German Supreme Court Decision I ZR 138/04

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Federal Republic of Germany: Supreme Court, Bundesgerichtshof: I ZR 138/04: 18 October 2007
In this case, the German Federal Supreme Court (BGH) rendered an important judgment on the question of which limitations of liability are applicable in the case where goods carried under multimodal contracts of carriage are damaged during transport

DMC Category Rating: Developed

This case note is contributed by Jacobus Bracker of the Law Office Jacobus Bracker. This firm is the International Contributor to the website for the Federal Republic of Germany

In this case the plaintiffs, the cargo insurers of a German exporter, sued the carrier, which had been instructed by the insured to transport printing machines from Bremerhaven/Germany to Durham/North Carolina via Portsmouth/Virginia. During the ocean carriage from Bremerhaven to Portsmouth two crates of the consignment had been stowed on a mafi-trailer. After arrival in Portsmouth the mafi-trailer with the crates had been trucked for 300 metres out of the vessel into a warehouse to be loaded on a truck for the further road transportation.

After the chains securing the crates to the trailer had been removed, one of the crates was successfully loaded onto the truck. In order to bring it into a better position for loading the second crate onto the truck, the trailer had to be moved again. During that process the second crate fell off the trailer and was damaged.

Plaintiffs argued that the legal provisions for road transport should apply and consequently defendants should only be allowed to limit their liability to 8.33 SDR per kilogram which would be sufficient to cover the damages completely. Defendants argued that, at the time of the damage, the ocean carriage had not yet ended and therefore their liability should - according to German maritime law - be limited to 2 SDR per kilogram.

The Court’s decision
The BGH decided that the damage occurred during a road transport and therefore the carrier’s liability was limited to 8.33 SDR per kilogram according to sec 431 of the German Commercial Code (Handelsgesetzbuch ‘HGB’).

However, the court pointed out that the haulage of the mafi-trailer out of the vessel and into the warehouse did not constitute a separate road leg of the multimodal transportation but was a dependent annex of the ocean carriage. That had been clarified in an earlier decision of the BGH – see below.

Unlike in the earlier case, here the goods had been damaged not during the movement of the mafi-trailer but during the process of loading the goods from the mafi-trailer onto the truck. That process of loading was considered as part of the subsequent road transport.

In its earlier decision (BGH, Judgment of 3 November 2005 - I ZR 325/02), the BGH had laid down that the ocean carriage would only end with the loading of the goods onto the next means of transportation by which they would leave the port.

The reasoning for this was that the cargo handling in the terminal area is closely connected to and characteristic of the ocean carriage. A survey of the container and an assessment of eventual damages would regularly take place only after delivery to the consignee. At that time, it could very often not be determined whether the damage had occurred whilst the goods were on board the vessel or whilst being handled in the terminal. Further the ocean carrier was obliged to deliver the goods to the consignee only and therefore the ocean carriage could not end before such delivery.

According to the BGH this may not apply if ‘special circumstances’ are given – see ‘Comment’ below.

The latest decision of the BGH now clarifies where the end of the ocean carriage could be. The process of loading the goods onto the truck by which the goods leave the dockside is considered as part of the following leg of the multimodal transportation. However, it may be difficult to decide in the concrete case whether or not loading operations have started already or which area could be considered as dockside, port or terminal.

The handling of the cargo by the terminal operator is part of the ocean carriage. However, according to the BGH, that applies only if no special circumstances are given. It would be a long shot to estimate what such circumstances could be. The length of the distance over which the cargo is transported on the terminal may play a role. However, the court gave no indication.

The decisions leave further questions open - they did not have to be decided in the respective cases – in particular, the question how the law applicable to the leg of transport where the damage occurred is to be determined and whether a choice of law clause in the multimodal contract of carriage influences that determination.

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