Multimodal mayhem

MULTIMODALISM is one of the most dynamic areas of the transportation industry. Despite this, the 1980 Geneva Convention on International Multimodal Transport of Goods has not yet entered into force and there is still no specific domestic regulation in existence in Italy.

In fact, only two kinds of combined transport are expressly regulated in Italy - transport whose land or sea elements are ancillary to air carriage (governed by the 1929 Warsaw Convention, pursuant to Article 18.3) and the multimodal transportation of goods without unloading from the truck (governed by CMR, according to Article 2). The challenge, therefore, is to identify the proper legal framework of multimodal transportation which does not fall within the scope of application as detailed above.

In the past, some Italian courts considered combined transport as a chain of unimodal carriages, each part of which was governed by its own rules. Therefore, the issue regarding the liability of the multimodal transport operator (MTO) was decided on the basis of the specific regulation of that part of the combined transport where the damage had arisen (Court of Appeal in Milan 7.11.1950, in Borelli v Bistolfi).

If the conventions on sea, road or air transport do not apply, multimodal transport is governed by national law but not necessarily by Italian law.

In another case, the application of the rules of unimodal carriage covering the prevailing part of the transport was extended to the whole multimodal transport operation (Court in Genoa 12.3.1992, in Costa Container Line v Metrans).

At present, however, the Italian courts are inclined to rule that international conventions on maritime, road or air transport can not be applied to multimodal transportation. They merely apply the Italian domestic transport rules contained in the civil code, as a residual law (Court of Cassation 2.9.1998, No 8713, in Andrea Merzario Spa v Vismara Associates; Court of Cassation 8.7.1993, No 7504, in Agenzia Marittima Fremura v Soc Beroy).

But this solution invites criticism because the assumption that Italian law applies, due to the lack of other specific regulation, is questionable. In fact, international contracts, unless subject to specific conventions, should be governed by the national law, to be determined on the basis of the rules set forth by the 1980 Rome Convention on the Law Applicable to Contractual Obligations.

Article 4.1 of this convention provides that the contract is governed by the law of the country with which it is most closely connected. The fourth paragraph establishes the presumption that the contract of carriage is most closely connected with the country where the carrier has its principal place of business, if the place of loading or the place of discharge or the principal place of business of the consignor is located in that country. Therefore, if the conventions on sea, road or air transport do not apply, multimodal transport is governed by national law, but not necessarily by Italian law.

There are, however, some implications arising from the application of Italian law:

(a) Extent of liability of the MTO

Article 1693 of the Italian Civil Code provides that the carrier is liable for loss or damage caused to the goods from the time it takes over the goods up to the time of delivery. The carrier is relieved of liability if it proves that the loss or damage was caused by force majeure, by act of the shipper/consignee, or by inherent vice of the cargo or its packages.

The carrier liability regime under the Italian Civil Code is different from that established by international conventions. This means that the MTO may be held liable vis-a-vis its contractor in some cases where the sub-carrier is not liable vis-a-vis the MTO itself. For instance, if the goods were damaged during the sea leg of a multimodal transportation due to neglect of the master in the navigation of the vessel, the MTO has to pay damages to the claimant, but has no recourse against the sea carrier as the latter is not liable under Article 4.2 (a) of the Hague-Visby Rules.

Furthermore, if a cargo is partly lost during the road leg of a multimodal transportation, the road carrier is entitled to claim the benefit of Article 17.4 (c) of CMR, such as to exclude its liability if it proves that the loss could have been caused by the loading effected by the consignor. On the contrary, the MTO is not relieved of liability due to the fact that, on the basis of Italian domestic rules, the driver is under a duty to supervise the loading operations, even if made by the consignor's personnel (Court of Cassation 20.1.1995, No 622, in Del Chiaro v Navale Assicurazioni Spa).

(b) Limitation of liability

While the Hague-Visby Rules, CMR and 1929 Warsaw Convention allow the sea, road and air carrier respectively to limit their liability for the loss of or damage to the cargo, no limitation is provided by Italian domestic rules covering international transportation. As a result, the MTO faces the risk of being entitled to recover from its sub-carrier only a part of the sum it has to pay the claimant.

(c) Time limitation

The time-bar period provided by Italian domestic rules covering carriage starting or ending outside Europe is 18 months (Article 2951, second paragraph, of the Civil Code). This is longer than that established by Article 3.6 of the Hague-Visby Rules, Article 32.1 of CMR, and Article 58.1 of CIM.

Furthermore, unlike the Hague Rules, Italian law allows the claimant to interrupt the time-bar period by means of a simple request for payment. This means that the claim against the MTO may drag on for years, while the MTO must institute proceedings against the sea carrier within one year after delivery of the goods, on pain of forfeiture.

It is worth noting that the MTO is not given appropriate protection by the liability limitation clauses contained in the general terms of multimodal transport waybills. This is because, according to Article 1341, second paragraph, of the Italian Civil Code, such clauses are ineffective unless they are specifically approved in writing.

On the basis of the above, and in light of the Italian courts' attitude, specific domestic regulations covering multimodal transportation are needed to prevent legal uncertainty from having a negative impact on the growth of multimodalism in Italy.