JOC 28/1/08

UN to vote on Cogsa treaty

WASHINGTON -- The United Nations Commission on International Trade Law working group's work is done, and it is now up to the parent body to approve a new convention governing carriers' liability for the loss of cargo moving under their bills of lading.

At its last meeting in Vienna, the group reached consensus on some of the final loose ends, said Chester D. Hooper, a member of the U.S. delegation.

The working group agreed to a liability limit of 875 Special Drawing Rights per package, or 3 SDR per kilogram. The SDR is a currency interchange standard used by the International Monetary Fund. At current rates, the package limit would equal US$1,382.50 per package. The package limit under the existing Carriage of Goods by Sea convention is $500.

Washington had wanted a lower package limit, but agreed to the higher amount after other countries agreed to "freedom of contract" provisions to replace the 71-year-old Cogsa agreement.

Under the new agreement, carriers and shippers will be able to negotiate higher or lower liability limits in service contracts. In addition, the convention will cover liability of land carriers operating under the ocean carrier's bill of lading.

Uncitral will meet beginning June 16 to discuss the new cargo liability convention. If approved, it could be ratified by the U.N. General Assembly in the fall.