Working Group VI update

WORKING GROUP VI REPORT

DRAFT NEGOTIABLE CARGO DOCUMENTS CONVENTION

UNCITRAL, by Working Group VI, is developing a convention about negotiable cargo documents (NCD) for any form of transport used to freight goods globally that will have the same function as a bill of lading in maritime trade already does, to transfer title in goods. At present, cargo documents used to freight goods by road, rail or air, do not transfer title in the goods.

Existing maritime legal frameworks for the issuance and enforcement of bills of lading have molded the development of the NCD. The NCD may be paper or electronic. Maritime trade predominantly uses electronic bills of lading. Safeguards used to prevent fraud bills of lading being generated have informed Working Group VI.

NCDs are intended to provide greater flexibility in trade, facilitate financing and most importantly where the goods are freighted in a multimodal context, to provide a legal framework for the issuance and use of a single document that would cover door-to-door. NCDs should simplify the documentation process and increase efficiency in operations.

Currently, WG VI proposes that NCDs will be issued at the outset, and for each transfer of title in the goods, the NCDs will be annotated rather than new NCDs issued. The International Federation of Freight Forwarders Associations (FIATA) and other national freight forwarders, such as China International Freight Forwarders have created a template multimodal bill of lading, which meets the information requirements of the NCDs and can function as an NCD through annotation with reference to the new instrument under the default rule within the draft NCD convention.

Freight forwarders arranging transport and documentation for door-to-door shipment of goods by multi-modal transport should benefit by the use of the single document, NCDs to move goods door-to-door. Transfer of title to those goods between buyers and sellers will be effected by the NCD.

Successful pilot programs transporting goods from China by use of NCDs using multimodal networks of dry ports within the Asia-Pacific region have been run by FIATA, the ICC Banking Commissions, Greater Caspian Association, ESCAP and the Bank of China. The results of the pilot programs were presented to WG VI and were impressive.

Risk assessment for financiers and insurers in respect of title to the goods door-to-door ought to be reduced by the use of NCDs. Risk management of fraudulent NCDs will remain an operational matter. The annotated original NCD ought to assist in the reduction of fraudulent NCDs.

Enforcement of the NCDs should (as a general concept) be more efficient than present, given the rights and obligations of any holder of the NCD are within that document, irrespective of what stage of the multimodal transportation of the goods an issue arose. There will be only one document – the NCD – prescribing the form of dispute resolution, the laws governing a dispute and the forum in which any dispute is to be resolved. Currently, each contract governing each leg of the multimodal transport of goods prescribes those matters (if expressed at all), which can provide challenges when determining forum and governing law.

Matters for Australia to consider

The Peoples Republic of China proposed an UNCITRAL instrument for NCDs. As Australia’s largest trade partner, use of NCDs by Chinese buyers of Australian goods, may be inevitable. The Australian government will need to consider whether the flexibility and efficiency of NCDs will benefit Australian trade generally, and in particular, trade with China.

Australia does not have a strong track record of implementing UNCITRAL instruments relating to maritime trade. For example, the Rotterdam Rules (which have influenced the development of the NCDs) and the recent Beijing Convention (i.e. the Convention on the International Effect of Judicial Sale of Ships) have not been implemented into Australian law. Of the latter, China, Singapore and the European Commission are all signatories, and all have major maritime ports. Australian courts have consistently expressed the need in Australia for comity of international laws.

UNCCA was represented, with observer status, at Vienna in December 2024. At that session, a number of shipowner stakeholders attended, having become aware of the draft NCD convention. Concerns were expressed between sessions about whether shipowners would support the convention when existing regulatory regimes and ‘tested’ contractual terms, whether by trade, litigation or arbitration, which have provided the maritime sector commercial certainty.

During the General Assembly in Vienna, 7 to 23 July 2025, UNCITRAL provided a written update on the draft NCD convention along with a compilation of comments on the draft convention of NCDs dated 11 June 2025 (A/CN.9/1214/Add.1) from:

1. the intergovernmental agency, United Nations Conference on Trade and Development (UNCTAD);

2. non-intergovernmental agencies:

   1. Comité Maritime International (CMI) (the peak body for maritime law associations)

   2. Joint submission by Global Shippers Forum (GSF), International Federation of Freight Forwarders Associations (FIATA) and International Chamber of Commerce Banking Commission (ICC);

   3. International and Comparative Law Research Center (ICLRC); and

   4. Joint Submission by the International Chamber of Shipping (ICS), the International Group of Protection and Indemnity Clubs (IGP&I) and the Baltic and International Maritime Council (BIMCO).

Working Group VI is next expected to meet in Vienna, 15 to 19 December 2025. These submissions are likely to form part of the discussions at this next session.

Margo Harris, Counsel

Chair Working Group VI, UNCCA

25 July 2025