Shipping & Transport - Germany

Facts
Decision
Comment


On December 10 2009 the Federal Court of Justice clarified the rules regarding burden of proof and the scope of compensation under the Convention on Contracts on the International Carriage of Goods by Road (CMR) regime in an international land transport case.

Facts

The claimant, a German cigarette manufacturer, brought a claim against the defendant freight forwarder for damages arising from the theft of goods in transit through France.

The defendant had entered into a contract to collect the cigarettes from the claimant's premises in Luebeck, Germany, and transport them to the Spanish city of Leganes. The defendant accordingly instructed a sub-freight forwarder, which in turn instructed the actual carrier, based in Tallin, Estonia, to perform the transport. During the transit passage through France cigarettes worth approximately €1,600 were stolen. The defendant was compensated for the loss to that amount.

The claimant claimed damages arising from tax regulations, in particular EU Directive 92/12/EEC. Based on the directive, the claimant contended that it was liable to France for consumer tax payments caused by the theft of the cigarettes. It further claimed third-party damages caused to the Spanish buyer of the goods because the required Spanish tax strips had already been applied to the cigarette packages.

The court of first instance in Luebeck allowed the claim with regard to both positions. The Schleswig-Holstein Higher Regional Court of Justice allowed the defendant's appeal. The claimant then appealed and was partially successful before the Federal Court of Justice.

Decision

The court had no doubt that the carrier was liable under Article 17 of the CMR. The first question which arose was whether the claimant was entitled to compensation for the consumer taxes to be paid in France under Article 23 of the CMR. This was denied.

If a carrier is liable for compensation in respect of any loss of goods, that compensation will be calculated based on the value of the goods as defined in Articles 23(1) and (2) CMR. Additionally, carriage charges, customs duties and other charges incurred in respect of the carriage of the goods are to be refunded (Article 23(4) CMR). The court concluded that the tax obligations accrued in France could not be compensated according to Article 23. The defendant had already compensated the claimant for the loss of the goods to the amount stipulated in this provision (ie, the value of the goods). Moreover, the court found that the French consumer taxes were not to be considered "other charges" under Article 23(4) of the CMR, since such charges were only those incurred in the normal course of transport and not caused by the loss of the goods. The French consumer taxes were caused by the loss, since they would not have been incurred if the goods had not been stolen as they were transported across France.

The second issue for the court to determine was whether the defendant freight forwarder's liability was unlimited due to Article 29 of the CMR. This would have been the case if the defendant had caused the damage through wilful misconduct or behaviour considered to be equivalent to wilful misconduct. The court found that this was not the case.

The court held that the claimant had not satisfied its burden of proof. The court confirmed the two-step approach that is usually applied in cases involving goods lost during transport. First, the claimant must present to the court a possible scenario whereby the freight forwarder acted with wilful misconduct or the like. Second, the freight forwarder must state the relevant circumstances particular to the case. Here, in the court's view the defendant had adequately stated the relevant circumstances; namely that the lorry had parked at a specified guarded parking site. Overruling a prior judgment of November 7 1996, the court held that the claimant at this stage could not merely rely on challenging these facts. It held that, rather than the defendant bearing the burden of proof with regard to its statement regarding the theft of the goods, it was the claimant that had to prove that the defendant's statement was false.

The court also held that aerial photographs submitted by the claimant apparently obtained using a software application similar to Google Earth were insufficient to challenge effectively the defendant's contention that the parking site in France was guarded.

Finally, the court held that the taxes accruing to the Spanish buyer could be compensated under Article 23(1) since they might have contributed to the value of the cigarettes. On that basis the court remanded the case to the higher regional court for reappraisal.

Comment

Where goods are lost during transport, the allocation of the burden of proof is often crucial to the outcome of the subsequent proceedings. The courts have always aimed to strike a balance between the rule that the claimant bears the burden of proof for its claim on the one hand, and the fact that the defendant freight forwarder is usually closer to the matter on the other. The recent Federal Court of Justice judgment is in line with this balancing approach. The burden of proof remains with the claimant in cases of damaged goods, provided that it has access to the same evidence as the defendant.

For further information on this topic please contact Jörg Noltin at Dabelstein & Passehl by telephone (+49 40 31 77 970), fax (+49 40 31 77 97 77) or mail (j.noltin@da-pa.com).