Approval of the Convention on Negotiable Cargo Documents
On 11th July, at its 58th session, the United Nations Commission on International Trade Law (UNCITRAL) unanimously agreed to recommend that the United Nations General Assembly adopt the Convention on Negotiable Cargo Documents, which is expected to take place in December 2025. Juan Pablo Rodríguez, Of Counsel at the Firm and Professor of Commercial Law at Carlos III University in Madrid, has actively participated as a member of the Spanish Delegation during the drafting of the Convention since its inception in 2022.
The purpose of this Convention is to regulate the issuance and effects of a new negotiable transport document, the ‘negotiable cargo document’ or ‘NCD.’ This while also creating (and this is one of its strengths) a legal framework for the recognition and use of electronic negotiable cargo documents. While Bills of Lading are widely used as securities representing goods in the maritime sector, transport documents issued by rail, air and road carriers (traditionally known as ‘waybills’), which are not usually negotiable, cannot fulfil this representative function.
The new instrument creates a new representative title for goods (a classification traditionally reserved solely for maritime Bills of Lading), allowing transport documents issued by rail, air and road carriers to perform a function similar to that of a Bill of Lading for the transport of goods by any mode of transport in a multimodal or unimodal context. This measure has been called for by the industry to provide trade finance services (such as documentary letters of credit, currently limited to Bills of Lading, or other inventory finance services) with an instrument that allows them to take goods transported by other modes as collateral with cross-border effect. The NCD may be issued for both maritime and non-maritime transport, whether unimodal or multimodal. When issued for purely maritime or multimodal legs with a maritime leg, this may lead to a potential conflict with existing conventions that already regulate maritime negotiable documents (such as the Hague Visby Rules, the Hamburg Rules or the Rotterdam Rules), as all of them contain rules on negotiable documents or the rights and responsibilities of the holder of the document, which is why we anticipate that overlap could occur. The Instrument is based on the premise that this text respects the liability regimes already existing in the various conventions (HVR, Hamburg Rules, CMR, CIM, Montreal Convention, etc.), without altering them. However, in order to avoid possible conflicts, the final clauses include the possibility for States to declare that they will not apply the Convention to any negotiable transport document (a bill of lading) that proves or contains a contract for the carriage of goods by sea governed by an international convention to which that State is a party. The Commission agreed that the Convention would enter into force upon receipt of 10 ratifications.
That said, the new Convention on NCDs is extremely interesting for several reasons: The first is the explicit classification of the NCD as a document representing goods, which is undoubtedly very beneficial for documents issued in land and air transport, and especially for multimodal transport contracts (which, unlike Spanish legislation, do not currently have uniform recognition as representative documents). The second is that the regime and effects of NCDs are also formulated – in parallel for those issued on paper – for documents issued in electronic form (following the provisions of the UNCITRAL Model Law on Electronic Transferable Documents), which will undoubtedly, and by the time this Convention enters into force, we believe that they will account for a large proportion of the practice and operation of freight transport.