Transport and logistics contracts are the instruments by which the movement of goods through the supply chain is procured from carriers, freight forwarders, and integrated logistics service providers. Under Iraqi law, the framework is established principally by the Iraqi Civil Code No. 40 of 1951 at Articles 935 et seq. governing the contract of carriage, the Commercial Code No. 30 of 1984, the sectoral transport legislation governing each mode of transport, and the international conventions to which Iraq is a party in respect of the relevant mode of transport. The contract structuring should accommodate these instruments and address the substantive and procedural requirements applicable to the mode of transport and the nature of the consignment.
Contract of Carriage under the Civil Code
Articles 935 to 948 of the Iraqi Civil Code govern the contract of carriage of goods. The contract is concluded between the consignor (the party arranging the transport) and the carrier (the party undertaking to convey the goods), and is for the benefit of the consignee (the party to whom the goods are to be delivered) where the consignor and the consignee are distinct persons. The carrier’s principal obligations are to receive the goods, to convey them to the agreed destination, to preserve them during transit, and to deliver them to the consignee in conformity with the contract. The consignor’s principal obligations are to deliver the goods to the carrier in conformity with the contract, to provide the necessary documentation, and to pay the agreed freight.
Carrier Liability
Under the Civil Code, the carrier is liable for loss, damage, and delay occurring during the period of carriage, save where the carrier establishes that the cause of the loss, damage, or delay is attributable to:
- Force majeure within the meaning of the Civil Code
- The inherent nature or vice of the goods
- The fault of the consignor or the consignee
- Other causes outside the carrier’s control and not attributable to its fault
The liability of the carrier is, in general, calibrated to the value of the goods, with the carrier’s liability for delay limited to the loss directly caused by the delay. The contract may, within the limits permitted by Iraqi law, modify the default allocation through limitation clauses and insurance arrangements.
Carriage by Road
Carriage of goods by road within Iraq is governed by the Civil Code provisions on carriage, the Iraqi Land Transport Law, and the implementing instruments. International carriage by road to or from Iraq engages, in addition, the international conventions to which Iraq is a party. Iraq has historically been a party to the Convention on International Transport of Goods under cover of TIR carnets (the TIR Convention), and the position with respect to other road transport conventions including the CMR Convention should be verified at the contract structuring stage in light of Iraq’s current accession status. The contract should specify the route, the transit countries, the documentation requirements, and the applicable customs procedures.
Carriage by Sea
Carriage of goods by sea to and from Iraq is governed by the Iraqi Maritime Trade Law No. 84 of 1981, the international maritime conventions to which Iraq is a party, and the practice of the international shipping industry. The contract of carriage by sea is conventionally evidenced by a bill of lading, which functions as a receipt for the goods, a contract of carriage, and a document of title. The bill of lading engages substantive considerations regarding the parties’ rights and obligations, the carrier’s liability under the applicable convention, and the documentary discipline of negotiable bills of lading.
Carriage by Air
Carriage of goods by air to and from Iraq is governed by the Iraqi Civil Aviation Law and the international air conventions to which Iraq is a party. The contract of carriage by air is conventionally evidenced by an air waybill, which functions differently from the bill of lading: while it serves as a receipt and as the contractual document, it is not a document of title. The carrier’s liability is, in general, subject to specific liability limits under the applicable convention and the contractual provisions.
Multimodal Transport
Multimodal transport contracts engage the conveyance of goods by two or more modes of transport under a single contract. The legal framework for multimodal transport is less developed than the unimodal frameworks, with the position depending on the contractual provisions, the modes of transport engaged, and the legal status at each stage of the journey. The contract should specify the legal framework applicable to the carriage as a whole, the position with respect to liability at each stage, the documentation requirements, and the procedures for handover between modes. Multimodal transport is particularly relevant to consignments engaging maritime entry through Iraqi ports and subsequent inland transport to inland destinations.
Freight Forwarders
Freight forwarders organise the transport of goods on behalf of consignors, conventionally without themselves performing the carriage. The legal characterisation of the freight forwarder’s role under Iraqi law depends on the substantive content of the engagement: where the forwarder undertakes responsibility for the carriage as a principal, it is characterised as a carrier with corresponding liability; where it acts as an agent of the consignor in the procurement of carriage from third-party carriers, it is characterised as an agent under the Civil Code provisions on agency. The contract should specify the characterisation expressly and address the consequent allocation of responsibility and liability.
Logistics Service Providers
Logistics service providers offer integrated services combining transport, warehousing, customs clearance, inventory management, value-added services, and supply chain management. The legal characterisation engages multiple components within a single contract, with corresponding application of distinct statutory frameworks to each component. The drafting should address the characterisation of each component, the allocation of responsibility and liability for each component, and the integration of the components within the overall service. Third-party logistics (3PL) and fourth-party logistics (4PL) arrangements are addressed in further detail in Chapter 1 of this guide.
Documentation
The principal transport documents are:
- The bill of lading for sea transport, functioning as receipt, contract, and document of title
- The sea waybill for non-negotiable sea transport
- The road consignment note for road transport
- The rail consignment note for rail transport
- The air waybill for air transport
- The multimodal transport document for multimodal transport
- The freight forwarder’s certificate of receipt and certificate of transport
The documentation should be prepared with attention to the legal effects of each document and to the integration of the documents within the broader documentary supply chain.
Claims and Disputes
Claims and disputes arising under transport and logistics contracts engage procedural requirements that should be observed with care. The principal requirements include notification of loss, damage, or delay within the periods specified by the contract or the applicable law, conduct of joint surveys where appropriate, preservation of evidence, and the lodging of formal claims with the carrier within the limitation periods applicable under the contract and the applicable law. The contract should specify the procedures for claims handling, the dispute resolution mechanism, and the governing law, with attention to the appropriateness of the chosen mechanism to the cross-border nature of substantial transport disputes.
How We Can Help
Etihad Law Firm advises on transport and logistics contracts in Iraq, including the drafting and negotiation of contracts of carriage by road, sea, and air, multimodal transport contracts, freight forwarding agreements, and integrated logistics service contracts, the structuring of liability and insurance provisions, the handling of cargo claims, and the conduct of disputes arising from loss, damage, delay, or other transport-related events.