The Singapore Multimodal Transport Act 2021 – 2

1. Following our earlier article, The Singapore Multimodal Transport Act 2021 (“SMTA 21”), we were contacted by Land Transport Authorityⁱ, the Singapore Licensing Authority and who advised us that the provisions of the SMTA 21 is not mandatory but optional. This being the case, there are no penal provisions for an MTO that is not a member of the Registry trading in an ASEAN Member State (AMS). We had also been advised that the applicationsⁱⁱ would be processed by LTA from 28^th Nov 2021.
2. Given that the provisions of SMTA 21 are not mandatory and only optional, the question should be is whether Multimodal Transport Operators (“MTO”) should voluntarily register themselves to come within the provisions of this act. As mentioned in our earlier article, the advantages of registering would be the application of the SMTA 21, and which entitles  MTO’s to
   1. exclude liability and / or limit liability both for damage and delay claims
   2. shorter period for time bar i.e. 9 months. While Multimodal Transport Bills of Lading (“MTD”) do provide for such shorter time periodsⁱⁱⁱ, given the compulsory application of mandatory conventions such as the Hague / Hague Visby Rules or the Montreal Convention, we submit that the provisions of the MTD’s would be overridden by these conventions, if applicable. With respect to periods outside the compulsorily applicable conventions, on the basis of the Singapore judicial pronouncement^iv, it does appear that any shorter period than the limitation period provided under the Singapore Limitation Act (Chapter 163) would be held invalid. 
   3. consider incorporating an arbitration clause as the dispute resolution clause of choice.
      1. Given that most of the MTD’s issued will be for both “Port to Port” shipment and Multimodal / Combined Transport, it would be best to consider an arbitration clause for both i.e. unimodal and multimodal transport. The presently applicable unimodal conventions do not have a barrier against the provision of an arbitration clause and some jurisdictions have indeed held it valid^v.
      2. Given that the article is based on the SMTA 21, we would suggest the below arbitration clause (we welcome suggestions from readers to make this clause better)
         “The contract evidenced by this Bill of Lading / Multimodal Transport Document shall exclusively be governed by English Law^vi. Any and all disputes/differences arising out of this contract and/or connection with the interpretation of any of its clauses shall be settled by arbitration in Singapore in accordance with the Singapore International Arbitration Act Cap (Chapter 143a). The arbitration shall be conducted in accordance with the Arbitration Rules of the Singapore Chamber of Maritime Arbitration (SCMA).
         Unless the claim and counter-claim exceeds USD 150,000, the arbitration will be conducted in accordance with the SCMA Small Claims Procedure.“
   4. Transport Liability Insurers provide cover to their Insured’s on the basis of compulsorily applicable laws / conventions, and in their absence, on the basis of approved Standard Trading Conditions^vii. If a Singapore MTO is registered with the LTA, then the SMTA 21 would compulsorily apply such that this would fall within the provisions of the policy conditions. As mentioned in 2 above, given the obvious benefits of the provisions of the SMTA 21, Liability Insurers should welcome this Act as it would result in dealing with potential claims more effectively. 
   5. We would have preferred if SMTA 21 is mandatory instead of merely being optional. This would have avoided any potential confusion on which act would apply and which would have to be ascertained by conducting a further check as to whether the MTO is registered with the relevant authorities. Additionally, application of SMTA 21 would ensure parity in the requirement of MTO’s having the same threshold for assets / capital^vi and a liability policy^vii for their associated liabilities with respect to cargo. We are therefore hopeful that amendments are made in the SMTA 21 to make this Act mandatory in nature.

ⁱ. See email from LTA and which can be viewed at https://nau.com.sg/wp-content/uploads/2021/11/EmailLTA.231121.pdf ⁱⁱ. See feedback from LTA and which can be viewed at https://nau.com.sg/wp-content/uploads/2021/11/LTA-Feedback.121121.pdf
ⁱⁱⁱ. See Clause 5(G) of the TT Series 100 Bills of Lading which provides for 9 months’ time bar for Combined Transport.
^iv. See Press Automation Technology Pte Ltd v Trans-Link Exhibition Forwarding Pte Ltd [2002] SGHC 286
^v. See Caravel Shipping Services v/s Premier Sea Food Exim Pvt Ltd decided by the Indian Supreme Court on the applicability of the arbitration clause in the Bill of Lading.
^vi. See our earlier article “The Case of NTUC Foodfare Co-operative Ltd – Whether Singapore law is better or English Law is preferrable?” where we argued that English Law is more beneficial to Carriers vis-a-vis Singapore Law.
^vii. Approved Standard Trading Conditions would generally include national forwarding associations Standard Trading Conditions. In the case of Singapore, this would include the Singapore Logistics Association.
^viii.See point 3 in feedback from LTA referred to in ii above.
^ix. See point 2 in feedback from LTA referred to in ii above.