Multimodal or combined transport is a single contract for transporting goods using at least two modes of transportation. The contract is legally binding for the entire carriage even though it is fulfilled using several modes of transportation, such as rail, sea, and road. The carrier is only required to own some of the means of transportation. Sub-carriers frequently conduct the carriage of goods.
The multimodal transport operator refers to the carrier in charge of the entire transportation. The ‘consignor’ is any person by whom, in whose name, or on whose behalf a multimodal transport contract has been executed with the multimodal transport operator. He/she is the first party in a mode of multimodal transport. The term ‘consignee’ refers to the recipient of the products. He/she is the second party to this form of transportation.
International multimodal transportation of goods is the movement of goods using at least two modes of transportation in accordance with a multimodal transport contract from a location in one country where the operator picks up the goods to a destination in a foreign country.
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An intergovernmental body inside the UN Secretariat, the United Nations Conference on Trade and Development (UNCTAD), advances the interests of developing nations in international trade. The primary objective of UNCTAD is to design policies for all facets of development, including trade, aid, transportation, finance, and technology.
Establishing specific regulations related to the carriage of goods under international multimodal transport contracts to ensure the smooth flow of trade and services is critical. The United Nations acknowledged the necessity for the controlled growth of international trade and considered the concerns and issues of developing nations during its conference on the convention on multimodal transportation of commodities.
A consistent set of rules applicable to multimodal transport contracts needed to be established regardless of the domestic laws of the country to which the parties may belong because many legal systems govern the international transportation of commodities.
Parties to a Multimodal Transport Contract
The consignor, multimodal transport operator, and consignee are parties to a multimodal transport contract. A multimodal transport contract is created between these parties based on a multimodal transport document. The multimodal transport document, which serves as a title document and has an evidentiary value under the multimodal transport contract, is a crucial component of multimodal transportation.
A single transport document covering all modes of transport from the premises of the exporter to the premises of the consignee has been devised due to increased containerisation.
The benefits of such multimodal transportation under a single document are decreased total transport costs, decreased delays, smoother and faster flow of goods, and improved service quality.
Trade Facilitation through the Act
In India, The Multimodal Transportation of Goods Act of 1993 was enacted to govern multimodal transportation. Such legislation was essential because of the increasing use of more than one mode of transport to complete the delivery of a consignment. Deliveries are made either to a destination within the nation or abroad. The provisions of the Act assist in regulating the procedure of multimodal transport and pave the way for resolving disputes arising out of contracts drafted and signed.
On April 2, 1993, the Multimodal Transportation of Goods Act was enacted. The Act outlined the rules and regulations governing the shipment of products from one location in India to another outside of India. Such a shipment of goods must be made possible by using at least two or more modes of transportation based on a single multimodal transport document.
Registration for Multimodal Transportation
As per Section 3 of the Multimodal Transportation of Goods Act, no commerce or business of multimodal transportation can be performed without due registration made in the prescribed form, accompanied by the payment of the registration fee. The competent authority may revoke the approved registration on grounds of irregularities in business particulars.
Any party to a multimodal transport contract may initiate an action in a court with jurisdiction in cases of disputes arising out of its breach. The parties may also employ an alternative dispute settlement system. They may opt for arbitration to resolve any disputes arising from the contract as per the provisions of the Act.
Liability of Multimodal Transport Operators
Section 13 of the Act presents the basis of liability of multimodal transport operators. The operator shall be liable for loss resulting from delay in delivery of the consignment or for any loss of or damage to the shipment. This provision has the caveat that the multimodal transport operator will not be held responsible if he/she can demonstrate that none of his/her negligence or that of his/her agents led to the loss, damage, or delay in the delivery.
The claimant may treat the shipment as lost if it is yet to be delivered after 90 days in a row from the expressly agreed-upon date of delivery. In the case of loss or damage to a consignment, compensation is assessed per Section 17 of the Multimodal Transportation of Goods Act.
When determining the amount of compensation, consideration must be given to the value of the consignment at the location or at the particular time it is delivered or should be delivered to the consignee. The current commodity exchange price is also considered when ascertaining the value of the consignment. Thus, compensation equivalent to the loss is to be paid.
Multimodal Transport Document and its Implementation in India
A multimodal transport document is either a negotiable or non-negotiable document that is issued when the consignor and the multimodal transport operator have entered into a contract for multimodal transportation. Such a document is issued only after the multimodal transport operator takes charge of the goods. The document is issued only at the option of the consignor.
The document is to be signed by the transport operator or by someone duly authorised by him. Notably, the document must be issued only during the subsistence of a valid insurance cover. This detail is provided in Section 7 of the Multimodal Transportation of Goods Act, of 1993.
Suppose the multimodal transport operator or someone representing them becomes aware of or has reasonable grounds to suspect inaccuracies in the details provided by the consignor in the multimodal transport document, specifically regarding the goods taken into custody. In such a case, they are obligated to insert a reservation specification in the document.
This requirement is also applicable when they lack a reasonable method to verify the accuracy of those details. Section 10 of the Act mentions that when the multimodal transport operator or someone acting on their behalf, forgets to make a reservation about the apparent condition of the goods listed in the multimodal transport document, the commodities are assumed to have been accepted in apparently good condition.
Consignors and Their Responsibility
As per the document, the consignor is named in the multimodal transport contract. Goods covered by such contracts are entrusted by or on the consignor’s behalf to a multimodal transport operator for multimodal transportation.
According to Section 12 of the Multimodal Transportation of Goods Act, when the multimodal transport operator takes possession of the consigned goods, the consignor is assumed to have given the operator sufficient accurate assurances regarding the general nature and apparent condition of the items.
The consignor repays the multimodal transport operator against loss caused by incomplete or inaccurate information about the aforementioned particulars. Section 11 of the Act details that a multimodal transport document is conclusive proof that the multimodal transport operator has acquired control of the goods it describes. Thus, the document serves as prima facie evidence.
Contents of the Multimodal Transportation of Goods Act
The contents of the multimodal transport document given in Section 9 of the Multimodal Transportation of Goods Act are as follows:
- The general nature of the goods
- The number of packages or units
- The name and principal place of business of the multimodal transport operator
- The place and date of taking charge of the goods by the multimodal transport operator
- The leading marks necessary for the identification of the goods
- Apparent condition of the goods
- Whether it is negotiable or non-negotiable
- The character of the goods, including dangerous goods
- The name of the consignor
- The gross weight and quantity of the goods as declared by the consignor
- The name of the consignee, if specified by the consignor
- The place of delivery of the goods
- The place and date of its issue
- The signature of the multimodal transport operator or of a person duly authorised by him
- Terms of shipment and a statement that the document has been issued subject to and in accordance with this Act
- The intended journey route, modes of transport, and places of transhipment, if known at the time of its issue
- Any other particular that the parties may agree to insert in the document if any such particular is not inconsistent with any law for the time being in force
The phenomenon known as multimodal transportation of goods is fundamental to developing the container system, which facilitates international trade. Rules governing the international transportation of products were only necessary in the late 1950s. The use of intermodal containers skyrocketed by the late 1950s and was starting to revolutionise ocean shipping. Although attempts to establish specific regulations to regulate this type of trade had already been attempted in Europe, few nations were willing to approve them.
The Indian government became aware of the expanding significance of multimodal transportation of goods in international trade, and it recognised the necessity of codifying several regulations to ensure the seamless operation of the system to remain competitive on the world stage. The Multimodal Transportation of Goods Act of 1993 was subsequently enacted.
FAQs on Multimodal Transport Act
Who are the various parties to a multimodal transport contract?
The consignor, the multimodal transport operator, and the consignee are the parties to a multimodal transport contract.
Which section of the Multimodal Transportation of Goods Act specifies the liability of multimodal transport operators?
The basis of liability of multimodal transport operators is provided in Section 13 of the Act. The operator shall be liable for loss resulting from the delayed delivery of the consignment or for any loss or damage to the consignment.
What are the contents of the multimodal transport document?
The contents of the multimodal transport document are given in Section 9 of the Multimodal Transportation of Goods Act. They are the general nature of the goods, the number of packages or units, and the multimodal transport operator's name and principal place of business, among others.
Does the multimodal transport document serve as prima facie evidence in court in case of a dispute?
Section 11 of the Multimodal Transportation of Goods Act provides that a multimodal transport document is conclusive proof that the multimodal transport operator has acquired control of the goods it describes.