¹ United Nations Conference on a Code of Conduct for Liner Conferences, Final Act and Annexes, TD/Code/13/Add.1 (United Nations Publication, Sales No. E. 75. Il. D.12). The conference was convened under the auspices of U.N.C.T.A.D., pursuant to General Assembly Resolution 3035 (XXVII) of December 9, 1973. The first part of the conference was held from November 12 to December 15, 1973 (see Report of the Conference on the First Part of its Session TD/Code/7) and the Second Part from March 1 to April 6, 1974 (see Report of the Conference on the Second Part of its Session, TD/Code/10, Vol. I).

² Among the important intergovernmental organizations represented were the European Economic Community and the Organization for Economic Cooperation and Development (O.E.C.D.). The Council of European and Japanese National Shipowners’ Association was represented as a non-governmental observer. The latter played a significant role in the formation of the position of shipowning states at the conference.

³ Final Act Annex 1, Convention on a Code of Conduct for Liner Conferences, supra note 1. It is not without question whether the three principles referred to in the preamble are principles of law, properly stated, in any manner distinct from the rules set out in the treaty itself. Although the preamble is used as one of the contextual elements in treaty interpretation by virtue of Article 31(2) of the Vienna Convention on the Law of Treaties, it is difficult to predict what effect the statement of principles will have on any future judicial interpretations of the substantive provisions of the convention.

⁴ Both the Plenipotentiary Conference itself and the two Preparatory Committee sessions that preceded it were organized along geographical group lines, which are an integral feature of U.N.C.T.A.D. General Assembly Resolution 1995 (XXI), which created U.N.C.T.A.D., sets out the listings of the different geographical groups of states to which members belong. The developing countries, that is, countries in the Asian, African, and Latin American groups, have formed an association with fairly cohesive solidarity known as the Group of 77. At the first meeting of the Preparatory Committee, January 8-26, 1973, the spokesman for the Group of 77 declared that “the countries of the Group of 77 wished to redress, in light of the [United Nations] Charter, historical economic unbalances and inequities, which existed in international trade, including maritime transport”: TD/Code/1, February 7, 1973, at 7.

⁵ Report of the Conference on the Second Part of its Session, TD/Code/10, Vol. I, at 104–41.

⁶ Along with the total support of the Group of 77, the Socialist Countries of Eastern Europe (Group D) voted in favour of the adoption of the convention. As well, among the developed countries (Group B) voting affirmatively were Australia, Belgium, France, the Federal Republic of Germany, and Japan. Denmark, Finland, Norway, Sweden, Switzerland, the U.K., and the U.S.A. voted against adoption. Canada, together with Greece, Italy, The Netherlands, and New Zealand abstained. See TD/Code/10, Vol. I, at 103.

⁷ Bosies and Green, “The Liner Conference Convention: Launching an International Regulatory Regime,” 6 Law and Policy in International Business 533 (1974).

⁸ In Canada, for example, liner or “shipping conferences” are exempt from the restraint of trade provisions of the Combines Investigation Act, R.S.C. 1970, c. C-23 as a result of the passage in 1970 of the Shipping Conferences Exemption Act, R.S.C. 1970, 1st supp., c. 39. It reflects Canadian government policy to protect both users and suppliers of conference services from the effects of open competition. The Act, in the words of the then Minister of Transport, “substitutes regulation and scrutiny [for completely unregulated conduct] while safeguarding a degree of competition as an alternative to the unrestricted competition that would result from the application of the Combines Investigation Act“: see H. C. Deb. (Can.), 1970, Vol. IV, at 3397.

⁹ Bennathan, and Walters, , “Shipping Conferences: An Economic Analysis,” 4 J. of Maritime L. and Comm. 93 (1973).Google Scholar

¹⁰ “The Liner Conference System,” Report by the U.N.C.T.A.D. Secretariat, TD/B/C.4/62/rev. 1 (United Nations Sales No. E.70.II.D.9) 1970, at 3.

¹¹ Grossman, , Ocean Freight Rates 62 (Cambridge, Maryland: Cornell Maritime Press, 1956) (cited ibid., 3).Google Scholar

¹² Ibid., 3.

¹³ Shipping Conference Arrangements and Practices, Report of the Restrictive Trade Practices Commission (Department of Justice, Ottawa, 1965).

¹⁴ COS Resolution 5 (III), Annex I, Report of the Committee on Shipping on its Third Session, April 11-25, 1969, TD/B/240, TD/B/C.4/55.

¹⁵ “The Liner Conference System,” Chapter X — Conclusions, supra note 10, at 67-68.

¹⁶ Report of the Committee on Shipping at its Fourth Session, April 20 to May 4, 1970, Chapter III, TD/B/301, TD/B/C.4/73.

¹⁷ Resolution 12 (IV) of the 4th COS, ibid., Annex 1. The Working Group of International Shipping Legislation was established by the Committee on Shipping, as a subgroup of the COS, in 1969 at its Third Session.

¹⁸ Report of the Working Group on International Shipping Legislation on its Second Session, February 15-26, 1971, TD/B/C.4/86, Annex 1.

¹⁹ Resolution 19 (V), Report of the Committee on Shipping on the First Part of its Fifth Session, March 22-April 3, 1971, TD/B/347, TD/B/C.4/89, Annex I.

²⁰ The Trade and Development Board is established as a permanent organ of the Conference pursuant to U.N. General Assembly Resolution 1995 (XIX), the Resolution which created U.N.C.T.A.D. in 1964.

²¹ Report of the Trade and Development Board on its Eleventh Session, General Assembly, Official Records: Twenty-Sixth Session, Supplement No. 15 (А/ 8415/Res. 1).

²² For a description of the events leading up to U.N.C.T.A.D. III in relation to liner conference practices, and of the reaction to U.N.C.T.A.D. developments of the members of the Consultative Shipping Group (the CSG comprises Belgium, Denmark, Finland, France, the Federal Republic of Germany, Greece, Italy, Japan, The Netherlands, Norway, Spain, Sweden, and the United Kingdom— the traditional maritime powers, save for the United States), see Zamora, , “U.N.C.T.A.D. Ill —The Question of Shipping,” (1973) 7 Journal of World Trade Law 90.Google Scholar

²³ United Nations Conference on Trade and Development, Third Session, Santiago de Chile, Volume I, Report and Annexes, TD/180, Vol. I, Annex 1. All the states members of Group В (with the exception of Austria, which abstained) voted against the resolution.

²⁴ TD/104/Rev. I.

²⁵ Resolution 66(III) requested the General Assembly to make the necessary preparations for a conference of plenipotentiaries, including the preparation of “a draft multilateral instrument on the Code of Conduct for liner conferences.”

²⁶ See Report of the Preparatory Committee on its First Session, Jan. 8-26, 1973, supra note 4, and Report of the Preparatory Committee on its Second Session, June 4-29, 1973, TD/Code/2, TD/Code/DC/9.

²⁷ Reports of the Conference on the First and Second Parts of its Session, supra note 1.

²⁸ Report of the Conference on the Second Part of its Session, supra note 1.

²⁹ The 40-40-20 formula, which along with the dispute settlement provisions was the most contentious issue at the conference, is accomplished as follows: Article 2 (4) relating to participation in the trade provides that when a conference determines a share of trade within a pool of industrial members lines or groups of national shipping lines, certain “principles“ shall be observed, namely; the national shipping lines of the two countries at each end of a particular trade served by a conference shall have equal rights to participate in the freight and volume of traffic generated by their trade; third-country shipping lines shall have the right to acquire a significant part, such as 20 per cent, of such trade. By implication, the foregoing embodies a sharing formula on a 40–40–20 basis.

³⁰ TD/Code/13/Add. ι, supra note 1, Article 7.

³¹ Ibid., Article 11 provides: “There shall be consultations on matters of common interest between a conference, shippers’ organization, representatives of shippers and, where practicable, shippers, which may be designated for that purpose by the appropriate authority if it so desires.”

³² Ibid., Article 14.

³³ Ibid., Article 16, which allows for surcharges to be imposed by a conference to cover sudden changes in circumstances, but requires advance notice (of an unspecified time period) and consultation thereafter between the conference and persons affected by the surcharge. If no agreement is reached within fifteen days, the settlement of disputes provisions of the Code apply. Prior notification, though not subsequent consultation, is waived in cases of exceptional circumstances.

³⁴ Ibid., Article 17. It is similar in effect to Article 16 on surcharges.

³⁵ Ibid., Part Two, Chapter VI, Chapters 23–46.

³⁶ Ibid., Article 23(4).

³⁷ The Group of 77 draft code, annexed to Resolution 66 (III), provided for disputes to be settled by mandatory arbitration on the local level; certain disputes, unless otherwise provided by national laws, such as rate increases or unfair conference practices, were referrable to mandatory arbitration at the international level by a tribunal selected from a panel of arbitrators.

³⁸ The concerns of the Group В countries regarding the arbitration provisions contained in Resolution 66 (III) are found in Chapter IV of the Report of the Preparatory Committee, on its First Session, supra note 1. In introducing the Group В counterproposals at the Second Session of the Preparatory Committee, which contained an entirely voluntary settlement procedure, the Group В spokesman said that, in the view of the developed market economy countries, conciliation was a useful procedure for friendly settlement of disputes which had proved valuable in other international commercial contexts, and that existing provisions on conciliation had been used as models for the draft proposals, which covered the most important aspects of conciliation. Report of the Preparatory Committee at its Second Session, supra note 26, at 36.

³⁹ Mr. C. P. Srivastava, now Secretary-General of I.M.G.O., then President of the Conference, announced a set of compromise principles at the first session of the conference. These “package” principles appeared to command a broad base of support and excluded mandatory disputes settlement as a component of the compromise: see Annex I, TD/Code/7.

⁴⁰ Supra note 30. Article 24 provides that “the conciliation procedure is initiated at the request of one of the parties to the dispute.” Once such a request is made, the procedures established under the convention must be complied with.

⁴¹ Ibid., Article 31, which defines the purpose of conciliation to be “to reach an amicable settlement of the dispute through recommendations formed by independent conciliators.”

⁴² Ibid., Article 30. The nominations are for a six-year period, subject to renewal.

⁴³ Ibid, Article 45(2).

⁴⁴ Ibid., Article 32(2).

⁴⁵ Ibid., Article 32(3).

⁴⁶ Ibid., Article 32(4).

⁴⁷ Ibid., Article 40.

⁴⁸ Article 49 provides for entry into force six months after at least twenty-four states representing twenty-five per cent of world general cargo and container tonnage based on Lloyds Registry of Shipping, Statistical Tables 1973, have become contracting parties.

⁴⁹ Bangladesh, Belgium, Benin, Cameroon, Chile, Cuba, Gambia, Ghana, Guatemala, Mexico, Niger, Nigeria, Pakistan, the Philippines, Sri Lanka, Tanzania, Togo, Venezuela. The convention remains open for accession pursuant to Article 48.