Shipping & Transport - Germany

German shipping law has taken a step towards extensive reform after a group of experts – following five years of deliberation – produced a draft for new legislation, including a detailed statement on the reasons for each modification.

The minister of justice established the group of experts in order to modify a law which came into force in 1860 and has since been revised only slightly and adapted to international conventions.

The group aimed to modernize the law and establish a firm base for tackling the challenges that Germany faces as a leading export nation with an important shipping industry, while at the same time taking into account modern international conventions and recent developments in shipping law that have occurred in other countries.

The draft law was structured on the general Transport Law on Freight, Forwarding and Warehousing. Thus, it aims to facilitate access to shipping law, which has hitherto been a field for a few legal experts only.

In addition to a thorough revision of the law on the contract of affreightment, a section has been introduced regarding bareboat charter and time charterparties, while the section on the principle of general average has been streamlined and the section on the co-ownership of ships discarded.

The group's report suggests that the law be modified in order to:

• introduce liability for damages which are caused by a delay in the delivery of goods;
• facilitate the stipulation of individual agreements by commercial parties;
• allow specific changes in general conditions which deviate from the statutory law only if liability has been increased to 17 special drawing rights (SDR) per kilogram;
• exclude the right of a carrier to escape liability for damages caused when the goods are at land in the custody of the carrier;
• eliminate the nautical fault defence, which currently entitles a carrier to avoid liability based on negligent navigation or management of the vessel;
• extend the carrier's obligation to exercise due diligence during the entire voyage by sea; and
• increase the limitation of liability only marginally, in accordance with new developments in international shipping law, to 875 SDR per package or 3 SDR per kilogram.

Following the presentation of the report, some experts and commentators have stated the need for further minor modifications.

None of the experts in the group was fully satisfied with the outcome of the deliberations. This could be considered to be a good sign, indicating that the report is sufficiently balanced to be passed by Parliament (the Bundestag) and the Federal Council (the Bundesrat) when the time comes. Reports suggest that Parliament will consider the draft in 2010.

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