Shipping & Transport - Germany

Facts
Decision
Comment


On June 18 2009 the Federal Supreme Court ruled on the requirements applicable to the forfeiting of a carrier's right to limit liability in the context of shipping.

Facts

The claimant purchased a car to be carried from Antwerp in Belgium to Luanda in Angola. The transport was carried out by the defendant, a German freight forwarder, by way of a multimodal carriage by land and then sea. During the sea carriage from Belgium to Angola the car was damaged on board due to the ocean carrier's fault.

The claimant claimed damages totalling €41,691. It submitted that: (i) the defendant forwarder was to be treated as a carrier since it charged for the transport on the basis of a fixed tariff; and (ii) as such, the defendant was barred from relying on the Hague-Visby limitation (two special drawing rights (SDR) per kilogram or 666.67 SDR per package) as incorporated into Section 660(3) of the Commercial Code on the grounds that the damage was caused by an act of gross negligence by the carrier (ie, a 'qualified fault') attributable to the defendant.

The regional court and the higher regional court ruled in favour of the claimant and allowed the claim in full. Upon appeal by the defendant, the Federal Supreme Court rejected the claimant's argument and applied the Hague-Visby limitation.

Decision

The Federal Supreme Court confirmed the forwarder's role as carrier, but held that a carrier forfeits the right to limit its liability pursuant to Sections 658, 659 and 660(1) of the code only if the damage was caused by the carrier's personal qualified fault. A carrier is not responsible for an act or omission by its servants or agents amounting gross negligence – in this case, an act or omission committed by the ocean carrier as the party instructed by the defendant to undertake the sea carriage.

The claim for damages against the defendant would be allowed on the basis of Sections 459, 452, 452a and 606(2) of the code, but quantum would therefore be limited pursuant to Section 660(1) of the code to SDR 666.67 per package or unit or two SDR per kilogram, whichever was higher.

Section 660 does not specifically state that the carrier must be personally at fault. However, the court held that the history of Section 660(3) of the code justified this conclusion on the grounds that the German provisions correspond with the Article 4(5)(e) of the Hague-Visby Rules. Had the German legislature intended to amend the provision in this respect – as it did when incorporating Article 13 of the Athens Convention 1974 into Article 10(1) of Section 664 of the code (which specifically stipulates that negligent acts by the crew are to be attributed to the carrier) – it would have proceeded accordingly. The fact that such an amendment was not made indicates that a personal act or omission amounting to gross negligence is still required in order for the carrier to lose the right to limit liability.

Comment

The finding that a carrier forfeits its right to limit liability only where it is guilty of a qualified fault is in line with previous court rulings.

A few German commentators have complained that this position does not comply with German rules on the construction of legal provisions. It is argued that Section 607(2) of the code precisely defines that the carrier is responsible for its own fault only when the damage is caused by the handling of the ship or by fire. Apart from this exemption, a carrier is responsible for the acts or omissions of the crew (eg, pursuant to Section 606(1)). Section 660(3) of the code is based on Hague-Visby and as such should be reconciled with the rules concerning liability and limitation of liability of other international conventions of carriage (eg, the Warsaw Convention 1929 and the Convention on the Contract for the International Carriage of Goods by Road). According to Article 25 of the Warsaw Convention and Article 29(2) of the Convention on the Contract for the International Carriage of Goods by Road, the carrier's liability extends to the acts or omissions of the crew.

Regardless of the arguments on this issue, practitioners must take note of the Supreme Court's ruling since the lower courts are very likely to follow suit.

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