A German contracting carrier (A) issued a booking note to the German division of a Danish corporation (B) to perform a carriage of goods by sea from Hamburg to Felixstowe, England, as well as the subsequent road carriage from Felixstowe to Enfield. The booking note contained a reference to the latest version of the common German conditions of freight forwarding (General German Forwarding Conditions (ADSp)), and named Hamburg as the choice of venue. The Danish corporation accepted the booking note the same day by sending a booking confirmation.
B filed declaratory proceedings against A in Denmark. During the court proceedings, B exhibited the booking confirmation which had been sent to A. It referred to B's own terms and conditions, which stated that "all transport is undertaken according to B's standard non-negotiable Combined Bill of Lading". B argued that its non-negotiable bill of lading terms and conditions were printed on the back of the booking confirmation. Section 27 of the terms and conditions stated that disputes were to be resolved at the Copenhagen Maritime and Commercial High Court. These conditions were also contained in the bill of lading issued to the shipper in connection with the delivery of goods for the carriage by sea.
During subsequent court proceedings, the question arose as to which parties' standard terms and conditions were to prevail.
The court found that the parties had agreed on the Copenhagen Maritime and Commercial High Court as the venue for resolving disputes under the contract.
The court confirmed that B's standard terms and conditions had been printed on the back of the booking confirmation sent to A, and that A had failed to object to these conditions. The content of the clause was found to be neither unusual nor particularly burdensome. The court further noted that, at the time of the contract, a continuous and long-term contracting arrangement had prevailed between the parties. Therefore, the contracting carrier was aware that it was customary for the standard terms to be printed on the back of the bill of lading, thereby comprising the terms under which the carriage was to be performed.
Having considered these facts, the court rejected the argument that a contracting carrier's reference to the ADSp and Hamburg as the choice of venue in the booking note could justify an alternate result.
The case before the Copenhagen Maritime and Commercial High Court illustrates a situation in which both parties, immediately before the formation of a contract, refer to their own standard terms and conditions. This is commonly known as the 'battle of the forms'. The case further illustrates the problem which arises when contracting parties, while focusing on issues essential to a specific deal, are less conscious of questions such as the choice of venue for resolving disputes.
The task is to determine whose standard terms of carriage prevail in a battle of the forms. A number of different models can be applied to resolve such a conflict: the knock-out rule, the first-shot rule and the last-shot rule. In the case at hand, the court seems to have applied the last-shot rule, stating that when a party fails to object to a last shot, the standard terms contained in the booking confirmation will govern the contract.
Therefore, a contracting carrier that wants its own standard terms to govern a contract must object to a booking confirmation that incorporates conflicting standard terms and conditions. This is paramount in long-term contracting relations with a certain degree of continuity, wherein the other party's terms and conditions have previously been a part of the contract.
For further information on this topic please contact Jesper Windahl at Windahl Sandroos & Co by telephone (+45 3525 3800) or email ([email protected]). The Windahl Sandroos & Co website can be accessed at www.wsco.dk.
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