Sumedha Srinath

Intern, MD&T Partners

 In the commercial life of any country, the need for carrying
goods from one place to another cannot be
overemphasized.
 Also, goods are to be moved from one country to another.
 For these purposes, a contract of carriage is to be entered
into.
 The persons, organizations or associations which carry
goods are known as carriers.
 Multimodal transportation is the movement of cargo
from the point of origin to the final destination, outside
India, by using two or more modes of transport.
 Therefore the combination of all four modes of
transportation i.e. (a) Air (b) Road (c) Rail (d) Sea is defined
as `multimodal transport system'.
 Article 1.1 of the UN CONVENTION ON
INTERNATIONAL MULTIMODAL TRANSPORT
OF GOODS "International multi modal
transport" means the carriage of goods by at
least two different modes of transport on the
basis of a multimodal transport contract from a
place in one country at which the goods are
taken in charge by the multi modal transport
operator to a place designated for delivery
situated in a different country.
 The Multimodal Transportation of Goods Act,
1993 (Act) was enacted based on the
UNCTAD/ICC Rules.
 The concept of door-to-door delivery, which is
Multimodal Transportation is all about, is
catching up fast in international trade.
 The Act was introduced- to facilitate the
exporters and give them a sense of security in
transporting their goods.
 Multi-modal transportation reduces logistics
costs of exporter and makes products more
competitive in the international market.
 The Act is divided into five chapters under the heads-
(1) Preliminary aspects
(2) Regulation of Multimodal transportation
(3) Multimodal Transport Document
(4) Responsibilities and liabilities of the Multimodal
Transport Operator
(5) Miscellaneous aspects.
 A schedule is also attached to the Act which brings in
certain amendments to-
(1) The Carriers Act,1865
(2) The Indian Carriage of Goods by Sea Act, 1925
(3) The Sale of Goods Act, 1930.
 Multimodal transportation means carriage of goods by two or more
modes of transport from the place of acceptance of the goods in India
to a place of delivery of the goods outside India.
 Multimodal Transport Operator (MTO) - "MTO" means any person who
on his own behalf or through another person acting on his behalf
concludes a multimodal transport contract and who acts as a principal,
not as an agent or on behalf of the consignor or of the carriers
participating in the multi modal transport operations, and who assumes
responsibility for the performance of the contract.
 Multimodal transport contract- means a contract whereby a MTO
undertakes, against payment of freight, to perform or to procure the
performance of international multimodal transport.
 Multimodal transport document (MTD) - means a document, which
evidences a multi modal transport contract, the taking in charge of the
goods by the MTO, and an undertaking by him to deliver the goods in
accordance with the terms of that contract.
 Consignor-means any person by whom or in whose name or on whose behalf a
multimodal transport contract has been concluded with the MTO, or any person
by whom or in whose name or on whose behalf the goods are actually delivered
to the MTO in relation to the multi modal transport contract.
 Consignee- means the person entitled to take delivery of the goods.
 Delivery means –
(i) In the case of a negotiable multimodal transport document, delivering of the
consignment to, or placing the consignment at the disposal of, the consignee or any
other person entitled to receive it;
(ii) In the case of a non-negotiable multimodal transport document, delivering of the
consignment to, or placing the consignment at the disposal of, the consignee or any
person authorized by the consignee to accept delivery of the consignment on his
behalf;
 Negotiable multimodal transport document means a multimodal transport
document which is- (i) Made out to order or to bearer ; or (ii) Made out to order
and is transferable by endorsement ; or (iii) Made out to bearer and is
transferable without endorsement.
 Non-negotiable multimodal transport document means a multimodal
transport document, which indicates only one named consignee
 Unlike other contracts MTO acts as the principal and
not the agent of the shipper(consignor or consignee)
 In containerized transport, it is often difficult to
determine the point at which the cargo was damaged.
 In case of multi modal transport, cargo owner will
have no difficulty because he is bound by just one
contract, and can sue under that very contract
 In case of other transport contracts, cargo owner will
have to determine the stage at which the goods were
damaged, which is particularly important for suing the
responsible carrier
As per Rule 2 of THE MULTIMODAL
TRANSPORT DOCUMENT RULES, 1994, 3
conditions has to be satisfied:
 The goods are to be carried by two or more
modes of transport
 The place of acceptance of the goods should
be in India.
 The place of delivery of the goods should be
outside India.
Section 4 lays down the requirements for registration as a MTO-
 Any person can apply for registration to the competent authority to carry on or commence
business as a MTO
 Competent authority here is Director General of Shipping
 An application for seeking registration as a MTO must be in Form I (as per Rule 4)
prescribed by the Act
 In addition, a fee of Rs 10,000 must accompany the application.
 Once the application is received, the competent authority has to ensure that the applicant
fulfills certain criteria.
The criteria to be fulfilled for being registered as a MTO are as follows-
 The applicant should be a company, firm or proprietary concern.
 The applicant should be engaged either in the business of shipping or freight forwarding in
India or abroad.
 In addition, such an applicant must have a minimum annual turnover of Rs 50Lakh, during
the immediately preceding financial year or must have an annual average turnover of Rs
50 Lakh, during the preceding three financial years. However, the same needs to be
certified by a chartered accountant.
 The subscribed share capital or aggregate balance in its capital account or that in the capital
account of its partners or proprietor is not less than Rs 50 Lakhs and that the applicant has
offices, agents or representatives in not less than two other countries.
 The competent authority on being satisfied about the existence of the
abovementioned credentials shall, register the applicant as a MTO and will grant him a
certificate to carry on or commence the business of multimodal transportation
Refusal of Registration- Competent authority may for
reasons to be recorded in writing, refuse to grant registration, where it is satisfied
that the applicant does not fulfill the aforesaid conditions
Position Of Non-Residents
And Persons Not Engaged In The Business Of Shipping:
 An applicant who is not a resident of India and one, who is not engaged in
the business of shipping, will not be granted registration, unless he has
established a place of business in India.
 In addition in respect of such an applicant as has been mentioned above, the
turnover for determining eligibility for registration ,shall be certified by any autho
rity competent to certify the accounts of a company in that country
Duration of validity of registration
 A certificate of registration is valid for a period of 3 years;
 Such a certificate is subject to renewal from time to time for a further period of 3
years at a time.
 An application for the renewal is accompanied with such amount of fees as
notified by the Central Government.
 Ordinarily the fee for the registration of a MTO, should not be for a fee of less
than Rs 10,000 and exceed Rs 20,000
Section –5 of the Act lays down the guidelines for cancelling the registration of erring MTOs.
The competent authority wherever satisfied that the following situations have risen, can cancel
the registration-

 Any Statement in or in relation to any application for registration as a MTO or for the
purpose of renewal of the application for the registration of a multimodal transport
agreement, is incorrect or is false in any material particulars or
 In instances where any provisions of the Act have been contravened by such a MTO or
 In instances, where in the MTO has not entered in to any multimodal transport contract
during the preceding two years after his registration
Section-6, provides for provision of appeal against a refusal by the competent authority to
 Grant or renew registration
 on cancellation of registration
An appeal against refusal by the competent authority to grant, renew or cancel registration lies
with the Central Government.
 Rule 7 of THE REGISTRATION OF MULTIMODAL TRANSPORT OPERATORS RULES, 1992 -
A person aggrieved by an order made by the competent authority under Section 5 may
prefer an appeal in Form IV to the Central Government within a period of one month from
the date of receipt of such order and a fee of Rs 500 must accompany the appeal.
Section -7 deals with the issuance of a MTD:
 In instances where both consignor of goods as well as the MTO have entered in to a
contract for multi-modal transportation, and where such MTO has taken charge
of goods, then in such a case the MTO shall,(at the option of the consignor ) issue either a
negotiable or a Non –negotiable multi-modal transport document.
 However, the issuance of such MTD is permitted only after obtaining and during the
subsistence of a valid insurance cover.
 Due care must be taken to ensure that, such a multi-modal transport document is signed:
 By a MTO or
 By a person duly authorized by him

MTD as A Document of Title:

 Section-8 provides that a MTD will be regarded as a document of title.
 Every Consignee named in the negotiable or non–negotiable multi-modal transport
document or every endorsee of such document shall have all the rights and the liabilities of
the consignor.
 Nothing contained in the Negotiable or the Non –Negotiable transport document should
prejudice/affect the right of the MTO to claim: freight from consignor or enforce any
liability of consignee or endorsee because of his being such consignee or endorsee.
Section -9 specifies the details of the necessary particulars, required to be specified
in every MTD.
(a)Details of General Nature of Goods:
 The details of general nature of goods shall comprise of details such as:
 Leading marks meant for identification of goods.
 Character of Goods (including dangerous goods)
 Number of Packages or units of goods.
 Gross weight and quantity of goods as declared by consignor.
(b) Information on apparent condition of the goods.
(c)Details of the Name and Principal place of business of the MTO
(d) Name of Consignor.
(e) Name of Consignee
(f) Place and date of taking charge of goods by the multi-modal transporter.
(g) Place of Delivery of Goods.
(h) Details of the date or period of delivery of goods by MTO as have been
expressly agreed upon between the consignor and the MTO.
(I) Details, as to whether it is a negotiable or a Non –negotiable document.
(j) The place and date of issue of document.
k) Terms of shipment accompanied with a statement that the multi modal
transport document has been issued subject to or in accordance with \ act.
By the issuance of the MTD, the MTO-
(a) Undertakes to perform, and/or in his own name to procure performance of, the
Multimodal transport including all services which are necessary to such transport,
from the time of taking the goods in charge to the time of delivery, and accepts
responsibility for such transport and such services
(b) accepts responsibility for the acts and omissions of his agents or servants, when
such agents or servants are acting within the scope of their employment, as if such
acts and omissions were own;
(c) accepts responsibility for the acts and omissions of any other person, whose
services he uses, for the performance of the contract evidenced by this MTD;
(d) undertakes to perform, or to procure performance of, all acts necessary to ensure
delivery;
(e) assumes liability, of loss of or damage to the goods, occurring between the time
of taking them into his charge and the time of delivery, and undertakes to pay
compensation as set out in these conditions in respect of such loss or damage;
(f) assumes liability, for delay in delivery of the goods and undertakes to pay
compensation.
(Rule 3 of THE MULTIMODAL TRANSPORT DOCUMENT RULES, 1994)
Section-10, deals with the concept of reservation in MTD
The concept of reservation has relevance in instances where
a MTO or a person acting on behalf of such MTO
 Has reasonable grounds to suspect, that the particulars
furnished by consignor in the MTD do not accurately
represent the goods actually taken in charge.
 in case where he hasno reasonable means of checking/mat
ching the particulars of the goods consigned.
In the above mentioned cases, a reservation clause can be
inserted(by the MTO) specifying the details of the
inaccuracies, grounds of suspicion or the fact about the
absence of reasonable means of checking the particulars of
such consignment of goods in question
Section- 12 enumerates the responsibilities of a consignor.
 The consignor must provide a guarantee to the MTO that
the goods (to be transported) are both adequate and
accurate.
At a time when the MTO takes charge of goods the
particulars such as:
 General nature of goods, the leading marks necessary for
identification of goods, character of goods (including
dangerous nature of goods), number of packages or units
and the gross weight and quantity of goods as declared by
the consignor
 The apparent condition of goods, as furnished by the
consignor for insertion in multi-modal transport
document,.
 Section 13, deals with the basis of liability of a
MTO
 Section 14 deals with the limits of liability of a
MTO, when nature and value of consignment
have not been declared and stage of transport
where loss or damage occurred is not known
 Section 15- limits of liability when nature
and value of consignment have not been
declared or where stage of transport where such
loss or damage occurred is known
 Section 16- liability of MTO for delay of delivery
of goods under certain circumstances
A MTO is liable for any loss resulting from any:
 Damage to the consignment.
 Any delay in delivery of consignment.
 Any consequential loss or damage arising from such delay.
 MTO is not liable for any loss or damage which arises or is
consequential to such delay in delivery, unless the
consignor made a declaration that time is of the essence,
which is accepted by the MTO
 The liability of the MTO to pay compensation should not
exceed 2 SDR/ Kg (Special Drawing Rights per Kilogram)
of the gross weight of the consignment lost or damaged or
666.67, SDR/Package or unit lost or damaged whichever
is higher.
 The liability of the MTO to pay compensation
should not exceed 2 SDR/ Kg (Special Drawing
Rights per Kilogram) of the gross weight of the
consignment lost or damaged or 666.67,
SDR/Package or unit lost or
damaged whichever is higher.
 Instances where the multimodal transport
contract does not include carriage of goods by
Sea or Inland waterways- liability of MTO is
limited to and not exceeding a maximum of 8.33
SDR of gross weight of goods lost or damaged
 Limit of liability of such a MTO for such loss or
damage is determined in accordance with
provisions of relevant law applicable in relation
to mode of transport, during course of which
such loss or damage occurred.
 Any stipulation in the multimodal transport
contract to the contrary shall be both void and
unenforceable.
Liability of the MTO for Delay of Delivery of
Goods under Certain Circumstances- Liability
limited to the freight payable for the consignment
delayed.
Assessment of compensation
 prevailing value of such consignment ,at the place and time at which, such
consignment is delivered or should have been delivered to the consignee.
 The current commodity exchange price shall be the index for determining the
value of consignment for the purpose of assessment of such compensation.
 When current market price is not ascertainable, and then such assessment is
madewith reference to the normal value of consignment of a similar kind
and quantity
Loss of Right of MTO to limit his liability:
MTO will not be entitled to the benefit of limitation of his liability if it is proved that
such loss, damage or delay in delivery of such consignment had in fact resulted from-
 an act or omission on part of MTO or his agents, servants or sub-carriers ,with an
underlying intention to cause such loss, damage or delay or
 or with recklessness in utter disregard of his knowledge about the fact that such
loss, damage or delay shall in all probably ensue
Right of MTO to have Lien on goods and documents:
Section 20
 A MTO, who has not been paid the amount of
consideration stipulated in his multimodal transport
contract, would then be entitled to have a lien over the
documents as well as the consignment in his possession.
 The period during which the MTO has lien over the
consignment or documents, such a period is not
considered for calculating the time of delay.
Responsibilities of the MTO for Goods, Under His Charge:
 the responsibility of the MTO starts & begins from the
time when the goods are put
under his charge and cease only after they have been duly
delivered to the designated consignee.
 Generally the delivery of consignment to the consignee by MTO shall be
treated as a prima –facie evidence of delivery of goods of a description as
have been described in a multi-modal transport document.
 On any loss or damage being noticed in the consignment delivered by
MTO, it shall be necessary for such a consignee to give a written notice of
the general nature of loss or damage to the goods.
 However such notice must be given in written & that too at the very
instance of handing over of such goods to the consignee
 Where the loss of or damage is not apparent, notice must be sent within
6 consecutive days after the date of handing over of goods.
 Notice in writing need not be given when the state of goods are
subjected to a joint survey or inspected by the parties or their
representatives at the place of delivery.
 In the case of any actual or apprehended loss or damage, the MTO and
the consignee must provide all reasonable facilities to each other to
inspect and tally the goods
Period of responsibility
 The responsibility of the MTO for the goods covers the period from the time he takes the
goods in his charge to the time of their delivery.
 For the purpose of this responsibility, the MTO is deemed to be in charge of the goods –
(a) from the time he has taken over the goods from:
(i) the consignor or a person acting on his behalf; or
(ii) an authority or other third party to whom, pursuant to law or regulations applicable at the
place of taking charge, the goods must be handed over for transport;
(b) until the time he has delivered the goods:
(i) by handing them over to the consignee; or
(ii) by placing them at the disposal of the consignee, in accordance with the Multimodal
Transport Contract or with the law or with the usage of the particulars trade applicable at the
place of delivery; or
(iii) by handing over the goods to an authority or other third party to whom, pursuant to law or
recognitions applicable at the place of delivery, the goods must be handed over.
Period Of Limitation –Section 24
 The MTO will not be held liable under the Act unless action against him is brought with 9
months of-
 The date of delivery of the goods, or
 The date when the goods should have been delivered
 The date on and from which the party entitled to receive delivery treats the goods as lost as
per Section 13(2)
Provision for Determination of Jurisdiction for Initiation of Action against MTO
Any of the parties to the Multimodal transport contract are entitled to institute an
action in a competent court, having requisite jurisdiction to try such cases.
Thus jurisdiction for initiation of action against a MTO shall consist of:
 Principal place of business or in absence of such a place the place of habitual
residence of such defendant.
 Place of entering into multi-modal transport contract, provided it is also the place
having the business, branch or agency of the defendant.
 The place of taking charge of goods for delivering them for multi-modal
transportation
 Any other place as may be specified in multi-modal transport contract and such
as is evidenced by multi-modal transport document.
 Provisions about jurisdiction are mandatory and need to be duly followed by
courts.
Provision for referring Multimodal Transport Disputes to Arbitration-Section-25
 Parties entering in to a multimodal transport contract are free to agree to refer all
multimodal transportation related disputes to arbitration;
 These proceedings may be instituted at such place & in accordance with such
procedure as may have been specified by such