic record is issued, also when no document or electronic record is issued at all. Article 81(b) sets out the conditions under which freedom of contract is permitted in respect of contracts of carriage that are not volume contracts first in positive, then in negative terms. First, it specifies what the character and condition of the goods or the circumstances and terms and conditions under which the carriage is performed must be. Secondly, it sets out what they should not be. In order to clearly identify the scope of application of this provision, the positive requirements must be considered in the light of the 15 Report of the 11 th session, paragraph 216 (document A/CN.9/526). 16 That proviso did not exist in the Hague Rules 1921, Article V of which contained only a provision in the terms of the first part of Article 6 of the Hague-Visby Rules. It was added in the text as amended in 1922 with the view of its enactment in the United Kingdom and was annexed to a circular of the Chamber of Shipping of the United Kingdom of 1 st June 1922 (CMI Bulletin No. 65, p It then became part of the draft of the Hague Rules adopted by the CMI 1922 London Conference (CMI Bulletin No. 65, (p.) 375, at 383) and of the ensuing Diplomatic Conference of October 1922 (CMI Bulletin No. 65, (p.) 385, at ). Rev. dr. unif

14 Francesco Berlingieri negative requirements. The analysis must be conducted in respect of each of the two positive requirements which are alternative to one another. (a) Character and condition of the goods The character and condition of the goods must be such as reasonably to justify special treatment, but they must not consist in an ordinary commercial shipment made in the ordinary course of trade. Special treatment may be required in respect of goods that must be handled and stowed in a particular manner, such as, for example, a big piece of machinery, a crane, a yacht, a set of pipes. Once this is established, it is necessary to find out if the carriage of any one of such goods may be considered as being an ordinary commercial shipment made in the ordinary course of trade: even if, for example, the carriage of a crane may be considered as being effected in the ordinary course of trade (on the assumption that the term trade refers to the ship and not to the goods), it is unlikely that the crane can be considered an ordinary commercial shipment. (b) Circumstances and conditions Freedom of contract is also permitted when the circumstances and terms and conditions under which the carriage is to be performed are such as to justify special treatment, irrespective of the character and condition of the goods, and provided always that the carriage does not qualify as an ordinary commercial shipment made in the ordinary course of trade. The carriage of a single piece of machinery, of a yacht or of a set of pipes (just to mention the examples made under (a) above) is unlikely to fall under the above description. If, however, the subject matter of the carriage is not a single piece of machinery, but the whole set of machinery and other equipment required for the construction of a steel factory, or the complete set of pipes and pumps required for the construction of a pipeline, then the conditions under consideration would be met.17 In such cases, the conditions set out in the 17 During the fourth plenary session of the commission appointed by the Diplomatic Conference held in October 1923, the Danish delegate, Judge Bagge, so stated (Travaux Prépararoires, supra note 1, 659): Mr. Bagge felt that it was difficult to understand the scope of Article 6. Those who were aware of the history of this article knew it had been introduced with exceptional cargoes in mind. For his part, the Belgian delegate, Antoine Franck (at the time President of the CMI), so stated (ibidem, p. 661): For example, in the case of a large undertaking for the construction of a port, the contractor dealt with shipping interests for rather special forms of carriage, comprising complicated material and with an obligation to deliver one part to one place and another elsewhere. 844 Unif. L. Rev. 2009

15 proviso are likely to be met. When more than one shipment is required for the carriage of that material, the question arises whether the contract might fall also under the definition of volume contract, and, consequently, whether compliance with the conditions set out in Article 80(2) and (5) would be required. It is thought that this would not normally be the case, since it appears from the definition of volume contract that the goods to be carried in a series of shipments must consist in a specified quantity, and that requires that the weight or number of pieces or unit loads (e.g. containers) be indicated. Rev. dr. unif