German Law: liability in multimodal transport - beginning and end of carriage by sea clarified

Which regime determines liability in the case of multimodal transport where the damage occurs during the period of transition from the land transport leg and the carriage by sea leg? The Hamburg Supreme Court deals with this issue in its ruling of 28 February 2008.

Facts

 

The defendant, a freight forwarder, undertook to transport five concrete mixer trucks from Bad Schussenried in Germany to Mumbai in India at a fixed price. The defendant then subcontracted the road carriage and the sea carriage to different carriers. The road carrier transported the goods from Germany to Antwerp in Belgium and handed them over to a terminal operator. The terminal operator took over the goods on the basis of a terminal contract with the sea carrier. The goods were stored for a few weeks on the terminal area while waiting for their shipment to India. Unfortunately, four of five concrete mixer trucks were stolen before having been loaded on the vessel.

The cargo underwriters claimed damages for the loss of the cargo after having obtained the shipper’s claims against the freight forwarder by way of an automatic transfer of rights (cessio legis) as consequence of the payment of the insurance indemnity.

Decision

Both the Hamburg District Court in first instance and the Hamburg Supreme Court found that German law was applicable. It was obvious that the carriers and terminal operators were involved in order to fulfil the freight forwarder’s obligations to transport the goods to India, so that the terminal operator’s failure to protect the cargo against loss was attributable to the freight forwarder. However, one of the main issues between the parties was whether the land or sea transport liability regimes were to apply to this loss.

The District Court found in first instance that terminal operations are to be qualified as an independent land transport leg rather than an annex or prefix to other legs of the voyage. The Hamburg Supreme Court rejected this approach. It followed recent judgments of the Federal Supreme Court which found that any terminal operations are characteristic of the sea transport, so that  “under usual circumstances” it is not justified to qualify terminal operations as an independent leg of a transport. The Hamburg Supreme Court did not accept that any “unusual circumstances” of the case (e.g. the storage of the goods for more than three weeks at the terminal) gave rise to an exception and, consequently, only had to consider whether the terminal operations were in this case part of the previous land transport or part of the following sea transport.

Of course, the categorisation of storage at the terminal as land or sea transport significantly affected the extent to which the freight forwarder could limit its liability. The sea transport regime allowed a limitation of liability of 2 SDR/kg whereas the freight forwarder’s liability would have been 8.33 SDR/kg if the terminal operation was to be qualified as part of the previous land transport. The Hamburg Supreme Court decided in favour of the sea transport regime. Its decision was driven by the circumstances of this individual case, in particular that the terminal operator was instructed by the sea carrier and, therefore, received the goods on behalf of the sea carrier. Nevertheless, the reasoning of the judgment reveals that the Court, in the absence of “unusual circumstances” (whatever these may be) tends to qualify terminal operations generally as being part of the sea leg of a voyage as those operations are characteristic of sea transport.

markus.eichhorst@incelaw.com

katharina.schicho@incelaw.com