Shipping & Transport - Germany

Facts
Judgment
Comment

Facts

In a recent judgment the Federal Court of Justice heard an action commenced by an English plaintiff under a bill of lading against the German owner of the vessel in respect of a cargo of steel carried from England to Sweden. The front page of the bill of lading contained the name and address of the vessel’s English time charterer in bold print, with Clause 3 containing the Conline bill of lading jurisdiction clause and Clause 17 containing the identity of carrier clause. The plaintiff alleged that the identity of carrier clause made the owner of the vessel the carrier under the bill of lading so that the Oldenburg District Court would have jurisdiction for a claim for damages caused to the steel cargo. The Oldenburg Regional Court denied its international jurisdiction. It held that, under German law, the identification of a carrier on the front page supersedes as an individual agreement the identity of carrier clause on the reverse side, which qualifies only as a standard contract term. As the jurisdiction clause linked the jurisdiction to the carrier's principal place of business, which was in England, the court dismissed the action as inadmissible. This decision was upheld by the Oldenburg Court of Appeal. The cargo plaintiff appealed to the Federal Court of Justice.

Judgment

The Federal Court of Justice reversed the decision and referred the case back to the court of appeal. It held that German courts must determine their international jurisdiction on the basis of the EU Brussels I Regulation (44/20012). As the defendant shipowner had its seat in Germany, German courts would have international jurisdiction under Article 2(1) of the regulation. This jurisdiction would be excluded only if there was a valid agreement excluding the jurisdiction of the German courts. The court considered whether the jurisdiction clause in the bill of lading contained such an agreement and confirmed the view of the appeal court that the effect of an identity of carrier clause in a bill of lading must be determined by the law that would apply if the clause were valid. As the clause intended to make the shipowner the carrier, and as the shipowner was domiciled in Germany, the validity of the clause would have to be tested under German law. Referring to its own previous decisions, the Federal Court of Justice also confirmed the appeal court’s view that under German law the clause has no effect, as the naming of the carrier in the bill of lading prevails as an individual agreement. The federal court referred to the UK House of Lords decision in Homburg Houtimport BV v Agrosin Ltd, and expressly stated that it wished to remain in line with that decision.

Therefore, the federal court held that it was not the German shipowner, but rather the English time charterer which was the carrier under the bill of lading, with the consequence that the bill of lading contained an agreement on the exclusive jurisdiction of the English courts and the application of English law.

Nevertheless, the federal court referred the case back to the court of appeal as that court had not considered whether the jurisdiction clause in the bill of lading still applied between the plaintiff and the shipowner. The federal court confirmed this for the plaintiff, stating that jurisdiction clauses in bills of lading are customary and that those who acquire a bill of lading are bound to the jurisdiction clause therein. Turning to the shipowner, the federal court held that it was so far unclear whether the shipowner had also agreed to the jurisdiction clause. The international jurisdiction of the German courts would be excluded only if the shipowner could rely on the clause. The federal court referred the case back to the appeal court to hear evidence as to whether the shipowner was represented by the master of the vessel, who signed the bill of lading, with the express proviso that this question would have to be determined under English law as this was the law governing the bill of lading.

Comment

This judgment is in line with previous judgments in respect of the substantive effects of an identity of carrier clause under German law. The court confirmed its own previous decisions, according to which such a clause has no effect if the bill of lading identifies a carrier by name. The appeal court had started its considerations with the finding that the shipowner was not the carrier, as the identity of carrier clause had no effect, which led that court to find that it had no jurisdiction as the jurisdiction clause of the bill of lading referred to the exclusive jurisdiction at the place of business of the carrier. Against that, the federal court distinguished between substantive and procedural law, with the result that this is the first German judgment dealing with the procedural effects of an identity of carrier clause.

The federal court stressed that the German courts would have to determine their jurisdiction under the provisions of the EU Brussels I Regulation. As the German courts have genuine jurisdiction against German defendants, they could reject a legal suit only if the parties had derogated the jurisdiction of the German courts by agreement. The jurisdiction clause in the bill of lading could constitute such an agreement.

Consequently, the procedural fate of identity of carrier disputes in German courts will depend on the defence submitted by the defendant shipowner. If the shipowner does not dispute the jurisdiction of the German courts, they will accept their jurisdiction under the EU Brussels I Regulation and reject the claim on the grounds that the identity of carrier clause does not make the shipowner the carrier under the bill of lading. However, if the shipowner disputes the jurisdiction of the court, the court will have to investigate whether the shipowner may refer to the jurisdiction clause in the bill of lading. The difference is remarkable. A decision on the merits is res judicata between the parties, while a procedural decision on the jurisdiction is not.

For further information on this topic please contact Dieter Schwampe at Dabelstein & Passehl by telephone (+49 40 31 77 970) or by fax (+49 40 31 77 97 77) or by email (D.Schwampe@da-pa.com).