Which Document to issue?

Unitization including containerization has allowed cargo to be moved seamlessly between various modes of transport. Often, there are multiple modes of transport used for the movement of goods, one of them being road and the other either being sea, rail or air. While cargo interests could arrange with separate operators for each mode of transport, there are obvious advantages in dealing with one single point of contact / operator to deal with the complete transportation. This has led to the development of Multimodal Transport Operator (“MTO”) and who is positioned to transport cargo by various modes of transport. The MTO’s often also provide unimodal services (one mode of transport) and for which they may issue documents such as Bills of Lading (Sea), Air Waybill (Air) or Waybill (Road) for such shipments. Sometimes, either knowingly or unknowingly, they may issue MTD’s for the unimodal shipments or vice versa – say Bills of Lading for multimodal shipments. The question to be asked is whether there are any ramifications to the Operator for the issue of incorrect documents?

1. Definitions: We have considered the definitions provided in the ICC Publication No 481 and is as follows:
   1. Multimodal Transport Contract means a single contract for the carriage of goods by at least two different modes of transport. 
   2. Multimodal Transport Operator (“MTO”) means any person who concludes a multimodal transport contract and assumes responsibility for the performance thereof as a carrier.
   3. Carrier means the person who actually performs or undertakes to perform the carriage, or part thereof, whether he is identical with the MTO or not.
   4. Multimodal Transport Document: Multimodal transport document (“MTD”) means a document evidencing a multimodal transport contract … and be, (a) issued in a negotiable form or, (b) issued in a non-negotiable form indicating a named consignee.
2. Some jurisdictions have legislated to regulate Multimodal Transport and which may either be compulsorily applicable (the Indian Multimodal Transport Act applies for all multimodal shipments out of Indiaⁱ) or optional (the Singapore Multimodal Transport Act 2021ⁱⁱ). While it is the general practice of MTO’s/CTO’s to issue Transport Documents which can be used for both unimodal (Sea Shipments) or multimodal, the practice with respect to Indian MTO’s is to issue MTD’s based on the model prescribed by Rule 3 of the Multimodal Transport Document Rules 1994. This being the case, we have considered the MTD issued by Indian MTO’s to consider the potential issues arising from their use in Sea shipments and similarly Bills of Lading (“B/L”) for Multimodal shipments.
   1. Multimodal Document issued for Sea shipments: As a matter of course, Transport Documents generally incorporate a Clause Paramount and which provides for the application of either the Hague or the Hague Visby Rules, should this not be compulsory applicable by force of law. This is obviously beneficial to Carriers given that they have the benefit of incorporating these Rules for Sea Carriage (which can be extended outside the period provided in the Rules subject to their being no other compulsorily applicable law) which would assist in either excluding or limiting liability together with shorter time bars. The Indian MTD’s do have any Clause Paramount providing for this option. Accordingly, we submit that for sea shipments, the MTGA 1993 (given that the shipment is not in two or more modes as required in the act) will not apply. This being the case, we need to ascertain what would then apply?
      
      1. While an argument could be made that the Indian COGSA compulsorily applies for sea shipment, as mentioned in our earlier articleⁱⁱⁱ, the Indian COGSA^iv requires an express statement to be included in the B/L^v. Given that the Indian MTD’s do not have this statement and based on the judgement by the Indian Supreme Court^v, we submit that common law should apply. This would be obviously beneficial to the cargo interests as the only exclusions available to the Carriers would be the Act of God, Sovereign’s enemies, Inherent vice and Fault of Consignor (Common Law exceptions).
      2. Even if the Indian COGSA 1925 were to apply, Article 1(b) of the schedule^vi provides that ““Contract of carriage” applies only to contracts of carriage covered by a bill of lading or any similar document of title,…”. While a straight MTD could be argued to be a document of title given the presence of an attestation clause^vii, if this document was never meant to be issued or surrendered, then this document would not be a document of title such that the Indian COGSA would not apply.
   2. Unimodal Documents, such as B/L, issued for Multimodal Shipments: While there is no issue for a B/L to be issued for multimodal shipments, the issue here that the terms of the B/L have not been extended for other modes of transport. This being the case, unless there are compulsory statutory provisions applicable, common law would apply. This would then result in a similar situation as stated in 2ai above i.e. only common law defences.
3. MTO’s and Unimodal Carriers would, as a matter of risk management, insure for their cargo liability risks. It is invariably a requirement of Risk Carriers (Insurers & Mutuals) that the terms of carriage should be on the basis of compulsorily applicable cargo conventions, and in its absence, Standard Trading Conditions seen and approved by the Risk Carriers^viii. Given that the use of a MTD for a Unimodal Shipment and a Unimodal Document such as BL for a Multimodal Shipment may result in the application of common law, Insurers would be entitled to deny cover given that the basis of cover is on different terms then what was originally agreed. Hence, it would be best for the Operators to update their Risk Carriers on the use of their documents to avoid any issues arising at a later date.
4. Conclusion:
   1. In order to avoid any ambiguity, it would be best to issue a document which could be used for both Unimodal and Multimodal shipments.
   2. If it is desired to issue multiple documents, then it would be best to issue appropriate documents for the shipments to avoid any increase in liability exposure and potential coverage issues with the risk carriers.

ⁱ. See our article Unintended Consequences of the Indian MTGA 1993 para 4 ix in which we commented on this issue.
ⁱⁱ. See our article The Singapore Multimodal Transport Act 2021 -2
ⁱⁱⁱ. See Para 4 x of our article Unintended Consequences of the Indian MTGA 1993
^iv. S4 of the Indian COGSA 1925 
^v.   National Thermal Power … vs Singer Company and Ors 
^vi. Provides for the Hague Visby Rules with some amendments.
^vii. See The“Rafaela S” (2005) decided by the English House of Lords and APL v Voss Peer decided by the Singapore Court of Appeal.
^viii.See Transport and Logistics Operators 2022 Wordings T1 Clause 3.1
    We insure you only for liabilities under:
     3.1.1 the provisions of a law or convention which apply compulsorily and cannot be avoided or limited by contract
     3.1.2 your standard trading conditions as approved by the Managers, or other approved contract (subject to 3.3)
     3.1.3 our model conditions