An Overview of the Law of Multi Modal Transportation:

Multi Modal Transportation of Goods :( Meaning).

In its essence Multi Modal Transportation of goods means transportation of cargo from the premises of the shipper to those of the consignee, by more than one mode of transportation, under a single contract which has its evidence in form of a single multimodal transport contract.

Thus a multi modal transport system involves the coordination of rail and road networks to ensure good connectivity between port and hinterland.

As a general rule criteria such as Speed, Safety, Reliability, Availability and Flexibility in any transportation system ensures an efficient door to door service & there by determine the quality& success of any mode of transportation.

Establishment of an efficient door to door transportation service plays a key role in eliminating an interruption in continuous movement of goods from the place of their origin to that of their destination. Consequently the enactment of a system of multi modal transportation had its genesis in reducing costs, delays and improving upon the quality of transportation of goods and services.

Traditionally, a system of unimodal transportation was in vogue. Under this system of transportation, cargo used to be carried by a single carrier, this was later on replaced by the concept of segmented transportation, where in each leg of cargo transportation began to be carried out by different modes, under a series of separate set of contracts, each of which was being independently entered for each segment of transportation, from the place of its dispatch to that of its final destination.

However multimodal transport on account of its ability :to minimize loss of time at Transshipment points, coupled with its encouraging faster transit of goods, reducing documentation formalities and its success in saving costs, scored over the existing modes of cargo transportation, and became the primary choice of majority of cargo consignors from around the world.

The Success of the multimodal system lies in its initiative to harness upon the positive aspects of each mode of transportation.In essence the multi modal system consists of beneficial characteristics of each mode of transportation viz: it makes use of rail transport for utilizing its feature of ensuring transportation of a high volume of goods at a comparatively lower per unit variable cost. It also envisages very low per unit cost by transporting cargo by sea. Apart from encouraging door to door delivery of merchandise, Inclusion of road transport in the multi-modal system has even solved the pressing problem of connectivity of hinterland

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based indigenous industries with sea ports. This has in fact spiraled abundant export of local indigenous products in international markets.1

On account of its advantages over the Segmented and Uni-Modal systems of Transportation, the Multi-Modal system of transportation has become so popular that it has become a standard practice of trade between developed countries and has been gaining steady popularity in developing countries as well.

History of Multimodal Transportation:

Concept of multimodal transportation is not new, multimodal transportation was born with the railways in 1830, in the beginning horse drawn carriages were detached from their wheels and were loaded on flat wagons or were attached to bogies so as to save travelers from the trouble of changing from carts to wagons, this system however soon disappeared because of fierce opposition from a few cities.

As far as cargo transport is concerned, container transport on railways had started even before the First World War; In France the cargo was being moved in strong re-useable boxes carrying goods mainly removable from door to door.

The Real multi modal revolution was however introduced by an American Trucker Malcolm Maclean, who wanted to overcome the legislative hurdles, being posed to his trucking businesses, wherein several legislative regulations and license formalities were being required to be abided, by his trucks carrying cargo, across 50 states of The United States. So as to overcome this ambiguity Malcolm Maclean devised a chassis on which a container could be bolted and in turn started the first ever multi modal transport chain from New Jersey to Texas, there by revolutionizing the era of multi-modal transportation. His containers could be stacked on top of each other and could nest safely in bad weather.

This container revolution coupled with advances in transport technology has introduced several structural changes in international transportation of goods.

With the advent of containerization, multimodal transportation has become standard practice of international trade, & general overseas cargo of India too has started moving in containers. In light of the popularity of the container revolution, Government of India on its part; has taken several measures to facilitate smooth flow of international trade & promote exports.

So as to give shape to these aspirations, Government of India recommended a law on multi modal transportation of goods in India, which regulates the law governing the rights, liabilities and responsibilities of multi modal transport operators for loss and damage to consigned goods and commodities..

1 www.ficci.com/icanet/rules/commercial-lawupdate/acts2.htm

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How Is Multi-Modal Transport Contract Different From Other Contracts:

Unlike other contracts MTO2 acts as the principal and not the agent of the shipper, in containerized transport it is often difficult to determine the point at which the cargo was damaged , while in case of multi modal transport cargo owner will have no difficulty because he is bound by just one contract, and can sue under that very contract, while in case of other transport contracts, cargo owner will have to determine the stage at which the goods were damaged, this is particularly important for suing the responsible carrier, in instances where he is not able to determine the stage of journey at which goods were damaged, then he might be forced to claim against all carriers involved and this shall lead to additional expenses.

Purpose and Objective behind Enactment of Multi Modal Transportation Law

Purpose of Enactment of Multi Modal Law:

In view of various measures for liberalizing control and simplifying procedure for facilitating smooth flow of international trade and export promotion, there arose an immediate need to regulate the multi modal transportation of goods by law. Need for the enactment of this legislation in India was all the more inevitable, considering the fact that interruption in continuous movement of goods, from their place of origin to that of their destination needed attention for serving the larger commercial interests ,which are considerations quite often relevant to all developing countries such as India..

Thus following considerations were relevant, while enacting a law for governing multi-modal transportation of goods.

A Multi-Modal Law was needed for reducing costs and delays& for improving upon the quality of transportation services.

For determining liabilities & responsibilities of multi-modal transport operator for loss or damage to goods.

To reduce and eliminate interruption in continuous movement of goods from their place of origin to that of ultimate destination.

Multi-Modal law was also necessary to enhance trade and commerce.

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Reasons for Enactment of Multi-Modal Law In India :( Multi-Modal Transport Act, 1993)

International Transportation of general cargo has undergone structural changes, due to advancement of technology, especially with the advent of container revolution & containers have popularized the use of more than one mode of transport and now carriers are being globally used in International trade.

Multi- Modal transport has become a standard practice in trade between developed countries and is now gradually spreading to developing countries.

Multi-Modal system benefits both the consignor as well as the consignee.

India’s overseas general cargo trade has also started moving in containers, now containerized cargo is moving from hinterland (inland container depots set up in countries, connect hinterland to the ports, to the ports ,& there by facilitate containerized trade, now containerized handling facilities are being developed at all major ports & railway flat wagon inland container depots are also being adequately developed.

Features of Multi-Modal System:

In International trade goods mainly pass through the hands of more than one carrier and through more than one mode of transportation. Under conventional system of segmented transportation, consignee enters into separate contracts with each other, and the liability of each carrier is limited to the carriage performed by him.

An interesting feature of multi-modal system is that here only the consignor or his agents have to attend to all arrangements required for trans-shipment of goods from one mode to another, so much so that this even includes warehousing of such goods.

Law of Multi-Modal Transportation and Its Relevance to India

Multi-modal transportation has become a standard practice in International trade, and general cargo of India too has started moving in containers. However concept of Multi-Modal law is quite new to India .Liberalization of the Indian economy has led a host of consumer goods industries being set up through the length and breath of the country and for these industries to be serviced effectively, multi-modal transportation has to be accorded high priority as a vital infrastructural input, consequently leading companies in multi–modal transport sector have begun investing time and resources in establishing quality systems complying with ISO3-9000, series of standardization of services in India.4

3 International Standards Organization4 www.hinduonnet.com/businessline/2000/07/31/stories/093171

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The Government of India took various measures to: liberalize controls, simplify procedures, facilitate smooth flow of international trade and promote exports, so as to realize these objectives it became pertinent to immediately regulate multimodal transportation of goods by law.

Multi- Modal Transport Document and Its Implementation in India:

In India the business environment is moving faster than ever before, increase in competition means that both quality as well as profitability must be preserved. Trade in India desperately requires an efficient and simpler door-door liability system.

In India there was no uniformity in multi-modal transport of goods and government felt that absence of uniformity leads to ambiguity and imbalance of interests between operators and cargo owners, thus multi-modal transportation of goods provides for, regulation of multi-modal transportation of goods, from any place in India to any place outside India, involving two or more modes of transport on the basis of a single multi-modal transport contract.

Multi-Modal Transportation of Goods Act came in force in India in 1993 and provides for the registration of a person as a multi-modal transport operator. In India a multi-modal transportation can only be carried out by a person registered as a multi-modal transport operator, under the multi-modal transportation of goods act.

The multi-modal transportation of goods was in fact introduced to facilitate exports by giving exporters a sense of security in transporting their goods.

Multi-modal transportation reduces logistics costs of exporter and makes products more competitive in the international market.

It was in fact in view of, the aforesaid needs that, Government of India codified and enacted the multi-modal law which is based on UNCTAD5 and ICC6 rules.

5 United Nations Council for Trade and Development6 International Council for Commerce

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Certain Draw- Backs & Constraints Pertinent In Indian Multi-Modal Transportation Laws:

Air freight operators are excluded from the applicability of this act.

Multi-modal transport operator’s license needs to be renewed on an annual basis.

Indian Multi-Modal Law provides higher liabilities for multi-modal transport operators

In addition the basic multi-modal motto, don’t stop the box appears to be a mirage in the Indian context.

Even though containerization and multi-modal transportation are necessary to make Indian merchandize competitive, yet inability to develop necessary infrastructure due to lack of finance and inadequate legal and institutional environment, have often proved to be the stumbling blocks, hindering the development of a sound system of multi-modal transportation.

Detailed Over-View Of Key Provisions Of Indian Law For Multi–Modal Transportation Of Goods .

In India Multi-Modal Transportation of Goods is regulated by, Multi-modal transportation of Goods act of 1993, which stands amended by, the Multi-modal transportation of goods act of, 2000.The Indian law on Multi-Modal Transportation has been quite liberal in borrowing some of its provisions from the Carriers act and United Nations Convention on International Multi Modal transport of goods, this particular convention was held in Geneva in 1980.

Registration of Multi-Modal Transportation

Each and every person willing to start the business of Multi-Modal Transport operation, has to get himself registered as a multi-modal transport operator, such a requirement is mandatory, thus in absence of compliance with the requirements of registration, a non-registered multi-modal transport operator would not be permitted to carry on the business of multi-modal transportation .

Section-3, 4, 5&6 of Multi-Modal transportation of goods act deal with the law regulating various aspects such as registration, cancellation and appeal against such registration or cancellation of registration of multi-modal transport operator.

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Section-3, Provides, that no person shall carry on the business of multi-modal transportation, unless he is registered as a certified multi-modal transport operator under the provisions of this act.

The multi-modal transportation of goods act prohibits any person from carrying on or even commencing the business of a multi-modal transport operator, without being registered as a multi-modal transport operator under this act.

How ever the act does provide a breather, to those carrying on the business of a multi-modal transportation prior to the commencement of this act, and such persons are permitted to carry on the business of multi-modal transportation, for an additional period of three months, from the date of enactment of this law, even without their being registered as multi-modal transport operators.But they too need to get themselves registered within the stipulated period, & in case of any non-compliance on their behalf they stand the risk of being prohibited from carrying on the business of multi-modal transportation of goods.

Section-47: Lays down the legal provisions with regards to the formalities required for the registration of multi-modal transportation, the law on the subject provides that:Any person may apply for registration to the competent authority to carry on or commence business as a multi-modal transport operator.

An application for seeking registration as a multi-modal transport operator shall be in a form prescribed by this act; In addition an application for multi-modal transportation of goods shall be accompanied by a fee of Rs 10,000.

Once an application for multi-modal transportation has been received, the competent authority has to ensure that the applicant fulfills certain criteria.

The criteria to be fulfilled for being registered as a multi-modal transport operator are as follows:

The applicant should be a company, firm or proprietary concern.

The applicant should be engaged either in the business of shipping or freight forwarding in India or abroad.

In addition such an applicant must have a minimum annual turn over of Rs 50 Lakh, during the immediately preceding financial year or must have an annual average turn over of Rs 50 Lakh, during the preceding three financial years. How ever the same needs to be certified by a chartered accountant.

Where the applicant is a company, firm or proprietary concern other than one engaged in the business of shipping or fright forwarding in India or abroad, and

7 of The Multi-Modal Transportation of Goods Act of 1993,

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that the subscribed share capital or aggregate balance in its capital account or that in the capital account of its partners or proprietor is not less than Rs 50 Lakhs and that the applicant has offices, agents or representatives in not less than two other countries.

The competent authority on being satisfied about the existence of the above mentioned credentials shall, register the applicant as a multi-modal transport operator and will grant him a certificate to carry on or commence the business of multi-modal transportation.

Refusal of Registration

Competent authority may for reasons to be recorded in writing, refuse to grant registration, where it is satisfied that the applicant does not fulfill the aforesaid conditions.

Position Of Non-Residents And Persons Not Engaged In The Business Of Shipping:

An applicant who is not a resident of India and one, who is not engaged in the business of shipping, shall not be granted registration, unless he has established a place of business in India.

In addition in respect of such an applicant as has been mentioned above, the turnover for determining eligibility for registration ,shall be certified by any authority competent to certify the accounts of a company in that country.

Duration of the Validity of the Certificate of Registration:

A certificate of registration shall be valid for a period of three years; such a certificate is subject to renewal from time to time for a further period of 3 years at a time.

An application for the renewal shall be accompanied with such amount of fees as shall be notified by the central government.Ordinarily the fee for the registration of a multi-modal transport operator, shall in no case be for a fee of less than Rs 10,000 and not be one that exceeds Rs 20,000.

Thus a company ,firm or proprietary concern ,engaged either in the business of freight forwarding in India or abroad ,with a minimum annual turn over Rs 50 lakh,during the immediately preceding financial year or an average annual turn over of Rs 50 Lakh during the preceding three financial years, and having offices, agents or representatives in at least two countries ,can apply for registration to carry on or

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commence the business of multi-modal transportation in prescribed form when accompanied with a fee of Rs 10,000.

Cancellation Of Registration To Carry On Business As A Multi-Modal Transport Operator:

Section –5 of the Multi-Modal Transportation of Goods Act lays down the guidelines for cancelling the registration of erring Multi-Modal Transport Operators.The competent authority wherever satisfied that:

Any Statement in or in relation to any application for registration as a multi-modal transport operator or for the purpose of renewal of the application for the registration of a multi-modal transport agreement, is incorrect or is false in any material particulars or.

In instances where any provisions of The Multi-Modal Transport of Goods Act have been contravened by such an Multi-Modal Transport Operator or

In Instances where in the multi-modal transport operator has not entered in to any multi-modal transport contract during the preceding two years after his registration , Then in case of the fulfillment of the aforesaid criteria the competent authority shall be competent to pass an order to cancel the certificate of registration awarded to such an defaulting multi-modal transport operator .

Note:

However all things said and done in all eventualities a multimodal transport operator must be afforded all reasonable opportunity for showing cause as to why his registration should not be cancelled.Thus as evident from the above discussion, the registration entitling the commencement of the business of multi-modal transport is liable to be cancelled if any statement in relation to application for such registration is found to be false, incorrect or where any rules made under the said agreement have been contravened or where a multi-modal transport operator has not entered in to a contract during preceding two years after registration.

Provision of Preferring an Appeal under Multi-Modal Transportation of Goods Act

Section-6, of Multi-modal transportation of goods act, 1993 provides for provision of appeal against a refusal by the competent authority to (a) Grant or renew registration (U/s8 4) or (b) on cancellation of registration under section –(5).

An appeal against refusal by the competent authority to grant, renew or cancel registration lies with the Central Government. Generally an appeal preferred after the expiry of the prescribed period shall not be admitted, but where the appellant satisfies the central government that he has sufficient cause, for not preferring the appeal within the

8 Under section

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prescribed period, and then in such a situation his appeal may be preferred even after the expiry of such prescribed period.

General Rules With Regards To Appeal:

All Appeals to be made in the prescribed form and on the payment of the prescribed fee.All Appeals shall be accompanied by a copy of order, against which such an appeal has been preferred.Where the central government receives an application for appeal, it shall:

“After giving parties a reasonable opportunity of being heard, & after making such inquiry as the central government deems proper”, make such order as it deems fit.

Relevance of Multi Modal Transport Document in Multi-Modal Transportation:

Section -7 of the Multi-Modal Transportation of Goods Act deals with the issuance of a Multi-Modal Transport Document:

In instances where both consignor of goods as well as the multi-modal transport operator have entered in to a contract for multi-modal transportation, and where such multi-modal transport operator has taken charge of goods, then in such a case the Multi-modal transport operator shall,(at the option of the consignor ) issue either a negotiable or a Non –negotiable multi-modal transport document.

However the issuance of such multi-modal transport document shall be permitted only after obtaining and during the subsistence of a valid insurance cover.

Due care must be taken to ensure that, such a multi-modal transport document is signed: (i) By a Multi-Modal Transport Operator or (ii) by a person duly authorized by him.

Multi-Modal Transport Document as A Document of Title:

Section-8 of the Multi-Modal Transportation of Goods Act provides that a Multi-Modal Transport Document Shall be regarded as a document of title.

Every Consignee named in the negotiable or non–negotiable multi-modal transport document or every endorsee of such document(to whom the property in the goods mentioned in such multi-modal transport document shall pass upon by reason of such consignment or endorsement ,shall have all the rights and the liabilities of the consignor.Nothing contained in the Negotiable or the Non –Negotiable transport document shall, in any way prejudice/affect the right of the Multi-Modal Transport Operator to claim: freight from consignor or enforce any liability of consignee or endorsee by reason of his being such consignee or endorsee.

Particulars of A Multi-Modal Transport Document:

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Section -99, specifies the details of the necessary particulars, required to be specified in every multi-modal transport document. The Performa of a multi-modal transport document shall comprise of:

(a)Details of General Nature of Goods:

The details of general nature of goods shall comprise of details such as:

(i) Leading marks meant for identification of goods.(ii)Character of Goods (including dangerous goods)(iii)Number of Packages or units of goods.(iv)Gross weight and quantity of goods as declared by consignor.

(b) Information on apparent condition of the goods.

(c)Details of the Name and Principal place of business of the Multi-Modal Transport operator.

(d) Name of Consignor.

(e) Name of Consignee (shall be mentioned in instances where it has been specified by the consignor).

(f) Place and date of taking charge of goods by the multi-modal transporter.

(g) Place of Delivery of Goods.

(h) Details of the date or period of delivery of goods by MTO10, as have been expressly agreed upon between the consignor and the multi-modal transport operator.

(I) Details, as to whether it is a negotiable or a Non –negotiable document.

(j) The place and date of issue of document.

Note: Freight payable by the consignor and the consignee (shall be mentioned) only if expressly agreed by the consignor and the consignee)

Note:Instances where the intended route of journey, modes of transport and places of Transshipment if known at the time of issue, must be mentioned in the multi-modalTransport document.

9 Of The Multi-Modal Transportation of Goods Act of 1993,10 Multi-Modal Transport Operator

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(k)Terms of shipment accompanied with a statement that the multi modal transport document has been issued subject to or in accordance with the Multi-modal transportation of Goods act. Note: Parties to a multi-modal transport agreement are free to insert any other particular, however any particular so inserted shall not be inconsistent with any Law for the time being in force. It must be noted that the absence of any of the particulars listed above shall not in any Way affect the legal character of such a multi-modal transport document.

Concept of Reservation in Multi-Modal Transport Document:

Section-10 of the Multi-Modal Transportation of Goods Act, deals with the concept of reservation in multi-modal transport document

The concept of reservation has relevance in instances where a multi-modal transports operator or a person acting on behalf of such an operator:

(i) Has reasonable grounds to suspect, that the particulars furnished by consignor in multi-modal transport document do not accurately represent the goods actually taken in charge

.(ii) Or in case where he has no reasonable means of checking/matching the

particulars of the goods consigned.

In the above mentioned cases the Multi-Modal Transport Operator or person acting on his behalf shall insert in the multi-modal transport document a reservation specifying the details of the inaccuracies, grounds of suspicion or the fact about the absence of reasonable means of checking the particulars of such consignment (of goods in question)

Note:

However where a multi-modal transport operator or a person acting on his behalf fails to insert a reservation in such multi-modal transport document, specifying the apparent

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condition of goods ,then he shall be deemed to have accepted the goods in an (apparent good condition).

Thus in instances where a multi-modal transport operator or those acting on his behalf know or have reasonable grounds to suspect, that the particulars furnished by the consignor (in the multi-modal transport document) do not represent the exact accurate description of the goods being transported or being taken under his charge for such transportation and where he has no reasonable means of checking such particulars. Then in this situation an insertion highlighting such inaccuracies in the multi-modal transport document shall be duly specified.

Admissibility of Multi-Modal Transport Document as Evidence:

Section -11 of the multi-modal transportation of goods act 1993, deals with the evidentiary effect of a multi-modal transport document.

In all cases except those in which a reservation has been made in multi-modal transport document:

The Multi-Modal Transport Document shall be prima-facie evidence of the fact that the multi-modal transport operator has taken charge of goods as described in the document.

No proof furnished by the multi-modal transport operator to the contrary (with regards to goods actually taken in charge) shall be admissible if multimodal transport document is issued in a negotiable form and has been transmitted or transferred by a consignee to a third party who has acted in good faith relying upon the description of the goods in the document.

Issuance of an International Multi-Modal Transport Document Under, the UN Convention on Multi-Modal Transportation of Goods:

When goods are taken in charge by a MTO11, under an International Multi-Modal Transport assignment, then he shall in such a situation issue a multi-modal transport document, which at the option of the consignor shall either be negotiable or non –negotiable.

Such a document shall be signed by the MTO or by a person authorized by him, such a signature shall be in the handwriting, may be stamped or be in any electronic means, provided it is not inconsistent with the law of the country where such multi-modal transport document has been issued.

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The Convention12 also provides for the issue of a non-negotiable multi-modal transport document, in case of issue of such a document the multi-modal transport operator shall after taking the goods in charge deliver the consignor a document containing all particulars recorded so recorded and the same shall be deemed to be a multi-modal transport document for the purpose of the aforesaid act.

Difference between a Negotiable and a Non –Negotiable Transport Document:

In case of a Negotiable Multi-modal transport document goods can be demanded from the MTO only against the surrender of duly endorsed multi-modal transport document, while a Non-Negotiable Multi-Modal transport document shall have to indicate the name of consignee.

An MTO shall only be discharged from his liability to deliver goods where he makes delivery to the consignee named in a non-negotiable multi-modal transport document or to any other person as is duly instructed in writing.

Performa of Contents of an International Multi-modal transport document shall be similar to a Multi-modal transport document, in addition parties to an international multi-modal transport document shall be free to agree to insert any particulars that they deem fit, this however is subject to the condition that they are not inconsistent with the law of the country, where such multi-modal transport document is issued.

Though the multi-modal transport document does not preclude issue of any other documents relevant for facilitating transportation or any other services in accordance with law applicable to international conventions, yet the same shall only be permitted only if it does not affect the legal character of the multi-modal transport document.

Duties and Responsibilities of a Multi-Modal Consignor:

Section- 12 of the Multi-Modal Transportation of goods act enumerates the responsibilities of a consignor.

The consignor shall be deemed to have guaranteed the multi-modal transport operator of both adequacy as well as accuracy of the goods, which he intends to transport through such a multi-modal transport operator.At a time when the multi-modal transport operator takes charge of goods the particulars such as:

General nature of goods, the leading marks necessary for identification of goods, character of goods (including dangerous nature of goods), number of packages or units and the gross weight and quantity of goods as declared by the consignor.

12 UN Convention on Multi-Modal Transportation of Goods:

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The apparent condition of goods, as furnished by the consignor for insertion in multi-modal transport document, Need to be mentioned by the consignor.

Note

In event of any loss resulting from any adequacy or inaccuracy of any of the above stated particulars ,such as general nature, gross weight or quality of goods the consignor shall be liable to indemnify the multi-modal transport operator .

How ever such a right of being indemnified for any inadequacy or inaccuracy with regard to particulars of goods shall in no way limit his liability, under multi-modal transport contract to any person other than the consignor.

Responsibilities and Liabilities of a Multi-Modal Transport Operator:

Section 13, of the multi-modal transportation of goods act deals with the basis of liability of a multi-modal transport operator.

A multi-modal transport operator shall be liable for any loss resulting from any:

Damage to the consignment. Any delay in delivery of consignment. Any consequential loss or damage arising from such delay.

However a multi-modal transporter shall be liable only in instances where such loss, damage or delay in delivery of consignment took place at a time when the consignment was in the charge of such multi-modal transport operator.

Where a multi-modal transport operator is successful in proving that no fault or neglect on his or his servant or agents behalf had caused or contributed to such loss, then in such a situation a multi-modal transport operator cannot be made liable for the loss or damage to such a consignment.

Moreover a multi-modal transport operator shall not be liable for any loss or damage which arises or is consequential to such delay of delivery, unless such consignor had made a declaration highlighting his interest in timely delivery, which has been accepted by the multi-modal transport operator.

Note:

A delay in delivery shall be deemed to occur when the consignor fails to deliver the consignment within the time agreed upon, and where there is no such agreement then within reasonable time (as would have been required by a diligent multi-modal transport operator (to deliver such a consignment having regard to circumstances of the case as to effect delivery of consignment.

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Under circumstances where the consignment has not been delivered ( within 90 consecutive days) following the date of delivery or within a reasonable time as is agreed upon or within a reasonable time (required by a diligent multi-modal transport operator , having regard to the circumstances of the case),then in such a situation the claimant ought to treat the consignment as lost .and the multi-modal transport operator shall be liable for any consequential loss or damage which follows such delay.

Limits of Liability of Multi-Modal Transport Operator:

Section 14 of the Multi-modal transportation of goods act, deals with the limits of liability of a multi-modal transport operator, when nature and value of consignment have not been declared and stage of transport where loss or damage occurred is not known.

Thus in instances where a multi-modal transport operator becomes liable for any loss or damage to any consignment, nature and value of which have not been declared by consignor, while entrusting it upon such multi-modal transport operator, or where the stage of transport at which such loss or damage occurred is not known then in such a situation :

“The liability of the multi-modal transport operator to pay compensation will in no case exceed a maximum of 2 SDR/ Kg (Special Drawing Rights per Kilogram) of the gross weight of the consignment lost or damaged. Or 666.67, Special Drawing Rights Per Package or unit lost or damaged which ever is higher.”

Note:

However where a container, pallet, or similar article is stuffed with more than one package or units, then units enumerated in the multi-modal transport document shall also be deemed to be packages and units.

Liability of Multi-Modal Transport Operator When Multi-Modal Transport Document Does Not Include Carriage Of Goods By Sea Or Inland Waterways:

In Instances where the multi-modal transport contract does not include carriage of goods by Sea or Inland water ways, then in such a scenario, liability of a multi-modal transport operator shall be limited to an amount not exceeding a maximum of 8.33 SDR (Special Drawing Rights per Kilogram of gross weight of goods lost or damaged.

Liability When Nature and Value of Consignment Have Not Been Declared or Where Stage of Transport Where Such Loss or Damage Occurred Is Not Known

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In cases where nature and value of the consignment have not been declared or where the stage of transport where such loss or damage occurred is unknown ,then the liability of the multi-modal transport operator to pay compensation, shall in no case exceed 2 SDR/Kg(Special Drawing Rights per Kilogram of gross weight of consignment) lost or damaged. Or 666.67 SDR (Special Drawing Rights per Package of unit lost or damaged, which ever is higher.

Limits Of Liability When Nature And Value Of Consignment Have Not Been Declared Or Where Stage Of Transport Where Such Loss Or Damage Occurred Is Known:

Section 15, deals with instances where a multi-modal transport operator becomes liable for any loss or damage to any consignment, nature and value whereof have not been declared by the consignor before such consignment has been taken in charge by multi-modal transport operator and where stage of transport at which such loss or damage occurred is known ,then in such a situation Section -15 of the act comes in to picture, and then the limit of liability of such a multi-modal transport operator for such loss or damage shall be determined in accordance with provisions of relevant law applicable in relation to mode of transport, during course of which such loss or damage occurred.

Any stipulation in the multi-modal transport contract to the contrary shall be both void and unenforceable.

(Where there is any loss, damage or delay in delivery, due to a cause for which the carrier is exempted from liability in accordance with any applicable law ,then in such a situation the multi-modal transport operator /carrier shall be exempted from liability in accordance with that law)

Limitation of Liability under International Multi-Modal Transport Agreement:

If the International Multi-modal transport does not according to contract include, carriage of goods by Sea, or Inland Waterways, then in that case liability of MTO shall be limited to an amount not exceeding 8.33 units of account /SDR(Special Drawing Rights),per KG of gross weight of goods lost or damaged.

Liability In Case Of Localized Damage In Case Of International Multi-Modal Transport Agreement:

When loss or damage to the goods occurred during one particular stage of multi-modal transportation, in respect of which an applicable international convention or mandatory national law provides a higher limit of liability than the average limit, then in that case the limit of multi-modal transport operator’s liability for loss or damage shall be determined by reference to the provisions of such convention or mandatory national law.

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Liability of Multi-Modal Transport Operator for Delay of Delivery of Goods under Certain Circumstances

Section 16, of the multi modal transportation of goods act deals with the liability of multi-modal transport operator in case of, delay in delivery of goods under certain circumstances.

Instances where delay in delivery of consignment occurs, due to:

Consignment not having been delivered with in the time expressly agreed upon or in absence of such agreement ,within such reasonable time as is required by a diligent multi-modal transport operator having regard to the circumstances of the case, to effect the delivery of the consignment or any consequential loss or damage that arises from such delay, then in such a situation liability of such a multi-modal transport operator shall be limited to the freight payable for the consignment so delayed.

Note:

Where there is delay in delivery the liability of the multi-modal transport operator shall be limited to freight payable for the consignment so delayed.

Provision for Assessment of Compensation for Loss or Damage to Consignment, Delivered Under the Multi Modal Transport Agreement:

An assessment of compensation for loss or damage to consignment shall be made ,with reference to the prevailing value of such consignment ,at the place and time at which ,such consignment is delivered or should have been delivered to the consignee.

The current commodity exchange price shall be the index for determining the value of consignment for the purpose of assessment of such compensation .in instances where the current market price is not ascertainable, and then such assessment shall be with reference to the normal value of consignment of a similar kind and quantity.

Loss Of Right Of Multi-Modal Transport Operator To Limit His Liability:

Multi-Modal transport operator shall not be entitled to the benefit of limitation of his liability under any of the provisions of the multi-modal transportation of goods act ,if it is proved that such loss, damage or delay in delivery of such consignment had in fact resulted from:(i) an act or omission on part of multi-modal transport operator ,with an underlying intention to cause such loss, damage or delay or (ii) or with recklessness in utter disregard of his knowledge about the fact that such loss, damage or delay shall in all probably ensue .

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Liability of Multi-Modal Transport Operator for Total Loss of Goods:

The Multi-Modal Transport Operator shall in no case be liable for an amount greater than the liability for total loss of goods, for which a person shall be entitled to make claims under any of the provisions of the Multi-Modal Transport Act.

Rights and Responsibilities of Multi-Modal Transport Operator: Right of Multi-Modal Transporter To Have Lien On Goods and Documents:

A multi-modal transport operator, who has not been paid the amount of consideration stipulated in his multi-modal transport contract, would then be entitled to have a lien over the documents as well as the consignment in his possession.

Responsibilities of Multi-Modal Transport Operator for Goods, Under His Charge: Responsibility of a multi-modal transport operator shall continue to exist for a period of time, commencing from the moment he has taken the goods in his charge, and shall cease only after delivery of such goods has been duly completed.

Thus in other words the responsibility of the multi-modal transport operator (under multi-modal transport of goods act starts & begins from the time when the goods are put under his charge and cease only after they have been duly delivered to the designated consignee.

Provision for Notice of Loss or Damage to Goods:

It is in fact section -20 of the multi-modal transportation of goods act which enumerates the provision of issuance of notice in case of loss or damage to goods.

Generally the delivery of consignment to the consignee by multi-modal transport operator shall be treated as a prima –facie evidence of delivery of goods of a description as have been described in a multi-modal transport document. On any loss or damage being noticed in the consignment delivered by a multi-modal transport operator , it shall be necessary for such a consignee(receiver of goods) to give a written notice of the general nature of loss or damage to the goods.

However such notice must be given in written & that too at the very instance of handing over of such goods to the consigneePeriod Of Limitation For Attracting The Provisions Of Multi-Modal Transportation Of Goods Act:

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No provision of the multi-modal transportation act shall make a multi-modal transport operator liable under the provisions of this act, unless the aggrieved consignee initiates an action with in, 9 months of:

The date of delivery of goods, or The date when such goods should have been delivered. Or from such date on and from which the party entitled to receive delivery of

goods has the right to treat the goods as lost (where the consignment has not been delivered with in 90 consecutive days, following the date of delivery expressly agreed upon or with in such, reasonable time as is required by a diligent multi-modal transport operator, having regard to the circumstances of the case, to effect the delivery of the consignment.

Period Of Limitation For Attracting The Provisions Of International Multi-Modal Transport, Under UN Convention:

Any legal action relating to international multi-modal transport, under this convention shall be time barred, if judicial and arbitral proceedings have not been instituted within a period of 2 years.

However in instances where the nature and main particulars of claim have not been given, then such aforesaid proceedings shall lie with in 6 months after the day when the goods were to be delivered or should have been delivered and any action after this period shall be time-barred.

Provision for Determination of Jurisdiction for Initiation of Action against the Multi-Modal Transport Operator:

Any of the parties to the Multi-modal transport contract are entitled to institute an action in a competent court, having requisite jurisdiction to try such cases.

Thus jurisdiction for initiation of action against a multi-modal transport operator shall consist of:

Principal place of business or in absence of such a place the place of habitual residence of such defendant.

Place of entering into multi-modal transport contract, provided it is also the place having the business, branch or agency of the defendant.

The place of taking charge of goods for delivering them for multi-modal transportation.

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Any other place as may be specified in multi-modal transport contract and such as is evidenced by multi-modal transport document.

Provisions with regards to jurisdiction are mandatory and need to be duly followed by courts.

Jurisdiction in Judicial Proceedings Related To International Multi-Modal Transportation.

In Judicial proceedings relating to International Multi-Modal Transport under the convention, plaintiff at his option may institute a suit in a court which according to the law of the state, where the court is situated is competent and within jurisdiction of which:

Principal Place of Business or Habitual Residence of defendant exists.

Place of entering into multi-modal transport contract, provided it is also the place having that business, branch or agency of the defendant. Through which contract was made or

At the place of taking the charge of goods for international multi-modal transport or in the place of delivery of such goods.

Apart from the places enumerated above, no judicial proceedings can be instituted at any other place.

Note:

An agreement made by parties which designates the place where plaintiff may institute action (where made after the claim has been arisen) shall be effective.

Provision for Referring Multi-Modal Transport Disputes To Arbitration

Section-2513, enumerates provision for Arbitration in case involving multi-modal transport disputes:

Parties entering in to a multi-modal transport contract are free to agree to refer all multi-modal transportation related disputes to arbitration; these proceedings may be instituted at such place & in accordance with such procedure as may have been specified by such multi-modal transport document.

Provision of Arbitration In Case of International Multi-Modal Transportation.

13 Multi-modal Transportation of Goods Act,1993

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Parties to an International multi-modal transport agreement, may by an agreement evidenced in writing provide that in case of any dispute that may arise in relation to international multi-modal transportation, under the UN Multi-modal Convention, then such dispute shall be referred to Arbitration

Venue for International Arbitration

International Arbitration shall, at the option of the claimant be held at any of the following places.

In a State with in whose territory claimant is situated.

Habitual Residence or Principal Place of business of the defendant.

Place where multi-modal transport contract was made, provided the defendant has at such a place a business or agency through which such contract was made.

Place of taking charge or delivery of goods, under multi-modal transport agreement.

Any other place designated in the arbitration clause or in an arbitration agreement between the parties.

Note

In case of any dispute under the United Nations Convention on Multi-Modal Transportation, arbitrator or the arbitral tribunal shall apply the provisions of this convention.It is mandatory for all multi-modal transport documents to mention a statement with regards to the fact that such multi-modal transport agreement is subject to provisions of this convention.

Brief Overview of the United Nations Convention on International Multi-Modal Transportation of Goods

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The United Nations Convention on Multi-modal transport of goods14, has been quite instrumental in encouraging the development of the Indian multi-modal transportation laws, it has in fact been a great source of inspiration and to say the least is the very foundation on which the multi modal law of several countries including ours are based.The importance of the aforesaid convention can be gauged from the fact that there has been a growing consensus on International Multi-modal Law being considered as the very means of facilitating the orderly expansion of world trade.

Main Objectives of the UN Convention on International Multi-Modal Transportation of Goods.

The Primary objectives of the aforesaid convention were to encourage the:

Orderly development of international multi-modal transportation in interest of all countries while side by side considering the special problems being faced by the transit countries.

Determining of the rules for carriage of goods by/under international multi-modal transport contracts, including equitable provisions concerning liabilities of MTO’s.

Laying down of emphasis upon the need to have regard to the special needs, interests and problems of developing countries, such as those relating to introduction of new technology, cost efficiency & maximum use of local labor and insurance in their multi-modal systems.

Assurance of an adequate emphasis upon the need for creating a balance of interests between suppliers and users of such multi-modal transportation services.

Emphasis upon the need to streamline custom procedures, while giving due regard to problems of transit countries.

The UN Multi-modal Convention Agreed To the Following Basic Principles:

Fair balance of interest, between developed and developing countries should be established in International Multi-Modal Transport.

There should be consultation with regards to terms and conditions of service both before and after the introduction of any new technology in multi-modal transportation of goods between multi-modal transport operator, shipper, shipper’s organization and appropriate national authorities.

14 held in Geneva in 1980

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The Liability of the multi-modal transport operator under this convention shall be based upon the principal of presumed fault or neglect.

Scope of Application of the UN Convention on Multi-Modal Transportation:

Provisions of the convention shall apply to all contracts of multi-modal transport between persons in two states if:

(a)The place of taking charge of goods, by the multi-modal transport operator (as provided in the multi-modal transport contract) is located in the contracting state or

(b) Place of delivery of goods as mentioned in multi-modal transport contract is located in any of the contracting states.

Mandatory Application of Convention When Indispensable:

Where a multi-modal transport contract has been concluded in accordance with the convention, provisions of such convention shall be mandatorily applicable to such contract.

Regulations With Regards To Control of Multi-Modal Transport Under the UN Convention:

The UN Convention lays down that:

The Convention shall not be incompatible with application of any national law relating to regulation and control of transport operations, including the right of licensing of the multi-modal transport operators, participation in multi-modal transport and all other steps in national, economic and commercial interest.

The Multi-modal transport operator shall be bound to comply with the: (a) laws applicable in the country in which he operates (b) along with provisions of this convention.

Conclusion:

In essence the previously popular mode of uni-modal transportation has been largely replaced by the Multimodal Transport system which has had its genesis in the combining and utilizing of the outstanding features involving several key uni-modal transportation modules.

What had largely started as an aftermath of the Malcolm Maclean induced container revolution has now come to assume such vast proportions that a large chunk of domestic as well as international trading operations have readily adopted it as a safe ,quicker & reliable substitute for easy growth and expansion of their international export operations.

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The popularity and growing significance of the multimodal system of transportation in domestic as well as international arena is amply evident from the fact that even UN, on account of its growing international acceptance had to duly enact a convention for regulating and harmonizing trade relations between trans-border consignors and multi-modal transport operators.

Its ability to combine the four S’s representing: Speed, Safety and Superior quality of service combined with Substantially low costs of transportation have in fact given a boost to multimodal transport which has grown to become the first transport media preference of developed nations and has quite steadily garnered due acceptance in the Third World, and is now in vogue in developing nations.

The multi-modal act of 1993,by catering for: adequate provisions of registration ,criteria for being recognized as an multi-modal transport operator, and by enumerating consequences of non-registration and specifying the rights and duties of Multi-modal transport operator, coupled with its relentless efforts to clear anomalies regarding jurisdiction for settlement of disputes along with its unending efforts for encouraging peaceful and amicable settlement of disputes by facilitating ,arbitration and other adjudicatory rules and regulations, has on its part been quite successful in putting to rest all confusions .and anomalies, if any ,as may in due course arise from the interpretation of the aforesaid act .The success of the law can be gauged by analyzing the growing harmonization of international trade relations which can be sufficiently gauged by analyzing the changing dynamics of international shipping and containerized transport which in their wider sense have assumed the status of being the very foundation of the entire multi-model transport regime. Created by Aniket Datta on 4/8/2023

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