2 Inland waterways: freight
| Committee's assessment
| Legally and politically important |
| Committee's decision | Not cleared from scrutiny; further information requested
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| Document details | Draft Council Decision to allow Austria, Belgium and Poland to participate in a convention about contract law for inland waterways freight
|
| Legal base | Articles 2(1), 81(2) and 218(6), point (a) TFEU; consent; QMV
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| Department
Document numbers
| Transport
(36582), 17025/14 + ADD 1, COM(14) 721
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Summary and Committee's conclusions
2.1 The Budapest Convention on the Contract for the Carriage of
Goods by Inland Waterways (CMNI) is intended to harmonize contractual
and navigational standards on inland waterways in European countries.
Article 29 of the Convention contains provisions on the choice
of law by the parties to a contract for carriage falling under
the Convention. Those provisions affect the rules laid down in
Regulation (EC) No. 593/2008 on the law applicable to contractual
obligations (Rome I), thus Member States cannot now lawfully ratify
or accede to it without an EU authorization.
2.2 Ten Member States became Contracting Parties
to the CMNI before Rome I came into force. This draft Council
Decision would authorise three further Member States, Austria,
Belgium and Poland, to become Contracting Parties.
2.3 Since the UK is not a party to the CMNI, the
provisions do not have any impact on UK businesses or operations
involving contracts for the carriage of goods by inland waterways
nor in relation to the three Member States seeking authorisation.
2.4 As the proposal has a legal basis found in Title
V TFEU (Justice and Home Affairs), the Government asserts that
the UK opt-in applies.[9]
This is contested by the Commission and the Council Legal Service
on the grounds that the UK has already opted into the Rome I Regulation,
and the EU's exclusive competence to enter into the choice of
law provisions of the CMNI derives from that Regulation. Recital
(11) of the draft Decision reflects the Commission's legal view.
2.5 When we first considered this matter we asked
the Government what its decision on the opt-in might be, and why.
We also asked for the Government's view on the use of Article
216(6) TFEU as a procedural legal basis.
2.6 The Minister (Mr John Hayes) now provides further
information on the opt-in and indicates that the legal basis question
is still under consideration.
2.7 We support the Government's assertion that
the UK opt-in applies. It follows from this and from the principle
of legal certainty that the text of the Decision should properly
reflect the fact that the UK opt-in is engaged, as well as whether
or not it has been exercised. We therefore urge the Government
to press for recital (11) to be amended to reflect this. In the
event that this does not prove possible to achieve we ask the
Minister for an analysis of whether a Decision adopted with recital
(11) in its current terms should be treated as invalid and, if
so, the prospects and value of a legal challenge.
2.8 On the question of whether the UK should opt-in,
we note that the Government considers that the relevant factors
are: the limited effect of the Budapest Convention on the UK;
the desirability of the proposal in general; and the legal principle
at stake. We do not consider that the opt-in decision in this
case merits a recommendation for a specific debate.
2.9 We retain this document under scrutiny and
look forward to a further update which should address: whether
or not the Government has decided to opt in; its efforts to amend
recital (11); its view on the use of Article 216(6) TFEU as a
legal basis; and the general progress of the negotiations.
Full details of
the documents: Draft
Council Decision authorising Austria, Belgium and Poland to ratify,
or to accede to, the Budapest Convention on the Contract for the
Carriage of Goods by Inland Waterways (CMNI): (36582), 17025/14
+ ADD 1, COM(14) 721.
The Minister's letter of 30 January 2015
2.10 In answer to the Committee's request concerning
the UK opt-in the Minister replies:
"The Budapest Convention contains rules
applicable to the transport of goods by (European) inland waterways
and establishes the relationship and responsibilities for not
only the handling, carriage and delivery of goods, but who is
liable for damage or loss of them. The rules of the Convention
apply to all contracts of transport of a border crossing nature,
which means that the place of taking over the goods (the port
of loading) and of delivery (the port of discharge) are located
in two different states. The CMNI may likewise be declared applicable
to domestic transport.
"The Convention is applicable irrespective
of the nationality, the place of registration or the home port
of the ship, the domicile of the carrier or his or her incidental
presence elsewhere. The Convention regulates the rights and obligations
of the parties to the contract of transport (carrier, substitute
carrier, consignor, consignee). Transport documents are mandatory
and must comply with certain requirements. The liability of the
carrier is mandatory and takes priority over the responsibility
of the consignor.
"Although the UK is not a party to the Budapest
Convention and has no cross-border exchange of goods within EU
inland waterways, it is clearly an important legal instrument
for those Member States that do, since it provides a mechanism
for resolving conflicts of law in relation to the contracts associated
with the carriage of goods.
"The Government continues to consider its
position on the opt-in, bearing in mind the limited effect on
the UK and the desirability of the proposal in general. From
our perspective, the only issue of contention is over the legal
principle - whether the UK is automatically bound by the agreement
due to the fact that it falls within an area of exclusive external
competence or, as we argue, the UK can choose whether or not to
participate via the Justice and Home Affairs Opt-In Protocol.
"We take the latter position because the
draft Decision engages the UK's opt-in rights under the TFEU.
However, neither the Commission nor Council Legal Services (CLS)
agree that the opt-in applies in such cases."
Previous Committee Reports
Twenty-ninth Report HC 219-xxviii (2014-15), chapter
5 (14 January 2015).
9 Protocol 21 on the Position of the United Kingdom
and Ireland in Respect of the Area of Freedom, Security and Justice. Back
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