The Rotterdam Rules: An Update

Roberto Bergami | November 22, 2009 | Export Finance
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The Rotterdam Rules: An Update | Shipping SolutionsThis is the first of two articles dealing with The United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea, which are commonly known as the Rotterdam Rules.

This article provides the background to the process of converting the Rotterdam Rules into an international convention. My next article will deal with aspects of the Rotterdam Rules in the context of their affect on 1) delivery terms (Incoterms 2010) within international sales/purchase contracts, and 2) documentary requirements of letters of credit where they are used as the method of payment in international trade transactions.

The Rotterdam Rules were adopted on December 11, 2008, by the General Assembly of the United Nations. On September 23, 2009, the Rotterdam Rules were opened for signature, thereby paving the way for them to become an international convention.

It should be noted that within international conventions, the word "state" is used instead of the word "country" to identify a sovereign nation. This may create confusion in countries such as Australia, Canada and the United States that are federations of states making up the nation as a whole.

Despite much talking up of this convention by parties supporting its introduction, such as the World Shipping Council (carriers sailing to/from the U.S.), the National Industrial Transportation League (U.S. shippers), and the International Chamber of Shipping, the minimum quota of 20 signatory states was not reached on the official opening day at Rotterdam.

In accordance with Article 88(1) of the Rotterdam Rules, states may sign after September 23, 2009, at the headquarters of the United Nations in New York. As of November 11, 2009, there are sufficient signatory states to enable the Rotterdam Rules to progress to international convention status.

Article 88(2) of the Rotterdam Rules states: “This convention is subject to ratification, acceptance or approval by the signatory States.” Just what does this mean?

In plain and simple language it means that each signatory state to the Rotterdam Rules must follow subsequent processes in their own country to incorporate the Rotterdam Rules into appropriate and relevant domestic legislation. As much as anything else, this is a political process.

For example, in the United States approval by Congress will be required before the Rotterdam Rules will be ratified. The speed by which approval happens cannot be guaranteed, particularly as some of the Articles within the Rotterdam Rules have optional opt-in applications, so it is not difficult to imagine that arguments for and against their inclusion, or exclusion, may take up debate time in congressional (or parliamentary) chambers and delay decision making processes.

The Articles that are subject to opt-in are 1) Chapter 14 – Jurisdiction – Articles 66 to 74, and 2) Chapter 15 – Arbitration – Articles 75 to 78. Jurisdiction, in particular, has important implications for where legal proceedings may be instituted against the carrier. Further discussion about legal and political processes is, however, outside the scope of this article.

In accordance with Article 94, the Rotterdam Rules will enter “into force on the first day of the month following the expiration of one year after the date of deposit of the twentieth instrument of ratification, acceptance, approval or accession.”

It is important to note that there is no approval deadline, so it is possible that, despite some euphoria about the Rotterdam Rules, their effective date may yet be some years away.

So why should we be concerned about these rules now? The concern arises from the potential application of some of the articles, as these may introduce uncertainty into business processes. I will discuss these concerns in my next article.

The table below shows the countries that have signed the Rotterdam Rules. The ratification processes have not yet been completed by any signatory state. Below the table are the definitions of the terms used in the above article. (Source: http:/, viewed 14 November 2009).

Table 1: Signatory States to the Rotterdam Rules as of November 11, 2009



Participating State

Signature Date 




23 Sep 2009




23 Sep 2009




23 Sep 2009




23 Sep 2009




23 Sep 2009




23 Sep 2009




23 Sep 2009




23 Sep 2009




23 Sep 2009




23 Sep 2009




23 Sep 2009




23 Sep 2009




23 Sep 2009




23 Sep 2009




23 Sep 2009




23 Sep 2009




25 Sep 2009




29 Sep 2009




29 Sep 2009




22 Oct 2009




26 Oct 2009



Adoption is the formal act by which the form and content of a proposed treaty text are established. As a general rule, the adoption of the text of a treaty takes place through the expression of the consent of the states participating in the treaty-making process. Treaties that are negotiated within an international organization will usually be adopted by a resolution of a representative organ of the organization whose membership more or less corresponds to the potential participation in the treaty in question. A treaty can also be adopted by an international conference which has specifically been convened for setting up the treaty, by a vote of two thirds of the states present and voting, unless, by the same majority, they have decided to apply a different rule.

[Art.9, Vienna Convention of the Law of Treaties 1969]

Acceptance and Approval

The instruments of acceptance or approval of a treaty have the same legal effect as ratification and consequently express the consent of a state to be bound by a treaty. In the practice of certain states acceptance and approval have been used instead of ratification when, at a national level, constitutional law does not require the treaty to be ratified by the head of state.

[Arts.2 (1) (b) and 14 (2), Vienna Convention on the Law of Treaties 1969]


Accessio is the act whereby a state accepts the offer or the opportunity to become a party to a treaty already negotiated and signed by other states. It has the same legal effect as ratification. Accession usually occurs after the treaty has entered into force. The Secretary-General of the United Nations, in his function as depositary, has also accepted accessions to some conventions before their entry into force. The conditions under which accession may occur and the procedure involved depend on the provisions of the treaty. A treaty might provide for the accession of all other states or for a limited and defined number of states. In the absence of such a provision, accession can only occur where the negotiating states were agreed or subsequently agree on it in the case of the state in question.

[Arts.2 (1) (b) and 15, Vienna Convention on the Law of Treaties 1969]


Ratification defines the international act whereby a state indicates its consent to be bound to a treaty if the parties intended to show their consent by such an act. In the case of bilateral treaties, ratification is usually accomplished by exchanging the requisite instruments, while in the case of multilateral treaties the usual procedure is for the depositary to collect the ratifications of all states, keeping all parties informed of the situation. The institution of ratification grants states the necessary time-frame to seek the required approval for the treaty on the domestic level and to enact the necessary legislation to give domestic effect to that treaty.

[Arts.2 (1) (b), 14 (1) and 16, Vienna Convention on the Law of Treaties 1969]

Signature Subject to Ratification, Acceptance or Approval

Where the signature is subject to ratification, acceptance or approval, the signature does not establish the consent to be bound. However, it is a means of authentication and expresses the willingness of the signatory state to continue the treaty-making process. The signature qualifies the signatory state to proceed to ratification, acceptance or approval. It also creates an obligation to refrain, in good faith, from acts that would defeat the object and the purpose of the treaty.

[Arts.10 and 18, Vienna Convention on the Law of Treaties 1969]

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