Shipping & Transport - Germany

Contractual Lien
Statutory Lien
Comment


A carrier may invoke a right of retention in respect of goods in its custody based on a contractual lien clause, or else avail of a statutory lien under German law. A lien may refer to claims which are connected to the particular shipment of the goods being retained, such as freight and storage charges for that specific shipment ('connected claims'). Additionally, the lien may include all of the carrier's claims against the contracting party, whether connected or not to the retained consignment ('unconnected claims').

Contractual Lien

In practice, in most cases the carrier is instructed not by the goods owner, but by a freight forwarder. Consequently, the carrier is aware of the fact that the contracting party is not the owner of the consignment, and can thus assume that the owner does not agree with the constitution of a contractual lien.

The carrier can obtain a contractual lien only if the owner of the goods ought to have anticipated and taken into account that the contracting party (ie, the freight forwarder) could have accepted the subcontractor's contractual lien clause. However, the extent to which a carrier may acquire a contractual lien under these conditions is disputed. Since the statutory lien provides security only for connected claims and for unconnected claims which are undisputed, it is reasonable to argue that the owner ought to anticipate a contractual lien only to the same extent as the statutory lien. A claim is considered to be undisputed if it is either legally binding as established by a court decision or, acknowledged, or if the objections against the claim are absurd, without substance or non-existent.

Thus, the carrier may invoke a contractual lien only for claims directly connected to the specific carriage of goods or for other undisputed claims based on carriage, forwarding or storage contracts between the carrier and the contracting party.

Furthermore, the carrier may acquire a contractual lien in 'good faith'. In civil law it is generally recognized that this good faith refers to the ownership of the goods. Thus, for this good faith to apply under civil law, the carrier would have to assume that his contracting party is the owner of the goods – obviously not the case with freight forwarders. However, under Section 366(1) of the Commercial Code, it is sufficient that carrier's good faith refers to freight forwarder's right of disposal of the goods. If the carrier trusts the freight forwarder's authority to organize the transportation, the carrier may acquire a lien in good faith. Nevertheless, the carrier is prevented from seeking security for disputed claims which are unconnected to the particular shipment, as German law tends to protect owners that lack insight into which subcontractor is instructed by the freight forwarder.

Statutory Lien

Section 441 of the code sets out a statutory lien for the carrier. Section 441(1) reads as follows:

"The carrier has a lien over the goods for all claims founded on the contract of carriage and for uncontested claims arising from other carriage, forwarding or warehousing contracts concluded with the sender."

The statutory lien covers claims directly connected with the shipment of the lien object. The carrier also has a lien for claims which are unconnected with the particular carriage (eg, claims arising from other freight or warehousing contracts), as long as these claims are uncontested.

If the contracting party of the carrier is not the goods owner, but a freight forwarder, the carrier is nevertheless entitled to rely on the statutory lien if the owner ought to have been aware of the possibility of a statutory lien being invoked. Since it is common practice for the goods owner to authorize a freight forwarder to handle the goods and subsequently subcontract a carrier, the prevailing opinion is that the owner ought to know that the statutory lien exists. As such, the carrier is entitled to seek security for connected and uncontested unconnected claims by retaining the consignment.

Beyond that, a statutory lien may be acquired in good faith. Section 366(3) states that Section 366(1) applies to connected claims. Thus, the carrier may obtain a lien if it trusts in the freight forwarder's right of disposal of the goods. Furthermore, Section 366(3) provides that, for unconnected claims, 'good faith' must refer to the ownership of the goods. In other words, it is impossible for the carrier to acquire a lien in good faith for unconnected claims since the carrier knows that the freight forwarder is not the owner of the goods.

Comment

The issues surrounding the right of retention based on a contractual or statutory lien are highly significant, since such liens may constitute the only promising way for a carrier to seek the satisfaction of claims against an insolvent freight forwarder. However, the owner's interests must be taken into account, since goods owners usually have nothing to do with the problems within the privity of contract between the freight forwarder and the carrier. German law tries to balance the interests of carriers and goods owners by providing for a contractual and a statutory lien for connected claims and unconnected claims which are not contested. For other claims the carrier is not entitled to enforce a lien on the owner's goods. The legal background for an acquisition in good faith is still disputed in Germany, but it appears that the prevailing understanding is that, ultimately, the owner's interests prevail in respect of unconnected claims in dispute.

For further information on this topic please contact Steffen Maelicke at Dabelstein & Passehl by telephone (+49 40 31 77 970) or by fax (+49 40 31 77 97 779) or by email (s.maelicke@da-pa.com).