Shipping & Transport - Germany

Facts
Decision
Comment

In a decision of February 28 2008 the Hamburg Higher Regional Court dealt with the question of where the carriage by sea leg of a multimodal transportation begins (for further details please see "Is Cargo Handling and Storage at Port Terminal Part of Subsequent Sea Carriage?"). In a recent case (dated April 10 2008) the court confirmed its findings in that case. The court's decision provided a reliable method to determine the starting point of the carriage by sea leg; considered together with the Federal Court of Justice’s answer to the question of where the carriage by sea leg ends, the decision enables the clear demarcation of the special drawing rights (SDR) regime.

Facts

The defendant had been instructed by the claimant’s insured to arrange the transport of a cooling machine to the consignee in the United States. The defendant received the cooling machine in good order and arranged transport from Zerbst to Hamburg, Germany by truck. The shipment was transported from Hamburg to Bremerhaven, Germany on a feeder vessel and was discharged at the Bremerhaven container terminal, where it was stowed until the sea voyage to New York could commence. The shipment was placed on a flat rack in order to be moved to a storage room by MAFI trailer. Shortly before it arrived there, the cooling machine fell from the trailer and was damaged. The plaintiff argued that the damage had been caused by gross negligence, as the security belt on the trailer had not been fastened.

The claim was made for the full amount of damages under the German Land Transport Law. The defendant argued that its liability should be limited to two SDR under the applicable law for the carriage by sea leg.

Decision

At first instance, the Hamburg Regional Court granted the unlimited amount of damages under the Land Transport Law. The court found that cargo handling and storage is significant enough not to be treated as an annex to the subsequent carriage by sea. Furthermore, it ruled that the liability limitation did not apply because the defendant acted recklessly or with the intention to cause damage by not fastening the security belt.

However, the Hamburg Higher Regional Court found that the handling of the cargo at the container terminal could not be considered a leg of the land transportation. The court cited a Federal Court of Justice decision of October 18 2007 and found that the case at hand was similar to that case because the transportation to and storage at the container terminal was a logical part of the sea carriage leg. Even if storage in the port area continues for several weeks, it is logical to combine it with the ensuing sea passage because it depends on the schedule of the vessel for the sea voyage. Hence, the limitation of liabilty for carriage by sea imposed by the two SDR must apply. Even if the cargo-handling company acted negligently or with the intention to cause damage, this cannot be attributed to the carrier under sea transport law because it was not directly caused by it or its servants or agents.

Comment

By this decision, the Hamburg Higher Regional Court confirmed its judgment of February 28 2008 regarding where carriage by sea begins. The key difference between the case at hand and the cited decision is that in the case at hand, the cargo handling company did not have a contract with the shipping company to accept cargo on the latter’s behalf. In this decision the court found that it is characteristic that the cargo is stored and handled at the terminal. The Hamburg Higher Regional Court found that it was not decisive for how long the cargo was stored at the sea port or how many times it was moved. The court found that it was a logical step before commencement of the sea voyage; therefore, the storage period was governed by the carriage by sea rules.

However, one question remains unanswered: under what circumstances are storage in a port area and movement of a shipment subject to the Land Transport Law? Despite this, the judgment confirmed the tendency of the Hamburg Higher Regional Court to extend carriage by sea to the handling of a shipment in the port area. Together with the Federal Court of Justice decision of October 18 2007 and the Hamburg Higher Regional Court decision of February 28 2008, the limitation of liability to two SDR per kilogram has been further confirmed.

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