Shipping & Transport - Germany

Facts
Decision
Comment

Facts

In a recent case German cargo insurers sued a German forwarder in the Regional Court of Hamburg for damage caused to a printing machine. The machine was carried under a sea waybill, which had been issued under a forwarding contract for fixed remuneration from a place in Germany via the ports of Bremerhaven and New York to Brooklyn. Initially, direct delivery from the ocean vessel to the final receiver in Brooklyn was planned. However, due to the excessive rates for weekend work, it was decided to keep the printing machine on the terminal until the beginning of the following week. On its way from the ocean vessel to the storage location, the printing machine fell from a MAFI trailer, causing more than €600,000-worth of damage to the machine. The cargo insurers treated the carriage on the terminal as an independent inland transport leg of a multimodal transport and argued, on the basis of the German statutory provisions on multimodal transport, that the truck driver acted recklessly, leading to an unlimited liability. The defendant forwarder argued that the carriage on the terminal was part of the ocean voyage, so its liability under the terms of the contract of carriage was limited to 666.67 special drawing rights (SDR).

Decision

The court held the forwarder liable for an amount equivalent to 2 SDR per kilogram. It accepted that the printing machine was carried under a multimodal transport contract of carriage. The handling on the terminal at New York did not qualify as an independent land transport. The ocean carriage would end only with delivery of the cargo by the ocean carrier. The individual facts of the case would determine whether such delivery took place alongside of the ocean vessel or at the terminal gate. At the terminal in question, it was standard practice for ocean carriers to arrange discharge of the cargo into the terminal and for on-carriers to take delivery from the terminal rather than from the ocean carrier directly alongside the vessel. The fact that in this case the parties had intended a direct delivery alongside the vessel was irrelevant if the plans later changed and the standard practice was followed.

The applicable limitation was that of Section 660 of the German Commercial Code - that is, 2 SDR per kilogram or 666.67 SDR per package, whichever was the higher. Here the kilogram alternative resulted in the higher amount. This result did not contradict the Hague rules, as the mandatory application of the Hague Rules in trade between Germany and the United States requires that a bill of lading be issued. In this case the forwarder had only issued a sea waybill, which referred to German law as such.

Comment

The judgment addresses two important aspects of law.

First, the general view in Germany is that discharge from an ocean vessel into a terminal is part of the ocean transport and does not qualify as land transport. This appears to be the first German decision in an ocean transport case that at least considers the application of German land transport law on cargo handling in a terminal at a foreign port. However, this requires that the parties effectively agree on a non-customary delivery alongside the vessel and that such delivery actually takes place. The mere intention for such a delivery to take place, where the delivery is not ultimately carried out, is not sufficient to render the transport on the terminal independent from the ocean transport.

The judgment further demonstrates that the widespread perception that in trade to US ports only the Hague Rules or the US Carriage of Goods by Sea Act applies is incorrect. The court stressed that in the absence of a bill of lading, the parties are free to agree on terms which are to govern their contract. If they agree on German law, in the absence of any other contractual terms the substantive law of the Hague-Visby Rules applies, as they have effect in Germany not only for bills of lading but also for all kinds of contract of carriage by sea. Claimants should thus carefully study the transport documents issued to determine what limitation of liability governs the transport.

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).