Transshipment of Cargo as a Transport Obligation in Private Maritime Law

Abstract: The relations on transshipment (reloading) of goods remain poorly studied, questions arise about the possibility of separating transshipment (reloading) into the class of independent, but related to carriage, transport obligations. Transshipment (reloading) cannot be considered outside the form and content of civil law regulation and be identified only with a technical operation in transport. The legal regulation of transshipment (reloading) in Russian and foreign legislation is not uniform, the legislator is faced with the difficulty of harmonizing the interests of all persons in the law, whose rights may be affected by its implementation. The Russian legislation initiated an approach requiring discussion to the regulation of offshore transshipments with the inclusion of special articles in the Merchant Shipping Code of the Russian Federation (hereinafter – MSC RF), although no fewer interesting questions about determining the nature of obligations for transshipment (reloading) of goods in private maritime law remain on the agenda.

Transshipment (reloading) of cargo in the meaning of a legal fact and legal relationship is not absorbed by cargo transportation and is objectively characterized by distinctive features of an independent civil law obligation (parties, subject and purpose, features of the exercise of rights and performance of civil obligations, grounds and allocation of civil liability).

The quality and safety of transshipment (reloading) ensure the integrity and safety of the cargo, and ultimately the performance of the contract of carriage (chartering); but its implementation entails additional risks associated with the safety of the cargo (natural attrition, loss or damage). It should be remembered that any manipulations with the cargo after loading on board the carrier’s vessel create an additional risk of loss of its volume and quality, and the corresponding burden may be distributed differently depending on the specific circumstances, but still more concentrated on the carrier. From this alone it can be seen that transshipment (reloading) is a risky activity, and the process of off-loading / loading / transporting cargo as such creates the potential for its damage, sometimes greater than the transportation itself. As a general rule, when transporting cargo, the carrier bears the risk of loss or damage to the cargo due to its own imprudent behavior during transportation, according to the standards of a “serviceable carrier”¹; and when transshipment (reloading) of cargo, the risks and grounds of civil liability are much broader: improper stowage, loading, fastening, packing and packaging of cargo can lead to damage to both the cargo itself and to the means of transportation.

Transshipment (reloading) is often carried out during cargo transportation but involves the implementation of special additional measures: additional navigation time, stevedoring costs, attraction of services of transport companies, distribution of risks and responsibilities, etc.², requiring registration and special transport documents. It would be rash not to say that transshipment (reloading) obligations may include elements of storage and chartering if the corresponding cargo is moved to the place of storage, loading/unloading. Including these features, transshipment (reloading) differs from loading / unloading cargo when the carrier fulfills its obligations for transportation. As an economic activity, transshipment (reloading) has an independent economic significance, which is a prerequisite for special legal regulation and determines its place in the system of transport obligations. Understanding the transshipment (reloading) of cargo exclusively as a purely technological process in isolation from a special civil legal form is insufficient. Technically, transshipment (reloading) can be carried out from one to another type of transport or from one to another vehicle of the same type of transport, as well as through a warehouse. The legal regulation of transshipment (reloading) may have features due to the types of transport used, the conditions of transshipment, the characteristics of the cargo.

Taken together, these features make it possible to qualify legal relations for transshipment (reloading) of cargo into an independent type of transport obligations. This approach does not prevent the consideration of legal relations for the transshipment of goods as related, derivative or auxiliary in relation to the contract of carriage.

At the same time, not all legal systems of our time have established special regulation for the transshipment (reloading) of goods in general and, taking into account certain features and types of this activity, special norms of legislation. Scientists, on the one hand, emphasize the specifics of the obligations arising, the combination of two elements in the contract – obligations to perform work and provide services; on the other hand, it is recognized that it is the severity and complexity of burden and responsibility distribution in the relations of transport companies, carrier, shipper, consignee that significantly complicated the formulation of special rules on transshipment (reloading) of cargo in transport legislation³.

In the legal literature, the specifics of transshipment (reloading) as a special obligation are analyzed in sufficient detail; and a general indication is made that transshipment of cargo does not entail the appearance of a new carrier or its replacement as a consequence. In particular, it is indicated that transshipment (reloading): can be determined by an indication or a freedom stipulation in the bill of lading (‘liberty’ clause); can follow from the provisions of multimodal transport agreements (Connection Carrier Agreements); or can be determined by the carrier’s decision. The carrier may be released from liability for damage and loss of cargo if the relevant harmful circumstances occurred after unloading the cargo from his vessel and exclude imprudence in his behavior, even if the total price of transportation was received from the shipper in full – in relation to the other transport organizations and carriers, the first carrier acts as the shipper’s agent. The decision on transshipment (reloading) may be predetermined by necessity or determined by the will of the carrier itself, independently determining effective options for using its vessels⁴. In this case, the rules for determining the carrier’s liability are different. As a general rule, the carrier is responsible for delivery of the cargo in accordance with the quality and safety requirements for its delivery to an authorized consignee; accordingly, the carrier can independently determine the need to perform intermediate transport operations. So, if transshipment of the cargo was necessary and followed from the circumstances, but was not carried out by the carrier, it is the carrier who will be responsible for the consequences of the carelessness and unreasonable nature of his own behavior and possible damages for loss, detriment to the cargo, and/or delay in delivery⁵. Initially, it was believed that the carrier’s right to transship cargo from one vessel to another occurs when completion of the voyage becomes virtually or commercially impossible, even if such impossibility has already occurred at the port of destination, despite the fact that “the carrier is not responsible for deviations in transit for whatever reason, nor for reloading goods en route to another vessel without having warned the sender”⁶. In modern conditions, this approach has been noticeably adjusted. In particular, modern English law, in cases of delayed delivery of cargo caused not by circumstances of objective necessity, but rather at the benefit of the carrier, restricts his freedom to carry out transshipment (reloading) of cargo and considers the carrier’s actions as a breach of contract (fundamental breach of contract). In the carrier’s relations with specialized transport organizations, without the participation of the shipper and the consignee⁷, transshipment (reloading) services are provided by transport companies during the operation of transport infrastructure facilities and are aimed at “continuing the cargo delivery process”, in connection with which the conclusion of nodal agreements is mandatory⁸. We will only clarify that when determining the civil-legal function of obligations for transshipment (reloading), we are no longer talking about continuation, but about ensuring transportation, which should be seen as the substantive features of nodal agreements. Clarification of these issues does not negate the urgent need to determine the legal nature of the obligations for transshipment (reloading). The opinions expressed in this regard by domestic researchers are mainly reduced to the consideration of transshipment (reloading) as a type of contract for the provision of paid services⁹, which in itself does not explain many of the substantive specifics of this obligation, despite the fact that previously transshipment (reloading) was characterized only by an indication of a separate contract without explaining its specifics¹⁰. In law enforcement practice, the essential conditions of the cargo transshipment (reloading) agreement are highlighted: the volume and timing of transshipment (reloading) (see, for example: The Decision of the Magadan Region Commercial Court of 25 July 2018 in Case No. А37-829/2018). Obligations for transshipment (reloading) require clarification of their individual civil law nature.

In the law of international treaties, legal relations on the transshipment (reloading) of goods have not found special regulation. Nevertheless, they are regulated by the Brussels Convention on the Unification of Certain Rules on Bills of Lading (Hague Rules) 1924 and its Protocols; The UN Convention on the International Carriage of Goods by Sea (Hamburg Rules) 1978. In the international and foreign practice of merchant shipping, legal relations on transshipment (reloading) of cargo are regulated on the basis of acts of coastal States within their economic zone, as well as rules developed by regional fisheries management organizations, if transshipment (reloading) is carried out in international waters. It is noteworthy that international law does not allow discrimination between or among the nationality of vessels in the provision of transport services¹¹. The rules developed by regional fisheries management organizations provide for a number of provisions regulating the procedures for transshipment (reloading). They include the procedures for monitoring vessels, issuing permits for transshipment (reloading), conducting inspections, notification and reporting, etc. Currently, the EU Council Regulation of 29 September 2008 is in force at the EU level. No. 1005/2008 on combating illegal, unregulated and unofficial fishing, according to which transshipment (reloading) is prohibited between vessels of third countries, as well as between a vessel flying an EU flag and a vessel of a third country within all waters of the European Community, and is allowed only in ports according to the lawful regulation of port activities. In countries such as Chile and Senegal, transshipment (reloading) within the exclusive economic zone is completely prohibited. In Belize, transshipment (reloading) is allowed only under conditions of extreme necessity.

It should be kept in mind that the legal regulation of transshipment (reloading) of cargo outside the seaport requires special attention, since this method is often resorted to for unseemly purposes of circumventing the law or evading control, when the consequences of carrying out these transport operations outside the port can have negative consequences not only for participants in transport obligations, but also for the natural environment. Probably, the assessment of these circumstances is caused by the prohibitions or restrictions established by national law that determine the possibilities of transshipment (reloading) outside the port only for certain types of transport and/or cargo.

In Russian private maritime law, the transshipment (reloading) contract is specifically regulated (Art. 20 of the Law ‘On Seaports in the Russian Federation and on Amendments to Certain Legislative Acts of the Russian Federation’). Unlike the Code of Inland Water Transport of the Russian Federation (Art. 112), the Merchant Shipping Code of the Russian Federation does not regulate transshipment (reloading) relations specifically, without defining the specifics of performing this transport operation outside the seaport.

Technical rules of cargo transshipment at the seaport are regulated at the sub-legislative level (Order of the Ministry of Transport of the Russian Federation No. 182G, 09.07.2014): loading, unloading, movement and accumulation of cargo; acceptance and delivery of cargo in accordance with their characteristics and categories; requirements for the operator of a sea terminal; the use of warehouses, paperwork and related transshipment (reloading) services for labelling, sorting, packing, cargo handling (weighing, unloading, filling, repacking, sorting, linking, etc.); grouping and packing of goods; fastening / loosening / separation of cargo, including the manufacture of devices for securing cargo on transport.

Legal relations on transshipment (reloading) should be settled synchronously in the system of Russian legislation, in particular, in the norms: The Code of Merchant Shipping of the Russian Federation; Code of Inland Water Transport of the Russian Federation; the Law “On Seaports in the Russian Federation”; the Law “On Internal Sea Waters, Territorial Sea and Adjacent Zone of the Russian Federation”. Determining the modes of transshipment (reloading) by the norms of civil and administrative law, one should proceed from a comprehensive assessment of its purpose and consequences not only for the parties to the contract, but also for third parties, the state of the natural environment.

In the current legislative work, at the instigation of the Ministry of Transport of the Russian Federation, an initiative has been outlined to specify the regime of transshipment (reloading) of goods outside the seaport, to clarify the powers of the operator of the transshipment area, the captain of the seaport. A proposal has been raised to fill the gap in the Russian legislation, which does not provide for the possibility of transshipment (reloading) of cargo from ship to ship, administrative liability for violation of the rules of such transshipment (reloading) outside the marine area of seaports. Separately, attention should be paid to the initiative to introduce a prohibition of transshipment (reloading) of dangerous cargo outside the port. Such proposals require discussion and a comprehensive assessment from the point of view of the optimality of the restrictions imposed and the clarity of the consequences for both participants in economic activity and public administration. It should be taken into account that transshipment (reloading) in the seaport and the high seas differ significantly, which is predetermined primarily by external conditions.

Most of these initiatives were reflected in the draft law “On Amendments to the Code of Merchant Shipping of the Russian Federation and Other Legislative Acts of the Russian Federation (regarding the regulation of Transshipment (reloading) of cargo from ship to ship outside the waters of seaports)”, developed by the Ministry of Transport of the Russian Federation in January 2021. In particular, the developers formulated a draft of a separate article of the MSC RF defining the concept of cargo transshipment from ship to ship and the content of the rules of such transshipment. The rules of in-transit transshipment define the following: information on the permitted places of cargo transshipment operations from ship to ship; requirements for hydrometeorological conditions – permissible wind strength, sea waves, swell size, visibility; list of goods that can be transshipped; requirements for the method of transshipment; requirements for emergency rescue support; the order of interaction of the seaport captain with border and customs authorities. The draft federal law stipulated the obligation of each vessel involved in the in-transit transshipment to notify the port captain of its intention no later than 48 hours before the start of operations.

In such notification, it was deemed necessary to indicate: the name of the vessel; flag; IMO number; name of the shipowner; estimated time of arrival at the transshipment point; estimated date, time and place of commencement of operations; type and planned volume of cargo; class and planned volume of dangerous cargo (in case of transshipment of dangerous goods); estimated duration of transshipment operations; confirmation of the presence on the ship of a plan for eliminating oil and petroleum products spills (in case of planned transshipment of oil or petroleum products); the seaport captain was authorized to prohibit transshipment no later than 6 hours before the start of the planned operations, if the established rules of in-transit transshipment are not fulfilled.

It seems necessary to focus on the following. First of all, any changes introduced should not negatively affect the rights and interests of participants in merchant shipping or create new administrative barriers for participants in economic activity. In particular, the idea of the possibility of switching from a notification to a permissive procedure for transshipment (reloading) of cargo is objectionable, as is the possibility of determining an exhaustive list of goods whose transshipment outside the waters of seaports will be allowed.

The interests of the safety of merchant shipping and environmental protection presuppose the definition of those goods whose transshipment is prohibited, but not a thorough enumeration of all goods whose transshipment (reloading) is permissible. Regulatory specification in the national law requires the rights, obligations, distribution of risks and responsibilities of the carrier and persons involved in transshipment (reloading) of cargo, as well as guarantees provided to the consignee and the shipper in case of damage to the cargo or violation of the terms of its transportation caused by transshipment (reloading).

It seems that the shipper and the consignee should be informed about the transshipment (reloading), since their rights and interests are directly dependent on the period of carriage and the condition of the cargo. The civil law status of the operator of the transshipment area and the principles of pricing of its services as interconnected with and in relation to the transportation fee, the requirements for obtaining the civil law and administrative status of the operator of the transshipment area should be determined. Clarity is required in determining the subjects of the obligations to pay the in-transit fee introduced by the bill, in particular, whether all vessels departing from ports or only those whose cargoes contain pollutants and involve transshipment outside the seaport are its payers. When introducing any restrictions on the transshipment of goods at sea according to the criteria of pollutants, such criteria should be clearly defined by the regulations.

It is unacceptable to assign responsibility and obligations to the captains of seaports for the administration of cargo transshipment (reloading) operations outside their seaports, since they, due to the remoteness of the cargo operation from the seaport and the changing hydrometeorological conditions that require consideration when making a decision, initially lack the necessary resources for real control over compliance with the rules of transshipment from ship to ship outside the seaport. ■

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