M/V Atlantic Concert

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Transport insurer of X. v. freight forwarder Y – M/V "Atlantic Concert"
Federal Republic of Germany: Regional Appeal Court Hamburg (Oberlandesgericht Hamburg – OLG): TranspR 2004, 403: 19 August 2004 – 6 U 178/03
Combined transport: law applicable to losses during transhipment: Whether a separate land transport: whether subject to limitation of general german law of affreightment: whether bill of lading limitation clause in valid form

In this case, goods transported under a Multimodal Transport Bill of Lading were damaged when they fell off a mafi trailer after discharge from the sea vessel on their way to the warehouse for on-carriage by road. The Court held, overruling the decision at first instance, that transport by mafi trailer in the port constituted a separate land transport, subject to the general German law of affreightment, under which the defendants’ liability was limited to 8.33 SDR per kilogram. The Court rejected the defendants’ argument that the transport by trailer to the warehouse was an annex to the sea transport and subject to maritime law, so that their liability was limited to 2 SDR per kilogram pursuant to German maritime law and their bill of lading terms. The limitation of liability contained in the bill of lading was invalid as it was not in accordance with the formal requirements set by the general law of affreightment

DMC Category Rating – Developed

Case Note contributed by Daja H. Böhlhoff, partner of BBL Rechtsanwälte. BBL is the International Contributor to this website for Germany

The defendant freight forwarder was instructed to arrange for the transport of a consignment of printing machines from Bremerhaven via Portsmouth to Durham, North Carolina, in the United States of America. The transport was covered by a Multimodal Bill of Lading issued by the defendant. The goods were stowed in crates, which were loaded onto mafi trailers. The trailers carrying the crates were loaded on board m/v "Atlantic Concert" at Bremerhaven. After arrival at Portsmouth, the trailers and crates were discharged and hauled to a warehouse for on-carriage by truck. After one crate had already been removed from one of the trailers and heaved onto the truck, the trailer was moved to allow the removal of the second crate. When the trailer was moved, the second crate (weight: 25,490 kgs) fell to the ground and the goods inside were severely damaged.

After the defendants had compensated the plaintiffs on the basis of 2 SDR per kilogram, the plaintiffs claimed an additional amount of EUR 173,041. They argued that the limitation of liability was 8.33 SDR per kilogram pursuant to the general German law of affreightment. The loss had occurred during a separate land transport leg of the voyage and was thus not subject to the maritime law limitations and exclusions of liability. The defendants were of the opinion that the transhipment in port after discharge from the sea vessel constituted an annex to the sea voyage which was governed by maritime law.

The Landgericht Hamburg had ruled in favour of the defendants that the loss was governed by maritime law and that the defendants’ liability was limited to 2 SDR per kilogram.

Upon the plaintiffs’ appeal, the Oberlandesgericht ("OLG") overruled the decision of the first instance court and held that the loss was governed by the general German law of affreightment so that the limitation of liability was 8.33 SDR per kilogram.

The contract for the combined transport was between two German parties so that the liability of the defendant was subject to German law, in particular section 452* German Commercial Code (HGB). Because it was undisputed that the goods were damaged during transhipment it could be established that the loss occurred during a specific leg of the carriage. That meant that the law governing the liability of the carrier was to be determined by section 452(a) HGB**, that is, in accordance with the legal provisions which would apply to a contract of carriage covering the leg of carriage where the loss occurred. The transport by mafi trailer covered a distance of several hundred metres which was sufficient to make it a separate leg of carriage. Because the goods had already been discharged from the vessel and were in the course of being loaded onto the truck, the transport to the warehouse was not an annex to the sea transport, which would be subject to maritime law, but a separate land transport to which the general German law of affreightment applied. In this regard, the court attached importance to the complexity of the heaving and lashing of the crates, on which the shipper had given specific and detailed instructions, and to the fact that the chains securing the crates on the trailer had already been removed prior to the loss occurring whilst the trailer was being shifted. Accordingly, the limitation of liability was 8.33 SDR pursuant to section 431 HGB.

The Court held that the defendants could not rely on the bill of lading clause limiting their liability to 2 SDR per kilogram because the general law of affreightment (section 449 HGB) required that general business terms relating to the limitation of liability had to be given a prominent appearance by a special printing technique. In this case, the limitation clause had been marked on both sides by a vertical line. The Court held this to be insufficient because the line ran along the entire clause and did not particularly emphasise the limitation amount of 2 SDR.

An appeal to the Federal Supreme Court (Bundesgerichtshof) was not allowed by the OLG. The defendants have filed an objection to this ruling, claiming the right to appeal. This application is still pending at the Bundesgerichtshof.

The judgment – which is surprisingly short in view of the relevance of the matter – confirms the prevailing opinion in legal literature that transport within the port during the course of transhipment constitutes a separate leg of carriage and is not to be considered an annex to the sea transport, with the result that maritime law does not apply. This principle - which would also govern transhipment from vessel to vessel - has far-reaching consequences for the liability of the sea carrier and the combined transport operator: if the liability for losses during transhipment is subject to the general law of affreightment, the general limitation of liability is 8.33 SDR and the requirements for the valid incorporation of general terms to stipulate different limitations or exclusions of liability are very strict. To safeguard their rights of recourse against terminal operators and sub-carriers, it seems advisable for combined transport operators as well as sea carriers to reconsider the terms of their bills of lading and sub-contracts.

* section 452 HGB: "If carriage of goods is performed by various modes of transport on the basis of a single contract of carriage, and if, had separate contracts been concluded between the parties for each part of the carriage which involved one mode of transport (leg of carriage), at least two of these contracts would have been subject to different legal rules, the provisions of the [general law of affreightment] shall apply to the contract, unless the following special provisions or applicable international conventions provide otherwise. This also applies if part of the carriage is performed by sea."

** section 452(a) HGB: "If it has been established that the loss, damage or event which caused delay in delivery occurred on a specific leg of the carriage, the liability of the carrier shall…. be determined in accordance with the legal provisions which apply to a contract of carriage covering this leg of carriage…"

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