Shipping & Transport - Germany

Facts
Stuttgart Court of Appeal decision
Comment


On October 21 2009 the Stuttgart Court of Appeal ruled on a case involving the conclusion of a contract of carriage by air, the concept of gross negligence in the Montreal Convention and the notification process pursuant to Article 31 of the convention.

Facts

The claimant claimed damages from the defendant freight forwarder for damage in transit to a consignment of electronic equipment. The parties had concluded a framework agreement giving the defendant the discretion to choose the means of transport for each individual carriage. The consignment was collected at the defendant's subsidiary in the Czech Republic, received in an "apparent good order and condition" and carried by air to the defendant's transshipment warehouse in Germany for subsequent carriage by road to the consignee's business premises. The consignment was delivered on January 8 2007. The consignment showed no visible signs of damage and the consignee acknowledged receipt without any qualifications. It transpired that the consignment had suffered wet damage during its handling at the defendant's transshipment warehouse. The claimant notified the defendant of the damage by email on January 23 2007.

The claimant alleged that the defendant was liable as carrier, pursuant to German transport law as incorporated into the Commercial Code. The Montreal Convention was inapplicable because the goods were not carried by air and there was no contract of carriage by air between the parties. The defendant could not rely on the limitation of liability under the code as it acted with gross negligence, since it was unable to state in detail:

• how the goods were carried;
• the cause of the loss; or
• the nature of any precautions taken to prevent damage occurring.

The defendant argued that the parties had concluded a contract for carriage by air, since the defendant had issued an air waybill. In any event, it was well known that the defendant regularly used aircraft to perform the carriage. Hence, the defendant argued, the Montreal Convention applied and the defendant was entitled to limit liability accordingly. The circumstances of the damage were investigated by the defendant and there was no further obligation to undertake further activities in this respect.

The court of first instance allowed the claim. The defendant's appeal was successful.

Stuttgart Court of Appeal decision

The court noted that the goods were carried by air between two Montreal Convention jurisdictions. The defendant had issued an air waybill. In such circumstances there was no reason to assume that the goods were not carried by air. It was a publicly known fact that the defendant operated an air carrier fleet and it would be economically unreasonable to arrange for a carriage by road for the consignment concerned unless this had been specifically agreed, which was not the case.

The court held that the parties had, at the very least, concluded an implied contract for the carriage by air – notwithstanding that the framework agreement did not specifically stipulate aircraft as a means of transport. The issuing of an air waybill constitutes an offer to contract for carriage by air. The claimant did not object, and in light of the undisputed and established fact that the defendant had regularly used aircraft for the claimant's previous shipments, the court inferred that the claimant had implicitly accepted this offer.

The Montreal Convention was applicable even if the damage occurred in the defendant's warehouse. Article 18(4) of the convention provides that where carriage by land outside the airport takes place in the course of the performance of an air carriage contract, whether for the purposes of loading, delivery or transshipment, any damage is presumed, subject to proof to the contrary, to have been the result of an event which took place during the air carriage.

Thus, the court ruled that since the carriage outside the airport was performed for the purposes of transshipment, the convention was applicable. The claimant failed to refute this assertion.

It was irrelevant whether the defendant acted with gross negligence. The carrier's right to limit liability in the event of damage to goods provided for in Article 22(3) of the convention is not displaced by Article 22(5) which refers only to Article 22(1) and 22(2) and excludes 22(3).

Finally, the court found that the claimant had failed to notify the defendant of its claim within the timeframe stipulated in Article 3(2) of the convention. Notice should have reached the defendant by January 22 2007, 14 days after the delivery of the consignment. In the event, notice was served one day later. Leave to appeal on a point of law was denied.

Comment

This judgment is not final. According to the Stuttgart Court of Appeal registry, the claimant lodged an application for leave to appeal to the Federal Supreme Court on the grounds that it had not been granted a fair hearing. However, such applications rarely succeed.

On the one hand, the judgment demonstrates the tenacity with which parties are prepared to battle in order to prevent the application of the Montreal Convention and its limitation of liability regime. On the other, it highlights the fact that the application of the convention may be denied even in cases where the carrier issued an air waybill – as held by the court of first instance. Thus, especially when operating on the basis of framework agreements, carriers would be well advised to establish clear evidence of the conclusion of the contract to avoid having to rely on a court to rule that an implied agreement had been reached, based on circumstantial evidence.

For further information on this topic please contact Esther Mallach at Dabelstein & Passehl by telephone (+49 40 31 77 970), fax (+49 40 31 77 97 77) or mail (e.mallach@da-pa.com).