Written statement to Parliament

The Budapest Convention on the contract for the carriage of goods by inland waterways

UK to opt into the Budapest Convention on the contract for the carriage of goods by inland waterways.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Rt Hon John Hayes CBE MP

The government has decided to opt in to the proposed 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).

The Budapest Convention was adopted by the Diplomatic Conference organised jointly by the Central Commission for the Navigation of the Rhine and the Danube Commission in collaboration with the United Nations Economic Commission for Europe. It entered into force on 1 April 2005, and is intended to harmonise contractual and navigational standards on inland waterways in European countries. The UK is not a contracting party to the Budapest Convention.

The convention is intended to harmonise contractual and navigational standards on inland waterways in European countries. Article 29 of the Budapest Convention contains provisions on the choice of law by the parties to a contract of carriage falling under the convention. Those provisions affect the rules laid down in the Rome I Regulation, which came into force on 24 July 2008 and applies in situations involving a conflict of laws and to contractual obligations in civil and commercial matters.

Austria and Poland have on several occasions expressed their interest in becoming parties to the convention. Although Belgium ratified the Budapest Convention on 5 August 2008, it was after the adoption and entry into force of Regulation (EC) 593/2008 (the Rome I Regulation) on the law applicable to contractual obligations within the EU. Therefore, the Budapest Convention falls partly under exclusive European Union competence, because of its relationship with the EU regulation and any member state wishing to join the Budapest convention is first required to obtain union authorisation to do so. The proposal is therefore also addressed to Belgium, in order to ensure union authorisation and to rectify the currently unlawful situation.

The proposal has been published with a legal base falling within Title V of part 3 of the Treaty on the Functioning of the European Union (TFEU) – Justice and Home Affairs (JHA) matters. The EU currently has competency in this matter; the government also maintains that the UK is still entitled to use its opt-in under protocol 21 of the treaty and in negotiations the government will continue to seek amendments to the wording of the relevant recital of the proposed decision to reflect this. If the government is unable to succeed, we will revert to laying a minute statement to underline the UK’s position.

The UK is not a party to the Budapest Convention and has no cross-border exchange of goods within EU inland waterways. The UK has previously indicated, as has the Republic of Ireland, that there is no commercial carriage of goods by inland waterways between the 2 and so there is no impact on the UK. Nonetheless, it is clearly an important legal instrument for those member states that do have cross-border exchange of goods within EU inland waterways, since it provides a mechanism for resolving conflicts of law in relation to the contracts associated with the carriage of goods.

Since the provisions are not expected to have any impact on UK businesses or operations involving contracts for the carriage of goods by inland waterways, and there are no effects on relations with the 3 member states seeking authorisation, the government has chosen to opt in.

Published 24 March 2015